20120425 0955 Global Market Related News.

Asian Stocks Snap Four-Day Loss on U.S. Homes Sales (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as better-than-estimated company earnings and signs the U.S. housing market is stabilizing boosted the outlook for Asian exporters. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1 percent. Samsung Electronics Co. (005930), a supplier and competitor of Apple Inc., rose 1.3 percent in Seoul after the maker of iPhones and iPads reported profit almost doubled in the three months ended March. LG Display Co. climbed 3.2 percent after the world’s second-largest maker of liquid- crystal displays said it may return to profit this quarter. “A recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 123.70 as of 9:32 a.m. in Tokyo, with about five shares rising for each that fell. The gauge has fallen 1.4 percent in the past four days as political uncertainties in Europe deepened concern governments in the region will struggled to contain the sovereign-debt crisis and amid signs China’s economy is slowing.

Japanese Stock Futures Gain on U.S. Home Sales, Earnings (Source: Bloomberg)
Japanese stocks headed for their first advance in five days as better-than-estimated earnings at companies from Shimano Inc. to Apple Inc. and signs the U.S. housing market is stabilizing boosted the outlook for exporters. Shimano Inc. jumped 3.6 percent after the bicycle parts maker’s quarterly profit more than tripled. Sharp Corp. (6753), which supplies components for Apple’s iPhone, rose 1.5 percent after the U.S. company’s net income almost doubled last quarter. Sony Corp., Japan’s biggest exporter of consumer electronics, gained 1.4 percent as the yen weakened. “In addition to a weakening yen, a recovery trend on earnings is being seen both in Japan and the U.S. at the moment, boosting markets,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”
The Nikkei 225 Stock Average (NKY) gained 1.1 percent to 9,575.83 as of 9:12 a.m. in Tokyo, with volume a third lower than the 30- day average. The broader Topix Index rose 1 percent to 812.19, with more than seven times as many shares advancing as falling.

U.S. Stocks Rise Amid Better-Than-Forecast Earnings (Source: Bloomberg)
U.S. stocks advanced, following yesterday’s decline in the Standard & Poor’s 500 Index, amid better-than-estimated earnings at companies from AT&T Inc. to 3M (MMM) Co. and as data indicated the housing market is stabilizing. AT&T, the largest U.S. telephone company, and 3M, the maker of Post-it Notes, rose at least 1.5 percent. International Business Machines Corp. added 0.7 percent after the company boosted its buyback plan by $7 billion and raised its dividend. Juniper Networks Inc. increased 7.2 percent as revenue beat analysts’ projections. Apple Inc. (AAPL) jumped 7.5 percent at 5 p.m. New York time as profit almost doubled last quarter. The S&P 500 rose 0.4 percent to 1,371.97 at 4 p.m. New York time. The Dow Jones Industrial Average added 74.39 points, or 0.6 percent, to 13,001.56. The Nasdaq Composite Index lost 0.3 percent to 2,961.60. About 6.2 billion shares changed hands on U.S. exchanges, or 7.8 percent below the three-month average.
“Stocks have room to move higher,” said David Kelly, who helps oversee about $394 billion as chief market strategist at JPMorgan Funds in New York. “Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”

Europe Stocks Rebound From Three-Month Low; Nordea Gains (Source: Bloomberg)
European stocks rebounded from a three-month low as earnings from Nordea Bank AB (NDA) to Kone Oyj (KNEBV) topped analyst estimates and sales of new homes in the U.S. exceeded forecasts. Nordea, the Nordic region’s biggest lender, rose 3.8 percent and Kone, a Finnish maker of elevators and escalators, surged 8.2 percent. TeliaSonera AB (TLSN) rallied 6.6 percent after saying it will receive 22 billion kronor ($3.3 billion) in dividends and proceeds from the sale of a stake in OAO MegaFon. Michelin & Cie. climbed 6.1 percent on increased revenue. The benchmark Stoxx Europe 600 Index (SXXP) gained 1 percent to 254.37 in London. The measure has advanced 4 percent this year as the European Central Bank disbursed 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Equities are stronger than in the fall, as central banks have moved to support the market with liquidity and removing the structural risks to banks, so markets should weather the recent turmoil better than last year,” said Hans Peterson, the chief investment officer of SEB Private Bank in Stockholm. “Investors are concerned about growth prospects, which may turn into a drag on the market, but that’s not the case yet.”

