Asian Stocks Rise, Headed for 10th Weekly Gain, on U.S. Jobs, Housing Data (Source: Bloomberg)
Asian stocks rose, sending the regional benchmark index toward its longest-ever streak of weekly gains, as U.S. jobs and housing data beat projections, boosting confidence the world’s largest economy is recovering. Samsung Electronics Inc. (005930), the world’s third-biggest maker of mobile phones, rose 0.9 percent in Seoul. Inpex Corp., Japan’s biggest energy explorer, advanced 4 percent in Tokyo after crude oil futures extended gains for a seventh day. Air New Zealand Ltd., the nation’s biggest carrier, slipped 1.1 percent after posting a 61 percent drop in first-half profit. The MSCI Asia Pacific Index (MXAP) rose 0.3 percent to 128.09 as of 9:56 a.m. in Tokyo, heading for its tenth week of advance, the longest run of weekly gains since the data began in 1988. The rally was powered by optimism Europe will contain its sovereign debt crisis, bets China will ease monetary policy and signs the U.S. economy is improving.
“If you can get better data on employment and housing, I think investors will be comfortable the recovery in the U.S. this time around has a better chance of surviving and thriving,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Improved risk appetite and improving economic fundamentals will create a catalyst that’s been lacking despite attractive valuations across a number of risk assets.”
Japan Stocks Swing From Gains, Losses on U.S. Data, Signs of Overheating (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Japanese stocks swung between gains and losses after U.S. jobs and housing data beat estimates while technical indicators showed the market may be overbought as the Nikkei 225 (NKY) Stock Average reached a six-month high yesterday. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 1.1 percent. Inpex Corp., the nation’s biggest energy explorer, rose 3.8 percent after crude prices reached a nine- month high. Kawasaki Kisen Kaisha Ltd. (9107) led shipping firms lower after the group closed yesterday at its highest since Aug. 8. The Nikkei 225 fell 0.2 percent to 9,581.38 as of 9:28 a.m. in Tokyo, set for a 2.1 percent advance this week. The broader Topix Index was little changed at 829.62, headed for 2.4 percent gain on the week.
“Investors are sensitive to short-term overheating in the market,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Japanese stocks are still far away from the level before Lehman’s collapse, and they remain pretty cheap when you think about earnings in the next fiscal year.”
Dow Average Rises to Highest Since May 2008 (Source: Bloomberg)
U.S. stocks rose, sending the Dow Jones Industrial Average (INDU) to the highest level since May 2008, amid better-than-estimated housing and jobs market reports. International Business Machines Corp. (IBM), which comprises 12 percent of the share-price weighted Dow, added 28 points to the index. Procter & Gamble Co. (PG) rose 3.1 percent as the largest consumer-products company said it will cut 5,700 jobs. PulteGroup Inc. and KB Home advanced at least 4.3 percent to pace gains in homebuilders. Sears Holdings Corp. (SHLD) soared 19 percent as it plans to raise as much as $770 million by selling 11 store sites and separating some smaller-format businesses.
The Standard & Poor’s 500 Index increased 0.4 percent to 1,363.46 at 4 p.m. in New York, erasing earlier losses. The benchmark gauge briefly rose above its April 2011 peak of 1,363.61 (SPX), which was the highest level since June 2008. The Dow gained 46.02 points, or 0.4 percent, to 12,984.69. The Russell 2000 Index (RTY) of small companies rallied 1.6 percent to 829.23.
European Stocks Decline on Economy Concern; Fiat Drops (Source: Bloomberg)
Stocks in Europe declined for a third day as the European Commission said the region’s economy will shrink this year, dragged down by Italy and Spain. Commerzbank AG (CBK) tumbled 6.6 percent after saying it won’t pay a dividend for 2011 and will ask investors to swap some hybrid instruments for shares. Fiat SpA (F) led a drop among carmakers. Swiss Re Ltd., the world’s second-biggest reinsurer, gained after raising its shareholder payout. The Stoxx Europe 600 Index (SXXP) lost 0.2 percent to 264.08 at the close of trading, after earlier rising as much as 0.4 percent and falling as much as 0.7 percent. The gauge has rallied 8 percent this year as euro-area leaders took measures to contain the region’s debt crisis and U.S. economic data topped estimates.
“The European Commission comments remind us that the situation in the eurozone is not good at all,” said Stephane Ekolo, chief European strategist at Market Securities in London. The earnings scorecard, which showed that one out of two companies in the region reported earnings below analyst estimates, also weighed on sentiment, he said. “Overall, the earnings season hasn’t been a good one.”
