Asia Stocks Rise a 2nd Day on U.S. Housing Data (Source: Bloomberg)
Asian stocks (MXAP) rose for a second day, with a benchmark index poised for the biggest gain in two weeks, after U.S. housing starts increased more than economists forecast, boosting the earnings outlook for Asia’s exporters. Honda Motor Co., Japan’s second-largest carmaker by market value that gets about 44 percent of its sales from North America, advanced 2.2 percent in Tokyo. James Hardie Industries SE (JHX), a maker of building materials that counts the U.S. as its biggest market, climbed 2.6 percent in Sydney. BHP Billiton Ltd. (BHP), Australia’s No. 1 oil producer and the world’s largest miner, jumped 2.9 percent after crude and copper prices rose.
“The U.S. is showing it’s fairly robust in terms of not being dragged down to the extent of European economies, but there remain significant structural impediments,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “There will be significant gains today. The question is, given we are coming into a holiday period, how sustainable those gains are going to be over the next week or so.”
Stocks in U.S. Advance as Housing Starts Increase to Highest Level of Year (Source: Bloomberg)
U.S. stocks climbed, giving the Standard & Poor’s 500 Index its biggest gain of the month, as better-than-estimated housing starts added to expectations the world’s largest economy will weather Europe’s debt crisis. Homebuilders PulteGroup Inc. (PHM) and Lennar Corp. (LEN) rose more than 6.3 percent. Caterpillar Inc. (CAT), Chevron Corp. (CVX) and Bank of America Corp. (BAC) rallied at least 3.7 percent, pacing gains among the biggest companies. Jefferies Group Inc. (JEF) surged 23 percent as the investment bank reported profit that beat estimates. Sprint Nextel (S) Corp. jumped 9.3 percent and Juniper Networks Inc. (JNPR) added 8.9 percent as AT&T Inc. pulled its bid for T-Mobile USA. The S&P 500 rose 3 percent to 1,241.30 at 4 p.m. New York time, as 492 out of 500 stocks gained. The gauge lost 1.2 percent yesterday. The Dow Jones Industrial Average added 337.32 points, or 2.9 percent, to 12,103.58 today. The Russell 2000 Index of small companies rallied 4.2 percent to 738.22.
Japanese Stocks Advance Second Day Day as U.S. Housing Data Beat Estimate (Source: Bloomberg)
Dec. 21 (Bloomberg) -- Japanese stocks rose for a second day after U.S. housing starts beat estimates, adding to optimism the world’s largest economy will weather Europe’s debt crisis. Honda Motor Co. (7267), which counts North America as its biggest market, rose 1.9 percent. Mitsui O.S.K. Lines Ltd. (9104) and Nippon Yusen K.K. gained after creating an alliance with other shipping lines to curb falling cargo rates. Olympus Corp. (7733) added 6.4 percent after a report the scandal-hit camera maker has hired advisers to help it raise capital. “The U.S. is showing it’s fairly robust in terms of not being dragged down to the extent of European economies, but there remain significant structural impediments,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “A question is, given we are coming into a holiday period, how sustainable those gains are going to be over the next week or so.”
European Stocks Rise on German Business Confidence; UniCredit, BNP Advance (Source: Bloomberg)
European stocks posted their biggest rally this month as banks climbed after a report showed German business confidence unexpectedly rose for a second month. UniCredit SpA (UCG), BNP Paribas SA and Intesa Sanpaolo SpA (ISP) all climbed more than 5 percent as borrowing costs eased. Arkema SA (AKE) rallied 9.1 percent amid speculation the company may be a takeover target. Bayer AG (BAYN) added 5 percent after the drugmaker said four of its drugs in development may become blockbusters. The benchmark Stoxx Europe 600 Index gained 2 percent to 238.51 at the close in London, its biggest advance since Nov. 30, as the gauge rebounded from an earlier slide of as much as 0.5 percent. The Stoxx 600 has still lost 14 percent this year amid mounting concern that policy makers will fail to stop at least one member of the euro area from defaulting.
Emerging Stocks to Drop on Commodities ‘Downside’ Risk: Technical Analysis (Source: Bloomberg)
Emerging-market stocks, especially Brazil and India, are poised to “significantly underperform” next year as commodity prices fall further, according to Bank of America Corp. (BAC) The Continuous Commodity Futures Price Index (CCI)’s drop below key Fibonacci support “points to additional downside risk,” Mary Ann Bartels, New York-based head of U.S. technical and market analysis at Bank of America, wrote in a Dec. 19 note. Emerging markets may be “negatively impacted by the break in commodities,” she said. The commodities index of 17 raw materials rose 0.4 percent to 549.98 on Dec. 19, paring this year’s slump to 13 percent. The measure is testing the 38.2 percent retracement near 550 of a rally between December 2008 and April 2011, after falling below the “uptrend support” near 570, Bartels said. The risk is for a steeper decline toward the 50 percent and 61.8 retracements near the 507 and 463 levels, she said.
German Stocks Gain as Business Confidence Gauge Beats Estimates; BMW Rises (Source: Bloomberg)
German stocks (DAX) climbed the most this month after a measure of the country’s business confidence unexpectedly increased and U.S. housing starts topped economists’ estimates. Bayerische Motoren Werke AG (BMW), Continental AG (CON), HeidelbergCement AG (HEI) and Metro AG (MEO) led gains. Bayer AG (BAYN) added 5 percent after saying four of its drugs in development may become blockbusters. Deutsche Telekom AG (DTE) declined after a deal to sell its T-Mobile USA unit to AT&T Inc. collapsed. The DAX Index gained 3.1 percent to 5,847.03 at the close in Frankfurt, after earlier falling 0.6 percent. That’s the biggest gain since Nov. 30, and trims this year’s retreat to 15 percent. The broader HDAX Index also added 3.1 percent today.
