By Millie Munshi
Aug. 7 (Bloomberg) -- Copper rose the most in a week as a decline in the dollar boosted investor demand for commodities as an alternative investment.
The dollar fell as much as 0.6 percent against a basket of the euro, yen and four other major currencies, snapping a four- session rally. Before today, copper gained 13 percent this year, reaching a record in May, as supplies of raw materials trailed global demand.
``We expect the firmer tone to continue for the balance of the day'' as the dollar slides, said Edward Meir, an analyst at M.F. Global Ltd. in Darien, Connecticut.
Copper futures for September delivery rose 2.25 cents, or 0.7 percent, to $3.446 a pound at 9:22 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage gain for a most-active contract since July 30. The metal rose to the all-time high of $4.2605 on May 5.
A rebound in energy costs drove commodities higher, Meir said. Crude oil jumped as much as 2.7 percent on renewed supply concerns. Before today, oil tumbled 19 percent from a record on July 11. The Reuters/Jefferies CRB Index of 19 raw materials climbed as much as 0.9 percent today, snapping a five-session skid.
On the London Metal Exchange, copper for delivery in three months gained $55, or 0.7 percent, to $7,670 a metric ton ($3.48 a pound). Before today, the price dropped 1 percent in the past 12 months.
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net
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Thursday, August 7, 2008
Nickel Gains in London as Russian Producer Considers Output Cut
By Chanyaporn Chanjaroen
Aug. 7 (Bloomberg) -- Nickel rose the most in almost a month in London after Russia's third-largest producer said it may cut production because of this year's price slump. Aluminum and copper also advanced.
Industrial Metallurgical Holding, based in Moscow, shut its two nickel plants for 10 days at the end of July for maintenance and is considering an output cut, spokesman Pavel Kovalenko said today. Minara Resources Ltd., Australia's second-largest producer, deferred a A$300 million ($272 million) expansion plan.
``We would expect to see further projects put on hold and production cuts should prices head lower than $17,000,'' RBC Capital Market traders, led by Alex Heath, in London wrote today in a report. Cash costs for 10 percent of world nickel production exceeded that price level, according to the brokerage.
Nickel for delivery in three months gained as much as $1,010 a metric ton, or 5.7 percent, to $18,810 a ton on the London Metal Exchange, the biggest one-day increase since June 12. The contract traded at $18,600 a ton as of 12:41 p.m. local time, paring this year's loss to 29 percent.
Nickel prices have fallen for a second consecutive year as stainless-steel mills, the biggest user of the metal, slowed purchases because of weakening construction in the U.S. and Europe. OAO GMK Norilsk Nickel and Cia. Vale do Rio Doce, the world's largest producers, are unlikely to reduce output at current prices, according to GFMS Metals Consulting Ltd.
High Prices
``Given the still-high prices of byproducts such as platinum group metals, cobalt and copper, prices would have to fall by a few thousands dollars more'' for the companies to cut output, Neil Buxton, GFMS Metals managing director, said today by phone form London.
Industrial Metallurgical's Ufaleynickel plant produced 14,144 tons of nickel last year, while its Reznickel plant makes an intermediate product processed at Ufaleynickel. The company sold 5,796 tons of the metal in Russia last year.
LME-tracked lead stockpiles fell 1.6 percent to 91,575 tons. The contract gained $50, or 2.4 percent, to $2,115 a ton.
Investors should buy copper for delivery in 63 months if it falls below $5,500 a ton, UBS AG said in a report dated yesterday, when the price closed at $6,387.
Investors should also short aluminum, or bet prices will decline, if the benchmark price is more than $3,000 a ton by the end of September, according to the report.
``Any summer production interruptions from China should happen in August or September,'' UBS said. ``Thereafter Chinese smelters will be able to quickly make up any resulting shortfall.''
Copper for delivery in three months gained $31 to $7,646 a ton and aluminum rose $21.50 to $2,927.50. Lead added $30 to $2,095 a ton and tin increased $50 to $20,525 a ton. Zinc lost $8 to $1,757.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Aug. 7 (Bloomberg) -- Nickel rose the most in almost a month in London after Russia's third-largest producer said it may cut production because of this year's price slump. Aluminum and copper also advanced.
Industrial Metallurgical Holding, based in Moscow, shut its two nickel plants for 10 days at the end of July for maintenance and is considering an output cut, spokesman Pavel Kovalenko said today. Minara Resources Ltd., Australia's second-largest producer, deferred a A$300 million ($272 million) expansion plan.
``We would expect to see further projects put on hold and production cuts should prices head lower than $17,000,'' RBC Capital Market traders, led by Alex Heath, in London wrote today in a report. Cash costs for 10 percent of world nickel production exceeded that price level, according to the brokerage.
Nickel for delivery in three months gained as much as $1,010 a metric ton, or 5.7 percent, to $18,810 a ton on the London Metal Exchange, the biggest one-day increase since June 12. The contract traded at $18,600 a ton as of 12:41 p.m. local time, paring this year's loss to 29 percent.
Nickel prices have fallen for a second consecutive year as stainless-steel mills, the biggest user of the metal, slowed purchases because of weakening construction in the U.S. and Europe. OAO GMK Norilsk Nickel and Cia. Vale do Rio Doce, the world's largest producers, are unlikely to reduce output at current prices, according to GFMS Metals Consulting Ltd.
High Prices
``Given the still-high prices of byproducts such as platinum group metals, cobalt and copper, prices would have to fall by a few thousands dollars more'' for the companies to cut output, Neil Buxton, GFMS Metals managing director, said today by phone form London.
Industrial Metallurgical's Ufaleynickel plant produced 14,144 tons of nickel last year, while its Reznickel plant makes an intermediate product processed at Ufaleynickel. The company sold 5,796 tons of the metal in Russia last year.
LME-tracked lead stockpiles fell 1.6 percent to 91,575 tons. The contract gained $50, or 2.4 percent, to $2,115 a ton.
Investors should buy copper for delivery in 63 months if it falls below $5,500 a ton, UBS AG said in a report dated yesterday, when the price closed at $6,387.
Investors should also short aluminum, or bet prices will decline, if the benchmark price is more than $3,000 a ton by the end of September, according to the report.
``Any summer production interruptions from China should happen in August or September,'' UBS said. ``Thereafter Chinese smelters will be able to quickly make up any resulting shortfall.''
Copper for delivery in three months gained $31 to $7,646 a ton and aluminum rose $21.50 to $2,927.50. Lead added $30 to $2,095 a ton and tin increased $50 to $20,525 a ton. Zinc lost $8 to $1,757.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Robusta Coffee Rebounds in London as Roasters Replenish Stocks
By Marianne Stigset
Aug. 7 (Bloomberg) -- Robusta coffee in London rebounded from yesterday's drop as investors and roasters took advantage of lower prices to add to holdings. Cocoa and sugar gained.
