DJIA chart reading : correction range bound upside biased.
Hang Seng chart reading : side way range bound.
Asian Commodity Stocks Drop on U.S. Concern (Source: Bloomberg)
Asian commodity stocks dropped as oil and metal prices fell after U.S. Federal Reserve Chairman Ben S. Bernanke said he won’t act immediately to stimulate the world’s biggest economy, which was placed on Creditwatch negative by Standard & Poor’s. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, sank 1.9 percent. Woodside Petroleum Ltd. (WPL), the nation’s second-biggest oil and gas producer, lost 1.6 percent in Sydney. Mitsubishi Corp. (8058), Japan’s largest commodities trader, dropped 0.3 percent in Tokyo. Japanese utility stocks advanced.
Moody's U.S. warning hurts stocks, dollar
LONDON, July 14 (Reuters) - Rating agency Moody's warning that the U.S. economy's top credit ranking may be in danger weakened world stocks , hit the dollar and helped push gold to a record high.
"The U.S. debt situation is annoying. It's politics pure and simple. I guess they'll get out of it in time so no harm will be done," said Koen De Leus, strategist at KBC Securities.
Geithner Says No More Time for Debt Talk (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner warned lawmakers there’s no possible extension to the time limit to raise the federal debt ceiling as Standard & Poor’s put the U.S. sovereign rating on watch for a downgrade. There’s “no way to give Congress more time” on lifting the debt limit, Geithner said after meeting with Democratic lawmakers on Capitol Hill in Washington. He has repeatedly said U.S. borrowing authority will end on Aug. 2 without congressional action. Geithner’s remarks suggested the Treasury Department is approaching the end of its efforts to shift federal cash flows to avert a breach of the mandated borrowing limit. S&P today joined Moody’s Investors Service in warning that the nation may lose its top AAA rating, saying that there’s a “small, though increasing” risk of a default on U.S. debt obligations.
Bernanke: No Plans Now for Bond Purchases (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke told Congress that the central bank isn’t currently ready to embark on a third round of government bond-buying to stimulate the economy. “We’re not prepared at this point to take further action,” Bernanke said today, in response to a question from Senate Banking Committee Chairman Tim Johnson, a Democrat from South Dakota. Johnson asked Bernanke why the Fed wasn’t immediately starting a new stimulus program given the weak economic recovery and rising unemployment. Stocks fell, driving the Standard & Poor’s 500 Index to the lowest level of the month. The S&P declined 0.7 percent to 1,308.89 at 3:17 p.m. in New York after rising as much as 0.7 percent. Gold futures pared gains after reaching a record $1,594.90 an ounce.
Retail Sales in U.S. Stagnate as Rising Unemployment Keeps Consumers Away (Source: Bloomberg)
Sales at U.S. retailers stagnated in June, highlighting weakness in consumer demand that accounts for 70 percent of the economy. Purchases rose 0.1 percent, the Commerce Department said today in Washington. Sales excluding autos were little changed, the poorest performance since July 2010. Wholesale prices fell more than forecast in June on lower energy costs, the Labor Department said. Americans contending with declining home values and unemployment above 9 percent are holding back on spending, prompting retailers such as Target Corp. to sweeten discounts. Another report today showed that first-time claims for unemployment benefits fell last week to the lowest level since April, indicating dismissals may start to abate.
Bernanke Says Failure to Raise Debt Limit Would Be ‘Self-Inflicted Wound’ (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke warned lawmakers that they would cause a “self- inflicted wound” should they prompt a credit-rating downgrade by failing to raise the $14.3 trillion U.S. debt ceiling. Congress should recognize it’s “tremendously important that we have the confidence of the world in terms of willingness to hold Treasuries, to trade in Treasuries, to maintain a liquid market in Treasuries,” he said today in testimony to the Senate Banking Committee. “It’s a very important asset and losing that credit rating is, again, I think a self-inflicted wound.”
U.S. May Have Its Credit Ratings Cut by S&P (Source: Bloomberg)
The U.S. may have its AAA long-term and A-1+ short-term credit ratings cut by Standard & Poor’s Ratings Services, which said there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling. S&P put the ratings on Creditwatch negative, meaning there’s a one-in-two chance they may be cut in the next 90 days. The outlook on the AAA rating was revised to negative from stable by S&P on April 18.
