G-7 Will Be Eclipsed by E-7 by 2020 as China Surges, PwC Says

By Simon Kennedy

Jan. 21 (Bloomberg) -- The Group of Seven economies will be eclipsed in size by the world’s biggest emerging markets within two decades, led by China, according to calculations by PricewaterhouseCoopers LLP.

After matching the G-7 in around 2019, the combined gross domestic product of China, India, Brazil, Russia, Mexico, Indonesia and Turkey will be around 30 percent higher by 2030 than that of the U.S., Japan, Germany, France, U.K., Italy and Canada, John Hawksworth, PwC’s London-based head of macroeconomics, said in a report today.

The study is the latest to highlight the rise of emerging economies such as China and their increasing power over the direction of the world economy after developed nations triggered the worst financial crisis since the Great Depression. As recently as 2000, the G-7’s GDP was twice as large as that of what PwC calls the Emerging Seven and this year the gap will have shrunk to 35 percent, the study said.

“The E-7’s influence is already huge and this analysis shows it’s not a matter of if the E-7 will overtake the G-7, but when,” said Hawksworth.

China is on course to overtake the U.S. as the world’s largest economy around 2020 before its ageing population slows its advance, the economist said.

The next largest economies by 2030 will be India, Brazil, Russia, Germany, Mexico, France and the U.K., the report said.

To contact the reporter on this story: Simon Kennedy in Paris at Skennedy4@bloomberg.net

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European Manufacturing, Services Expansion Slows

By Simone Meier

Jan. 21 (Bloomberg) -- Expansion in Europe’s service and manufacturing industries unexpectedly slowed in January, adding to signs the pace of the economy’s recovery may weaken.

A composite index based on a survey of purchasing managers in both industries in the 16-nation euro region fell to 53.6 from 54.2 in December, London-based Markit Economics said today in an initial estimate. Economists expected an increase to 54.4, according to the median of 15 estimates in a Bloomberg survey. A reading above 50 indicates expansion.

The euro-region economy may lose momentum as the effect of government stimulus measures tapers off and rising unemployment erodes consumers’ willingness to spend. German investor confidence dropped in January and European Central Bank Executive Board member Juergen Stark said yesterday that euro- area growth in the first half of 2010 may be “somewhat more muted” than in the second half of last year.

“The drop was a little bit stronger than expected,” said Juergen Michels, chief euro-area economist at Citigroup Inc. in London. “We might see more of a sideways development over the coming months. We’re far from a contraction though.”

An index of services dropped to 52.3 in January from 53.6 in the previous month, Markit said. A gauge of manufacturing increased to 52 from 51.6 in December.

‘Bumpy’ Recovery

The euro extended declines against the dollar after the report and was down 0.4 percent at $1.4054 as of 11:10 a.m. in Frankfurt. The yield on the German 10-year benchmark bond rose 0.1 basis point to 3.23 percent.

The ECB this month kept borrowing costs at a record low of 1 percent and President Jean-Claude Trichet predicted Europe’s economy would expand at “only a moderate pace” this year. Stark said on Jan. 20 that the euro region will show a “gradual” and “bumpy recovery.”

“The region faces a still challenging economic environment,” said Howard Archer, chief European economist at IHS Global Insight in London. “There remains a compelling case for the ECB to only very gradually withdraw its emergency liquidity measures.”

Companies may remain reluctant to step up hiring as the euro’s 8 percent ascent against the dollar over the past year threatens to undermine exports by making them less competitive just as surging energy prices pushing up costs. Crude oil prices have more than doubled over the past year to about $78 a barrel.

Forecasts ‘Difficult’

European unemployment rose to the highest in more than 11 years in November. Exports declined for a second month and retail sales fell the most in over a year.

“Forecasts regarding consumer behavior this year are as difficult as forecasts about the exact end of the global economic crisis,” Henning Kreke, chief executive officer of Douglas Holding AG, Europe’s largest makeup and perfume retailer, said on Jan. 13.

Governments around the world have pledged trillions of dollars to fight the worst global recession in more than six decades. In the U.S., the world’s largest economy, industrial production rose for a sixth month in December and consumer confidence increased.

A rebound in exports helped the euro-region economy emerge from a recession in the third quarter, with gross domestic product increasing 0.4 percent. In Germany, Europe’s largest economy, GDP growth accelerated to 0.7 percent in that period.