Robusta coffee rallied from yesterday's 2.6 percent slide. The UBS Bloomberg CMCI Index of 26 raw materials has slipped 4.6 percent this week on signs of weakening global economic growth and demand from industry for raw materials.
``The short-term funds were pushed and had to get out but then industry has come in to buy at lower levels,'' said Angus Kerr, owner of Coffee ag, a trader in Cobham, England.
Robusta for September delivery rose $15, or 0.6 percent, to $2,377 a metric ton as of 1:38 p.m. on London's Liffe exchange. The beans have gained 25 percent this year, outperforming the 14 percent advance in the CMCI Index.
Arabica coffee futures for September delivery climbed 1.4 percent to $1.398 a pound on ICE Futures U.S.
Crude oil rose for the first time in four days today and the dollar fell from near a seven-week high against the euro, further buoying coffee, Kerr said. A weaker U.S. currency makes dollar-denominated commodities cheaper to buy for those holding other monies.
Coffee shipments from Brazil, the biggest producer and exporter, fell 10 percent in July from a year earlier, the country's Coffee Exporters Council said yesterday.
Brazil last month shipped 2.03 million bags of the commodity, including instant coffee, compared with 2.26 million bags a year earlier, according to the council, known as Cecafe. A bag weighs 60 kilograms (132 pounds).
Arabica Exports
Exports of mild-tasting arabica beans fell 15 percent to 1.48 million bags in July, while shipments of the robusta variety expanded 33 percent to 277,581 bags.
Global coffee exports fell in June from a year earlier as the two main producing countries, Brazil and Vietnam, reduced shipments, the International Coffee Organization said July 31. Exports in June declined to 8.28 million bags from 8.35 million bags a year earlier, the London-based ICO.
Among other agricultural commodities, white, or refined, sugar for October delivery advanced $4.70, or 1.2 percent, to $400.60 a ton.
Output in Brazil's Center South region, the biggest cane- growing area, fell 11 percent this year through July 16 as heavy rains reduced sucrose levels and cut yields, according to Unica, the country's sugar-cane industry association. Brazil used 60 percent of its harvest for ethanol in the period, up from 56 percent a year earlier, Unica said.
Sugar Yields
``Sugar prices have benefited from expectations of a declining global surplus due to lower yields in key producers Brazil and India, as well as from the perception that globally, more cane will be used for ethanol over the coming years,'' Abah Ofon, a commodities analyst with Standard Chartered Plc, wrote in a report today.
Ofon expects raw sugar to average 14 cents a pound in the last two quarters due ``in part to only moderate international demand for Brazilian ethanol.'' Raw sugar traded up 0.1 percent today at 13.95 cents a pound in New York.
Cocoa futures for September delivery rose 9 pounds, or 0.6 percent, to 1,493 pounds ($2,908) a ton on Liffe.
To contact the reporter on this story: Marianne Stigset in London at mstigset@bloomberg.net
Read more...
Aug. 7 (Bloomberg) -- Robusta coffee in London rebounded from yesterday's drop as investors and roasters took advantage of lower prices to add to holdings. Cocoa and sugar gained.
Robusta coffee rallied from yesterday's 2.6 percent slide. The UBS Bloomberg CMCI Index of 26 raw materials has slipped 4.6 percent this week on signs of weakening global economic growth and demand from industry for raw materials.
``The short-term funds were pushed and had to get out but then industry has come in to buy at lower levels,'' said Angus Kerr, owner of Coffee ag, a trader in Cobham, England.
Robusta for September delivery rose $15, or 0.6 percent, to $2,377 a metric ton as of 1:38 p.m. on London's Liffe exchange. The beans have gained 25 percent this year, outperforming the 14 percent advance in the CMCI Index.
Arabica coffee futures for September delivery climbed 1.4 percent to $1.398 a pound on ICE Futures U.S.
Crude oil rose for the first time in four days today and the dollar fell from near a seven-week high against the euro, further buoying coffee, Kerr said. A weaker U.S. currency makes dollar-denominated commodities cheaper to buy for those holding other monies.
Coffee shipments from Brazil, the biggest producer and exporter, fell 10 percent in July from a year earlier, the country's Coffee Exporters Council said yesterday.
Brazil last month shipped 2.03 million bags of the commodity, including instant coffee, compared with 2.26 million bags a year earlier, according to the council, known as Cecafe. A bag weighs 60 kilograms (132 pounds).
Arabica Exports
Exports of mild-tasting arabica beans fell 15 percent to 1.48 million bags in July, while shipments of the robusta variety expanded 33 percent to 277,581 bags.
Global coffee exports fell in June from a year earlier as the two main producing countries, Brazil and Vietnam, reduced shipments, the International Coffee Organization said July 31. Exports in June declined to 8.28 million bags from 8.35 million bags a year earlier, the London-based ICO.
Among other agricultural commodities, white, or refined, sugar for October delivery advanced $4.70, or 1.2 percent, to $400.60 a ton.
Output in Brazil's Center South region, the biggest cane- growing area, fell 11 percent this year through July 16 as heavy rains reduced sucrose levels and cut yields, according to Unica, the country's sugar-cane industry association. Brazil used 60 percent of its harvest for ethanol in the period, up from 56 percent a year earlier, Unica said.
Sugar Yields
``Sugar prices have benefited from expectations of a declining global surplus due to lower yields in key producers Brazil and India, as well as from the perception that globally, more cane will be used for ethanol over the coming years,'' Abah Ofon, a commodities analyst with Standard Chartered Plc, wrote in a report today.
Ofon expects raw sugar to average 14 cents a pound in the last two quarters due ``in part to only moderate international demand for Brazilian ethanol.'' Raw sugar traded up 0.1 percent today at 13.95 cents a pound in New York.
Cocoa futures for September delivery rose 9 pounds, or 0.6 percent, to 1,493 pounds ($2,908) a ton on Liffe.
To contact the reporter on this story: Marianne Stigset in London at mstigset@bloomberg.net
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Crude Oil Rises as Turkey Says Pipeline Repair May Take 2 Weeks
By Margot Habiby
Aug. 7 (Bloomberg) -- Crude oil rose for the first time in four days after Turkey said a pipeline carrying crude to the Mediterranean from Azerbaijan may remain shut for two weeks following an explosion on Aug. 5.
The pipeline is able to ship 1 million barrels a day, Ali Gungor, governor of the Erzincan province, where the blast occurred, said today. The fire is still burning in a ``controlled manner,'' Huseyin Sagir, a spokesman at Turkish pipeline company Botas International, said. A Kurdish separatist group claimed responsibility for bombing the pipeline.
``This is a global market, so it does have an impact'' around the world, said Peter Beutel, president of Connecticut- based Cameron Hanover Inc. ``This is a pipeline that has not been attacked before. To have it now politicized by the Kurds opens up a whole new realm of political frustration and supply loss.''
Crude oil for September delivery rose $1.90, or 1.6 percent, to $120.48 a barrel at 9:25 a.m. on the New York Mercantile Exchange. Earlier, the contract touched $121.78 a barrel.
