Thursday, January 5, 2012

20120105 1208 Global Market Related News.

Asian Stocks Fall as France Debt Sale Raises European Debt-Crisis Concerns (Source: Bloomberg)
Asian stocks (MXAP) retreated, snapping a two-day rally, after Australia’s services industry shrank and the euro weakened ahead of France’s plans to sells as much as 8 billion euros ($10.4 billion) of debt today. Sony Corp. (6759), a Japanese electronics maker that gets 21 percent of its sales from Europe, fell 1.1 percent in Tokyo as a weaker euro cuts the earnings outlook for exporters. Wesfarmers Ltd. led declines among Australian retailers after a report showed the nation’s services industry contracted in December as consumer spending weakened. BHP Billiton Ltd., the world’s largest mining company, slipped 1.5 percent in Sydney as copper futures dropped. “Problems sparked by the European debt crisis are reigniting and people in the market have reaffirmed that the situation has not changed,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “That’s weakening the euro and hurting exporters with a heavy reliance on Europe.”

U.S. Stocks Erase Early Loss Amid Improving Sales at Retailers, Carmakers (Source: Bloomberg)
U.S. stocks erased an early loss to finish little changed, leaving the Dow Jones Industrial Average at the highest level since July, as improving sales at retailers and carmakers helped offset lower-than-forecast factory orders. Ford Motor Co. (F) rose 1.5 percent after carmakers reported December sales that beat analysts’ estimates, capping the industry’s best year since 2008. Home Depot Inc. (HD), Lowe’s Cos. and Starbucks Corp. advanced at least 1.4 percent after the International Council of Shopping Centers increased its estimate for December retail-sales growth. Yahoo! Inc. (YHOO) lost 3.1 percent after appointing Scott Thompson chief executive officer. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,277.30 at 4 p.m. New York time, after dropping as much as 0.7 percent earlier. The benchmark index is at its highest level since Oct. 28. The Dow added 21.04 points, or 0.2 percent, to 12,418.42 today.

Stocks Retreat in Europe Amid Debt Concern; Vestas, UniCredit Lead Decline (Source: Bloomberg)
European stocks (SXXP) retreated from a five-month high as UniCredit (UCG) SpA’s rights offer boosted concern that banks will need to raise more capital to weather the region’s debt crisis. UniCredit, Italy’s largest lender, slid the most in more than two decades after setting a 43 percent price discount for the rights offer. Vestas Wind Systems A/S (VWS), the world’s biggest wind-turbine maker, slumped 19 percent after cutting its revenue and profit forecasts. Next Plc (NXT) dropped 3.1 percent as the U.K.’s second-largest clothing retailer reported sales that missed analyst estimates. The Stoxx Europe 600 Index (SXXP) fell 0.6 percent to 249.62 at the close in London, snapping a four-day rally. The measure rose to the highest level since Aug. 3 yesterday after a report showed that U.S. manufacturing expanded in December at the fastest pace in six months. The gauge lost 11 percent last year.

Shares, euro dip on Europe;French bond auction eyed
TOKYO, Jan 5 (Reuters) - Asian shares and the euro eased on Thursday as concerns about the ability of euro zone countries to refinance their huge public debt dampened investor risk appetite ahead of a French bond auction later in the day.
"Europe still lacks a credible mechanism to rekindle growth, and without growth the crisis can only intensify," said Russell Jones, analyst at Westpac Bank.

Fed Primary-Dealer Survey Predicts Rate Increase in Second Quarter of 2014 (Source: Bloomberg)
The Federal Reserve Bank of New York’s survey of primary dealers conducted before policy makers’ Dec. 13 meeting showed the firms expected the Fed to raise its benchmark interest rate during the second quarter of 2014. Respondents saw a 45 percent chance the first rate increase would occur in the second quarter of 2014 or later, according to the results posted today on the New York Fed’s website. The median among the predictions for the timing of the first increase was the second quarter of 2014, the bank said in a statement. The Fed has kept its benchmark interest rate near zero since December 2008. The December survey asked primary dealers the probability that central bankers would make changes to their public communications within the next year. Fed officials decided at the last meeting of the Federal Open Market Committee to start publishing their own forecasts for the central bank’s key interest rate, according to minutes of the gathering released yesterday.