Alstom SA, the world’s second-largest train maker based in Paris, said on Jan. 19 that it “saw an improvement” in the last three months of 2009. Lanxess AG, Germany’s biggest publicly traded specialty chemicals maker, said it expects 2010 to be “a good year” on reviving demand.

“We continue to have growth in the fourth quarter,” European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said on Jan. 18. “It’s a fragile recovery and we have a level of uncertainty that’s clearly higher than in a normal situation.”

To contact the reporter on this story: Simone Meier in Dublin at smeier@bloombert.net

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Jobless Claims in U.S. Unexpectedly Rise on Backlog

By Bob Willis

Jan. 21 (Bloomberg) -- More Americans than anticipated filed claims for unemployment benefits last week, reflecting a backlog of applications from the year-end holidays.

Initial jobless claims rose by 36,000 to 482,000 in the week ended Jan. 16, the highest level in two months, from 446,000 the prior week, Labor Department figures showed today in Washington. The jump was due to an “administrative” accumulation from late December and early January holidays, and did not reflect “economic” reasons, a Labor Department spokesman said.

The biggest increase in sales in two decades and an expanding economy may be prompting companies to retain remaining staff after cutting 7.2 million workers from payrolls since the recession began in December 2007. A rebound in hiring may take longer to develop, one reason why unemployment is forecast to average 10 percent this year.

“The trend in employment is still toward improvement,” said James O’Sullivan, chief economist at MF Global Ltd. In New York. “This level of claims is still associated with net declines in payrolls, but the message is that declines are getting smaller and smaller.”

Stock-index futures dropped immediately after the report, erasing earlier gains. The contract on the Standard & Poor’s 500 Index was down 0.1 percent to 1,133.2 at 8:49 a.m. in New York. Treasury securities fell.

Exceeds Forecast

Initial jobless claims were forecast to decline to 440,000 from 444,000 the week before, according to the median estimate of 40 economists surveyed by Bloomberg. Estimates ranged from 430,000 to 457,000.

Government workers took time to sort through applications that piled up in prior weeks after returning from Christmas and New Year vacations, the Labor Department spokesman said in a press conference. That suggests claims in the prior two weeks may have been lower than the numbers indicated. The number of applications is likely to fall when the next week’s data are released, the spokesman said.

In addition, because state offices were closed on Jan. 18 for the Martin Luther King holiday, the government had to estimate claims for six states and the District of Columbia, the spokesman said.

Continuing claims fell by 18,000 to 4.6 million in the week ended Jan. 9. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Extended Benefits

Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 613,000 to 5.92 million in the week ended Jan. 2.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.5 percent in the week ended Jan. 9, today’s report showed.

The U.S. unexpectedly lost 85,000 jobs in December after a revision for November showed the first payroll gain in almost two years, according to Labor Department data released Jan. 9.

The unemployment rate held at 10 percent, near the 26-year high of 10.1 percent reached in October. The report also showed workers were unemployed for 29.1 weeks on average, the most since records began in 1948.

Job Losses

The loss of jobs since the recession began has been the worst in the post-World War II era.

The world’s largest economy probably grew in excess of 5 percent at an annual rate in the fourth quarter, the best performance in almost six years, according to forecasts by economists at JPMorgan Chase and Credit Suisse in New York. Gross domestic product expanded at a 2.2 percent in the previous three months, the first gain in more than a year.

Sales at factories, wholesalers and retailers increased 6.2 percent from June through November, the biggest six-month gain since 1987, according to figures from the Commerce Department.

Smithfield Foods Inc., the world’s largest pork processor, is among companies cutting jobs in a bid to lower costs. The Smithfield, Virginia-based companies said yesterday it plans to close an Iowa meat plant that was among the company’s oldest and most inefficient. The shutdown will affect 1,450 workers.

The John Morrell & Co. facility in Sioux City, Iowa, will close on April 20 and shift some pork production to other locations, the Smithfield, Virginia-based company said yesterday in a statement.

“We recognize that layoffs and plant closings are difficult for everyone concerned,” Joseph B. Sebring, the president of John Morrell, said in the statement. “At the same time, we believe this is a necessary business decision.”

Chevron Corp., the second-biggest U.S. oil company, said Jan. 19 it will cut an undisclosed number of refining jobs as part of a restructuring.

