Monday, October 17, 2011

20111017 1019 Global Market Related News.

Asia Stocks Rise on Europe Optimism (Source: Bloomberg)
Asian stocks rose, extending the biggest weekly gain since March on the region’s benchmark index, after Group of 20 finance chiefs meeting in Paris endorsed parts of a plan to contain Europe’s debt crisis. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, advanced 1.9 percent in Sydney. National Australia Bank Ltd., the nation’s biggest business lender, climbed 1.8 percent. S-Oil Corp., South Korea’s third-largest crude refiner, surged 5.4 percent in Seoul. Sony Corp. rose 4.3 percent after profit at its Sony Ericsson Mobile Communications AB venture beat analyst estimates. Olympus Corp. tumbled 24 percent after at least six brokerages cut their ratings on the optical-equipment maker after the sacking of its.
The MSCI Asia Pacific Index advanced 1.3 percent to 118.27 as of 10:34 a.m. in Tokyo. Almost six stocks rose for each that fell. The gauge climbed 3.4 percent last week after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.

S&P 500 Index Caps Best Weekly Gain Since July 2009 on Retail-Sales Data (Source: Bloomberg)
U.S. stocks rose, driving the Standard & Poor’s 500 Index to the largest weekly gain since July 2009, amid optimism over corporate earnings and steps by European leaders to support the region’s banks. Caterpillar Inc. (CAT), Walt Disney Co. (DIS) and DuPont Co. jumped at least 7.6 percent to lead the Dow Jones Industrial Average, which rallied a third straight week, the longest stretch since April, and erased its 2011 loss. Energy, raw-material and technology shares led gains by all 10 industries in the S&P 500 and added at least 7.5 percent. Apple Inc. (AAPL) closed at a record high and Google Inc. completed a nine-day streak of gains. The S&P 500 climbed 6 percent this week to 1,224.58, the highest level since Aug. 3. The measure has surged 11 percent since Oct. 3, when it closed within 1 percent of a bear market, or 20 percent plunge, from its high in April. The Dow rose 541.37 points, or 4.9 percent, to 11,644.49 this week.

European Stocks Gain for Third Week on Speculation Policy Makers Will Act (Source: Bloomberg)
European stocks rose for a third week, their longest winning streak since April, on speculation that policy makers will increase efforts to contain the debt crisis as company earnings and U.S. retail sales beat estimates. Carmakers and chemical companies led gains over the week, with Porsche AG and Syngenta AG (SYNN) climbing more than 6 percent. SAP AG, the largest maker of business-management software, and ASML Holding NV (ASML), Europe’s biggest chip-equipment maker, jumped after reporting better-than-estimated earnings. The Stoxx Europe 600 Index advanced 2.8 percent to 238.51 this past week. The gauge has still retreated 18 percent since this year’s high on Feb. 17 on concern that Greece will default, pushing borrowing costs higher for other indebted euro-area countries. The gauge traded at 9 times its companies’ estimated earnings on Sept. 22, the cheapest since March 2009, according to data compiled by Bloomberg. The Stoxx 600 last increased for three consecutive weeks more than six months ago.

U.K. Stocks Advance After IMF Capital Boost Talk; Miners Lead Gains (Source: Bloomberg)
U.K. stocks advanced, with the FTSE 100 Index (UKX) headed for its longest streak of weekly gains since April, after International Monetary Fund members discussed boosting its capital to help end Europe’s debt crisis. Fresnillo Plc (FRES), the world’s largest primary silver miner, and BP Plc (BP/), the U.K.’s second biggest oil producer by market value, advanced as metals and oil prices rose. The benchmark FTSE 100 Index climbed 62.98, or 1.2 percent, to 5,466.36 at the close in London. The gauge rose for the third week, its longest streak of weekly gains since April. Even then, the measure is 10 percent lower than this year’s peak on Feb. 8 amid concern that Europe’s sovereign-debt crisis will deepen. The FTSE All-Share Index added 1.1 percent and Ireland’s ISEQ increased 1.6 percent today.