Stocks Jump as Treasuries Fall on U.S. Housing Data, German Business Index (Source: Bloomberg)
Stocks rallied, with the Standard & Poor’s 500 Index rebounding from its lowest level of the month, and Treasuries fell as U.S. housing starts topped economists’ estimates and German business confidence unexpectedly grew. The S&P 500 surged 3 percent to close at 1,241.29 at 4 p.m. in New York and the Dow Jones Industrial Average jumped 337.17 points, or 2.9 percent, to 12,103.43, the biggest gains since Nov. 30 for both. Spain’s government bonds stayed higher as the nation sold 5.64 billion euros ($7.4 billion) of Treasury bills. The yield on the 10-year U.S. Treasury note advanced 11 basis points to 1.92 percent, with the dollar weakening versus all 16 of its most-traded peers. Oil gained 3.6 percent and the GSCI index of 24 commodities climbed for a second day.
U.S. builders broke ground in November on the most houses in over a year, a sign that the market is stabilizing heading into 2012. Federal Reserve Bank of Richmond President Jeffrey Lacker predicted the U.S. economy will grow at least 2 percent next year. German business confidence unexpectedly rose for a second month in December, according to the Ifo institute.
Fed Bolsters Tools to Avert Collapse of Big Firms (Source: Bloomberg)
The Federal Reserve sought to curb the threat of financial turmoil by compelling the biggest banks to follow a tougher standard for risk management and demanding stricter oversight by companies’ boards of directors. The proposed rules would set triggers for regulatory enforcement for weak firms and require boards of directors to oversee and approve plans for limiting liquidity risk. The Fed delayed releasing rules for supervision of foreign firms and for risk-based capital and leverage requirements. The draft standards aim at averting a recurrence of instability following the collapse of U.S. mortgage finance, targeting banks with assets totaling $50 billion or more and financial firms deemed “systemically important.” The Dodd- Frank law passed in July 2010 mandates a supervisory crackdown.
U.S. Housing Starts Jump 9.3%, to Highest in Year (Source: Bloomberg)
Builders broke ground in November on more houses than at any time in the past 19 months, led by a surge in multifamily units, signaling the market is stabilizing heading into 2012. Starts increased 9.3 percent to a 685,000 annual rate, exceeding the highest estimate of economists surveyed by Bloomberg News and the most since April 2010, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, also climbed to a more than one-year high. Work on multifamily units like apartments and townhouses is growing as the rental market improves. Single-family-home construction may be starting to strengthen as lower home prices and borrowing costs near record lows draw in some buyers, even as builders face competition from existing houses as another wave of foreclosures throws more marked-down properties on the market.
Payrolls Rose in 29 States in November, Led by New York; Michigan Has Gain (Source: Bloomberg)
Payrolls increased in 29 states in November, while the jobless rate declined in 43, a sign the labor market is recovering across much of the U.S. New York led the nation with a 29,500 gain in jobs, followed by Texas with 20,800, figures from the Labor Department showed today in Washington. The biggest drop in unemployment was in Michigan, where the jobless rate fell 0.8 percentage point to 9.8 percent. “We’re seeing a modest recovery in hiring across much of the country,” Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “There are a few hot spots where activity is stronger.”
Japan Exports Fall on Yen, European Woes (Source: Bloomberg)
Japan’s exports fell for the second straight month as the global economic slowdown and a stronger yen threaten the nation’s recovery from the March earthquake. Shipments dropped 4.5 percent in November from a year earlier, the Ministry of Finance said today in Tokyo. The median estimate of 29 economists surveyed by Bloomberg News was for a 4.3 percent decline. In October, exports slid 3.7 percent. Japan’s currency, which reached a postwar record against the dollar on Oct. 31, is also approaching a decade high against the euro, threatening profits of exporters Nissan Motor Co. (7201) and Toyota Motor Corp. Christine Lagarde, the managing director of the International Monetary Fund, said last week that the crisis in the euro region, Japan’s third-biggest export market, is “escalating.”
Temasek Buys Mosaic Shares to Become Fertilizer Company’s Largest Investor (Source: Bloomberg)
Temasek Holdings Pte., Singapore’s state-owned investment company, increased its stake in Mosaic Co. (MOS) to become the biggest shareholder of North America’s second- largest fertilizer producer. Temasek owns 17.9 million shares in Mosaic, according to a filing with the U.S. Securities and Exchange Commission made public today. The investment company owned 108,026 Mosaic shares as of Sept. 30, according to a Nov. 14 filing. Temasek now owns 5.9 percent of the Plymouth, Minnesota-based company, according to data compiled by Bloomberg. Cargill Inc., formerly the biggest Mosaic shareholder, said in January it was beginning a process to sell its 64 percent stake in the fertilizer producer.
Hungary May Raise EU’s Highest Benchmark Rate Again as IMF Pressure Mounts (Source: Bloomberg)
Hungary may need to raise the European Union’s highest benchmark interest rate next year as talks over a bailout stalled and the government and the central bank spar over monetary-policy independence. The Magyar Nemzeti Bank increased the two-week deposit rate by a half-point for a second month to 7 percent yesterday and said it would raise borrowing costs further if country risk worsens. Policy makers also considered a quarter-point increase. The European Commission and the International Monetary Fund suspended talks on a financial aid package to Hungary last week, citing objections to a draft law on the central bank that they say may undermine policy autonomy. The forint is the worst- performing currency in the world since June 30, data compiled by Bloomberg show.
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