20110829 1004 Global Market Related News.

Asia Stocks Climb for Third Day (Source: Bloomberg)
Asian stocks advanced for a third day after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is slowly recovering and the central bank has more means to prop up growth if appropriate. Elpida Memory Inc., a maker of computer-memory chips that gets about 11 percent of sales from the U.S., jumped 7.1 percent in Tokyo. James Hardie Industries SE (JHX), a building materials supplier that counts the U.S. as its largest market, gained 1.9 percent in Sydney. Woodside Petroleum Ltd., Australia’s second- biggest oil and gas producer, rose 2.1 percent after crude oil futures increased. The MSCI Asia Pacific Index added 0.6 percent to 120.98 as of 10:08 a.m. in Tokyo. Almost twice as many shares rose as fell in the gauge. The measure snapped four weeks of losses last week on speculation Bernanke would foreshadow measures to shore up the U.S. recovery. The Fed chief didn’t announce new economic stimulus and instead decided to extend next month’s policy meeting to a second day.

Central Bankers Urge Governments on Expansion (Source: Bloomberg)
Central bankers gathered at an annual retreat in Jackson Hole, Wyoming, this weekend had a message for political leaders: monetary policy alone can’t keep the global expansion going. Federal Reserve Chairman Ben S. Bernanke urged adoption of “good, proactive housing policies” to reverse the depressed U.S. real estate market and warned lawmakers to avoid steps that may hurt short-term growth. Ewald Nowotny of the European Central Bank Governing Council said euro-area governments should expand the powers of their regional bailout fund. “Most of the economic policies that support robust economic growth in the long run are outside the province of the central bank,” Bernanke said at the annual conference of policy makers and economists, sponsored by the Kansas City Fed.

GLOBAL MARKETS - Bernanke ahead, European stocks take hit
LONDON, Aug 26 (Reuters) - European shares and the dollar fell on Friday, with markets playing down chances of a major shift towards further economic stimulus from U.S. Federal Reserve chairman Ben Bernanke later in the day.
"With many traders feeling like we're standing on the edge looking down into a global recession, Bernanke has   the ability to significantly elate or deflate the markets today," said Jonathan Sudaria, dealer at Capital Spreads.

Bernanke ahead, European stocks take hit
LONDON, Aug 26 (Reuters) - European shares and the dollar fell, with markets playing down chances of a major shift towards further economic stimulus from U.S. Federal Reserve chairman Ben Bernanke later in the day.
"With many traders feeling like we're standing on the edge looking down into a global recession, Bernanke has   the ability to significantly elate or deflate the markets today," said Jonathan Sudaria, dealer at Capital Spreads.

Financial Markets Will Be Open Monday After Dodging Worst of Irene’s Wrath (Source: Bloomberg)
U.S. stock, bond and commodity markets will open as usual tomorrow after Manhattan was spared the worst of Hurricane Irene, avoiding the first shutdown due to weather since 1985. NYSE Euronext (NYX), Nasdaq OMX Group, Bats Global Markets and Direct Edge Holdings LLC -- the largest operators of equity exchanges in the world’s biggest capital market -- sent statements saying they plan normal trading sessions tomorrow. The Securities Industry and Financial Markets Association recommended no change to bond-market schedules, and CME Group Inc. (CME) said the New York Mercantile Exchange will open. “Exchanges had prepared for the worst, and thankfully the worst didn’t materialize,” Chris Isaacson, the chief operating officer at Bats, said in a phone interview. “The U.S. securities industry is very resilient,” he said. “Because of the electronification of markets, most systems are not dependent on humans being there.”

U.S. Stocks Rally as S&P 500 Index Ends Biggest Weekly Retreat Since 2009 (Source: Bloomberg)
U.S. stocks rose, breaking a four- week losing streak in the Standard & Poor’s 500 Index, after Federal Reserve Chairman Ben S. Bernanke indicated the world’s largest economy isn’t deteriorating fast enough to warrant additional stimulus. Bank of America Corp. (BAC) rallied 11 percent after Warren Buffett’s Berkshire Hathaway Inc. invested $5 billion. Tiffany & Co. (TIF) surged 20 percent after raising its earnings forecast. MEMC Electronic Materials Inc. (WFR) jumped 18 percent, leading a rally in solar stocks, as Goldman Sachs Group Inc. said the industry is close to bottoming. Apple Inc. (AAPL) rose 7.7 percent even after Chief Executive Officer Steve Jobs quit. Travelers Cos. slumped 2.4 percent as Hurricane Irene headed for the U.S. East Coast. The S&P 500 rose 4.7 percent to 1,176.80 this week. The index lost 16 percent between July 22 and Aug. 19, the most in four weeks since March 2009. The Dow Jones Industrial Average added 466.89 points, or 4.3 percent, to 11,284.54 this week.

