DJIA chart reading : correction range bound little upside biased.
Hang Seng chart reading : side way range bound .
Twenty-four new hedge funds in Asia raised $2.86 billion in the first half of 2011, more than double the preceding six months as the average startup size surged, an AsiaHedge New Funds Survey showed. The amount raised compares with $1.09 billion in the second half of 2010 and 70 new funds that started in the first half of last year, AsiaHedge said in an e-mailed survey dated yesterday. The average new hedge fund size jumped to $119 million in 2011 compared with about $40 million in the first half of last year, while multi-strategy funds attracted the most money for the first time, luring $1.9 billion, it said. Assets raised by new funds is Asia climbed to the highest since the peak of $5.7 billion raised in the first half of 2007. The Eurekahedge Asian Hedge Fund Index, which tracks more than 450 funds, has lost 0.3 percent in the first six months of 2011, underperforming the 0.4 percent return by the global benchmark.
Asia Stocks Rise on U.S. Deficit Plan, Apple (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index set to close at its highest level in a week, on optimism U.S. lawmakers will reach an agreement to cut the budget deficit and after Apple Inc. (AAPL)’s profit topped estimates, boosting the earnings outlook for exporters. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, climbed 3.7 percent in Seoul. James Hardie Industries SE, the largest seller of home siding in the U.S., jumped 6.3 percent after construction of new homes in the world’s biggest economy rose to a five month high in June. BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, advanced 1.8 percent in Sydney after oil and metal futures increased. The MSCI Asia Pacific Index increased 1 percent to 136.57 as of 11 a.m. in Tokyo, headed for its highest close since July 11. About eight stocks advanced for each that fell on the gauge.
The measure dropped for the first week in four last week after European finance ministers declined to rule out a temporary default for Greece and as Moody’s Investors Service put the U.S. under review for a possible credit-rating downgrade.
Stocks rise, euro steady after flight to safety
LONDON, July 19 (Reuters) - World stocks clawed back some recent losses and the euro steadied as investors paused from selling riskier assets in the face of the euro zone debt crisis and worries about Washington's debt ceiling fight.
"Things are coming to a head. This is a political crisis just as much as a financial crisis. We need some real leadership," said Justin Urquhart Stewart, director at Seven Investment Management.
Housing Starts in U.S. Surge on Apartment Construction; Permits Increase (Source: Bloomberg)
Housing starts in the U.S. jumped more than forecast in June as better weather allowed the struggling industry to break ground on delayed projects. Work began on 629,000 houses at an annual pace, up 15 percent from May and the highest level in five months, figures from the Commerce Department showed today in Washington. The level topped the most optimistic forecast in a Bloomberg News survey of 71 economists. Building permits, a sign of future construction, unexpectedly climbed 2.5 percent. “A lot of this was due to some catch-up in activity that didn’t occur in April and May,” said Paul Dales, a senior economist at Capital Economics Ltd. in Toronto, who had the highest forecast in the Bloomberg survey. “I wouldn’t be surprised to see starts edge up gradually, but the bigger picture is it’s still at a very depressed level.”
Fed Bank Directors Expressed ‘Heightened Caution’ on Outlook for Economy (Source: Bloomberg)
Directors at the Federal Reserve’s regional banks expressed “heightened caution” about the pace of improvement in the economy, according to minutes of Board of Governors’ meetings in May and June. The directors of the 12 banks “generally noted that recent economic data had been weaker than expected, and they expressed a heightened caution about the likely pace of improvement in the economy over coming quarters,” according to the minutes released in Washington today, which summarize discussions at the regional banks. The minutes show that directors of the Fed’s regional banks shared Fed Chairman Ben S. Bernanke’s view in a press conference last month that some of the “headwinds” facing the economy, such as weakness in housing, “may be stronger and more persistent than we thought.”
Treasuries Decline Before Report That May Show Home Sales Climbed in June (Source: Bloomberg)
Treasuries fell, eroding a rally from yesterday, before an industry report that economists said will show sales of previously owned U.S. homes increased in June from a six-month low. The longest maturities led the decline as Federal Reserve Bank of Kansas City President Thomas Hoenig said the U.S. economy will keep growing “at a modest pace.” The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, widened to 2.33 percentage points from 1.71 percentage points a year ago.
