DJIA chart reading : correction range bound little upside biased.
Hang Seng chart reading :
side way range bound little downside biased.
LONDON, July 18 (Reuters) - World stocks and the euro fell while gold hit record highs as disappointment over financial health checks on European banks and escalating U.S. and euro zone debt problems sent investors scrambling for safe haven assets.
Some banking shares took a fresh beating after the stress test results released late on Friday failed to address the potential for a Greek sovereign default], which many economists expect to happen in some form.
Ratings agencies rattle cages in U.S., Europe
NEW YORK, July 17 (Reuters) - The credit ratings agencies are again angering governments, but this time they are taking on the big fish of the world economy.
From Washington to Brussels, Moody's, Standard & Poor's and Fitch have added to the intense pressure on governments trying to deal with crushing sovereign debt.
Most Asian Stocks Decline on U.S., Europe Debt Crisis (Source: Bloomberg)
Asian stocks swung between gains and losses on concern U.S. lawmakers will fail to reach a deal on the country’s debt limit and Europe’s worsening crisis will slow the global economic recovery. Gold producers rose as the precious metal climbed to a record.
Republicans Pressing for a Balanced Budget Fail to Deliver Details on How (Source: Bloomberg)
Congressional Republicans are clear in their demand for a constitutional amendment forcing the government to balance its budget. What they’re not offering is clarity on how to get there. It’s politically popular to line up behind such an amendment; laying out specific cuts is less appealing. Almost all Republicans and some Democrats will vote to alter the Constitution when the issue comes up as early as this week. Almost none, including a leading co-sponsor of the Senate measure, Orrin Hatch, and Bill Flores of Texas, a co-sponsor of the House measure, say how they’d slash Medicare, eliminate federal programs or shrink education, law enforcement or national defense. Republicans agree that tax increases shouldn’t be part of the equation.
Global Demand for U.S. Assets Rose $23.6B in May (Source: Bloomberg)
Global demand for U.S. stocks, bonds and other financial assets rose in May from a month earlier as China and Japan added to their holdings of government securities, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled $23.6 billion during the month, compared with net buying of $30.6 billion in April, according to statistics issued today in Washington. Including short-term securities such as stock swaps, foreigners sold a net $67.5 billion compared with net buying of $66.6 billion the previous month. The reporting on long-term securities is a gauge of confidence in U.S. economic policy, and today’s data suggest the country offers safety from the economic crisis in Europe even with the White House and Congress at odds over raising the Treasury’s borrowing authority.
Homebuilder Confidence in U.S. Rises More Than Estimated, NAHB Index Shows (Source: Bloomberg)
Confidence among U.S. homebuilders improved in July from a nine-month low as executives turned less pessimistic on the outlook for sales. The National Association of Home Builders/Wells Fargo sentiment index climbed to 15 this month, higher than forecast, from 13 in June, data from the Washington-based group showed today. The median projection of economists surveyed by Bloomberg News was for a gain to 14. “It’s still at a very low level,” Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York, said about the homebuilders’ measure. “In order to see a brighter future for housing, we need to see a stronger economy.”
Gloomy U.S. consumers cast dark cloud over economy
WASHINGTON, July 15 (Reuters) - U.S. consumer confidence hit a near 2-1/2 year low in early July and manufacturing output stalled in June, further frustrating expectations of a quick economic growth rebound in the second half of the year.
Worries about stubbornly high unemployment pushed the Thomson Reuters/University of Michigan's index of consumer sentiment to 63.8, the lowest since March 2009, a report showed on Friday. Economists had expected the index to climb to 72.5 from 71.5 in June.
U.S. Stocks Decline on Concern Over Debt-Ceiling Talks; Bank Shares Tumble (Source: Bloomberg)
U.S. stocks fell, pushing the Standard & Poor’s 500 Index to its worst seven-day period in more than a month, amid concern lawmakers will fail to reach a deal on the nation’s debt limit two weeks before a deadline. Financial shares slumped the most among 10 S&P 500 industry groups, with European leaders planning a summit this week as they seek to contain the region’s debt crisis. News Corp. fell 4.3 percent after two people familiar with the matter said independent directors are questioning whether a leadership change is needed after a phone-hacking scandal. LinkedIn Corp. slid 6.9 percent after JPMorgan Chase & Co. cut its rating.
Treasury Five-to-30 Spread Near Widest This Year on Debt Ceiling Concern (Source: Bloomberg)
The spread between five- and 30-year Treasury yields was near the widest since November as U.S. officials struggled to reach agreement on how to raise the debt ceiling to avoid a default.
China’s New Home Prices Accelerate Gains in Shanghai, Beijing Last Month (Source: Bloomberg)
New home prices rose in 67 Chinese cities in June, with growth in Beijing and Shanghai accelerating for the first time since the government stepped up efforts this year to curb growth. In Beijing, new home prices rose 2.2 percent last month from a year earlier, compared with 2.1 percent in May, while in Shanghai they climbed 2.2 percent, compared with 1.4 percent growth the previous month, the statistics bureau said on its website today.
China researcher sees more rate rises to cool prices
BEIJING, July 18 (Reuters) - China could raise interest rates in coming months as it keeps monetary policy tight to tame inflation that is running at three-year highs and is still the biggest threat to its economy, a researcher at a government think-tank said.