Consumer Comfort in U.S. Rose Last Week on Boost in Finances (Source: Bloomberg)
Consumer confidence in the U.S. rose last week as households became more upbeat about the state of their finances and optimism climbed among wealthier Americans. The Bloomberg Consumer Comfort Index increased to minus 43.9 for the period ended July 10 from minus 45.5 the prior week. Even with the gain, which is within the survey’s 3-point margin of error, the gauge is lower than it was at the start of the year.
Moody’s Downgrade Warning Adds Pressure on U.S. Debt Deal (Source: Bloomberg)
Moody’s Investors Service raised the pressure on U.S. lawmakers to increase the government’s $14.3 trillion debt limit by placing the nation’s credit rating under review for a downgrade. The U.S., rated Aaa since 1917, was put on review for the first time since 1996 on concern the debt threshold won’t be raised in time to prevent a missed interest or principal payment on outstanding bonds and notes, even though the risk remains low, Moody’s said in a statement yesterday. The rating may be reduced to the Aa range, and there is no assurance Moody’s would restore its top rating, even if a default is quickly “cured.”
U.S. Jobless Claims Declined More Than Forecast Last Week (Source: Bloomberg)
The number of Americans filing first-time claims for unemployment benefits dropped last week to the lowest level since April, a sign weakness in the labor market may be starting to abate. Applications for jobless benefits decreased 22,000 in the week ended July 9 to 405,000, Labor Department figures showed today. Economists forecast 415,000 claims, according to the median estimate in a Bloomberg News survey. The data included fewer layoffs in the auto industry than typical this time of the year, according to an agency spokesman.
Dollar Falls as S&P Puts U.S. on Review (Source: Bloomberg)
The dollar weakened against most of its major counterparts after Standard & Poor’s became the second ratings company this week to say it may downgrade the U.S.’s top credit grade.
U.S. Stocks Fall After Bernanke Damps Speculation on Immediate Stimulus (Source: Bloomberg)
U.S. stocks fell, driving the Standard & Poor’s 500 Index to the lowest level of the month, as Federal Reserve Chairman Ben S. Bernanke said he’s not prepared to take immediate action to stimulate the economy. Raw-material producers, technology and industrial companies lost the most among the 10 main industries in the S&P 500 Index (SPX), which erased a gain of as much as 0.7 percent. Marriott International Inc. dropped 6.6 percent on a lower-than-estimated earnings forecast. JPMorgan Chase & Co. (JPM) rallied 1.8 percent after investment banking profit surged and more customers paid their credit-card bills on time.
Moody's puts U.S. ratings on review for downgrade
NEW YORK, July 13 (Reuters) - The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country's legal borrowing limit and the government misses debt payments, Moody's Investors Service warned on Wednesday.
Moody's is the first of the big-three credit rating agencies to place the United States' Aaa rating on review for a possible downgrade, meaning the agency is close to cutting the country's rating.
China Bernanke "prepared to respond" if economy worsens
WASHINGTON, July 13 (Reuters) - The U.S. Federal Reserve is ready to ease monetary policy further if economic growth and inflation slow much more, Chairman Ben Bernanke said on Wednesday, giving a boost to the bruised stock market.
While holding to a view that recent economic softness would eventually pass, he appeared less confident in that projection and more willing to entertain the possibility of another round of stimulus.
China 1st half foreign direct investment up 18.4% from a year ago. (Source: Reuters)
China to Expand Housing Curbs in Smaller Cities (Source: Bloomberg)
China will expand its efforts to curb the growth in residential prices to smaller cities after limiting home purchases in Beijing and Shanghai, according to a summary of a State Council meeting chaired by Premier Wen Jiabao. The government said so-called second and third-tier cities which have seen excessive price gains should restrict the number of homes each family is allowed to buy, according to the State Council or cabinet yesterday. China is intensifying property restrictions nationwide after developers posted gains in first-half sales and housing transactions climbed 31 percent last month, even after more curbs were added earlier this year. The central bank last week raised interest rates for the fifth time since October.
China’s Stocks Drop on Property Tightening Measures, Narrowing Week’s Gain (Source: Bloomberg)
China’s stocks fell, narrowing this week’s gains, after the government said it will expand measures to curb property-price gains to smaller cities.
