Asian Stocks Snap Three-Day Loss (Source: Bloomberg)
Asian stocks (MXAP) rose, snapping three days of losses, after U.S. data on jobless claims and manufacturing beat estimates, easing concern Europe’s debt crisis will drag the global economy into a recession. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, increased 1 percent in Seoul. Nikon Corp. (7731), the camera maker that about 27 percent of sales from North America, rose 1.1 percent in Tokyo. Insurance Australia Group Ltd. gained 0.8 percent after the Sydney-based insurer agreed to buy New Zealand’s AMI Insurance for NZ$380 million ($288 million). “The U.S. economy is ending the year in a bit better shape than people had anticipated, and that is good, but Europe is obviously not,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The European economy is heading toward recession next year, and I think it’s going to continue to weigh on markets.”
U.S. Stocks Gain on U.S. Economic Data (Source: Bloomberg)
U.S. stocks rose, snapping a three- day decline in the Standard & Poor’s 500 Index (SPX), as data on jobless claims and manufacturing signaling a strengthening economy overshadowed concern over Europe’s debt crisis. Utilities, health-care and consumer staples had the biggest gains out of 10 S&P 500 groups, advancing at least 0.9 percent. FedEx Corp. (FDX), the operator of the world’s biggest cargo airline, jumped 8 percent after earnings beat analysts’ estimates on increased holiday orders. Novellus Systems Inc. (NVLS) surged 16 percent as Lam Research Corp. (LRCX) agreed to acquire the company. The S&P 500 rose 0.3 percent to 1,215.75 at 4 p.m. New York time, paring an earlier rally of 1.1 percent as oil declined and financial companies erased gains. The Dow Jones Industrial Average added 45.33 points, or 0.4 percent, to 11,868.81.
GLOBAL MARKETS-Euro steady, focus on Switzerland and Spain
LONDON, Dec 15 (Reuters) - The euro steadied just off new 11-month lows, with eyes fixed on a Swiss National Bank (SNB) meeting to consider its campaign of currency intervention while a Spanish bond auction will offer more signs on the depth of Europe's debt crisis.
"Overall, the outlook for the euro remains dark, with the unravelling of the treaty last week, refusal to lend to the IMF and the overall downside risks to global growth," said Paul Robson, currency strategist at RBS Global Banking.
Japan Stocks Snap 3-Day Loss (Source: Bloomberg)
Dec. 16 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average snapping a three-day losing streak, after U.S. data on jobless claims and manufacturing beat estimates, easing concern Europe’s debt crisis will drag the global economy into a recession. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 1.1 percent. Fanuc Corp. (6954), a leading maker of factory automation systems, added 1.2 percent. Maruzen CHI Holdings Co., a bookstore chain, fell 5.8 percent after forecasting its full- year loss will widen, citing slumping same-store sales. The Nikkei 225 rose 0.6 percent to 8,429.73 as of 9:20 a.m. in Tokyo, headed for a 1.2 percent weekly loss. The broader Topix index gained 0.3 percent to 727.44.
Manufacturing Output May Shrink From China to Europe: Economy (Source: Bloomberg)
Manufacturing may contract this month from China to the euro region as global demand slows and Europe’s leaders struggle to contain the worsening debt crisis. Chinese factory output may decline for a second month in December as Europe’s fiscal woes weigh on exports and home sales slide, preliminary results from a Markit Economics survey indicate. In the euro area, manufacturers may face a fifth straight month of contraction as the region endures its worst quarter for 2 1/2 years, a separate report showed. Ripples from Europe’s debt turmoil have dented confidence among companies and consumers and hit global demand. The Organization for Economic Cooperation and Development said last month that trade in goods stalled in most major economies in the third quarter and it cut its growth forecast. The slowdown is spilling over into unemployment, with Nokia Siemens Networks announcing last month that it plans to eliminate 17,000 jobs worldwide.
Global Demand for U.S. Assets Climb $4.8 Billion Even as China Cuts Back (Source: Bloomberg)
Global demand for U.S. financial assets cooled in October amid optimism Europe would resolve its debt crisis, expectations that that have since diminished. Net buying of long-term equities, notes and bonds totaled $4.8 billion during the month compared with net purchases of $68.3 billion in September, Treasury Department data showed today in Washington. Including short-term securities such as stock swaps, foreigners sold a net $48.8 billion compared with net buying of $65 billion the previous month. Demand for U.S. debt fell “as economic data improved and European leaders seemed to be getting a grip on the debt crisis” in October, Jay Bryson, global economist for Wells Fargo Securities, said in a note today. The European rescue fund was boosted to 1 trillion euros ($1.4 trillion) in October and investors agreed to a voluntary writedown of 50 percent on Greek debt.