Emerging-Market Stocks Slip on Prospect Europe Crisis to Derail Exports (Source: Bloomberg)
Emerging-market stocks fell the most in a week as the European Commission said the region’s economy will shrink this year, dimming the outlook for exports from developing nations. The MSCI Emerging Markets Index (MXEF) retreated 0.5 percent to 1,059.26 at the close in New York, the biggest drop since Feb. 16. South Korea’s Kospi Index (KOSPI) fell 1 percent, led by Samsung Electronics Co. (005930), Asia’s biggest exporter of consumer electronics. PGE SA (PGE), Poland’s biggest power producer, tumbled to a three-month low as the government prepared to sell a stake, pushing the country’s benchmark gauge lower. Brazil’s Bovespa Index (IBOV) dropped for a second day, losing 0.4 percent. The 17-nation euro-region economy, the world’s second largest after the U.S, will contract 0.3 percent in 2012, the European Union’s executive body said today, abandoning a November forecast for 0.5 percent growth. Italy’s economy will shrink 1.3 percent and Spain’s 1 percent, the commission said.
“You’re being hit by a slowdown of demand from the rest of the world, particularly out of Europe, a major customer for many of the emerging markets,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp, said by phone from Cleveland. “Although you’ve alleviated the financial crisis, you haven’t alleviated the economic decline that seems to be unfolding.”
Euro Touches 10-Week High Versus Dollar (Source: Bloomberg)
The euro touched its strongest level in more than 10 weeks against the dollar before a German report forecast to show Europe’s largest economy expanded for an eighth quarter. The 17-nation euro is set for its longest weekly winning streak since April 2011 versus the yen as Group of 20 officials meeting this weekend may discuss committing further resources to Europe’s debt crisis. The yen is poised for a weekly drop against 16 major peers as volatility for currencies of Group of Seven nations fell to the least since 2008, spurring demand for higher yields. The dollar slid against Australia’s currency before U.S. data forecast to show growth in new homes sales. “The worry is about European growth, so a good German number will feed into what we’re seeing at the moment, that core Europe seems to be ticking on quite nicely,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “The technicals are pointing toward an initial euro target of $1.3425.”
Consumer Comfort Highest in Almost Four Years (Source: Bloomberg)
Consumer confidence in the U.S. increased last week to the highest level since April 2008 as more Americans had a favorable view of their finances. The Bloomberg Consumer Comfort (COMFCOMF) Index rose to minus 38.4 in the period ended Feb. 19, its fifth consecutive gain, from minus 39.8 the previous week. It marked the second straight week above minus 40, which is the level associated with recessions and their aftermath. Men, homeowners and households with annual incomes of more than $50,000 were the most optimistic in more than a year. A majority rated their personal finances as positive for the first time since July, indicating a rising stock market and job growth may encourage consumers to keep spending. At the same time, higher gasoline costs threaten to unravel the recent gains in sentiment, as occurred a year ago.
Jobless Claims Point to Improving Labor Market (Source: Bloomberg)
The number of Americans filing first-time claims for jobless benefits last week held at a four- year low and consumers became more confident, indicating an improving labor market may boost household spending. Applications (INJCJC) for unemployment insurance benefits were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008, Labor Department figures showed today. The Bloomberg Consumer Comfort Index rose to minus 38.4 in the week to Feb. 19, the strongest reading since April 2008. “The labor market is better, and a stronger labor market and stronger consumer spending go hand in hand,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “Consumers are going to continue to spend.”
The best January for the Dow Jones Industrial Average since 1997 has also boosted optimism among households, whose purchases makes up 70 percent of the economy. A majority of consumers rated their personal finances as positive for the first time since July, the comfort survey showed.
Home Prices Declined 2.4% in Fourth Quarter (Source: Bloomberg)
U.S. home prices fell 2.4 percent in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties. Prices dropped 0.1 percent from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said today in a report from Washington. In December, prices retreated 0.8 percent from a year earlier, while increasing 0.7 percent from the previous month. Foreclosures (FORLTOTL) are boosting the supply of properties on the market and dragging down values for all houses. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said last month. Distressed properties, comprising foreclosures and short sales in which the lender agrees to a transaction for less than the mortgage balance, accounted for 35 percent of all existing- home purchases in January, the National Association of Realtors said yesterday.
RBA’s Stevens Says Monetary Policy at Right Setting, Sees Growth at Trend (Source: Bloomberg)
Australia’s benchmark interest rate is “about right for the moment” as economic growth is close to trend and concerns ease that Europe’s debt crisis will disrupt global output, Reserve Bank Governor Glenn Stevens said. “We do not, at this point, see the signs of the rapid collapse in global demand we saw three years ago,” Stevens said today in prepared testimony in Sydney to the House of Representatives Standing Committee on Economics. Stevens and his board unexpectedly kept the nation’s benchmark interest rate unchanged at 4.25 percent on Feb. 7 after making a quarter percentage-point cut Nov. 1 and another on Dec. 6. Three of 27 economists in a Bloomberg News survey predicted he’d pause this month, while the other 24 forecast a reduction to 4 percent. Australia has the highest benchmark borrowing costs among major developed nations. Policy rates in Japan and the U.S. are near zero, the European Central Bank has its benchmark at 1 percent, and New Zealand’s is a record-low 2.5 percent.