Yen Drops Versus Peers on Prospects BOJ to Add Stimulus (Source: Bloomberg)
The yen fell versus all of its 16 most-traded counterparts on speculation Bank of Japan (8301) officials will add to stimulus measures at a policy meeting this week. The yen remained lower after a one-day decline against the euro on expectations Asian stocks will climb after shares overseas rose, damping demand for haven assets. The greenback held a drop from yesterday versus the 17-nation euro before Federal Reserve policy makers conclude a two-day gathering today. The so-called Aussie dollar advanced after the first U.S. case of mad cow disease in six years increased prospects that demand for Australian beef will rise. “The yen is likely to remain weak heading into the BOJ meeting,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company. “Gains in stocks are also negative for the yen.”
The yen traded at 107.41 per euro at 9:03 a.m. in Tokyo after declining 0.5 percent to 107.32 yesterday. Japan’s currency fetched 81.39 per dollar from 81.32. The greenback was little changed at $1.3196 per euro.

FOREX-Euro subdued ahead of Dutch auction; Aussie falls
LONDON, April 24 (Reuters) - The euro steadied against the dollar on Tuesday but further gains looked unlikely ahead of a debt sale in the Netherlands that will be watched for any sign of lacklustre demand after the country's governing coalition collapsed.
"If we do not see a disaster in the bond auction the euro will be driven by this sideways movement in a range-trading environment. But the euro zone is running out of safe haven assets," said Ulrich Leuchtmann, head of FX research at Commerzbank.

Sales of New U.S. Homes Exceeded Estimates in March: Economy (Source: Bloomberg)
Demand for new U.S. homes was stronger than projected in March, showing more jobs and cheaper borrowing costs are helping stabilize the market. Houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued today in Washington. The median estimate in a Bloomberg News survey forecast a rate of 319,000. Other reports showed home prices are stabilizing and consumer confidence was little changed. Job gains, mortgage rates close to all-time lows and cheaper properties are underpinning residential real estate, which has been the economy’s weak spot. At the same time, immediate progress will be limited by distressed properties that will continue to hold down property values.
“Housing is going to gradually dig out of this deep hole because the job market is going to be firming,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the only analyst to correctly forecast the sales pace. “The one thing is the foreclosure pipeline,” Sweet said. Home values “may still have a little more room to fall, but this will probably be the year that prices find a bottom.”

Consumer Confidence in U.S. Little Changed as Outlook Cools (Source: Bloomberg)
Confidence among U.S. consumers was little changed in April as expectations over the outlook tempered increased optimism about the present. The Conference Board’s confidence index was at 69.2 com- pared to a revised 69.5 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6. The smallest increase in employment in five months may have raised concern that growth is not fast enough to reduce unemployment. The report also showed households trimmed buying plans for automobiles, homes and vacations, showing that more jobs will be needed to boost consumer spending, which accounts for about 70 percent of the economy. “Overall, consumers are more upbeat about the state of the economy, but they remain cautiously optimistic,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.

Home Prices in U.S. Cities Fell at Slower Pace in February (Source: Bloomberg)
Home prices in 20 U.S. cities dropped at a slower pace in the year ended February, pointing to stabilization in the real-estate market. The S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011, a report from the group showed today in New York. The median forecast of economists surveyed by Bloomberg News projected a 3.4 percent fall. The index climbed from the prior month on a seasonally adjusted basis for the first time since April of last year. Steadying home values are needed to lay the groundwork for a sustained rebound in the housing industry by giving prospective buyers confidence. Near record-low borrowing costs and more hiring may help the market absorb the foreclosures still in the pipeline, which may mean housing will no longer hinder economic growth. “Mortgage rates are very, very low, but you really need to see strong job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “It’s still a very long way to go before we get a full recovery.” Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in June was at 1,363.4 at 9:21 a.m. in New York, up less that 0.1 percent from yesterday’s close.

Gundlach Says Fed Won’t Preemptively Raise Rates (Source: Bloomberg)
The Federal Reserve won’t preemptively raise interest rates to suppress inflation, said Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP. “That is just not going to happen as long as we’re in this debt morass,” Gundlach said today at a conference in National Harbor, Maryland, held by the Investment Management Consultants Association, a membership group for brokers and investment advisers. “With all of this debt building up, one thing that’s been saving us is the interest rate on the debt has been collapsing,” Gundlach said. U.S. federal debt has risen to more than $15 trillion in 2011 from about $863 billion in 1980, according to the Federal Reserve. The Fed has held the federal funds rate at near zero since December 2008. In January the Federal Open Market Committee said economic conditions will probably warrant holding rates “exceptionally low” through 2014.
Raising rates would be “like shooting yourself in the head,” Gundlach said. Los Angeles-based DoubleLine manages more than $32 billion, primarily in fixed income. Treasury 10-year yields fell to 1.93 percent yesterday from about 4.64 percent five years ago, according to data compiled by Bloomberg.

