20111202 1023 Global Market Related News.

Asia Stocks Rise as U.S. Manufacturing Grows (Source: Bloomberg)
Asian stocks (MXAP) rose, as better-than- forecast U.S. manufacturing expansion showed the world’s largest economy is weathering concerns that Europe’s debt crisis will damp global growth. The MSCI Asia Pacific Index rose 0.3 percent to 117.43 as of 9:11 a.m. in Tokyo, headed for a 7.8 percent gain for the week. All 10 industry groups on the measure advanced, with more than three stocks gaining for each that declined.

U.S. Stocks Decline After Three-Day Rally (Source: Bloomberg)
U.S. stocks declined as better-than- forecast manufacturing growth and a rally in French and Spanish bonds were not enough to extend the biggest three-day gain in the Standard & Poor’s 500 Index since March 2009. Financial stocks (S5FINL) fell the most in the S&P 500 among 10 industries, dropping 1 percent, as Massachusetts sued some of the largest lenders over foreclosure practices. Alcoa (AA) Inc. lost 2.1 percent as commodities retreated. Kohl’s Corp. slumped 6.4 percent after November sales missed estimates. Yahoo! Inc. advanced 3.3 percent as a group including Alibaba Group Holding Ltd. was said to prepare a bid for the company.
The S&P 500 slid 0.2 percent to 1,244.58 at 4 p.m. New York time. The index rallied 4.3 percent yesterday as six central banks took action on Europe’s debt crisis by making it cheaper for lenders to borrow in dollars. The Dow Jones Industrial Average decreased 25.65 points, or 0.2 percent, to 12,020.03. Trading volume on U.S. exchanges dropped to about 6.8 billion shares, or 16 percent below the three-month average.

Japanese Stocks Gain for 2nd Day as U.S. Manufacturing Beats Estimates (Source: Bloomberg)
Japanese stocks rose for a second day as better-than-forecast U.S. manufacturing growth outweighed concern over Europe’s debt crisis. The Nikkei 225 Stock Average (NKY) rose 0.2 percent to 8,613.40 as of 9:18 a.m. in Tokyo. The broader Topix lost 0.4 percent to 742.75, with three times as many shares rising as falling.

IMF Says It’s Likely to Cut Global Growth Forecasts Amid Financial Turmoil (Source: Bloomberg)
The International Monetary Fund will probably lower its growth forecasts next month as the European debt crisis rocks financial markets and slows output, a spokesman said. Since the latest forecasts were released in September “there’s been a marked slowdown in economic activity,” particularly in Europe, IMF spokesman Gerry Rice told reporters in Washington today. “We will likely be revising downwards the forecast” near the end of January, he said, without specifying which projections may be affected. The IMF cut its forecast for global growth to 4 percent this year and next in September, predicting “severe” repercussions if Europe failed to contain its debt crisis. The turmoil has since worsened, with Italian and French bond yields rising and Germany failing to attract bids for 35 percent of bonds it offered for sale Nov. 23.

ISM Index of U.S. Manufacturing Increases (Source: Bloomberg)
U.S. manufacturing expanded in November at the fastest pace in five months, buttressing other reports this week that signal the economy is picking up as 2011 comes to an end. The Institute for Supply Management’s factory index increased to 52.7 last month from 50.8 in October, the Tempe, Arizona-based group said today. Readings above 50 indicate expansion, and economists surveyed by Bloomberg News projected a gain to 51.8. Construction spending climbed for a third month in October and jobless claims increased, other data showed. The manufacturing figure was punctuated by gains in orders and production in the same month that consumer confidence rebounded and companies beefed up their payrolls. Corporate purchases of new equipment and stronger holiday spending may help sustain U.S. factories after reports today showed the industry shrank in China and Europe.

