Investors Risk Appetite Shifts
by Hiland Doolittle
Investors have been watching the equity markets for telltale signs about the global recovery and have left oil as another recession casualty. On Monday U.S. crude oil CLcf1 rose 2% settling at $60.18 a barrel after hitting six-month highs earlier in the day.
Investors have shifted to an appetite for risk. Inspired by news of applications by Goldman Sachs, JPMorganChase & Company and Morgan Stanley to repay TARP funds and boosted by a surprising report from the National Association of Home Builders (NAHB) showing a surge in new home starts in April, global security markets rose for the third straight day.
The TARP applications generated strong responses on Wall Street and Britain’s announcement that talks with investors interested in buying stakes in the semi-nationalized banks were underway added fuel to the rise in risk appetite. As Antje Praefcke of Commerzbank assessed the activity: “Overall the market is again playing on the possibility that we may be seeing the end of the global recession and that is pushing appetite up.”
With the increase in risk appetite, the dollar and yen both fell back in overnight trading. The dollar fell 0.3% and the yen 0.4% to 96.63 per dollar. As investors shift to higher yielding currencies, the dollar and yen have less appeal.
About the Author - Hiland Doolittle
Hiland is a professional writer with extensive entrepreneurial experience. He is a graduate of St. George’s School Newport, RI and the State University of New York at Albany where he majored in history. He has been active in the real estate business for 30 years and has founded and sold several businesses.
Hiland currently writes for several financial sites and is a published author of the novel The Last Parade. He has recently completed a manuscript for a children’s book entitled Sami and The Minnow Man.