Chen Dongqi, deputy chief at the Academy of Macroeconomics Research, said he expects China's consumer inflation to quicken to 6.5 percent in July from June's three-year
peak of 6.4 percent, before easing to 4.5 percent by December.
Japan Stocks Fall Amid U.S., European Debt Concerns; Honda, Canon Decline (Source: Bloomberg)
Japanese stocks fell on concern U.S. lawmakers will fail to reach a deal on the country’s debt limit two weeks before a deadline and Europe’s worsening crisis will slow the global economic recovery.
Japan Quake Work Trails 1923 Effort on ‘Crazy’ Politics, Kan Adviser Says (Source: Bloomberg)
Japan’s rebuilding is lagging behind the nation’s responses to the Tokyo earthquake of 1923 and Kobe’s 1995 disaster because of political infighting, the head of the reconstruction committee said. “The obstacle to reconstruction is politics,” Makoto Iokibe, the chairman of the government-appointed panel, said in a July 15 interview in his Tokyo office. “It’s absolutely crazy,” Iokibe, 67, said. The March 11 earthquake and tsunami that left more than 20,000 people dead or missing should be serving as a catalyst for reinvigorating the world’s third-largest economy, according to Iokibe. Instead, politicians are focused on the future of embattled Prime Minister Naoto Kan rather than reconstruction, the adviser said.
Japan Stocks Top World as Factory Output Gains With Toyota (Source: Bloomberg)
Equities in Japan are rising more than any other developed country on speculation earnings will improve as the country recovers from its strongest earthquake. The Nikkei 225 Stock Average climbed 2.9 percent since the start of June, posting the biggest increase among 24 developed countries in the MSCI World Index, according to data compiled by Bloomberg. Toyota Motor Corp. climbed 4.9 percent since June 17 after saying production is rebounding faster than forecast. A measure of transport-equipment makers in the broader Topix index rose 3.6 percent as the government said June 29 that May industrial production expanded the most in 50 years.
South Korea Will Ban Finance Companies From Kimchi Debt for Local Projects (Source: Bloomberg)
South Korea said it will prohibit financial companies from buying foreign-currency bonds sold by local issuers for domestic use as the government seeks to curb external debt and gains in the won. “Our message is that local firms should raise funds in won when they use the money here,” Kim Han Soo, head of the international planning and coordination team at the Bank of Korea, told reporters in Seoul. The regulation takes effect on July 25, the central bank said in a statement today.
India Government Sees Growth Imperiled With Rising Greek-Like Tax Evasion (Source: Bloomberg)
As Rama Murthy completes the sale of his three-bedroom apartment in the southern Indian city of Hyderabad, he accepts from the buyer a bag full of rupees -- a part of the purchase price the tax man will never see. “Almost 40 percent of the sale price I got in hard cash,” said Murthy, 39, who works at a software maker. “It’s illegal, but it’s rampant in India to avoid paying tax.”
Asia Crisis Veteran Zeti Sees Region Surviving Risk (Source: Bloomberg)
Asia’s rising domestic demand and strengthened financial systems have made the region more resilient to global shocks even as slowing U.S. growth and the European debt crisis pose threats, Malaysia’s central bank Governor Zeti Akhtar Aziz said. Another global recession is unlikely and risks to growth probably won’t materialize, Zeti said in an interview in Jakarta late yesterday. The chance of an economic contraction is less in Asia, said Zeti, one of the region’s longest-serving governors who oversaw Malaysia’s monetary and currency responses to the Asian financial crisis more than a decade ago. “Right now, yes, there are risks but we don’t envisage these risks to materialize,” Zeti said. “Many of us recognized after the 1990s how vulnerable we were, when we were so export- led. Many of us now have promoted domestic demand and this has become more significant. We have a better chance of dealing and managing those risks.”
Germany Says It's Confident EU to Reach Agreement on Second Greek Bailout (Source: Bloomberg)
Germany said it’s confident that European leaders will reach agreement on funding a second Greek bailout at a July 21 summit, as investors sell Spanish and Italian bonds on concern that the crisis is spreading. “We must master this challenge,” Steffen Seibert, Chancellor Angela Merkel’s chief spokesman, said in Berlin today. “The way the chancellor sees it, the specific meeting this Thursday is about agreeing precisely on the main points of a new program for Greece, with all relevant details.”
Euro Trades Near One-Week Low Before Debt Summit, Australian Dollar Gains (Source: Bloomberg)
The euro was 0.6 percent from its lowest level in a week against the dollar on concern European leaders will be unable to agree on steps to contain the region’s debt crisis at a summit this week. The Swiss franc was 1.4 percent from a record versus the euro before Spain and Greece sell as much as 5.75 billion euros ($8.1 billion) of bills today amid concern surging bond yields threaten to boost financing costs. Australia’s dollar rose against the U.S. currency for the first time in four days before its central bank releases minutes of the July meeting when policy makers left interest rates unchanged.
WORLD FOREX: Euro Stalls As EU Summit Looms
LONDON (Dow Jones)-- The euro held above $1.40 in European foreign exchangetrade Monday as the focus switched to an emergency summit of euro-zone leadersscheduled for Thursday, having drifted down in the wake of Friday's euro-zonebank stress test results.
The examinations didn't test banks for the possibility of a sovereign debtdefault and that has left markets nervous ahead of the long-awaited summit,with pressure mounting for a new Greek bailout agreement that avoids a defaultand stems the growing contagion to other indebted parts of the region.
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