U.S. Jobless Claims Unexpectedly Rise (Source: Bloomberg)
More Americans than forecast filed applications for unemployment benefits during the holiday- shortened week, signaling limited recovery in the labor market. Jobless claims climbed by 6,000 to 402,000 in the week ended Nov. 26 that included the Thanksgiving holiday, Labor Department figures showed today in Washington. The median forecast of 43 economists in a Bloomberg News survey called for a drop to 390,000. The number of people on unemployment benefit rolls and those getting extended payments increased. Some companies are still trimming staff and others are reluctant to add workers until demand picks up and there’s more clarity on tax breaks due to expire at year-end. Faster hiring is needed to spur consumer spending, which accounts for about 70 percent of the economy, and reduce a jobless rate stuck near 9 percent that’s a concern for Federal Reserve officials.

UBS’s Harris as No. 1 Forecaster Says Housing Drives Recovery (Source: Bloomberg)
Working his way through a plate of wild Alaskan halibut at a restaurant a couple of blocks from Radio City Music Hall in New York, UBS Securities LLC Chief Economist Maury Harris holds forth in a slight Texas twang on what he expects from the U.S. economy in 2012. It isn’t a story of gloom and doom--although Harris worries that the turmoil in Europe will weigh on growth in the U.S. He sees some unexpected bright spots driving U.S. expansion and preventing a renewed downturn, Bloomberg Markets reports in its January issue. Harris’s predictions matter. His team is No. 1 among economic forecasters for the world’s largest economy during the two-year period ended on Sept. 30, according to data compiled for Bloomberg Markets’ annual ranking.

Treasuries Decline for Sixth Consecutive Day Before U.S. Payrolls Report (Source: Bloomberg)
Treasuries declined for a sixth day before a report that may show U.S. employers added jobs at a faster pace last month, reducing pressure on the Federal Reserve to add further measures to stimulate the economy. The difference between yields on 10-year Treasuries and inflation-indexed securities, a gauge of trader expectations for consumer prices over the life of the debt, widened to 2.11 percentage points yesterday, the most in two weeks, as a report showed manufacturing expanded at the fastest pace in five months in November. James Bullard, president of the St. Louis Fed, said recent economic reports point to stronger economic growth, and policy makers shouldn’t rush to ease further. “The current yield level is still too low given the growth outlook,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “Yields are likely to rise gradually as we continue to see good numbers in the U.S. economy.”

Manufacturing in U.S. Probably Expanded at a Faster Pace (Source: Bloomberg)
Manufacturing in the U.S. probably grew in November at the fastest pace in five months, showing factories will keep supporting the economic expansion through the end of the year, economists said before a report today. The Institute for Supply Management’s factory index rose to 51.8 last month from 50.8 in October, economists surveyed by Bloomberg News forecast the Tempe, Arizona-based group’s data showed today. Fifty is the dividing line between growth and contraction. Jobless claims fell last week and construction spending increased in October, other data may show. Corporate investment on new equipment, export demand, stronger consumer purchases during the holidays and leaner inventories lay the groundwork for a pickup in production. At the same time, risk of recession in Europe may restrain U.S. manufacturing, the industry that spurred the recovery.

Dollar Proves Best Bet for Investors (Source: Bloomberg)
The dollar (DXY) was the best place for investors to be in November, beating returns on worldwide bonds, commodities and stocks as Europe’s debt crisis threatened to derail global growth. The Dollar Index tracking the U.S. currency against six foreign-exchange peers rose 2.9 percent last month, leaving it down less than 1 percent for the year. Even as Treasuries gained 0.7 percent, fixed-income securities around the world lost 0.5 percent, Bank of America Merrill Lynch index data show. The Standard & Poor’s GSCI Total Return Index of commodities rose 1.4 percent, and the MSCI All Country World Index (MXWD) of shares fell 2.9 percent with dividends.
“There’s been a flight to quality, which means investors are keeping their money in U.S. dollars and Treasuries,” said Sean Callow, a Sydney-based senior currency strategist at Westpac Banking Corp., the second-most-accurate foreign-exchange forecaster measured by Bloomberg News. “The U.S. hasn’t been a bad bet, whether you’re on the safe-haven side or you see signs of life in the economy,” he said in a phone interview Nov. 29.