China May Sustain 9% Growth Pace for 2011 With Investment Moving Inland (Source: Bloomberg)
China may maintain growth of about 9 percent this year, avoiding a “hard landing,” as spending on low-cost homes and developing inland provinces counters the impact of Europe’s debt crisis and monetary tightening. Investment by local governments and private businesses helped drive a 9.5 percent gain in second-quarter gross domestic product from a year earlier, the National Bureau of Statistics said in Beijing yesterday. That was faster than estimated as growth in industrial output and retail sales accelerated and copper and aluminum production reached records.
Japanese Stocks Advance, Led by Appliance-Retailers on Subsidy Report (Source: Bloomberg)
Japanese stocks rose, trimming declines for the week on the Nikkei 225 Stock Average, as appliance retailers gained on a report the government may revive subsidies to get consumers to buy energy-saving products.
Bank of Korea Reduces Economic Growth Forecast for 2011 on Demand Slowdown (Source: Bloomberg)
The Bank of Korea lowered its economic growth forecast for this year on an expected slowdown in domestic demand, while raising the projection of inflation to its target limit. South Korea’s economy will expand 4.3 percent, compared with the 4.5 percent growth estimated in April, the central bank said today in a statement. Consumer prices are expected to rise 4 percent, higher than the earlier 3.9 percent gain forecast.
Indian inflation quickens; another rate rise expected
NEW DELHI, July 14 (Reuters) - India's inflation quickened in June, driven by higher prices of manufactured goods and fuel, adding pressure on the central bank to raise rates this month despite signs of slowing growth in Asia's third-largest economy.
New Delhi raised local prices of diesel, cooking gas and kerosene last month to cushion its finances and provide relief to government oil companies reeling from revenue losses on state-set fuel prices, adding to inflationary pressure.
European Bank Stress Tests Compromised by Greek Non-Default, German Mutiny (Source: Bloomberg)
European regulators’ attempts to bolster confidence in the region’s banking industry today are being undermined by their unwillingness to test for a Greek default and a mutiny by Germany’s Landesbank Hessen-Thueringen. The European Banking Authority will release the results of the stress tests for 91 banks as part of an effort to reassure investors the region’s banks have sufficient capital. Helaba, as the landesbank is known, refused to allow the EBA to publish its results in full, saying the EBA’s data “would lead to a halving of the core capital without legal grounds.” German regulator Bafin has also attacked the London-based EBA. Bafin Chairman Jochen Sanio said last month the watchdog lacks “legitimacy.”
Deutsche Boerse Shareholders Approve $9.4 Billion NYSE Euronext Takeover (Source: Bloomberg)
Deutsche Boerse AG (DB1) shareholders approved its $9.2 billion takeover of NYSE Euronext, surmounting the biggest hurdle yet to gain control of the 219-year-old exchange company and create the world’s biggest bourse operator. Owners holding more than 80 percent of Deutsche Boerse shares backed the agreement, surpassing the 75 percent needed for approval, the Frankfurt-based exchange said in a statement today. The all-stock transaction will give Deutsche Boerse 60 percent of the combined entity, while NYSE Euronext Chief Executive Officer Duncan Niederauer will run the organization.
Italian, Spanish Goverment Bonds Fall After Italy Auction, Austerity Vote (Source: Bloomberg)
Italian government bonds declined after borrowing costs rose to a three-year high at a sale of five-year securities today. Greek bonds fell as Fitch Ratings cut the nation’s credit rating three levels to CCC and said default is a “real possibility.” Ireland’s yields reached records, while Spanish bonds fell. Italian Prime Minister Silvio Berlusconi won a Senate confidence vote on an austerity package aimed at taming the nation’s 1.8 trillion euro ($2.6 trillion) debt burden. “The supply is out of the way, but the picture remains unchanged,” said Michael Leister, a fixed-income analyst at WestLB AG in London. “We have still the unresolved Greek situation and contagion worries, and the risk that Italy may run into a self-sustaining spiral of funding costs. The market is pretty worried.”
FOREX-Dollar soft on QE3 speculation, debt hangover
LONDON, July 14 (Reuters) - The dollar hit a record low against the Swiss franc and a four-month trough versus the yen on Thursday on expectations of further monetary easing by the Federal Reserve and a credit warning on U.S. debt.
Ratings agency Moody's issued a warning on the United States' credit rating just hours after Fed Chairman Ben Bernanke sent the dollar tumbling by suggesting to Congress that the central bank could provide more stimulus if the economy weakened further.
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