Details of the restructuring will be announced in March, spokesman Lloyd Avram said in an interview from San Ramon, California. “The organization is going to be leaner and less complex,” he said. “It will require fewer positions.”

To contact the reporter on this story: Bob Willis in Washington bwillis@bloomberg.net

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China’s Copper Output in 2009 Gains 9.6% to a Record

By Bloomberg News

Jan. 21 (Bloomberg) -- Copper production by China, the world’s largest metals consumer, gained to a record in 2009 as smelters expanded on rising demand and prices.

Output of refined copper gained 9.6 percent to 4.25 million metric tons, the statistics bureau said today. That’s a record, according to Grace Qu, an analyst at CRU International Ltd.

Copper had the biggest annual increase in more than two decades last year as China boosted imports to a record on $586 billion of stimulus spending and state stockpiling. The Asian nation’s growth rate accelerated to the fastest pace since 2007 in the fourth quarter.

The record output “is a result of expansions at Chinese smelters, spurred by strong demand and rising prices,” Qu said from Beijing.

Chinese smelters such as Daye Nonferrous Metal Co., the fifth largest, plan to expand this year by at least 25 percent, the Huangshi Daily reported this month, citing general manager Zhang Lin.

--Li Xiaowei. Editors: Richard Dobson, Jake Lloyd-Smith.

To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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Freeport Profit Tops Estimates on Higher Metal Prices

By Rob Delaney

Jan. 21 (Bloomberg) -- Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, posted a fourth-quarter profit that topped analysts’ estimates after the economic recovery boosted metal prices.

Net income was $971 million, or $2.15 a share, compared with a loss of $13.9 billion, or $36.78, a year earlier, Phoenix-based Freeport said today in a statement. Excluding one- time items, the company earned $2.25 a share. Freeport was expected to have a profit of $1.75, the average estimate of 17 analysts surveyed by Bloomberg.

Chief Executive Officer Richard Adkerson is benefiting from copper prices that more than doubled last year as the U.S. economic recovery boosted demand for the metal used in pipes and wires. Industrial production in the U.S. rose 0.6 percent in December, the sixth straight monthly gain. Freeport’s sales more than doubled to $4.61 billion.

Freeport rose 18 cents to $83.70 at 8:20 a.m., before the start of regular New York Stock Exchange composite trading. The shares gained more than threefold last year.

To contact the reporter on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.

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Oil Heading for $70.92, Commerzbank Says: Technical Analysis

By Grant Smith

Jan. 21 (Bloomberg) -- Crude oil may plunge toward $70 a barrel after failing to break resistance around $84 last week, according to technical analysts at Commerzbank AG.

Oil futures in New York have lost almost 7 percent since reaching a one-year high of $83.95 a barrel on Jan. 11. Prices have peaked in the short-term and will extend their slide until reaching a trend line linking price lows in 2009, according to analysts at Commerzbank, last year’s third most-accurate oil forecaster in a survey by Bloomberg.

“Last week the market charted a key week reversal from the $83.95 level,” Commerzbank’s London-based technical analyst Karen Jones said in a report. “This does imply that short-term at least, the market has charted an interim top, and we would allow for losses back toward the channel support at $70.92.”

Last year’s minimum support line connects weekly price lows such as $58.32 a barrel on July 17 and $68.59 on Dec. 18.

“Longer term, providing the channel holds, the outlook remains bullish,” Commerzbank’s Jones said.

Prices may then rise toward a resistance level between $85.82 and $86.24 a barrel, defined by oil’s low points in December 2007 and February 2008, she added.

This threshold is “a significant hurdle and we would not be surprised to see oil stall here for a while,” Jones said.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

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Asian Stocks Fall for Fourth Day on China Concern; ICBC Drops

By Anna Kitanaka and Kana Nishizawa

Jan. 21 (Bloomberg) -- Asian stocks fell the fourth straight day as China’s fastest quarterly economic growth since 2007 and Indian food inflation raised concern about government action to control price increases.

Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. sank at least 1.6 percent in Hong Kong. Larsen & Toubro Ltd., India’s biggest engineering company, tumbled 6.5 percent after profit slid by half Santos Ltd., Australia’s third-largest oil and gas producer, declined 1.1 percent after fourth-quarter sales dropped.