Dollar, Yen Poised for Weekly Declines on Signs of U.S. Economic Recovery (Source: Bloomberg)
The dollar and the yen were set for their biggest weekly declines against the euro in more than a month as signs the U.S. economy is picking up damped demand for haven currencies. The yen was 0.3 percent from a two-week low versus Europe’s common currency ahead of a U.S. report today forecast to show the pace of hiring quickened last month. The dollar was poised to weaken against 15 of its 16 major peers this week before Federal Reserve Bank of Philadelphia President Charles Plosser and Fed Bank of Dallas President Richard Fisher speak today. Gains in the euro were limited before German Chancellor Angela Merkel outlines her stance for a Dec. 9 European summit. “We’re actually seeing the U.S. economy being one of the few bright spots out there,” said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp., Australia’s second-largest lender. “Better U.S. data is in the short term a modest negative for the U.S. dollar.”

Consumer Comfort in U.S. Little Changed From Recession Levels (Source: Bloomberg)
Consumer confidence in the U.S. was little changed last week from levels typically reached during past recessions. The Bloomberg Consumer Comfort Index was minus 50.2 in the period ended Nov. 27, after minus 50.1 the prior week. The gauge has been at minus 50 or worse for 10 of the past 11 weeks. The lack of improvement underscores concern over unemployment hovering around 9 percent, wrangling by lawmakers over reducing the budget deficit, and the European debt crisis. Americans’ dim views prompted retailers to resort to price-cuts and earlier hours to boost sales in the week of the Thanksgiving holiday, the unofficial start of the shopping season. “Consumer spirits remain depressed amid elevated unemployment and tumultuous global economic conditions,” said Richard Yamarone, a senior economist at Bloomberg LP in New York. “In this environment, the only spending that seems to take place is during deep discounts, heavy couponing, or widespread sales.”

Goldman Joins HSBC Bucking China Economist Majority With ’12 Rate-Cut Call (Source: Bloomberg)
Goldman Sachs Group Inc. and HSBC Holdings Plc forecast that China will cut interest rates in 2012, putting the banks at odds with most of their rivals, who see elevated inflation preventing a reduction. The People’s Bank of China reduced lenders’ reserve requirements on Nov. 30 for the first time since 2008 as Europe’s debt crisis deepened. Eleven economists of 19 in a Bloomberg News survey conducted yesterday say rates will stay unchanged through next year and another three predict increases. Goldman and HSBC are among five that see cuts. China’s challenge in loosening monetary policy is to sustain the expansion of the world’s second-largest economy without spurring price gains, fueling bad loans or reigniting a real estate boom that has started to deflate. Inflation will remain too high for the benchmark one-year deposit rate to be lowered from the current 3.5 percent, according to Mizuho Securities Asia Ltd.

India's exports rise 10.8 pct in October - govt
NEW DELHI, Dec 1 (Reuters) - India's October exports  rose an annual at $19.6 billion. Oil imports for the month grew 21 10.8 percent to $19.9 billion, while imports  for the month rose 21.7 percent to $39.5 billion, the government said in a statement on Thursday.
India's trade deficit  in October was percent to $10.1 billion, the statement released by the trade ministry said.

Merkel Shuns ECB Role in Favor of Budget Limits (Source: Bloomberg)
Germany and France are pushing for closer economic ties among euro nations and tougher enforcement of budget rules to counter the debt crisis, snubbing investor pleas to back an expanded European Central Bank role. German Chancellor Angela Merkel, who will use a speech to lawmakers in Berlin today to outline her stance before a Dec. 9 European Union summit, has repeated her push to rework EU rules to lock in budget monitoring and seal off the ECB from political pressure. French President Nicolas Sarkozy late yesterday called for “more discipline” and automatic penalties for nations that break fiscal rules.
Merkel’s refusal to deploy the ECB is a rebuff to President Barack Obama after he exhorted Europe’s leaders to take more action to combat the crisis. The chancellor is loath to agree to follow the Federal Reserve and the Bank of England in policies she views as akin to fighting debt with more debt. Enlisting the ECB in battling the crisis would violate the central bank’s independence and set it on a course of action that might not work, destroying its credibility.