U.S. Employment Probably Slowed in August (Source: Bloomberg)
Hiring probably slowed in August and U.S. manufacturing contracted for the first time in two years as Americans lost confidence that the recovery will be sustained, economists said before reports this week. Payrolls climbed by 75,000 workers after a 117,000 increase in July, according to the median forecast of 65 economists surveyed by Bloomberg News before Labor Department data Sept. 2. Factories pulled back last month for the first time since July 2009, a report the previous day may show. The first U.S. credit downgrade in history, political squabbling over the budget and mounting concern over a default in Europe caused the Standard & Poor’s 500 Index to plunge 17 percent from July 22 to Aug. 8, probably prompting American companies and consumers to cut back. Federal Reserve Chairman Ben S. Bernanke last week said the recovery had been “less robust” than hoped and reiterated that the central bank still has tools to stimulate growth.

Irene Cuts Electricity to Almost 6 Million on East Coast (Source: Bloomberg)
Almost 6 million U.S. homes and businesses were without power as a weakening Tropical Storm Irene moved into New England and utilities began assessing damage in the wake of the storm. Power disruptions affected 13 states and the District of Columbia, the U.S. Energy Department said in a report today. Irene first hit the coast of North Carolina as a Category 1 hurricane yesterday. More than 800,000 customers were without power in Virginia and Maryland. Maine was the latest state added to the department’s list, with about 116,000 customers lacking power. Falling trees and debris dragged down power lines and winds blew over electrical poles, cutting electricity supplies to 471,000 customers on Long Island, east of where the storm made its second landfall today, the Long Island Power Authority said. More than 900,000 lost power in the state, according to a 1 p.m. report from New York Governor Andrew Cuomo’s office.

Dollar Undervalued in Purchasing Parity as Investors Seek Shelter From S&P (Source: Bloomberg)
The dollar is poised for its biggest monthly gain since May, reclaiming its status as a haven while Switzerland and Japan boost efforts to weaken their currencies. The U.S. currency has appreciated 1.2 percent in August against a basket of the developed world’s nine most-traded exchange rates, according to data compiled by Bloomberg. That compares with a decline of 14 percent in the world’s reserve currency from this time last year through July. Demand for America’s assets is rising even though the Federal Reserve has pledged to keep its benchmark interest rate near zero through mid-2013 and Standard & Poor’s cut the nation’s credit rating from AAA. The two other currencies considered havens in times of financial and political strife -- the Swiss franc and yen -- are under siege by their governments and central banks after rising to records.

New York City Area Avoids Serious Damage as Irene Weakens on Path to North (Source: Bloomberg)
New York City residents returned to Manhattan streets, yellow taxis began plying their usual routes and equity markets planned to open after Irene passed through as a tropical storm, less severe than the hurricane local officials feared. While subways and buses may not be restored to full service right away, and airports may not return to regular operations until tomorrow, bridges and tunnels and major highways that had closed in high winds opened. More than 1.7 million lost power as the storm swept through New York and New Jersey, parts of which remained flooded. In the city, water closed some highways, such as the Belt Parkway along the south Brooklyn shore. Metro-North commuter trains that link Manhattan with suburbs in Westchester and Connecticut will be out indefinitely due to track damage, according to Marjorie Anders, Metropolitan Transportation Authority spokeswoman.

Treasuries Snap Gain After Bernanke Soothes Concern of Recession in U.S. (Source: Bloomberg)
Treasuries snapped a two-day gain after Federal Reserve Chairman Ben S. Bernanke eased concern that the U.S. is headed for a recession. The Fed’s pledge to keep interest rates near zero until mid-2013 will underpin growth, economists say. Bernanke’s comments in a speech Aug. 26 reassured investors who had driven Treasury yields to record lows this month and sent the Standard & Poor’s 500 Index down almost 9 percent as U.S. economic growth slowed. “Sell bonds and buy stocks,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “Stocks have priced in a recession. We expect the economy to improve in the second half of the year.”

China to Lock Up More Cash to Tighten Liquidity (Source: Bloomberg)
China broadened the base of reserves it requires commercial lenders to deposit with the central bank to control liquidity and limit inflation, economists said. Reserve requirements are being extended to customers’ margin deposits, a move that may drain 900 billion yuan ($140 billion) from the banking system over six months, Bank of America Merrill Lynch economist Lu Ting said in an e-mailed note on Aug. 26. Mizuho Securities Asia Ltd. cited similar information. A central bank press official declined to comment. China has already raised reserve ratios to a record 21.5 percent for the biggest banks to counter the fastest inflation since 2008. London-based Capital Economics Ltd. said that the reported move may mean no further increases this year, after previously anticipating another 1 percentage point gain by the end of December.

China’s Stocks Raised to ‘Overweight’ at Macquarie on Inflation, Economy (Source: Bloomberg)
China’s stocks were raised to “overweight” from “neutral” at Macquarie Bank Ltd. as data signal inflation is being contained and there’s no risk of a so- called hard landing for the economy. “China’s policymakers are likely shifting back to a more balanced emphasis on both growth and inflation,” Michael Kurtz, Hong Kong-based head of Asian strategy at Macquarie, said in a report distributed on Aug. 27. “The mere fact that inflation is now better contained substantially reduces risks of policy oversteps and unwelcome growth downside, going forward.”