Inflation Probably Eased in September (Source: Bloomberg)
The cost of living in the U.S. probably eased in September and the pace of factory production held steady, consistent with the Federal Reserve’s forecast of moderating inflation and slow growth, economists said reports will show this week. Consumer prices rose 0.3 percent, the smallest gain in three months, according to the median forecast of economists surveyed by Bloomberg News before Labor Department data on Oct. 19. Industrial output increased 0.2 percent for a second month in September, while sales of previously owned homes declined, other reports may show. Clothing retailer Gap Inc. (GPS) and supermarket chain Safeway Inc. (SWY) said they are limited in how much they can raise prices to make up for higher raw materials expenses as weak job and income gains squeeze consumers. Contained inflation expectations and labor costs gave Fed officials scope last month to pursue monetary policy geared at stoking the economic recovery.

Central Banks Selling Most U.S. Bonds Since 2007 No Rally Killer (Source: Bloomberg)
International central banks are selling the most Treasuries since the credit crisis began just as institutional investors load up on U.S. government bonds. The Federal Reserve said its holdings of U.S. government debt on behalf of central bankers and institutional investors outside America has plunged $76.5 billion in the last seven weeks, the most since August 2007. At the same time, bond mutual funds are adding Treasuries, banks have increased their holdings 45 percent in the past five years and the Fed has added $656 billion to its balance sheet this year.
Rather than a referendum on the U.S.’s $1.3 trillion budget deficit and rising debt burden, sales by foreign policy makers may have more to do with supporting their currencies after the Brazilian real weakened 9.8 percent and Taiwan’s dollar lost 5.2 percent against the U.S. dollar since June. With economists forecasting inflation slowing to 2.1 percent in 2012 from 3.1 percent this year and the Fed’s commitment to keeping interest rates near zero, investors say the demand that pushed government bond yields to record lows last month will be sustained.

U.S. 30-Year Bonds in Longest Weekly Losing Streak Since January on Europe (Source: Bloomberg)
U.S. 30-year bonds capped the longest weekly losing streak since January as concern eased that Europe is unable to curb its debt crisis and U.S. retail sales climbed, damping bets the country will fall into a recession. Treasuries are off to the worst monthly start this year just after completing the strongest quarter since 2008 as appetite for higher-yielding assets overtook demand for a refuge that was spurred by speculation the debt crisis was worsening and the U.S. economy was floundering. Federal Reserve Chairman Ben S. Bernanke will speak next week on the effects of the last recession on central bank policy. “Optimism in Europe and a better outlook in the U.S. have weighed on Treasuries this week,” said Michael Cloherty, head of U.S. rates strategy for fixed income and currencies in New York at Royal Bank of Canada, one of the 22 primary dealers that trade with the Fed. “You really must have a steady drumbeat of bad news to sustain lower yields, and we are not seeing that.”

U.S. Delays Its Global Currency Report at a ‘Delicate Time’ for China Ties (Source: Bloomberg)
The U.S. postponed a report on the exchange-rate policies of its trading partners, including China, until after global meetings scheduled for this month and next. The delay will “give us a chance to assess progress following several international meetings,” including this week’s Group of 20 finance ministers’ session in Paris, a G-20 summit in November and meetings involving Asia-Pacific finance ministers and leaders in November, the Treasury Department said in a statement yesterday, a day before the report was due. Treasury Secretary Timothy F. Geithner has been pushing China to allow its currency to strengthen, saying that would help support global growth, while avoiding actions that could cause friction with the world’s No. 2 economy and the second- largest U.S. trade partner.

U.S. Retail Sales Rise More-Than-Forecast 1.1%, Easing Recession Concern (Source: Bloomberg)
Retail sales rose in September by the most in seven months, showing American consumers are helping the world’s largest economy fend off a slump. Purchases grew 1.1 percent, exceeding the median forecast of economists surveyed by Bloomberg News, Commerce Department data showed today in Washington. Another report called into question whether gains in spending can be sustained as household confidence unexpectedly dropped this month. Retailers like Macy’s Inc. (M) and Kohl’s Corp. (KSS) are among those planning to boost hiring, betting demand will hold up into the November-December holidays, the biggest selling season of the year. Stocks surged globally after the sales figures beat estimates and countries in the Group of 20 began talks to try to mitigate the European debt crisis.

China Growth May Top 9% as Global Slump Poses Risk (Source: Bloomberg)
China’s economy probably grew more than 9 percent in the third quarter, indicating the nation remains an engine of global growth even as Europe grapples with the sovereign debt crisis and the U.S. recovery falters. Gross domestic product increased 9.3 percent from a year earlier, according to the median estimate of 22 economists in a Bloomberg News survey. That would be the ninth straight quarter of expansion above 9 percent and follow a 9.5 percent gain in the previous three months. The data are due in Beijing tomorrow. Weaker gains in exports and lending in September suggest that Premier Wen Jiabao may need to weigh more measures to support growth after the State Council this month announced aid for small businesses. In Paris, attending a Group of 20 finance ministers’ meeting, Brazil’s Finance Minister Guido Mantega said Oct. 15 that signs of a “slight” slowdown in China, the world’s biggest consumer of commodities, will become a concern if the trend continues.