New York futures fell as low as $117.11 a barrel yesterday after an increase in U.S. inventories. That's more than 20 percent below the record $147.27 on July 11, a threshold commonly seen as the start of a bear market.
``That there's no significant follow-through selling after going through some stops yesterday shows there's strength in the market,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. That's adding support along with concern about the Turkish pipeline, he said.
Pipeline operator BP Plc canceled export obligations.
Kurds
The Kurdistan Workers' Party, or PKK, said it bombed the pipeline, the Kurdish news agency Firat said on its Web site today. The PKK, which has been fighting for autonomy in largely Kurdish southeast Turkey for two decades, attacked a section of the pipeline in east Turkey late on Aug. 5, the report said.
``Flows from the Caspian play an important role in non-OPEC supply growth this year, given an increasingly deteriorating growth outlook for Russia,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA in London. ``The region is one of the fastest areas of crude supply growth.''
Azerbaijan and other ex-Soviet states are among producers outside the Organization of Petroleum Exporting Countries that supply about 57 percent of the world's oil, according to the International Energy Agency.
Ex-Soviet States
Azerbaijan plans to pump 1.2 million barrels a day next year, President Ilham Aliyev said in June. That's up from a daily rate of 868,000 last year.
Output in Russia, the largest producer outside OPEC, fell to 9.78 million barrels a day last month, down 1.1 percent from last year, the government said. Drillers in the country face aging fields and rising costs.
Oil may trade near $115 a barrel in the coming months as demand slows and supply increases, according to Thomas O'Malley, chairman of Petroplus Holdings AG, Europe's biggest independent refiner by capacity.
``High crude oil prices and extreme volatility are causing demand destruction, primarily in the U.S. If we get a period of stability around these numbers, demand destruction will be limited,'' he said.
Brent crude for September settlement rose $1.65, or 1.4 percent, to $118.65 a barrel on London's ICE Futures Europe exchange. Earlier, it touched $119.75 a barrel. Yesterday, the contract declined to $115.60 a barrel in intraday trading, 22 percent below its record of $147.50.
Crude oil supplies rose 1.61 million barrels last week, and fuel consumption was 2.6 percent lower in the four weeks ended Aug. 1 from a year ago, the U.S. Energy Department said.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
Read more...
Aug. 7 (Bloomberg) -- Crude oil rose for the first time in four days after Turkey said a pipeline carrying crude to the Mediterranean from Azerbaijan may remain shut for two weeks following an explosion on Aug. 5.
The pipeline is able to ship 1 million barrels a day, Ali Gungor, governor of the Erzincan province, where the blast occurred, said today. The fire is still burning in a ``controlled manner,'' Huseyin Sagir, a spokesman at Turkish pipeline company Botas International, said. A Kurdish separatist group claimed responsibility for bombing the pipeline.
``This is a global market, so it does have an impact'' around the world, said Peter Beutel, president of Connecticut- based Cameron Hanover Inc. ``This is a pipeline that has not been attacked before. To have it now politicized by the Kurds opens up a whole new realm of political frustration and supply loss.''
Crude oil for September delivery rose $1.90, or 1.6 percent, to $120.48 a barrel at 9:25 a.m. on the New York Mercantile Exchange. Earlier, the contract touched $121.78 a barrel.
New York futures fell as low as $117.11 a barrel yesterday after an increase in U.S. inventories. That's more than 20 percent below the record $147.27 on July 11, a threshold commonly seen as the start of a bear market.
``That there's no significant follow-through selling after going through some stops yesterday shows there's strength in the market,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. That's adding support along with concern about the Turkish pipeline, he said.
Pipeline operator BP Plc canceled export obligations.
Kurds
The Kurdistan Workers' Party, or PKK, said it bombed the pipeline, the Kurdish news agency Firat said on its Web site today. The PKK, which has been fighting for autonomy in largely Kurdish southeast Turkey for two decades, attacked a section of the pipeline in east Turkey late on Aug. 5, the report said.
``Flows from the Caspian play an important role in non-OPEC supply growth this year, given an increasingly deteriorating growth outlook for Russia,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA in London. ``The region is one of the fastest areas of crude supply growth.''
Azerbaijan and other ex-Soviet states are among producers outside the Organization of Petroleum Exporting Countries that supply about 57 percent of the world's oil, according to the International Energy Agency.
Ex-Soviet States
Azerbaijan plans to pump 1.2 million barrels a day next year, President Ilham Aliyev said in June. That's up from a daily rate of 868,000 last year.
Output in Russia, the largest producer outside OPEC, fell to 9.78 million barrels a day last month, down 1.1 percent from last year, the government said. Drillers in the country face aging fields and rising costs.
Oil may trade near $115 a barrel in the coming months as demand slows and supply increases, according to Thomas O'Malley, chairman of Petroplus Holdings AG, Europe's biggest independent refiner by capacity.
``High crude oil prices and extreme volatility are causing demand destruction, primarily in the U.S. If we get a period of stability around these numbers, demand destruction will be limited,'' he said.
Brent crude for September settlement rose $1.65, or 1.4 percent, to $118.65 a barrel on London's ICE Futures Europe exchange. Earlier, it touched $119.75 a barrel. Yesterday, the contract declined to $115.60 a barrel in intraday trading, 22 percent below its record of $147.50.
Crude oil supplies rose 1.61 million barrels last week, and fuel consumption was 2.6 percent lower in the four weeks ended Aug. 1 from a year ago, the U.S. Energy Department said.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
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Gold Rises as Oil Rebounds, Dollar Retreats; Silver Advances
By Pham-Duy Nguyen
Aug. 7 (Bloomberg) -- Gold rose for the first time in a week as the dollar retreated and energy costs gained, boosting the appeal of the precious metal as a hedge against inflation. Silver also advanced.
Crude-oil futures rose as much as 2.7 percent to $121.78 a barrel after shedding almost $7 this week. Gold fell under $900 an ounce for the first time since June on Aug. 4, following a broader decline in commodities such as oil, copper and corn. Before today, gold slid 4.3 percent since July 31 and was down 15 percent from a record $1,033.90 in March.
``Commodities are not dead,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``Prices for gold and silver look attractive down here. You have a weaker dollar, energy concerns, economic concerns, geopolitical concerns. The demand for metals is not going to go away.''
Gold futures for December delivery rose $3.20, or 0.4 percent, to $886.20 an ounce at 9:22 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price gained as much as 1.1 percent.
Silver futures for September delivery rose 4.5 cents, or 0.3 percent, to $16.55 an ounce on the Comex. Before today, silver gained 11 percent this year, while gold advanced 5.4 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
Read more...
Aug. 7 (Bloomberg) -- Gold rose for the first time in a week as the dollar retreated and energy costs gained, boosting the appeal of the precious metal as a hedge against inflation. Silver also advanced.