Inventory Restocking to Propel U.S. Manufacturing in Early 2012: Economy (Source: Bloomberg)
The need to rebuild depleted inventories may supersede spending on business equipment as the catalyst propelling gains in U.S. manufacturing in early 2012. Orders (CGNOXAI%) for non-defense capital goods excluding aircraft, a measure of future corporate investment, dropped 1.2 percent in November, the biggest decline in 10 months, according to Commerce Department data today. A report yesterday showed a gauge of stockpiles at factories’ customers slumped in December to a seven-month low. Bookings by retailers like Macy’s Inc. (M) and Target Corp. may increase after holiday sales climbed more than forecast, putting to rest concern that the world’s largest economy was tipping back into a recession. At the same time, the expiration of a 100 percent depreciation allowance for equipment purchased in 2011 probably pulled some sales into last year.

Revealing Interest Rate Forecasts Advances Bernanke Transparency Campaign (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke is betting that announcing Federal Reserve officials’ own forecasts for borrowing costs will make monetary policy more effective while also supporting the two-year expansion. A decision to reveal forecasts for the federal funds rate starting this month represents the biggest step toward openness since Bernanke took office in 2006 promising greater transparency, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. and a former Fed board economist. The central bank didn’t even start announcing changes in interest rates until 1994. “This is a complete 180-degree shift from the old mysterious-institution approach,” said Ethan Harris, co-head of global economic research at Bank of America Merrill Lynch in New York. “There’s been a steady move toward opening up the central bank to outside scrutiny and trying to explain to the public the logic of what they’re doing.”

China’s Home Prices Slide Amid Speculation of Reserve Ratio Cut: Economy (Source: Bloomberg)
China’s home prices fell for a fourth month in December after the government reiterated plans to maintain property curbs, according to SouFun Holdings Ltd. (SFUN) Residential prices dropped 0.25 percent last month from November, said SouFun, the nation’s biggest real estate website owner. Prices slid in 60 out of 100 cities tracked by the company, including all of the country’s 10 biggest cities such as Shanghai and Beijing, it said in an e-mailed statement today. The government said last month at an annual economic planning meeting that it won’t back away from real-estate industry curbs this year that are damping home sales and pulling down prices. The nation’s financial center of Shanghai and some other Chinese cities have also said they will continue to impose the home purchase restrictions this year.

Slowing Inflation May Give ECB Room to Maneuver on Interest Rates: Economy (Source: Bloomberg)
Euro-region inflation (ECCPEMUY) slowed for the first time in five months in December, giving the European Central Bank room to lower borrowing costs further as the economy edges toward a recession. The inflation rate (ECCPEMUY) in the 17-nation euro area fell to 2.8 percent from 3 percent in November, the European Union’s statistics office in Luxembourg said in an initial estimate today. Euro-area services and manufacturing output contracted less than initially estimated last month and French consumer spending unexpectedly declined in November from October, separate reports showed. Europe’s economy (EUGNEMUQ) is showing increasing signs of a slowdown as governments struggle to contain the region’s debt crisis, adding pressure on the ECB to lower the benchmark interest rate from the current 1 percent, which matches a record low (EURR002W). Economists at IHS Global Insight and ABN Amro forecast the central bank will cut borrowing costs as low as 0.5 percent to fight a recession.

Euro-Area Manufacturing, Services Contract Less Than Initially Estimated (Source: Bloomberg)
Euro-area services and manufacturing output contracted less than initially estimated in December, led by Germany, the region’s largest economy, where output reached a four-month high. A euro-area composite index (ECPMICOU) based on a survey of purchasing managers in both industries rose to 48.3 from 47 in November, London-based Markit Economics said in an e-mailed report today. That’s above an initial estimate of 47.9 on Dec. 15. A reading below 50 indicates contraction. The German composite output gauge rose to 51.3 from 49.4. Europe’s economy is edging toward a recession as governments toughen budget cuts to contain the region’s debt crisis just as global demand for exports falters. The International Monetary Fund may cut its 2012 global growth forecast this month after lowering it to 4 percent in September, when it predicted “severe” repercussions if Europe fails to contain its crisis.

French Consumer Spending Declines on Unemployment, European Growth Outlook (Source: Bloomberg)
French consumer spending (FRSNMANM) slid in November as surging joblessness and concern about the European debt crisis prompted households to cut back. Spending fell 0.1 percent from October, when it rose a revised 0.1 percent, national statistics office Insee said today in an e-mailed statement. Spending fell 2.1 percent from the year-earlier period. Stagnant household demand reflects concern about earning prospects amid rising joblessness and mounting concern that the euro area is entering a recession. President Nicolas Sarkozy’s renewed effort to trim the budget deficit at a time when Europe’s debt crisis is hurting confidence may restrain spending growth in the months ahead, economists have said.

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