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Rate cuts boost markets but the worst may not be over yet

Stock markets worldwide surged yesterday after the US Federal Reserve slashed its benchmark interest-rate target by 0.5% to the lowest since 2004. Analysts however warned that the market has not yet bottomed out.

Reality will come when Corporate Earnings Plunge

Stock market might have gotten overly exubernat and the rebound might last for a few days, but the reality will come when corporate earnings start plunging.

IMF Provided Support with Liquidity Programmes

International Monetary Fund on Wednesday offered up to US$100 billion in short-term loans to developing countries that have been hit badly by the financial crisis but are otherwise sound, with none of its usual conditions attached. Fed's and IMF's liquidity programmes have helped to lower the risk of contagion in the emerging markets. With the flood of new liquidity, emerging- market countries are in a better position to cope with the deleveraging process that's contributed to money pulling out of their markets.

Deleveraging process has some more way to go: Not yet time to plunge into Stock Market

Though we have seen some degree of normalisation in the interbank markets with liquidity shortage easing somewhaat in the past several weeks, you look at the level of volatility in the market, it's a classic sign of a bear market. Investor sentiment remains highly fickle.

Economic Fundamentals remain weak for the US, Europe and Asia

The truth is the economic outlook for the US, Europe and even Asia remains very challenging. For the banks, we're likely to see more writedowns on investment securities. Q3 corporate earnings will be the most unpredictable earnings season ever.