Jobless Claims in U.S. Drop to Three-Year Low (Source: Bloomberg)
The fewest workers in three years filed claims for U.S. jobless benefits last week, indicating the world’s largest economy is strengthening heading into 2012. The number of applications for unemployment payments dropped by 19,000 to 366,000 in the week ended Dec. 10, less than the lowest forecast of economists surveyed by Bloomberg News and the least since May 2008, according to Labor Department figures issued today in Washington. Other reports showed manufacturing accelerated this month after pausing in November. “The U.S. economy, unlike the rest of the world, is gathering momentum as we head toward year-end,” said Eric Green, chief market economist at TD Securities Inc. in New York. “The labor market is improving sharply,” he said, and “we look for gains in industrial production.”
Consumer Confidence in U.S. Improves on Job Gains, Bloomberg Index Shows (Source: Bloomberg)
Consumer confidence in the U.S. rose last week to the highest level in two months, a sign that job gains may be lifting sentiment during the holiday shopping season. The Bloomberg Consumer Comfort Index was at minus 49.9 in the period ended Dec. 11, after a reading of minus 50.3 the prior week. Confidence among Americans with full-time jobs climbed to the highest level in almost five months. A decline in unemployment last month complemented by increasing payrolls may help reverse the recent decline in household confidence. At the same time, the European debt crisis and gridlock among lawmakers in Washington could prevent further gains in sentiment.
Wholesale Prices in U.S. Rose in November (Source: Bloomberg)
Prices paid to U.S. wholesalers excluding food and fuel rose less than forecast in November, indicating inflation will remain contained. The so-called core measure increased 0.1 percent, less than the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The producer price index climbed 0.3 percent, paced by a 1 percent advance in food expenses. Slowing growth from Europe to Asia may restrain the cost of raw materials, while subdued job growth and stagnant wages may hold down demand in the U.S., giving companies little room to raise prices. Less inflation would validate Federal Reserve policy makers in their renewed pledge this week to hold rates “exceptionally low” at least through mid-2013.
Singapore’s Exports Unexpectedly Rose in November on Pharmaceutical Boost (Source: Bloomberg)
Singapore’s exports unexpectedly rose in November as pharmaceutical sales countered weak demand for electronics amid a faltering global recovery. Non-oil domestic exports climbed 1.6 percent from a year earlier, after a revised 16.3 percent slide in October, the island’s trade promotion agency said in a statement today. The median of 12 estimates in a Bloomberg News survey was for a 1.2 percent decline. Europe’s sovereign-debt crisis has curbed demand for Asian goods, prompting nations from Indonesia to China to shield expansion by easing monetary policy in recent weeks. Singapore’s government has forecast the city state’s gross domestic product may grow as little as 1 percent in 2012.
Indonesia Regains Investment Grade Rating (Source: Bloomberg)
Indonesia regained investment grade rating for its sovereign debt at Fitch Ratings after 14 years, as Southeast Asia’s largest economy withstands faltering global growth and contains borrowings. The country’s long-term foreign and local currency debt was raised to BBB- from BB+, Fitch said in a statement yesterday. The outlook on both ratings is stable. Indonesia lost the investment grade rating in December 1997, during the Asian financial crisis. The rating puts the nation on the same level as India. “The upgrades reflect the country’s strong and resilient economic growth, low and declining public-debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” Philip McNicholas, director in Fitch’s Asia- Pacific Sovereign Ratings group, said in the statement.
Draghi Says Short-Term Contraction in Euro Area Unavoidable Amid Austerity (Source: Bloomberg)
European Central Bank President Mario Draghi said the euro area may not be able to escape a recession due to governments’ austerity measures. “The unavoidable short-term contraction may be mitigated by the return of confidence,” Draghi said during a speech in Berlin today. “But in the medium term, sustainable growth can be achieved only by undertaking deep structural reforms that have been procrastinated for too long.”
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