Crude-oil futures rose as much as 2.7 percent to $121.78 a barrel after shedding almost $7 this week. Gold fell under $900 an ounce for the first time since June on Aug. 4, following a broader decline in commodities such as oil, copper and corn. Before today, gold slid 4.3 percent since July 31 and was down 15 percent from a record $1,033.90 in March.
``Commodities are not dead,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``Prices for gold and silver look attractive down here. You have a weaker dollar, energy concerns, economic concerns, geopolitical concerns. The demand for metals is not going to go away.''
Gold futures for December delivery rose $3.20, or 0.4 percent, to $886.20 an ounce at 9:22 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price gained as much as 1.1 percent.
Silver futures for September delivery rose 4.5 cents, or 0.3 percent, to $16.55 an ounce on the Comex. Before today, silver gained 11 percent this year, while gold advanced 5.4 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
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Hong Kong's Stocks Climb Most in a Week; Esprit, Sinopec Rise
By Hanny Wan
Aug. 7 (Bloomberg) -- Hong Kong stocks rose the most in a week after a retreat in crude oil prices eased concern higher energy costs will hurt consumption and earnings.
Esprit Holdings Ltd., a global clothing retailer, jumped the most in two weeks. China Petroleum & Chemical Corp., the nation's biggest refiner, advanced after oil prices fell yesterday to a three-month low. Cathay Pacific Airways Ltd. retreated the most in a month after reporting its first loss in five years. The stock market was closed because of a typhoon yesterday when the MSCI Asia Pacific Index rallied 1.5 percent.
Given a decline in oil prices, ``refiners are probably the more direct beneficiaries,'' said Gary Chan, a portfolio manager at Mirae Asset Global Investments (Hong Kong) Ltd., which oversees more than $3 billion. ``The airline sector is getting more and more competitive across the world. I think we can see a better entry point.''
The Hang Seng Index added 154.45, or 0.7 percent, to close at 22,104.20, its steepest advance since July 30. The benchmark has fallen 21 percent this year as a 24 percent increase in oil drove concerns that energy costs will rise.
The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, lost 3.79 points, or less than 0.1 percent, to 11,943.85.
Li & Fung Gains
Esprit climbed 3.8 percent to HK$83, its largest jump since July 23 and making it the Hang Seng Index's second-biggest percentage gainer today. Li & Fung Ltd., which sells goods to Wal-Mart Stores Inc., added 3.1 percent to HK$25, its biggest advance since July 30.
Sinopec, as China Petroleum is known, rose 1.1 percent to HK$8.16, its largest advance since Aug. 1. The company said on July 17 that its first-half profit may have fallen more than 50 percent amid rising crude oil costs. The Chinese government's controls on refined oil prices distorted the correlation with crude prices, Sinopec said.
Crude oil futures dropped 0.5 percent to $118.58 a barrel in New York yesterday, the lowest close since May 2. The contract was recently at $119.31 in after-hours trading.
Cathay Pacific, Hong Kong's biggest carrier, lost 3.9 percent to HK$14.16, its worst drop since July 2. The company posted a first-half loss of HK$663 million ($85 million) after fuel costs almost doubled and it set aside funds to cover a U.S. price-fixing fine.
Goldman, Sachs & Co. cut its price estimate for the stock by 19 percent to HK$11, according to a research note today. UBS AG trimmed its price forecast for the stock to HK$14.25 from HK$14.50.
Almost two stocks on the 43-member Hang Seng Index advanced for each that dropped. August futures climbed 0.4 percent to 22,046.
The following stocks rose or fell. Stock symbols are in brackets after company names.
China Shipping Container Lines Co. (2866 HK) retreated 13 cents, or 5.8 percent, to HK$2.13, its lowest close since April 10, 2007. The country's second-largest carrier of sea-cargo boxes will buy its parent's terminal unit for 2.6 billion yuan ($380 million). The unit owns stakes in 29 berths in cities including Shanghai, Guangzhou and Dalian, the container line said yesterday.
Hunan Nonferrous Metals Corp. (2626 HK) tumbled 20 cents, or 11 percent, to HK$1.56, the lowest close since its March 31, 2006, debut. China's biggest zinc and tungsten producer said first-half profit fell ``significantly'' because of lower prices. The company didn't give a profit figure in its statement yesterday.
Standard Chartered Plc (2888 HK) advanced HK$9.80, or 4.4 percent, to HK$234, its largest jump since July 17. The U.K. bank that earns most of its money in Asia said on Aug. 5 that first- half profit rose 31 percent to $1.79 billion, helped by corporate lending in India and Hong Kong.
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net
Read more...
Aug. 7 (Bloomberg) -- Hong Kong stocks rose the most in a week after a retreat in crude oil prices eased concern higher energy costs will hurt consumption and earnings.
Esprit Holdings Ltd., a global clothing retailer, jumped the most in two weeks. China Petroleum & Chemical Corp., the nation's biggest refiner, advanced after oil prices fell yesterday to a three-month low. Cathay Pacific Airways Ltd. retreated the most in a month after reporting its first loss in five years. The stock market was closed because of a typhoon yesterday when the MSCI Asia Pacific Index rallied 1.5 percent.
Given a decline in oil prices, ``refiners are probably the more direct beneficiaries,'' said Gary Chan, a portfolio manager at Mirae Asset Global Investments (Hong Kong) Ltd., which oversees more than $3 billion. ``The airline sector is getting more and more competitive across the world. I think we can see a better entry point.''
The Hang Seng Index added 154.45, or 0.7 percent, to close at 22,104.20, its steepest advance since July 30. The benchmark has fallen 21 percent this year as a 24 percent increase in oil drove concerns that energy costs will rise.
The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, lost 3.79 points, or less than 0.1 percent, to 11,943.85.
Li & Fung Gains
Esprit climbed 3.8 percent to HK$83, its largest jump since July 23 and making it the Hang Seng Index's second-biggest percentage gainer today. Li & Fung Ltd., which sells goods to Wal-Mart Stores Inc., added 3.1 percent to HK$25, its biggest advance since July 30.
Sinopec, as China Petroleum is known, rose 1.1 percent to HK$8.16, its largest advance since Aug. 1. The company said on July 17 that its first-half profit may have fallen more than 50 percent amid rising crude oil costs. The Chinese government's controls on refined oil prices distorted the correlation with crude prices, Sinopec said.
Crude oil futures dropped 0.5 percent to $118.58 a barrel in New York yesterday, the lowest close since May 2. The contract was recently at $119.31 in after-hours trading.
Cathay Pacific, Hong Kong's biggest carrier, lost 3.9 percent to HK$14.16, its worst drop since July 2. The company posted a first-half loss of HK$663 million ($85 million) after fuel costs almost doubled and it set aside funds to cover a U.S. price-fixing fine.
Goldman, Sachs & Co. cut its price estimate for the stock by 19 percent to HK$11, according to a research note today. UBS AG trimmed its price forecast for the stock to HK$14.25 from HK$14.50.
