DJIA chart reading : side way range bound little upside biased.
Hang Seng chart reading : correction range bound little downside biased.
Stocks, euro rise betting Greece to avoid bankruptcy
LONDON, June 29 (Reuters) - Equities gained and the euro rose on Wednesday as investors bet on the ability of Greece's government to pass new austerity measured designed to prevent the country from going bankrupt.
"A lot of work has been done behind the scenes to ensure that the proposals get passed, and that optimism is getting reflected," said Graham Bishop, equity strategist at RBS.
Asian Stocks Rise as Greece Votes for Austerity (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index headed for its highest close in a month, after Greece passed austerity measures needed to secure financial aid, easing concern the country will suffer a default that could destabilize the banking system. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second- biggest publicly traded bank, gained 1.2 percent in Tokyo. Commonwealth Bank of Australia (CBA), the nation’s biggest lender by market value, added 0.9 percent in Sydney. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, increased 0.7 percent after crude and metal climbed.
U.S. Stocks Rise, S&P 500 Has Biggest Three-Day Gain Since March on Greece (Source: Bloomberg)
U.S. stocks rose, giving benchmark indexes the biggest three-day gain since March, as Greece passed austerity measures and the Federal Reserve moved to set a less- severe limit on debit-card swipe fees than previously proposed. Visa Inc. (V) and MasterCard Inc. (MA), the biggest consumer-payment networks, jumped more than 11 percent, as the Fed moved to cap debit-card transaction fees at 21 cents. Bank of America Corp. (BAC) advanced 3 percent after agreeing to pay $8.5 billion to resolve claims over soured mortgages. Monsanto Co. (MON), the largest seed company, climbed 5 percent after net income jumped 77 percent. U.S. Steel Corp. paced a rally in steelmakers, rising 5.9 percent, as Deutsche Bank AG predicted demand rebound.
Pending Sales of U.S. Existing Homes Rise by 8.2%, Almost Triple Forecasts (Source: Bloomberg)
The number of contracts to buy previously owned U.S. homes rose almost three times as much as forecast as falling prices made properties more affordable. The surprising 8.2 percent increase in the index of pending home resales from April followed a revised 11 percent drop the prior month, the National Association of Realtors said today in Washington. Economists forecast a 3 percent gain, according to the median estimate in a Bloomberg News survey. While the measure of contract signings has been volatile this year, last month’s index level is 0.1 point lower than the January figure, indicating residential real estate has made little headway. Foreclosures, unemployment at 9.1 percent and stringent loan terms are holding back demand even as a decline in home prices attract some buyers.
BofA Settles Soured Mortgages for $8.5 Billion (Source: Bloomberg)
Bank of America Corp. (BAC), the biggest U.S. bank, agreed to pay $8.5 billion to resolve claims made by bondholders including BlackRock Inc. (BLK) over soured mortgages. The lender rose as much as 4 percent in New York trading. The settlement will contribute to a second-quarter loss of $8.6 billion to $9.1 billion, or 88 cents to 93 cents a share, the Charlotte, North Carolina-based bank said today in a statement. Bank of America also said it will add $5.5 billion to a liability reserve for future loan-repurchase demands in the quarter and post $6.4 billion in other charges including legal costs and a writedown of mortgage-unit goodwill.
Moody’s Sees U.S. Rating Cut to Aa On Default (Source: Bloomberg)
Standard & Poor’s will cut the U.S. credit rating to its lowest level and Moody’s Investors Service said it would reduce its ranking if the government fails to increase the debt limit, leading to a default. S&P would lower its sovereign top-level AAA ranking to D, the last rung on its scale, John Chambers, chairman of the company’s sovereign rating committee, said in an interview yesterday. Moody’s said it would probably assign a level in the Aa range.
Fed’s Raskin Says Income Inequality Hinders Economy’s Ability to Recover (Source: Bloomberg)
Federal Reserve Governor Sarah Bloom Raskin said the financial inequality resulting from stagnating incomes for most Americans and rapid growth in wealth for the richest 1 percent is hindering the U.S. economic recovery. “This inequality is destabilizing and undermines the ability of the economy to grow sustainably and efficiently,” Raskin said today to a forum in Washington sponsored by the New America Foundation. The disparities help “drag down maximum economic growth and are anathema to the social progress that is part and parcel of such growth,” she said.