U.S. Stocks Climb as Obama Backs Deficit Plan; Apple Rallies on Earnings (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index to its biggest rally since March, as PresidentBarack Obama endorsed a bipartisan deficit-reduction plan. Equity futures rose after U.S. markets closed as Apple Inc. (AAPL)’s profit topped estimates on record iPhone and iPad sales. International Business Machines Corp. (IBM) and Coca-Cola Co. climbed 5.7 percent and 3.3 percent, respectively, as they led a group of companies reporting higher-than-estimated earnings. All 12 stocks in an S&P gauge of homebuilders advanced after U.S. housing starts increased to a five-month high. Bank of America Corp. (BAC) fell 1.5 percent after reporting the biggest quarterly loss in its history. The S&P 500 gained 1.6 percent to 1,326.73 at 4 p.m. in New York, rebounding from a three-week low. The Dow Jones Industrial Average advanced 202.26 points, or 1.6 percent, to 12,587.42. Nasdaq-100 Index futures contracts expiring in September climbed 0.7 percent to 2,405.25 at 5:07 p.m. in New York.
U.S. debt showdown moving into crunch time
WASHINGTON, July 19 (Reuters) - Two weeks before their final deadline, President Barack Obama and top lawmakers will face more pressure on Tuesday for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.
With talks at an impasse and time growing short for raising the U.S. debt ceiling, attention will shift to a congressional vote on a Republican deficit-cutting measure seen as mostly symbolic but a stark reminder of their ideological divide with Obama's Democrats.
Goldman Sachs cuts U.S. second-quarter growth estimates
WASHINGTON, July 18 (Reuters) - Goldman Sachs has cut its forecast for U.S. second-quarter growth to 1.5 percent from 2 percent, citing weak consumer spending.
The downgrade follows last week's raft of weak reports on retail sales, manufacturing and consumer sentiment, which have raised concerns that some of the factors impeding growth are no longer of a temporary nature, as previously thought.
China Leading Indicator Shows Growth Quickening as Wen Battles Inflation (Source: Bloomberg)
A Chinese leading indicator climbed, adding to evidence that the world’s second-biggest economy is maintaining momentum as Premier Wen Jiabao extends a campaign to cool inflation. The index rose 0.5 percent to 155 in May, The Conference Board said on its website today, citing a preliminary reading. The gauge is designed to capture prospects over the coming six months. April’s index was revised to a 0.1 percent gain from a previous 0.2 percent increase. China, the world’s fastest-growing major economy, may expand more than 9 percent this year, even after the central bank boosted interest rates and controlled lending to cool the quickest inflation in three years in June. Growth may be strong enough to withstand more monetary tightening as local governments raise spending on low-cost housing and manufacturers build more factories in inland provinces.
China’s Inflation Peaking Seen Boosting Stocks to JPMorgan Asset’s Wang (Source: Bloomberg)
Chinese government measures to curb property-price gains and tame inflation are “at or close to the peak,” bolstering the outlook for stocks, according to JPMorgan Asset Management. China’s inflation will ease as the measures have been “highly effective,” said Howard Wang, the Hong Kong-based head of the Greater China team at the JPMorgan unit, which oversees $14 billion of assets in China, Hong Kong and Taiwan. Wang said he is adding some “very cheap’” property developers, materials companies and technology shares to his holdings. His Greater China Fund has returned 22 percent over the past year, beating 86 percent of rivals, according to data compiled by Bloomberg. “We think inflation is peaking now and that it will ease off,” Wang said in an e-mailed response to questions. “All things equal, that should make a better environment for Chinese equities.”
Nikkei 225 Rises Most This Month on U.S. Deficit Plan, Apple Earnings (Source: Bloomberg)
Japan’s Nikkei 225 Stock Average rose by the most this month on optimism U.S. lawmakers will reach an agreement that will help the government avoid defaulting on its debt and after Apple Inc. (AAPL)’s profit topped estimates, boosting the earnings outlook for suppliers. Honda Motor Corp., which counts North America as its largest market, climbed 2.2 percent. Toshiba Corp., a maker of memory chips used to store songs and photos in Apple devices, rallied 2.7 percent. Teijin Ltd., a fiber maker, climbed 2.7 percent after the Nikkei newspaper said first-quarter profit jumped 60 percent. The Nikkei 225 rose 1.3 percent to 10,022.60 at the 11 a.m. trading break in Tokyo, set for the biggest increase since June 29. The broader Topix index gained 1.1 percent to 862.71. About four stocks advanced for each that fell.