Almost two stocks on the 43-member Hang Seng Index advanced for each that dropped. August futures climbed 0.4 percent to 22,046.
The following stocks rose or fell. Stock symbols are in brackets after company names.
China Shipping Container Lines Co. (2866 HK) retreated 13 cents, or 5.8 percent, to HK$2.13, its lowest close since April 10, 2007. The country's second-largest carrier of sea-cargo boxes will buy its parent's terminal unit for 2.6 billion yuan ($380 million). The unit owns stakes in 29 berths in cities including Shanghai, Guangzhou and Dalian, the container line said yesterday.
Hunan Nonferrous Metals Corp. (2626 HK) tumbled 20 cents, or 11 percent, to HK$1.56, the lowest close since its March 31, 2006, debut. China's biggest zinc and tungsten producer said first-half profit fell ``significantly'' because of lower prices. The company didn't give a profit figure in its statement yesterday.
Standard Chartered Plc (2888 HK) advanced HK$9.80, or 4.4 percent, to HK$234, its largest jump since July 17. The U.K. bank that earns most of its money in Asia said on Aug. 5 that first- half profit rose 31 percent to $1.79 billion, helped by corporate lending in India and Hong Kong.
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net
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German Stocks Advance, Led by Deutsche Bank; Utilities Climb
By Henrietta Rumberger and Stefanie Haxel
Aug. 7 (Bloomberg) -- German stocks rose for a third day as better-than-estimated earnings from Barclays Plc lifted bank shares and utilities climbed on Veolia Environnement SA's plan to sell assets.
Deutsche Bank AG and Commerzbank AG led the advance. E.ON AG and RWE AG, the country's biggest utilities, also increased. Insurance companies limited gains after Allianz SE scrapped its profit growth forecast and Hannover Re said second-quarter earnings declined.
The benchmark DAX Index added 29.05, or 0.4 percent, to 6,590.44 as of 2:52 p.m. in Frankfurt. DAX futures expiring in September rose 22.5, or 0.3 percent, to 6,625. The HDAX Index of the country's 110 biggest companies increased 0.5 percent to 3,348.1.
``Barclays gives the banking industry a positive impulse,'' said Robert Halver head of research at Baader Bank in Frankfurt.
European Central Bank President Jean-Claude Trichet said today the bank remains focused on bringing down inflation even as economic growth slows. The ECB kept its benchmark interest rate on hold at 4.25 percent.
Stocks pared earlier advances after German industrial production increased 0.2 percent in June, less than the 0.8 economist had forecast.
Deutsche Bank, Germany's largest bank, climbed 70.5 cents, or 1.1 percent, to 62.715 euros. Commerzbank, the second-biggest, rallied 56.5 cents, or 2.6 percent, to 22.19 euros.
Barclays, the U.K.'s third-largest bank, reported first-half net income of 1.72 billion pounds ($3.4 billion), beating the 1.5 billion-pound average estimate of 11 analysts surveyed by Bloomberg.
Utilities
E.ON, Germany's biggest utility, gained 63 cents, or 1.6 percent, to 40.59 euros. RWE, the second-largest, increased 96 cents, or 1.3 percent, to 76.64 euros.
Veolia, the world's biggest water company, rallied 8.2 percent in Paris after saying it will implement a ``robust'' plan to cut costs by 400 million euros ($619 million) and sell 1.5 billion euros of assets by the end of next year.
Allianz slipped 78 cents, or 0.7 percent, to 112.20 euros. Europe's biggest insurer scrapped its earnings growth forecast after losses at its Dresdner Bank unit led to a 29 percent drop in second-quarter profit. Allianz expects financial markets to remain difficult through 2009, meaning its target for 10 percent compound annual growth in operating earnings ``cannot be maintained,'' the insurer said.
`Hurts the Market'
``The thing with Allianz profit warning is, that although it did not come as a very big surprise, it still hurts the market when it actually is announced,'' Oliver Opgen-Rhein, a trader at HSBC Trinkaus & Burkhardt in Dusseldorf, said in a Bloomberg Television interview.
Hannover Re, Germany's second-biggest reinsurer, sank 1.03 euros, or 3.3 percent, to 30.29. Profit declined 40 percent to 100.8 million euros as falling stock markets weighed on income from investments. That missed the 142 million-euro median estimate of nine analysts surveyed by Bloomberg.
Munich Re, the world's biggest reinsurer, slipped 1.34 euros, or 1.2 percent, to 111.59.
The following stocks also rose or fell in German markets. Symbols are in parentheses.
10tacle Studios AG (T1C GY) tumbled 69 cents, or 73 percent, to 26 cents. The maker of computer and video games filed for insolvency, according to a regulatory statement last night.
Aixtron AG (AIX GY) surged 39 cents, or 6.6 percent, to 6.31 euros. The equipment maker for the chip industry said second- quarter profit jumped 94 percent to 7.4 million euros on demand for gear to produce light-emitting diodes. That compares with a 6.3 million-euro median estimate of seven analysts Bloomberg News surveyed by phone and e-mail.
Altana AG (ALT GY) slipped 35 cents, or 3.4 percent, to 10.05 euros. The world's largest maker of additives for coatings and plastics parts said second-quarter profit rose 2.4 percent to 33.8 million euros after it raised selling prices for specialty chemicals including pearlescent pigments used in cosmetics. Analysts surveyed by Bloomberg News had predicted net income of 34.4 million euros.
Bayer AG (BAY GY) rose 69 cents, or 1.2 percent, to 56.21 euros. Germany's largest drugmaker bought Nycomed Holding AS's experimental cancer medicines for as much as 52 million euros.
Biotest AG (BIO3 GY) added 2.28 euros, or 3.6 percent, to 65 after the biotechnology company that makes compounds from human blood plasma said it's expanding capacity for obtaining blood plasma.
Demag Cranes AG (D9C GY) gained 25 cents, or 0.7 percent, to 34.46 euros. The world's largest maker of mobile harbor cranes said third-quarter profit doubled to 24.8 million euros on sales of cranes and industrial services.
Deutsche Lufthansa AG (LHA GY) fell 39.5 cents, or 2.5 percent, to 15.235 euros. Europe's second-largest airline said it's grounding about 360 flights today as pilots at the CityLine regional unit strike over pay.
Separately, oil rose for the first time in four days after Turkey said a pipeline carrying crude to the Mediterranean from Azerbaijan may remain shut for two weeks following an explosion on Aug. 5.
Draegerwerk AG (DRW3 GY) climbed for a fourth day, rallying 1.12 euros, or 2.8 percent, to 40.89. The maker of the Infinity ACS patient-monitoring system said second-quarter profit rose 16 percent to 18.2 million euros as sales increased in Asia and its home market of Germany.
ElringKlinger AG (ZIL2 GY) decreased 41 cents, or 2.3 percent, to 17.59 euros. The supplier of car parts said second- quarter profit fell 8.6 percent to 19.2 million euros from a year earlier when extraordinary income swelled earnings.