The MSCI Asia Pacific Index lost 0.5 percent to 123.61 at 7:45 p.m. in Tokyo, with about five stocks falling for every four that rose. The measure has jumped 50 percent in the past 12 months as growth in China helped the global economy emerge from the worst slowdown since World War II.

“China has done the heavy lifting in the recovery process, and now needs to cool its economy down a little bit,” said Prasad Patkar, who helps manage about $1.6 billion at Platypus Asset Management in Sydney. “Policy tightening measures will be forthcoming, but they need to be viewed in the context of how strong the economy has been.”

Hong Kong’s Hang Seng Index fell 2 percent, while China’s Shanghai Composite Index advanced 0.2 percent. Australia’s S&P/ASX 200 Index lost 0.8 percent. The Bombay Stock Exchange’s Sensitive Index fell 2.4 percent after a government index of food inflation stayed above 15 percent.

Japan’s Nikkei 225 Stock Average climbed 1.2 percent, with Toyota Motor Corp. pacing gains among automakers as a weaker yen boosted the outlook for export earnings. South Korea’s Hynix Semiconductor Inc. advanced 2.2 percent after reporting its biggest quarterly profit in three years.

Starbucks, EBay

Futures on the U.S. Standard & Poor’s 500 Index lost 0.2 percent even as Starbucks Corp., the world’s largest coffee-shop operator, and EBay Inc., the most-visited U.S. e-commerce site, reported better-than-estimated profit after markets closed. The S&P 500 lost 1.1 percent yesterday.

Industrial & Commercial Bank of China, the world’s biggest bank by market value, fell 2.9 percent to HK$5.72, the third- biggest drag on the MSCI Asia Pacific Index. China Construction Bank dropped 1.6 percent to HK$6.12.

China’s fourth-quarter gross domestic product grew 10.7 percent from the same period a year ago, more than the median forecast of 10.5 percent in a Bloomberg News survey, a statistics bureau report showed in Beijing today.

The report may stoke speculation the central bank will raise its benchmark interest rate and tighten restrictions on the nation’s lenders. Minutes after the release, traders said the People’s Bank of China guided three-month bill yields higher at an auction for the second time in two weeks.

Oil Prices

Economic growth of 10 percent or more is excessive, monetary policy committee member Fan Gang said in November. The PBOC ordered ICBC to raise its reserve ratio by 0.5 percentage point, Reuters reported late yesterday, citing two unidentified people. A spokesman for the lender declined to comment.

“At this point, too much growth increases fear of inflation, and not enough growth increases the fear of a recession,” said Roger Groebli, Singapore-based head of financial-market analysis at LGT Capital Management, which oversees about $75 billion in assets. “The government has to make sure the recovery will continue smoothly and not build up a bubble,” he added.

Property developers with projects in China declined on concern tighter lending restrictions will curb real-estate demand. Shimao Property Holdings Ltd. dropped 3.7 percent to HK$12.58, the lowest since Sept. 2. Henderson Land Development Co., a Hong Kong-based developer which gets 12 percent of sales from China, slumped 4.1 percent to HK$51.90.

Consumer Prices

“The strong GDP growth will spur a normalization of easy monetary conditions in China but I don’t think there will be a serious tightening,” said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees $11 billion. “That’s not going to trigger a slowdown.”

Consumer prices in China rose 1.9 percent in December from a year earlier, today’s data showed, after a 0.6 percent gain in November. Producer prices climbed 1.7 percent, after declining for the previous 12 months.

Signs of a recovery in Asia’s economies have helped drive the MSCI Asia Pacific Index up by 75 percent from a more than five-year low on March 9. Stocks on the gauge are priced at 1.63 times book value, near the highest level since September 2008.

Asset Bubbles

Developing Asian economies face the risk of asset bubbles or overheating as the region’s growth outpaces the rest of the world this year, the World Bank said in a report today. An index of wholesale food articles compiled by the commerce ministry rose 16.81 percent in the week ended Jan. 9 from a year earlier.

Larsen & Toubro sank 6.8 percent to 1,524.1 rupees. The company cut its sales forecast for the year ending March 31 after customers delayed projects, Chief Financial Officer Y.M. Deosthalee said on CNBC-TV18 channel. His comment came after Larsen & Toubro reported third-quarter profit fell 50 percent.