Japan Stocks Swing Between Gains, Losses as U.S. Reports May Show Slowdown (Source: Bloomberg)
Japanese stocks swung between gains and losses ahead of U.S. reports that may show an economic slowdown and as the yen rose versus the dollar after the Federal Reserve failed to rule out further economic stimulus. Toyota Motor Corp. (7203), the world’s largest carmaker, lost 2.1 percent while Honda Motor Co., which receives 40 percent of its sales from North America, declined 2.1 percent. Kawasaki Kisen Kaisha Ltd. (9107), Japan’s third-largest shipper by market value, jumped 2.6 percent after Nomura Holdings Inc. said it was “bullish” on the nation’s shipping industry. The Nikkei 225 (NKY) Stock Average rose 0.1 percent to 8,806.7 as of 10:26 a.m. in Tokyo, reversing an earlier loss of as much as 0.5 percent. The broader Topix index was little changed at 755.99, after earlier rising as much as 0.4 percent and falling as much as 0.6 percent.

South Korea July Current-Account Surplus Widens to Highest in Nine Months (Source: Bloomberg)
South Korea’s current-account surplus widened to a 9-month high in July even as a stronger won eroded the competitiveness of exports. The excess was $4.94 billion, compared with a revised $2.03 billion in June, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income. The Bank of Korea raised its forecast for this year’s current-account surplus to $15.5 billion from $11 billion last month, citing strong export growth and stabilizing raw-material costs. Still, the global slowdown threatens to crimp demand for Asian exports, posing a bigger dilemma for South Korean policy makers already struggling with quickening inflation.

South Korean Won Gains, Government Bonds Fall on Surplus, Bernanke Speech (Source: Bloomberg)
South Korea’s won rose for a second day and government bonds fell as the current-account surplus widened to a nine-month high and Federal Reserve Chairman Ben S. Bernanke expressed confidence in the U.S. economy. The Bank of Korea said today the current-account surplus rose to $4.94 billion in July, from a revised $2.03 billion in June. Bernanke said the “growth fundamentals” of the U.S. economy haven’t been altered by the shocks of the past four years, adding that the Fed has tools to spur expansion, in a speech to central bankers in Jackson Hole, Wyoming, on Aug. 26. “Market players are interpreting Bernanke’s speech in an optimistic way, weighing possibilities for another stimulus in the near future,” said Ryoo Hyun Jung, chief currency dealer with Citibank Inc. in Seoul. “The speech has shifted sentiment from risk-averse to some risk-taking.”

U.K. Housing Demand Weaken Further After August Price Drop, Hometrack Says (Source: Bloomberg)
U.K. house prices fell for a fourth month in August and demand for homes may weaken further this year, property researcher Hometrack Ltd. said. The average cost of a home slipped 0.1 percent from July and was down 3.7 percent from a year earlier, the London-based firm said today in an e-mailed report on its monthly survey of real-estate agents. In London, prices increased by 0.1 percent. “Weak consumer sentiment, pressure on household incomes and the uncertain economic outlook are likely to see demand weaken further over the remainder of the year,” Richard Donnell, Hometrack’s director of research, said in a statement. “This is likely to accelerate the downward pressure on prices over the autumn.”

IMF’s Lagarde Urges Support for World Economy in a ‘Dangerous New Phase’ (Source: Bloomberg)
Christine Lagarde, the new managing director of the International Monetary Fund chief, warned that the world economy is in a “dangerous new phase” and that officials must take new steps to strengthen growth. Lagarde, speaking to international finance officials and economists in Jackson Hole, Wyoming, said the U.S. should arrest a slide in house prices and European banks must be required to boost capital to prevent the continent’s debt crisis from infecting more countries. The U.S. and European Union should enforce long-term budget discipline to free up cash for short- term stimulus, she said. “We risk seeing the fragile recovery derailed,” Lagarde, 55, said. “So we must act now.”

Trichet Says Regional Economic Diversity in U.S. Is Similar to Euro Area’s (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet said the U.S. economy features regional diversity similar to that of the euro area, urging policy makers to restructure their economies to promote smoother growth. It is “often assumed that the U.S. economy would be significantly more homogenous than the economy of the euro area,” Trichet said today to a forum of central bankers and economists in Jackson Hole, Wyoming. “Looking more closely at the regional dispersion across U.S. regions and euro area economies does not confirm this.” The speech, based on new analysis from the Frankfurt-based ECB of 14 U.S. cities, sounds a rejoinder to economists such as Harvard University’s Martin Feldstein, who said before the euro’s 1999 birth that it would prove tough to unite individual economies under the umbrella of a single currency and interest rate.