Fraport AG (FRA GY) gained for a fourth day, climbing 3.75 euros, or 9 percent, to 45.48. The owner of Frankfurt airport said second-quarter profit rose 3.3 percent to 68.5 million euros, beating analyst estimates, as it bought Peru's biggest terminal and cut costs buy selling a security division.
Gagfah SA (GFJ GY) slipped 24 cents, or 2.4 percent, to 9.66 euros, the first decline in three days. Germany's largest publicly traded residential landlord said second-quarter profit fell to 31.5 million euros from 559.7 million euros as the value of its apartments dropped.
Puma AG (PUM GY) climbed 3.78 euros, or 1.7 percent, to 227.10. Europe's second-largest sporting-goods maker posted a profit of 45.6 million euros after the company spent more promoting its shoes and apparel before the Olympic Games. That beat the 41.1 million-euro average of four analysts' estimates.
To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Stefanie Haxel in Frankfurt at shaxel@bloomberg.net
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Aug. 7 (Bloomberg) -- German stocks rose for a third day as better-than-estimated earnings from Barclays Plc lifted bank shares and utilities climbed on Veolia Environnement SA's plan to sell assets.
Deutsche Bank AG and Commerzbank AG led the advance. E.ON AG and RWE AG, the country's biggest utilities, also increased. Insurance companies limited gains after Allianz SE scrapped its profit growth forecast and Hannover Re said second-quarter earnings declined.
The benchmark DAX Index added 29.05, or 0.4 percent, to 6,590.44 as of 2:52 p.m. in Frankfurt. DAX futures expiring in September rose 22.5, or 0.3 percent, to 6,625. The HDAX Index of the country's 110 biggest companies increased 0.5 percent to 3,348.1.
``Barclays gives the banking industry a positive impulse,'' said Robert Halver head of research at Baader Bank in Frankfurt.
European Central Bank President Jean-Claude Trichet said today the bank remains focused on bringing down inflation even as economic growth slows. The ECB kept its benchmark interest rate on hold at 4.25 percent.
Stocks pared earlier advances after German industrial production increased 0.2 percent in June, less than the 0.8 economist had forecast.
Deutsche Bank, Germany's largest bank, climbed 70.5 cents, or 1.1 percent, to 62.715 euros. Commerzbank, the second-biggest, rallied 56.5 cents, or 2.6 percent, to 22.19 euros.
Barclays, the U.K.'s third-largest bank, reported first-half net income of 1.72 billion pounds ($3.4 billion), beating the 1.5 billion-pound average estimate of 11 analysts surveyed by Bloomberg.
Utilities
E.ON, Germany's biggest utility, gained 63 cents, or 1.6 percent, to 40.59 euros. RWE, the second-largest, increased 96 cents, or 1.3 percent, to 76.64 euros.
Veolia, the world's biggest water company, rallied 8.2 percent in Paris after saying it will implement a ``robust'' plan to cut costs by 400 million euros ($619 million) and sell 1.5 billion euros of assets by the end of next year.
Allianz slipped 78 cents, or 0.7 percent, to 112.20 euros. Europe's biggest insurer scrapped its earnings growth forecast after losses at its Dresdner Bank unit led to a 29 percent drop in second-quarter profit. Allianz expects financial markets to remain difficult through 2009, meaning its target for 10 percent compound annual growth in operating earnings ``cannot be maintained,'' the insurer said.
`Hurts the Market'
``The thing with Allianz profit warning is, that although it did not come as a very big surprise, it still hurts the market when it actually is announced,'' Oliver Opgen-Rhein, a trader at HSBC Trinkaus & Burkhardt in Dusseldorf, said in a Bloomberg Television interview.
Hannover Re, Germany's second-biggest reinsurer, sank 1.03 euros, or 3.3 percent, to 30.29. Profit declined 40 percent to 100.8 million euros as falling stock markets weighed on income from investments. That missed the 142 million-euro median estimate of nine analysts surveyed by Bloomberg.
Munich Re, the world's biggest reinsurer, slipped 1.34 euros, or 1.2 percent, to 111.59.
The following stocks also rose or fell in German markets. Symbols are in parentheses.
10tacle Studios AG (T1C GY) tumbled 69 cents, or 73 percent, to 26 cents. The maker of computer and video games filed for insolvency, according to a regulatory statement last night.
Aixtron AG (AIX GY) surged 39 cents, or 6.6 percent, to 6.31 euros. The equipment maker for the chip industry said second- quarter profit jumped 94 percent to 7.4 million euros on demand for gear to produce light-emitting diodes. That compares with a 6.3 million-euro median estimate of seven analysts Bloomberg News surveyed by phone and e-mail.
Altana AG (ALT GY) slipped 35 cents, or 3.4 percent, to 10.05 euros. The world's largest maker of additives for coatings and plastics parts said second-quarter profit rose 2.4 percent to 33.8 million euros after it raised selling prices for specialty chemicals including pearlescent pigments used in cosmetics. Analysts surveyed by Bloomberg News had predicted net income of 34.4 million euros.
Bayer AG (BAY GY) rose 69 cents, or 1.2 percent, to 56.21 euros. Germany's largest drugmaker bought Nycomed Holding AS's experimental cancer medicines for as much as 52 million euros.
Biotest AG (BIO3 GY) added 2.28 euros, or 3.6 percent, to 65 after the biotechnology company that makes compounds from human blood plasma said it's expanding capacity for obtaining blood plasma.
Demag Cranes AG (D9C GY) gained 25 cents, or 0.7 percent, to 34.46 euros. The world's largest maker of mobile harbor cranes said third-quarter profit doubled to 24.8 million euros on sales of cranes and industrial services.
Deutsche Lufthansa AG (LHA GY) fell 39.5 cents, or 2.5 percent, to 15.235 euros. Europe's second-largest airline said it's grounding about 360 flights today as pilots at the CityLine regional unit strike over pay.
Separately, oil rose for the first time in four days after Turkey said a pipeline carrying crude to the Mediterranean from Azerbaijan may remain shut for two weeks following an explosion on Aug. 5.
Draegerwerk AG (DRW3 GY) climbed for a fourth day, rallying 1.12 euros, or 2.8 percent, to 40.89. The maker of the Infinity ACS patient-monitoring system said second-quarter profit rose 16 percent to 18.2 million euros as sales increased in Asia and its home market of Germany.
ElringKlinger AG (ZIL2 GY) decreased 41 cents, or 2.3 percent, to 17.59 euros. The supplier of car parts said second- quarter profit fell 8.6 percent to 19.2 million euros from a year earlier when extraordinary income swelled earnings.
Fraport AG (FRA GY) gained for a fourth day, climbing 3.75 euros, or 9 percent, to 45.48. The owner of Frankfurt airport said second-quarter profit rose 3.3 percent to 68.5 million euros, beating analyst estimates, as it bought Peru's biggest terminal and cut costs buy selling a security division.