H.K. Billionaire Helps Fund U.K. Low-Income Housing (Source: Bloomberg)
Billionaire Cheng Yu-tung and two fellow Hong Kong investors, faced with soaring real-estate prices at home, are helping the U.K. plug a gap in funding for low-income housing after gaining control of a London-based property manager. Cheng’s Chow Tai Fook Enterprises Ltd., developer Sammy Lee and businessman Peter Fung last month paid 30 million pounds ($48 million) for 61 percent of Pinnacle Regeneration Group Ltd., manager of 22,000 homes in the U.K. Cuts in social housing are part of the British government’s plan to trim a record deficit with the biggest spending reductions since World War II. “There is a big opportunity for investors directly coming to the fore because of the cutback in funding,” said James Coghill, a real-estate investment adviser at Savills Plc. (SVS) “Social housing providers are seeking other funds and need to become more commercial.”
Ahluwalia Sees Several Months to Bring India Inflation to Acceptable Level (Source: Bloomberg)
India will take several months to reduce inflation to “an acceptable level,” and the central bank’s interest-rate increases haven’t hurt the economy, Prime Minister Manmohan Singh’s top economic aide said. “We will bring inflation down in control but it will take several months,” Montek Singh Ahluwalia, the deputy chairman of India’s planning commission, said in an interview in New Delhi late yesterday. “As of now, there has been no collateral damage at all” to growth from rate rises, the economic adviser, 67, said before next week’s central bank policy meeting. India has persisted with the most aggressive monetary tightening among Asia’s major economies even as regional neighbors from Malaysia to the Philippines held borrowing costs in recent weeks to protect growth. Indian policy makers need to worry about the economic cost only if the expansion rate dips below 8 percent, versus the 8.25 percent pace estimated for the fiscal year through March, Ahluwalia said.
Bank of Canada Keeps Key Rate at 1%, Says Stimulus Steps Will Be Withdrawn (Source: Bloomberg)
The Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers, with policy makers dropping the word “eventually” to describe the timing of their next move. The target for overnight loans between commercial banks remained 1 percent, where it’s been since September, as forecast by all 26 economists surveyed by Bloomberg News. The Ottawa- based bank also raised its outlook for so-called core inflation and affirmed the economy will reach full output by the middle of 2012 while trimming this year’s growth forecast. “To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” the central bank said in a statement. “Such reduction would need to be carefully considered.”
Papandreou Sees Make-or-Break Time in Crisis (Source: Bloomberg)
Greek Prime Minister George Papandreou says Europe’s leaders need to show tomorrow that they can resolve the European Union debt crisis to avoid a contagion enveloping Italy and Spain. “It could be a make-or-break moment for where Europe is going,” Papandreou said during an interview in his Athens office at Parliament yesterday. “Markets are saying pretty much what I’m saying too: that Greece is doing what it can, but that Greece is not going to be able to carry the weight of all of Europe and the other problems that Europe has.” Papandreou travels to Brussels tomorrow to meet with EU leaders as officials struggle to agree on measures to restore confidence in the euro region’s creditworthiness after the last year’s financial rescue of Greece. Policy makers are divided on how to prod investors into financing a new bailout package and whether the 17-nation euro area should issue eurobonds to help debt-laden nations across the bloc tap markets.
Greek Crisis Poses Serious Contagion Risk Even Without Default, IMF Says (Source: Bloomberg)
Greece’s sovereign-debt crisis risks contaminating the rest of the euro region even if officials avert a default, the International Monetary Fund said. Both the European Commission and the European Central Bank “considered that a sovereign default or a credit event would likely trigger contagion to the core euro-area economies with severe economic consequences,” according to an IMF staff report on the region’s economy released yesterday. “Staff however also saw serious risks of contagion, even under a strategy which tries to avoid default or credit events.” Government chiefs are meeting on July 21 for the second time in a month as they aim to break a deadlock over a new Greek rescue that has spooked investors. While German Chancellor Angela Merkel said yesterday the crisis can’t be resolved in “one spectacular step,” Greek counterpart George Papandreou said in an interview that the summit could be a “make-or-break moment” for the euro region.