Spanish, French Bonds Climb After Auctions (Source: Bloomberg)
U.S. stocks retreated as data showing improving manufacturing growth was not enough to extend the best three-day rally since 2009 for the Standard & Poor’s 500 Index. Spanish and French bonds rallied as successful debt auctions tempered concern about Europe’s sovereign crisis. The S&P 500 (SPXL1) slipped 0.2 percent to close at 1,244.58 at 4 p.m. in New York following a 4.3 percent jump yesterday when six central banks took coordinate action to ease funding strains stemming from turmoil in European bond markets. The yield on France’s 10-year note dropped 29 basis points, the most since 1991, to 3.11 percent. Spain’s five-year yield tumbled 57 basis points to 5.29 percent. The euro was up 0.1 percent at $1.3461, paring an earlier 0.6 percent advance.
A report showing U.S. manufacturing expanded at the fastest pace in five months and forecasts that data tomorrow will reveal a pickup in job growth failed to extend a three-day, 7.6 percent rally in the S&P 500. (SPX) A contraction in China’s manufacturing fueled concern Europe’s debt crisis is damaging the global economy as yesterday’s moves by central banks were viewed as only a temporary fix.

Lagarde: G-20 May Boost IMF for Europe Crisis (Source: Bloomberg)
International Monetary Fund chief Christine Lagarde said Group of 20 nations are prepared to boost the fund’s resources as the European debt crisis threatens the global recovery. “If circumstances require, the G-20 will commit the resources that are necessary for the IMF to play its systemic role,” she said during a joint press conference with Brazilian Finance Minister Guido Mantega in Brasilia today. “That gives you a range that is almost without a cap, without a limitation.”
Lagarde has indicated that the $390 billion the IMF currently has available for lending may not suffice should the global outlook worsen. The Washington-based lender to nations will probably cut its global growth forecast next month as the European crisis roils financial markets and slows output, spokesman Gerry Rice said.

Draghi Signals ECB May Step Up Debt Measures If EU Considers Fiscal Union (Source: Bloomberg)
European Central Bank President Mario Draghi signaled the ECB could do more to fight the debt crisis as long as governments push the euro area toward a fiscal union. “A new fiscal compact” is “definitely the most important element to start restoring credibility,” Draghi said in an address to the European Parliament in Brussels today. “Other elements might follow, but the sequencing matters. It is first and foremost important to get a commonly shared fiscal compact right.” Draghi didn’t specify what more the ECB could do and said the central bank’s bond purchases “can only be limited.” Still, he “appeared implicitly to hold up the offer of a significantly higher pace of debt purchases” and “potentially other measures, provided that euro-area governments were to commit to a new fiscal pact,” said Julian Callow, chief European economist at Barclays Capital in London.

Brazil Slashes Taxes to Protect 5% Growth From Spreading European Crisis (Source: Bloomberg)
Brazil suspended a levy on foreign stock (IBOV) purchases as part of 2.8 billion reais ($1.5 billion) in tax cuts intended to safeguard Latin America’s biggest economy from the spreading European debt crisis. The package of government measures announced today targeting 5 percent growth next year also include a reduction in levies on consumer loans, home appliances, homebuilding and foreign purchases of corporate bonds tied to infrastructure projects. Brazilian stocks rallied and the real strengthened. The stimulus measures come a day after the central bank cut the benchmark interest rate for a third consecutive meeting amid signs the world’s sixth-largest economy is stalling. Gross domestic product expanded 0.3 percent in the three months through September, the slowest pace in 10 quarters, the Finance Ministry estimates.