Gagfah SA (GFJ GY) slipped 24 cents, or 2.4 percent, to 9.66 euros, the first decline in three days. Germany's largest publicly traded residential landlord said second-quarter profit fell to 31.5 million euros from 559.7 million euros as the value of its apartments dropped.
Puma AG (PUM GY) climbed 3.78 euros, or 1.7 percent, to 227.10. Europe's second-largest sporting-goods maker posted a profit of 45.6 million euros after the company spent more promoting its shoes and apparel before the Olympic Games. That beat the 41.1 million-euro average of four analysts' estimates.
To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Stefanie Haxel in Frankfurt at shaxel@bloomberg.net
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U.K. Stocks Pare Gains; Liberty, Property Shares Decline
By Sarah Jones and Gareth Gore
Aug. 7 (Bloomberg) -- U.K. stocks pared earlier gains, paced by property companies after Hammerson Plc posted a loss in the first half and analysts recommended investors sell shares of Liberty International Plc.
The FTSE 100 Index gained 1.5, or less than 0.1 percent, to 5,487.6 in London at 1:37 p.m. The measure earlier rose as much as 1 percent. The FTSE All-Share Index lost less than 0.1 percent while Ireland's ISEQ Index fell 1.6 percent.
Hammerson slid 2.7 percent to 962.5 pence after the owner of Birmingham's Bullring and London's Brent Cross shopping centers posted a first-half loss of 421 million pounds ($820 million) as the value of its offices and malls declined.
Liberty International retreated 4.6 percent to 858.5 pence, extending yesterday's 7.2 percent decline. Deutsche Bank downgraded the U.K.'s largest shopping-centre owner to ``sell'' from ``hold,'' citing second-quarter write-offs and economic deceleration.
JPMorgan Chase & Co. lowered its recommendation on Liberty to ``underweight' from ``neutral.''
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Gareth Gore in Madrid at ggore1@bloomberg.net.
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Aug. 7 (Bloomberg) -- U.K. stocks pared earlier gains, paced by property companies after Hammerson Plc posted a loss in the first half and analysts recommended investors sell shares of Liberty International Plc.
The FTSE 100 Index gained 1.5, or less than 0.1 percent, to 5,487.6 in London at 1:37 p.m. The measure earlier rose as much as 1 percent. The FTSE All-Share Index lost less than 0.1 percent while Ireland's ISEQ Index fell 1.6 percent.
Hammerson slid 2.7 percent to 962.5 pence after the owner of Birmingham's Bullring and London's Brent Cross shopping centers posted a first-half loss of 421 million pounds ($820 million) as the value of its offices and malls declined.
Liberty International retreated 4.6 percent to 858.5 pence, extending yesterday's 7.2 percent decline. Deutsche Bank downgraded the U.K.'s largest shopping-centre owner to ``sell'' from ``hold,'' citing second-quarter write-offs and economic deceleration.
JPMorgan Chase & Co. lowered its recommendation on Liberty to ``underweight' from ``neutral.''
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Gareth Gore in Madrid at ggore1@bloomberg.net.
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Most European Stocks Fall, Led by Allianz; U.S. Futures Drop
By Sarah Thompson
Aug. 7 (Bloomberg) -- Most European stocks fell after a report showed U.S. jobless claims climbed last week to the highest level in six years, while Allianz SE's earnings were less than analysts' estimated. U.S. index futures and Asian shares declined.
Allianz retreated after Europe's biggest insurer said second-quarter profit tumbled 29 percent. American International Group Inc., the world's largest insurer, dropped after reporting a $5.36 billion loss. British Airways Plc, Europe's third- biggest airline, and Next Plc, the U.K.'s second-largest clothes retailer, fell as oil rose more than $2 a barrel.
Energy stocks advanced, leaving the Dow Jones Stoxx 600 Index little changed, adding less than 0.1 percent to 287.75 as of 1:39 p.m. in London. About 12 stocks fell for every 11 that rose. Futures on the Standard & Poor's 500 Index fell 0.4 percent, while the MSCI Asia Pacific Index slumped 0.8 percent.
The Stoxx 600 dropped after the U.S. government said initial jobless claims increased by 7,000 to 455,000 in the week ended Aug. 2, the most since March 2002. The number of continuing claims climbed to a four-year high.
Shares were earlier little changed after the Bank of England and European Central Bank kept their benchmark interest rates on hold.
ECB President Jean-Claude Trichet said the bank remains focused on bringing down inflation even as economic growth slows. Inflation is ``likely to remain well above levels consistent with price stability for a protracted period of time,'' Trichet said after today's decision.
Dexia SA, the world's largest lender to local governments, tumbled on plans to add $300 million to its U.S. bond insurance unit after the division posted a second-quarter loss.
Bear Markets
All 23 countries in the MSCI World Index except Canada have entered bear markets since September as accelerating inflation pressures central banks to raise borrowing costs, while credit losses nearing $500 billion worldwide and record oil prices threaten economic growth. Freddie Mac, Taylor Wimpey Plc and Babcock & Brown Capital Ltd. have led declines this year.
National indexes decreased in 12 of the 18 western European markets. The U.K.'s FTSE 100 added less than 0.1 percent as did Germany's DAX. France's CAC 40 rose 0.5 percent.
British Airways lost 4.7 percent to 255.5 pence. Air France-KLM Group, Europe's biggest airline, dropped 4.1 percent to 17.53 euros.
Next declined 3 percent to 1,021 pence. J Sainsbury Plc, the U.K.'s third-biggest supermarket company, slid 3 percent to 340.75 pence.
Crude oil for September delivery rose $2.81, or 2.4 percent, to $121.47 on the New York Mercantile Exchange. Yesterday, oil fell to $118.58 a barrel, the lowest close since May 2.
BP Plc, Europe's second-biggest oil company, added 2.9 percent to 536 pence. Total SA, the region's third-largest oil company, increased 1.6 percent to 48.82 euros.
Allianz, Dexia
Allianz slid 1.4 percent to 111.45 euros. Europe's biggest insurer abandoned its earnings growth forecast after losses at Dresdner Bank led to a 29 percent drop in second-quarter profit.
Allianz expects markets to remain difficult through 2009 and its target for 10 percent compound annual growth in operating earnings ``cannot be maintained,'' the Munich-based insurer said.
Dexia sank 9 percent to 9.12 euros on plans to add $300 million to its U.S. bond insurance unit after the division posted a second-quarter loss.
The capital will allow the unit, Financial Security Assurance Inc., to exceed requirements for a AAA credit rating, New York-based FSA said.
AIG, the world's biggest insurer, reported a worse-than- estimated loss after housing-related writedowns wiped out profit for a third straight quarter, renewing concern that the company may need more capital.
AIG lost 8 percent to $26.70 in Germany.
To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net.