Japanese Stocks Rise Toward One-Month High as G-20 Eases Europe Concern (Source: Bloomberg)
Japanese stocks climbed, with the Nikkei 225 (NKY) Stock Average heading for its highest close in a month, after Group of 20 finance chiefs meeting in Paris endorsed parts of a plan to contain Europe’s debt crisis. Sumitomo Mitsui Financial Group Inc., Japan’s second- largest lender by market value, gained 1.8 percent. Sony Corp. jumped 4.3 percent after earnings at its mobile phone unit beat analysts’ earnings estimates. Olympus Corp. slumped 24 percent after auditor PricewaterhouseCoopers called for an investigation into an acquisition. “Investors are recovering their risk appetite,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “We could see that G-20 countries would cooperate with European countries in tackling the debt crisis, which helped concern over the European crisis recede.”

Singapore Exports Unexpectedly Decline (Source: Bloomberg)
Singapore’s exports unexpectedly fell in September as weakening expansion in the world’s biggest economies eroded demand for electronics and petrochemicals. Non-oil domestic exports fell 4.5 percent from a year earlier, after a revised 3.9 percent increase in August, the island’s trade promotion agency said in a statement today. The median of 11 estimates in a Bloomberg News survey was for a 3.5 percent gain. Singapore lowered its growth forecast for 2011 last week and said the island’s expansion may slow further next year as the European debt crisis and a faltering U.S. recovery damp demand for goods made in Asia. China’s exports rose the least in seven months in September, while South Korean shipments climbed at the slowest pace in three months.

Singapore Shows Asia Dilemma as Inflation Compounds Global Economy Risks (Source: Bloomberg)
Singapore’s decision to slow its currency’s advance rather than halt gains shows the dilemma facing Asian nations trying to tame inflation while protecting exporters from faltering economies in Europe and the U.S. The Monetary Authority of Singapore, which uses the island’s dollar to manage prices, said yesterday it will continue to allow the currency to advance even as the trade ministry cut its growth forecast for 2011 and the central bank said the expansion may slow further next year. The Singapore dollar rose as much as 0.8 percent as policy makers signaled they’ll maintain efforts to curb prices rising at the fastest pace in almost three years. China yesterday reported inflation exceeded 6 percent for a fourth month even as bank lending fell to the lowest level since 2009, limiting Premier Wen Jiabao’s scope to ease policy to support growth.

Bangkok Spared as Thailand Floods Ease (Source: Bloomberg)
Thailand’s capital Bangkok was spared from the nation’s worst floods in more than five decades after water levels receded in provinces north of the capital and barriers protecting the city of 9.7 million people held. The three-month-old disaster has killed more than 300 people and swamped 930 factories employing more than 100,000 workers, according to government data. Nations including the U.S. have pledged equipment, manpower and cash to help get aid to 10 provinces that are at critical risk, the government said. “The situation is still under control,” Prime Minister Yingluck Shinawatra said yesterday in Bangkok, adding that the government wants to “reiterate and assure” people that the capital won’t be flooded after defenses were strengthened. “The overall situation has improved in some areas,” she said.

G-20 Gives EU One Week to Fix Debt Crisis (Source: Bloomberg)
European leaders have one week to settle differences and flesh out a strategy to terminate their sovereign debt crisis as global finance chiefs warn failure to do so would endanger the world economy. Group of 20 finance ministers and central banks concluded weekend talks in Paris endorsing parts of the emerging plan to avoid a Greek default, bolster banks and curb contagion. They set an Oct. 23 summit of European leaders in Brussels as the deadline for it to be delivered. “The risk of a recession would be increased dramatically were the Europeans to fail to accomplish goals that they’ve set for themselves,” Canadian Finance Minister Jim Flaherty said after the G-20 meeting, which ended Oct. 15.