EU Struggles to Convince on Greek Deal at Summit as Borrowing Costs Rise (Source: Bloomberg)
European leaders are struggling to convince investors that they will agree on a second Greek bailout at a summit this week as record bond yields boosted financing costs at sales of Spanish and Greek debt. European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue that has spooked investors. Spanish and Italian bond yields surged yesterday, piling pressure on officials to end the turmoil. Spain and Greece sold 6.08 billion euros ($8.6 billion) of bills today. “As another D-day looms on Thursday, we have few soothing words,” Suki Mann, senior credit strategist at Societe Generale SA in London, wrote in a note to investors. “Greece appears beyond repair, Italy is on the brink and the chances are that the euro might be no more very soon.”
No consensus as Europe limps toward Greece summit
BRUSSELS/PARIS, July 18 (Reuters) - European governments and banks struggled to reconcile competing proposals for a second bailout of Greece on Monday, three days before leaders meet to prevent the crisis from spreading through the region.
The euro zone summit scheduled for Thursday in Brussels is likely to agree on a rescue of Greece, supplementing a 110 billion euro ($154 billion) bailout launched in May last year , a French government spokeswoman said.
German Investor Confidence Falls More Than Forecast as Debt Crisis Worsens (Source: Bloomberg)
Investor confidence in Germany, Europe’s largest economy, dropped more than economists forecast in July as the euro-area debt crisis worsened. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, fell to minus 15.1 from minus 9 in June. That’s the lowest since January 2009. Economists expected a decline to minus 12.5, according to the median of 42 estimates in a Bloomberg News survey. Germany’s benchmark DAX index (DAX) has shed more than 2 percent this month amid investor concern that the debt crisis, which has already engulfed Greece, Ireland and Portugal, will spread to Italy. While government belt-tightening across the region and slowing global demand may damp growth, the Bundesbank said yesterday that Germany’s outlook remains “favorable” as falling unemployment boosts consumer spending.
European Stocks Advance, Lifting Benchmark Stoxx 600 From Seven-Month Low (Source: Bloomberg)
European stocks gained, rebounding from a seven-month low, as companies from Novartis AG (NOVN) to International Business Machines Corp. reported earnings that beat estimates. Novartis, Europe’s second-biggest drugmaker by sales, climbed the most in three months. SAP AG (SAP) led a rally in technology companies after IBM boosted its forecasts. Nordea Bank AB (NDA) soared 5.7 percent after profit increased. Electrolux AB (ELUXB), the world’s second-biggest appliance maker, plunged the most in four years as results trailed projections.
U.K. Stocks Climb After Three-Day Slide; Lloyds Banking, Vedanta Advance (Source: Bloomberg)
U.K. stocks gained for the first time in four days as better-than-forecast data from the U.S. on housing starts and corporate earnings boosted optimism in the outlook for the world’s largest economy. Lloyds Banking Group Plc (LLOY) rallied 4.3 percent for the biggest increase in the benchmark FTSE 100 Index. (UKX) Kazakhmys Plc (KAZ), Cairn Energy Plc and Vedanta Resources Plc (VED) led resources shares higher as each rose more than 2 percent. Johnson Matthey Plc (JMAT) advanced 4 percent after the manufacturer of a third of all auto-catalysts said profit rose 19 percent. The FTSE 100 rose 0.7 percent to 5,789.99 at the 4:30 p.m. close in London. The gauge has still fallen 5 percent since February amid speculation that European banks will need to raise more capital as stress tests failed to allay investor concern that lenders have insufficient capital to absorb losses. The broader FTSE All-Share Index climbed 0.6 percent and Ireland’s ISEQ Index advanced 0.5 percent.
FOREX-Euro up broadly but vulnerable before summit
LONDON, July 19 (Reuters) - The euro rose broadly on Tuesday as debt yields of some weaker euro zone countries retreated, but the single currency was vulnerable to uncertainty about whether a solution to Greece's debt problems will be agreed later this week.
Traders said official Asian and Russian names bought the euro as yields on Italian and Spanish government bonds retreated slightly following a surge in the past week on jitters that the debt crisis is deepening.
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