Apple Profit Rises 94% on Growing Global IPhone Demand (Source: Bloomberg)
Apple Inc. (AAPL) profit almost doubled last quarter, reflecting robust demand for the iPhone in China and purchases of a new version of the iPad, allaying the growth concerns that sliced shares 12 percent in two weeks. Net income in the fiscal second quarter climbed 94 percent to $11.6 billion, or $12.30 a share, as sales rose 59 percent to $39.2 billion, Cupertino, California-based Apple said today in a statement. Analysts had predicted profit of $10.02 a share on revenue of $36.9 billion, data compiled by Bloomberg show. Chief Executive Officer Tim Cook is relying more on regions outside the U.S. for sales growth. Apple sold 35.1 million iPhones in the period after releasing the latest model in China and 21 other countries in January. That helped make up for sales declines from the previous quarter at the top U.S. mobile-phone carriers, Verizon Wireless and AT&T Inc. It also quelled speculation that Apple’s growth pace may slacken.
“This report should erase any doubt in investors’ minds that this company can’t continue to deliver,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares. “It’s astounding.”

Bank of Japan Seen Anteing Up on Stimulus as Yen Impact Fades (Source: Bloomberg)
Japan’s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a 10 trillion yen ($123 billion) expansion in asset purchases in February is fading. All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on April 27. Most expect an increase ranging from 5 trillion yen to 10 trillion yen. One dynamic that may undermine stimulus efforts is Governor Masaaki Shirakawa’s own comments, repeated in the U.S. last week, that monetary policy has only a limited role in ending deflation and supporting growth. Former Bank of Japan (8301) board member Atsushi Mizuno says investors are confused on where the central bank stands, while JPMorgan Chase & Co. says failing to ease could see the yen strengthen further.
“The BOJ will have to clearly show powerful easing amid high market expecations and elevated political pressure,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former BOJ official. “Otherwise, investors will be more confused and the view will become more widespread that there is no change in the BOJ’s passive stance.” The yen traded around 81.1 per dollar in Tokyo yesterday after sinking to an 11-month low of 84.18 on March 15. Yields for benchmark 10-year bonds fell to the lowest since October 2010 this week on easing speculation.

BOJ Should Boost Monthly Bond Buys by 20%, Ex-Board Member Says (Source: Bloomberg)
The Bank of Japan (8301) should bolster its monthly purchases of government bonds by a fifth and double its inflation target at its April 27 policy meeting, a former board member said. Governor Masaaki Shirakawa and his board should also commit to pursuing monetary easing through 2014, mirroring the U.S. Federal Reserve’s pledge to keep rates near zero, Nobuyuki Nakahara, who served on the BOJ board from 1998 to 2002, said in a statement e-mailed to Bloomberg News today. The BOJ currently buys 1.8 trillion yen ($22 billion) in government debt each month. Some ruling Democratic Party of Japan lawmakers have called on the BOJ to do more to end deflation after it pledged to buy more government debt and introduced a 1 percent inflation target in February. Simply bolstering the size of the bank’s asset- purchase fund, its main policy tool, won’t translate into meaningful increases in monetary base or the central bank’s balance sheet, Nakahara said.

BOE’s Miles Says April Vote for More Stimulus Vindicated (Source: Bloomberg)
Bank of England policy maker David Miles said his vote for more so-called quantitative easing this month still looks vindicated as the economy is weak and data today might even show it contracted in the first quarter. “The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one,” Miles said in an interview in London yesterday. “On reflection that seems to me still the right strategy.” Miles was the sole official seeking more stimulus, after his colleague Adam Posen switched his vote and policy makers said inflation may turn out faster than forecast even though the U.K. economy might be in a recession. First-quarter gross domestic product data will be released at 9:30 a.m. in London. “It seems pretty likely that right now, growth in the economy is pretty weak, probably marginally positive, but pretty weak,” Miles said. “It wouldn’t be a great surprise if the GDP number was a small negative number.”
U.K. 10-year gilts rose to an intraday high after the comments yesterday, with the yield dropping three basis points to 2.10 percent.

French Bond Yields Test Hollande’s Economic Fealty (Source: Bloomberg)
Investors are steering away from French bonds as they cast a wary eye on election frontrunner Francois Hollande’s calls to ease austerity. French government debt ranked as the third-worst performer in Europe this month after Spanish and Italian securities as of yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The decline in French bonds occurred in an anticipation of Hollande winning the first round of balloting against President Nicolas Sarkozy on April 22, which he did. “It’s not time to buy French bonds,” said Tom Elliott, a global strategist at JPMorgan Asset Management in London. “The bond market is still uncertain just how Socialist Hollande will turn out to be, or whether he will turn out to be a fairly centrist president.”
For Hollande, who leads in the polls for the decisive May 6 final round against Sarkozy, the jittery markets show investors want to be reassured of his commitment to economic rigor in the face of signs of crisis fatigue in Europe and at home. Hollande plans to reverse Sarkozy’s plan to raise the sales tax and cut labor costs. He also wants to renegotiate the euro area’s so- called fiscal pact to include a commitment to growth.