Clinton Says U.S. Lacks Long-Term Planning Needed for Success (Source: Bloomberg)
Former President Bill Clinton opened a conference on job creation by saying the U.S. lacks the long- term budgeting and planning needed to be as successful as it could be on the global stage. “We’ve gotten ourselves in a position where we’re spending too much money on today and yesterday, and not money enough on tomorrow,” he said during the first panel discussion at the Clinton Global Initiative’s two-day conference in Chicago. “We’re borrowing too much, so that once the economy picks up, we’re creating tomorrow’s problem.”
IMF Urges U.S. Debt-Ceiling Increase to Avoid a ‘Severe Shock’ to Economy (Source: Bloomberg)
The International Monetary Fund said today global markets will suffer if the U.S. Congress fails to approve an increase in the $14.3 trillion debt ceiling and cautioned about the risk of a downgrade in the country’s credit rating. “The federal debt ceiling should be raised expeditiously to avoid a severe shock to the economy and world financial markets,” the IMF said in a report on the U.S. economy. The report said a failure to reach a budget and debt compromise could result in a “sudden increase in interest rates and/or a sovereign downgrade.”
Japan May factory output jumps by most in nearly 60 years
TOKYO, June 29 (Reuters) - Japanese factory output jumped by the most in almost 60 years in May as manufacturers restore supply chains damaged by the massive earthquake and tsunami in March, the latest evidence the economy is headed for a "V-shaped" recovery from the disaster.
Manufacturers, however, forecast smaller gains in output in coming months as they adjust production schedules to cope with possible electricity shortages in the summer.
Japanese Stocks Swing Between Gains, Losses on Greek Vote, Yen Advance (Source: Bloomberg)
Japanese stocks swung between gains and losses after Greece passed austerity measures needed to secure aid from the European Union, while the yen strengthened, cutting the value of export earnings. Canon Inc., a camera maker that gets more than 80 percent of its sales abroad, dropped 0.9 percent. Honda Motor Co., Japan’s second-biggest carmaker by sales, fell 1.1 percent. Nintendo Co., maker of Wii game consoles, slid 1.6 percent.
South Korea Raises Inflation Forecast to 4% While Cutting Growth Estimate (Source: Bloomberg)
South Korea’s inflation will exceed President Lee Myung Bak’s target this year and growth will be slower than previously forecast after global demand weakened and energy costs climbed, Finance Ministry forecasts showed today. Consumer prices are expected to rise 4 percent, the ministry said in a statement, exceeding its initial 3 percent projection. The government also lowered its estimate of economic growth to 4.5 percent from the 5 percent it projected last December.
Euro Climbs to Two-Week High Versus Dollar on Rate Prospects; Aussie Rises (Source: Bloomberg)
The euro rose to a two-week high against the dollar on prospects the European Central Bank will increase interest rates next week and as the immediate risk of default by Greece subsided. The common currency advanced against most of its major counterparts before a report forecast to show European consumer prices accelerated in June, adding to the case for the ECB to raise rates at its July 7 meeting to curb inflation. The central bank’s President Jean-Claude Trichet said on June 28 policy makers are in “strong vigilance mode.” Australia’s dollar touched a two-week high before a report forecast to show bank lending expanded.
Deficit Concerns Push Rupee to First Loss in Four Quarters: India Credit (Source: Bloomberg)
India’s decision to scrap import duties on crude oil is stoking concern that the government will fail to rein in its budget deficit, depressing the rupee and pushing up yields on government debt. The currency is headed for its first quarterly loss in a year, after weakening 0.6 percent against the dollar since March 31, the worst performance in Asia after the Thai baht’s 1.7 percent decline, according to data compiled by Bloomberg. Yields on 10-year government bonds have climbed 13 basis points from a six-week low of 8.19 percent on June 20.
FOREX-Euro edges up as Greek austerity vote seen passing
LONDON, June 29 - The euro edged higher on Wednesday, supported by expectations that the Greek parliament would vote in favour of an austerity package, though wariness that this would only be a short-term solution to the country's debt problems limited gains.
Traders said a positive outcome in the vote, which would allow funding for Greece to be released and avoid a disorderly default, could push the euro towards $1.4500, though concerns would remain about whether Greece can implement the measures.
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