India Said to Propose BRICS Bank (Source: Bloomberg)
India has proposed setting up a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries, two government officials with knowledge of the matter said. The plan has been circulated to the countries in the so- called BRIC group -- Brazil, Russia, India and China -- as well as to South Africa, an Indian government official said. A Brazilian government official confirmed the proposal. The plan will be discussed among developing nations alongside the meeting of Group of 20 finance ministers in Mexico City this weekend, the Indian official said, asking not to be identified by name as the proposal isn’t public and is in the early, exploratory phases.
“It would be a welcome thing if it actually happens as BRICS is the fastest-growing bloc in the world,” said Jay Shankar, an economist at Religare Capital Markets Ltd. in Mumbai. “These countries have tried to come together but they failed simply because, besides the aspiration of achieving higher growth, they don’t have anything in common.”
IMF Said to Limit Exposure to Greece at EU30 Billion After Second Loan (Source: Bloomberg)
The International Monetary Fund will seek to keep its exposure to Greece under a new bailout package at 30 billion euros ($39.8 billion), including money still owed from a previous loan, an IMF official said. IMF Managing Director Christine Lagarde has indicated that the fund’s credit to Greece after the second loan will remain at the maximum available under a 30 billion-euro loan agreed in 2010, said the official, who spoke to reporters in Washington yesterday on condition of anonymity. About 10 billion euros of the first loan hasn’t been disbursed, the official said. The IMF has yet to announce its share of the 130 billion- euro bailout package. With about $108 billion already promised to euro countries, including Portugal and Ireland, Lagarde must heed members’ calls to limit its commitments to the currency bloc, said Thomas Costerg, a European economist with Standard Chartered Bank in London.
“One of the main uncertainties of this Greek deal is the IMF participation,” Costerg said. “There’s some pressure from emerging markets and the U.S. to limit the IMF exposure to Europe, and it’s also a way to put pressure on Europeans so that they beef up their own existing rescue mechanism.”
Germany Confidence Defies Euro-Area Recession as Italy Contracts: Economy (Source: Bloomberg)
German business confidence rose more than economists forecast to a seven-month high in February as Europe’s largest economy bucks a recession that’s gripping the region’s southern fringe. The Munich-based Ifo institute said its German business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists predicted an increase to 108.8, the median of 38 estimates in a Bloomberg News survey. The European Commission forecast that Germany’s economy will expand 0.6 percent this year, helping to mitigate a euro- area contraction of 0.3 percent. This “mild recession” is driven by the shrinking economies of countries buffeted by the sovereign debt crisis, led by Italy and Spain, according to the commission’s interim economic forecast, published today.
Euro-Region Economy Poised to Shrink in 2012 as Italy Contracts With Spain (Source: Bloomberg)
Europe’s economy will shrink in 2012, with Italy and Spain facing sudden crunches as they battle to escape the debt crisis, the European Commission said. The 17-nation euro economy will contract 0.3 percent, the commission said, abandoning a November forecast of 0.5 percent growth. The downgrade was mainly due to projected contractions of 1.3 percent in Italy and 1 percent in Spain. “The euro area has entered into a mild recession,” European Union Economic and Monetary Commissioner Olli Rehn told reporters in Brussels today after releasing the forecasts. “Prospects have worsened and risks to the growth outlook do remain, but there are signs of stabilization.”
Two days after Greece clinched a second bailout, the forecasts showed an economy pockmarked by the two-year-old fiscal crisis and looked set to stiffen resistance in southern Europe to further doses of German-demanded austerity.
EU Confirms Spain Will Relapse Into Recession, Warns on Further Austerity (Source: Bloomberg)
Spain’s economy will relapse into a recession in 2012 and additional austerity measures may worsen the slump, the European Commission said. Spain’s economy will contract 1 percent this year after expanding 0.7 percent in 2011, the commission said in a report today. In November, the commission had forecast Spanish growth of 0.7 percent in 2012. “Additional fiscal measures in the forthcoming budget may significantly change the picture,” the commission said. Spain’s deficit-reduction efforts are being hobbled by a slump in growth since the last quarter of 2011. The International Monetary Fund expects the fourth-largest economy in the euro area to contract 1.7 percent this year, its second recession in as many years, preventing the nation from meeting its budget goals.
Private consumption will be “significantly weaker” this year, weighed down by austerity and “persistently high” unemployment, the commission said. Exports are expected to be “relatively resilient,” as inflation slows to 1.3 percent from 3.1 percent in 2011, falling below the euro-area average and improving the country’s price competitiveness.
German Business Confidence Climbs More Than Forecast to Seven-Month High (Source: Bloomberg)
German business confidence rose more than economists forecast to a seven-month high in February as progress in taming Europe’s debt crisis tempered the risk of a recession. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg News survey. Italian consumer confidence also rose more than forecast, a report showed today. Greece’s clinching of a second bailout package in Brussels this week and falling yields on government debt from Spain to Italy have buoyed investors’ optimism that the debt crisis has been shackled for now. The German economy, Europe’s largest, contracted less than forecast in the fourth quarter of 2011 and demand from abroad helped factory orders beat estimates in December, adding to signs the country can skirt a recession.
No comments:
Post a Comment