DJIA chart reading : pullback correction downside biased.
Hang Seng chart reading : pullback correction downside biased.
Asian Stocks Rise; Commodity Producers Gain(Source: Bloomberg)
Asia stocks rose, driving the regional benchmark index to its best performance in a week, as raw material producers increased after oil and copper prices rallied. Mitsubishi Corp. (8058), the Japanese trading company that gets about 40 percent of sales from commodities, gained 0.9 percent in Tokyo. Rio Tinto Group, the world’s second-biggest mining company by sales, climbed 1.8 percent. Bigger rival BHP Billiton Ltd. (BHP) advanced 1.8 percent after Deutsche Bank AG upgraded basic resources to “overweight” and named BHP among its top picks. Canon Inc. (7751), the world’s largest camera maker, jumped 5.1 percent on its plan to buy back shares.
OECD sees growth firm, but risks abounding
PARIS, May 25 (Reuters) - Global economic recovery is on track, helped by a stronger United States, but threats ranging from high oil prices to European sovereign debt crises could yet combine to create a bout of stagflation, the OECD said on Wednesday.
The Paris-based Organisation for Economic Co-operation and Development said the U.S. and euro area economies were growing faster than expected in forecasts six months ago, although Japan's economy was set to contract after the March earthquake, tsunami and nuclear crisis.
Container Leasing Surge Shows Global Economy Accelerating: Freight Markets(Source: Bloomberg)
The global trade rebound is pushing shipping lines to rely more on leasing companies such as CAI International Inc. and TAL International Group Inc. for the containers used to transport everything from bananas to blouses. “We’re seeing perfect conditions,” Brian Sondey, president and chief executive officer of Purchase, New York- based TAL, said in an interview. “Relatively strong growth in trade creates a good level of need for containers, supply is very tight and shipping lines aren’t purchasing as many containers as in the past.”
Durable-Goods Orders in U.S. Dropped 3.6% in April, the Most in Six Months(Source: Bloomberg)
Orders for U.S. durable goods dropped more than forecast in April, reflecting a slump in aircraft demand and disruptions in supplies of auto parts stemming from the earthquake in Japan.
Home Prices in U.S. Fell 5.5% in First Quarter, Biggest Drop in Two Years(Source: Bloomberg)
U.S. home prices dropped 5.5 percent in the first quarter from a year earlier, the biggest decline in almost two years, as sales of discounted foreclosures undermined real estate values. Prices fell 2.5 percent from the fourth quarter, the Washington-based Federal Housing Finance Agency said today in a report. Economists projected a 1.2 percent drop from the previous three months, according to the median of five estimates in a Bloomberg survey.
US new home sales rise, but signal no recovery yet
WASHINGTON, May 24 (Reuters) - Sales of newly built U.S. single-family homes rose for a second straight month in April and supply was the lowest in a year, but an overhang of previously owned houses on the market could hobble recovery.
The Commerce Department said on Tuesday sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest since December, also giving prices a lift.
Deficit May Snap 12-Year Tax Winning Streak for Top-Earning Americans(Source: Bloomberg)
The year 2013 may snap a 12-year winning streak for wealthy Americans on taxes due on income, capital gains, dividends and giving money to their heirs. The U.S. deficit, forecast by the nonpartisan Congressional Budget Office to reach a two-year cumulative total of $2.5 trillion in 2012, has prompted calls by some in President Barack Obama’s administration, Congress and a bipartisan commission to limit tax breaks for home mortgage interest, charitable contributions, municipal bonds and retirement contributions.
Food Inflation Accelerating as Nestle, McDonald’s React to Commodity Surge(Source: Bloomberg)
U.S. food-price inflation may top the government’s forecast as higher crop, meat, dairy and energy costs lead companies including Nestle SA, McDonald’s Corp. (MCD) and Whole Foods Market Inc. (WFMI) to boost prices. Retail-food prices will jump more than the U.S. Department of Agriculture’s estimate of 3 percent to 4 percent this year, said Chad E. Hart, an economist at Iowa State University in Ames. Companies will pass along more of their higher costs through year-end, said Bill Lapp, a former ConAgra Foods Inc. chief economist.