Santos fell 1.1 percent to A$13.48 after saying fourth- quarter sales dropped 7 percent because of lower oil prices. Crude oil for March delivery sank 2 percent to $77.74 a barrel in New York yesterday, while copper futures fell 2.7 percent.

BHP Billiton Ltd., the world’s largest mining company, dropped 1.7 percent to A$42.67. Rio Tinto Group, the world’s third-biggest mining company, retreated 3.2 percent to A$75.55. The two companies were the biggest drags on the MSCI Asia Pacific Index.

Yen Benefits

Japanese automakers advanced on optimism the weaker yen will boost the value of overseas sales when converted into the companies’ home currency. The yen depreciated to 91.56 against the dollar, the weakest intraday level since Jan. 14, from 91.24 yesterday.

Toyota, which gets 31 percent of sales in North America, jumped 2.1 percent to 4,190 yen. Honda Motor Co. added 1.7 percent to 3,310 yen.

Every 1 yen increase by the currency against the dollar this fiscal year will cut Honda’s operating profit by about 12 billion yen ($132 million) and reduce Toyota’s profit by about 30 billion yen, the automakers said in November.

Hynix, the world’s second-largest computer-memory chipmaker, gained 2.2 percent to 25,950 won after saying fourth-quarter net income was 652 billion won ($573 million), compared with a 1.69 trillion-won loss a year earlier. The company also said sales more than doubled.

Rising Demand?

Hynix’s earnings follow those of Intel Corp., the world’s largest chipmaker, which last week forecast higher first-quarter sales than analysts had estimated. Micron Technology Inc., the biggest U.S. producer of computer-memory chips, last month reported its first quarterly profit in more than two years.

Samsung Electronics Co. rose 1.9 percent to 850,000 won, the second-leading mover on the MSCI Asia Pacific Index, behind Toyota. Advantest Corp., the world’s largest maker of memory- chip testers, gained 3.6 percent to 2,597 yen, the highest since Aug. 11. Elpida Memory Inc., Japan’s biggest computer memory- chip maker, added 4.6 percent to 1,769 yen.

“The outlook for the first half looks positive” because of demand for personal computers, said Benjamin Ban, an analyst at Daishin Securities Co. “Still, if there’s too much investment in the industry going forward, we may have to see what happens in the second half.”

To contact the reporter for this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net.

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U.K.’s FTSE 100 Fluctuates; Easyjet Rises, Mining Stocks Fall

By Sarah Jones

Jan. 21 (Bloomberg) -- U.K. stocks fluctuated between gains and losses as a rally in United Utilities Plc and airline companies offset a selloff in mining shares and an unexpected rise in American jobless claims.

United Utilities Plc surged by the most in ten months on the company’s outlook. EasyJet Plc gained on higher revenue and passenger numbers and British Airways Plc also advanced. Anglo American Plc fell 2.6 percent, leading a gauge of mining shares lower for a second day as copper erased gains in London.

The benchmark FTSE 100 Index rose 4.79, or less than 0.1 percent, to 5,425.59 in London at 2:00 p.m. The gauge earlier rallied as much as 0.9 percent and fell as much as 0.4 percent. The FTSE All-Share Index gained 0.1 percent and Ireland’s ISEQ Index added 0.1 percent.

Stocks pared earlier gains after the U.S. Labor Department said more Americans than anticipated filed claims for unemployment benefits last week, reflecting a backlog of applications from the year-end holidays. Initial jobless claims rose by 36,000 to 482,000 in the week ended Jan. 16, the highest level in two months, from 446,000 the prior week. The jump was due to an “administrative” accumulation from late December and early January holidays, and did not reflect “economic” reasons, a Labor Department spokesman said.

United Utilities

United Utilities jumped 4.7 percent to 532.5 pence, the highest level since February last year, as Britain’s largest publicly traded water company said it’s confident of delivering a “sound underlying” performance for the year to March 31. The company also described its balance sheet as “robust.”

EasyJet rallied 4.7 percent to 382 pence after Europe’s second-biggest airline reported an 11 percent rise in first- quarter revenue to 608 million pounds ($984 million) and a 9 percent rise in passenger numbers to 11 million, beating internal forecasts. Chief Executive Officer Andy Harrison also predicted an improvement in earnings for the full year ending Sept. 30.