Europe Crisis Plan Wins Global Backing as G-20 Urges Action (Source: Bloomberg)
Europe’s revamped strategy to beat its two-year sovereign debt crisis won the backing of global finance chiefs, who urged the region’s leaders to deal “decisively” with the turmoil when they meet for emergency talks in a week’s time. European officials yesterday outlined the initiatives they’re considering at a meeting in Paris of finance ministers and central bankers from the Group of 20 economies. With the continent’s fiscal woes rattling financial markets and threatening the world economy, governments were urged to complete the plan at their Oct. 23 summit in Brussels and to tame the threat of contagion by maximizing the firepower of their 440 billion-euro ($611 billion) bailout fund. “The plan has the right elements,” U.S. Treasury Secretary Timothy F. Geithner told reporters in Paris. Bank of Canada Governor Mark Carney said that “some of what is being considered, if fully implemented, would be sufficient in our opinion.”

G-20 Set to Push European Leaders to Deliver Crisis Solution (Source: Bloomberg)
Group of 20 finance chiefs are pressing Europe’s leaders to deliver within the next few days a comprehensive plan that stamps out the region’s sovereign debt turmoil, according to an official from a G-20 nation. G-20 finance ministers and central bankers will say in a statement to be released after talks in Paris today that an Oct. 23 Brussels summit of leaders must quell the threat of contagion, the official said on condition of anonymity because the communique isn’t finished. They will also urge the euro-area to maximise the firepower of its 440 billion-euro ($611 billion) bailout fund, the person said. European governments are concentrating on a plan which would include writing down Greek bonds by as much as 50 percent and establishing a backstop for banks, people familiar with the discussions said yesterday. Worldwide stocks rose and the euro rallied the most against the dollar in more than two years this week on optimism officials are ramping up their crisis-fighting.

EU Said to Consider 50% Greek Writedown (Source: Bloomberg)
European officials are considering writedowns of as much as 50 percent on Greek bonds, a backstop for banks and continued central bank bond purchases as key planks in a revamped strategy to combat the debt crisis, people familiar with the discussions said. The Greek bond losses may be accompanied by a pledge to rule out debt restructurings in other countries that received bailouts, such as Portugal, to persuade investors that Europe has mastered the crisis, said the people, who declined to be identified because the negotiations will run for another week. In the works is a five-point plan foreseeing a solution for Greece, bolstering of the European Financial Stability Facility rescue fund, fresh capital for banks, a new push to boost competitiveness and consideration of European treaty amendments to tighten economic management.

Ambani Armed With $12.6 Billion to Buy Assets as Energy Valuations Slump (Source: Bloomberg)
Billionaire Mukesh Ambani’s Reliance Industries Ltd. (RIL) is poised to use its record cash for overseas acquisitions to take advantage of the cheapest valuations of oil and natural gas companies in three years as profit growth slows. “Reliance has a strong balance sheet and sustained earning base to pursue growth opportunities,” Chairman Ambani, 54, said Oct. 15 after the Indian refiner and explorer reported that a 16 percent rise in second-quarter profit and sale of assets to BP Plc (BP/) helped boost cash to 614.9 billion rupees ($12.6 billion). Reliance, PetroChina Co. and Cnooc Ltd. are among Asian companies likely to spend $150 billion over the next five years on assets to secure energy supplies for the region’s growing economies, according to Sanford C. Bernstein Co. Ambani has bought shale gas assets in the U.S. and is targeting acreages in Canada after a drop in gas output in India led to an 18 percent decline in his company’s shares in Mumbai trading this year.

Euro Approaches One-Month High as Europe Leaders Near Debt Plan Resolution (Source: Bloomberg)
The euro traded 0.2 percent from a one-month high after European Union Economic and Monetary Affairs Commissioner Olli Rehn said clarity on a plan to contain the region’s debt crisis will emerge in the “coming days.” The 17-nation currency held onto a gain that was the biggest on a weekly basis in more than two years against the dollar as Group of 20 finance chiefs and central bankers held out the possibility of handing more International Monetary Fund aid to Europe. Australia’s dollar was 0.2 percent from its highest level in almost four weeks before data tomorrow that economists predict will show China’s economy grew more than 9 percent for a ninth quarter in the period ended Sept. 30.
“We have hopes building around a European package, some easing in global recession fears, and if you get China data that’s a bit stronger it just feeds into that risk-on sentiment,” said Mike Burrowes, a currency strategist at Bank of New Zealand Ltd. in Wellington. “My bias for euro, kiwi, Aussie and the like is to buy dips, as we are getting closer to a package and that will see a stabilization in sentiment.”

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