‘Major Tornado Outbreak’ Seen for Midwest(Source: Bloomberg)
A “major tornado outbreak” brewing across nine states in the central U.S. is adding to insured losses that may already have reached $6.5 billion this season, according to an industry group. Tornadoes and thunderstorms have caused at least $3 billion in insured losses and perhaps more than double that, said Robert Hartwig, president and economist at the Insurance Information Institute in New York.
U.S. Stocks Snap Three-Day Drop as Commodity Producers Advance(Source: Bloomberg)
U.S. stocks advanced, with benchmark indexes snapping a three-day decline, as commodity shares rallied on expectations for higher raw material prices. Occidental Petroleum Corp. (OXY) and Halliburton Co. (HAL) gained at least 1.6 percent as oil climbed following a report showing that U.S. distillate fuel supplies dropped to a two-year low. Freeport-McMoRan Copper & Gold Inc. (FCX) advanced 2.4 percent as copper rose after Deutsche Bank AG said prices are likely to rebound. Fifth Third Bancorp and BB&T Corp. (BBT) increased more than 1 percent after Fitch Ratings said it probably won’t downgrade German banks because of their holdings of Greek debt.
China power crunch to worsen as drought slashes hydro output
BEIJING, May 25 (Reuters) - The worst drought to hit central China for half a century has brought water levels in some of the country's biggest hydropower producing regions to critical levels and could exacerbate electricity shortages over the summer.
The official Xinhua news agency said on Wednesday that the water level at the world's biggest hydropower plant at the Three Gorges Dam has fallen to 152.7 metres, well below the 156-m mark required to run its 26 700-megawatt turbines effectively.
BOJ Signals Readiness to Boost Lending as Exports Tumble Most Since 2009(Source: Bloomberg)
The Bank of Japan indicated its willingness to expand lending programs to support reconstruction efforts after the nation’s record March 11 earthquake crippled factory production and pushed the economy into a recession.
Japan’s Nikkei Index Rises Most in Three Weeks on Commodities(Source: Bloomberg)
Japanese stocks rose, sending the Nikkei 225 Stock Average to its biggest gain in more than three weeks, after oil and copper prices increased and as the yen weakened.
U.K. Economy Expanded 0.5% in First Quarter as Export Growth Accelerated(Source: Bloomberg)
U.K. exports helped the economy resume growth in the first quarter and outweighed the biggest slump in company investment and consumer spending in almost two years. Exports rose 3.7 percent in the quarter and net trade added a record 1.7 percentage points to gross-domestic-product growth, the Office for National Statistics said today in London. Consumer spending dropped 0.6 percent and company investment plunged 4.4 percent. GDP rose 0.5 percent on the quarter and 1.8 percent from a year earlier, matching initial estimates.
Australian Dollar Rebounds From Six-Week Low Versus Greenback Before Capex(Source: Bloomberg)
Australia’s dollar rebounded from the weakest level in six weeks versus the greenback before a report economists said will show the nation’s business investment increased to a record in the first quarter.
Euro Gains Versus Dollar, Yen on Interest Rates Outlook, as Stocks Climb(Source: Bloomberg)
The euro gained versus the dollar and the yen on prospects the European Central Bank will be quicker than its counterparts to raise interest rates and as stocks advanced.
FOREX-Debt concerns pound euro to record low vs CHF
LONDON, May 25 (Reuters) - The euro suffered broadly on Wednesday, plumbing a record low versus the Swiss franc as Greece's struggle for political consensus to salvage its finances underlined the possibility that the euro zone debt crisis will knock the single currency lower. Finland's approval of an EU/IMF bailout for Portugal helped the euro to pare some losses versus the dollar, but did little to stop the euro from falling to 1.2298 francs, the weakest since the single currency was launched in 1999.
Demand from hedge funds also prompted a short squeeze in the single currency versus the dollar, but analysts say the euro is tainted by ongoing uncertainty surrounding the euro zone debt crisis, and that a fall below $1.40 is imminent.
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