British Airways, Europe’s third-largest airline, climbed 4 percent to 210.3 pence. Ryanair Holdings Plc gained 1.3 percent to 3.44 euros in Dublin.

Enterprise Inns Plc surged after the company said the rate of decline in profit across its pub estate has slowed. The U.K.’s second-biggest pub owner reported a 4 percent fall in net income per pub in the 16 weeks ended Jan. 16. That compares to an 8 percent decline in the financial year that ended last September. The stock surged 21 percent to 114.5 pence, the biggest advance since October.

Mining Stocks

Anglo American paced declining shares, falling 2.6 percent to 2,582 pence, as copper pared gains in London. Rio Tinto Group, the world’s third-largest mining company, slid 2.3 percent to 3,385.5 pence. Kazakhmys Plc retreated 2.9 percent to 1,322 pence.

A gauge of mining shares yesterday dropped by the most since Nov. 26 amid concern China may rein in stimulus measures to prevent the economy overheating.

The nation’s chief banking regulator, Liu Mingkang, said in an interview that some banks have been asked to limit lending after they failed to meet certain requirements. A report today showed China’s economy expanded 10.7 percent in the fourth quarter from the same period a year ago, the fastest pace since 2007.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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European Stocks Pare Gains After U.S. Jobless Claims Increase

By Andrew Rummer

Jan. 21 (Bloomberg) -- European stocks pared their advance after a report showed more Americans than forecast filed unemployment-benefit claims last week.

The Dow Jones Stoxx 600 Index added 0.1 percent to 256.56 at 1:34 p.m. in London, having earlier risen as much as 0.6 percent.

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U.S. Stock Futures Retreat on Jobless Claims, China Concern

By Nikolaj Gammeltoft

Jan. 21 (Bloomberg) -- U.S. stock futures fell as a gain in initial jobless claims and concern China will move to slow economic growth offset better-than-estimated results at Goldman Sachs Group Inc., EBay Inc. and Starbucks Corp.

United Technologies Corp. and Walt Disney Co. fell at least 0.6 percent to lead declines in Dow Jones Industrial Average stocks. Goldman Sachs, the most profitable securities firm in Wall Street history, climbed after results were boosted by a reduction in the percentage of revenue allocated to compensation. EBay, the most-visited U.S. e-commerce site, added 8.4 percent after reporting its first profit increase in more than a year. Starbucks gained 3 percent as it raised its annual forecast following higher-than-estimated first-quarter earnings.

Futures on the Standard & Poor’s 500 Index expiring in March slipped 0.1 percent to 1,133.2 as of 8:51 a.m. in New York. Dow Jones Industrial Average futures dropped 0.2 percent to 10,528 and Nasdaq-100 Index futures lost less than 0.1 percent to 1,866.5.

More than 60 companies in the S&P 500 are reporting fourth- quarter results this week and analysts surveyed by Bloomberg forecast total earnings grew 67 percent, with estimates for a 30 percent increase in the first quarter of 2010. The benchmark index’s valuation climbed last week to 25 times its companies’ reported operating profits, the highest level since 2002, following a 70 percent jump since March.

‘Enduring Bull Market’

“2010 could be the year in which the market recovery of 2009 is transformed into a long and enduring bull market,” said Max King, a London-based strategist at Investec Asset Management, which oversees about $55 billion. “The consensus earnings forecast of over 30 percent growth looks not just achievable but beatable.”

China’s economy grew 10.7 percent in the fourth quarter, the fastest pace since 2007 and more than the median forecast of 10.5 percent in a Bloomberg News survey, according to the statistics bureau in Beijing, fanning speculation the central bank will curb record loan growth to prevent the economy from overheating.

A global rally in stocks may end in the second half of the year amid a muted recovery in the world’s largest economies and as deflationary pressures limit gains in corporate earnings, Nouriel Roubini, the Harvard-schooled New York University professor who in 2006 foresaw the financial crisis, said in Hong Kong today.

More Americans than anticipated filed claims for unemployment benefits last week, reflecting a backlog of applications from the year-end holidays. Initial jobless claims rose by 36,000 to 482,000 in the week ended Jan. 16, the highest level in two months, from 446,000 the prior week, Labor Department figures showed.

The index of U.S. leading indicators probably rose in December for a ninth month, signaling the economy will keep growing through the first half of the year, economists said before a report at 10 a.m. New York time.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

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