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Aug. 7 (Bloomberg) -- Most European stocks fell after a report showed U.S. jobless claims climbed last week to the highest level in six years, while Allianz SE's earnings were less than analysts' estimated. U.S. index futures and Asian shares declined.
Allianz retreated after Europe's biggest insurer said second-quarter profit tumbled 29 percent. American International Group Inc., the world's largest insurer, dropped after reporting a $5.36 billion loss. British Airways Plc, Europe's third- biggest airline, and Next Plc, the U.K.'s second-largest clothes retailer, fell as oil rose more than $2 a barrel.
Energy stocks advanced, leaving the Dow Jones Stoxx 600 Index little changed, adding less than 0.1 percent to 287.75 as of 1:39 p.m. in London. About 12 stocks fell for every 11 that rose. Futures on the Standard & Poor's 500 Index fell 0.4 percent, while the MSCI Asia Pacific Index slumped 0.8 percent.
The Stoxx 600 dropped after the U.S. government said initial jobless claims increased by 7,000 to 455,000 in the week ended Aug. 2, the most since March 2002. The number of continuing claims climbed to a four-year high.
Shares were earlier little changed after the Bank of England and European Central Bank kept their benchmark interest rates on hold.
ECB President Jean-Claude Trichet said the bank remains focused on bringing down inflation even as economic growth slows. Inflation is ``likely to remain well above levels consistent with price stability for a protracted period of time,'' Trichet said after today's decision.
Dexia SA, the world's largest lender to local governments, tumbled on plans to add $300 million to its U.S. bond insurance unit after the division posted a second-quarter loss.
Bear Markets
All 23 countries in the MSCI World Index except Canada have entered bear markets since September as accelerating inflation pressures central banks to raise borrowing costs, while credit losses nearing $500 billion worldwide and record oil prices threaten economic growth. Freddie Mac, Taylor Wimpey Plc and Babcock & Brown Capital Ltd. have led declines this year.
National indexes decreased in 12 of the 18 western European markets. The U.K.'s FTSE 100 added less than 0.1 percent as did Germany's DAX. France's CAC 40 rose 0.5 percent.
British Airways lost 4.7 percent to 255.5 pence. Air France-KLM Group, Europe's biggest airline, dropped 4.1 percent to 17.53 euros.
Next declined 3 percent to 1,021 pence. J Sainsbury Plc, the U.K.'s third-biggest supermarket company, slid 3 percent to 340.75 pence.
Crude oil for September delivery rose $2.81, or 2.4 percent, to $121.47 on the New York Mercantile Exchange. Yesterday, oil fell to $118.58 a barrel, the lowest close since May 2.
BP Plc, Europe's second-biggest oil company, added 2.9 percent to 536 pence. Total SA, the region's third-largest oil company, increased 1.6 percent to 48.82 euros.
Allianz, Dexia
Allianz slid 1.4 percent to 111.45 euros. Europe's biggest insurer abandoned its earnings growth forecast after losses at Dresdner Bank led to a 29 percent drop in second-quarter profit.
Allianz expects markets to remain difficult through 2009 and its target for 10 percent compound annual growth in operating earnings ``cannot be maintained,'' the Munich-based insurer said.
Dexia sank 9 percent to 9.12 euros on plans to add $300 million to its U.S. bond insurance unit after the division posted a second-quarter loss.
The capital will allow the unit, Financial Security Assurance Inc., to exceed requirements for a AAA credit rating, New York-based FSA said.
AIG, the world's biggest insurer, reported a worse-than- estimated loss after housing-related writedowns wiped out profit for a third straight quarter, renewing concern that the company may need more capital.
AIG lost 8 percent to $26.70 in Germany.
To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net.
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Financial Winners May Need to Be Sold After Gains, Birinyi Says
By Eric Martin and Matt Miller
Aug. 7 (Bloomberg) -- Investors should consider selling some financial stocks after they surged during the past three weeks, said Laszlo Birinyi, president of Birinyi Associates Inc.
``You should look at the individual banks and realize that in the intermediate term, from now until the end of the year, they're going to struggle to make gains,'' Birinyi, who oversees more than $350 million in Westport, Connecticut, said in an interview on Bloomberg Television. ``If you've made 10 percent in a stock in a month or two months, you've basically gotten a year's gain in 15 percent of a year's time.''
The investor said he is short selling Avon Products Inc., betting that the world's largest door-to-door cosmetics seller will slump. Birinyi said he favors shares of oil drillers and Apache Corp., an oil and gas producer.
The investor correctly predicted in October that financial shares would tumble. Birinyi's warning preceded a 34 percent plunge in the Standard & Poor's 500 Financials Index, spurred by writedowns and credit losses stemming from the subprime-mortgage market's collapse that exceeded $493 billion worldwide. On July 14, Birinyi said investors should avoid most financial companies because their shares will probably keep declining. The group went on to surge 25 percent.
U.S. stocks rose yesterday, sending benchmark indexes to a six-week high, as better-than-estimated earnings at Cisco Systems Inc. spurred a rally in technology shares and falling gasoline inventories boosted fuel refiners. The S&P 500 declined 22 percent from its October record through July 15, and has since advanced 6.1 percent.
Birinyi said June 26 that buying and holding U.S. stocks is ``very treacherous'' because share prices are swinging too much. He reiterated that view today.
Birinyi worked more than 10 years on the trading desk at Salomon Brothers Inc. before starting his research and money management firm in 1989. He is known for pioneering money flow analysis, which compares the dollar amounts moving into or out of a stock or index to establish whether it is being more aggressively bought or sold.
To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Matt Miller in New York at mtmiller@bloomberg.net.
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Aug. 7 (Bloomberg) -- Investors should consider selling some financial stocks after they surged during the past three weeks, said Laszlo Birinyi, president of Birinyi Associates Inc.
``You should look at the individual banks and realize that in the intermediate term, from now until the end of the year, they're going to struggle to make gains,'' Birinyi, who oversees more than $350 million in Westport, Connecticut, said in an interview on Bloomberg Television. ``If you've made 10 percent in a stock in a month or two months, you've basically gotten a year's gain in 15 percent of a year's time.''
The investor said he is short selling Avon Products Inc., betting that the world's largest door-to-door cosmetics seller will slump. Birinyi said he favors shares of oil drillers and Apache Corp., an oil and gas producer.
The investor correctly predicted in October that financial shares would tumble. Birinyi's warning preceded a 34 percent plunge in the Standard & Poor's 500 Financials Index, spurred by writedowns and credit losses stemming from the subprime-mortgage market's collapse that exceeded $493 billion worldwide. On July 14, Birinyi said investors should avoid most financial companies because their shares will probably keep declining. The group went on to surge 25 percent.
U.S. stocks rose yesterday, sending benchmark indexes to a six-week high, as better-than-estimated earnings at Cisco Systems Inc. spurred a rally in technology shares and falling gasoline inventories boosted fuel refiners. The S&P 500 declined 22 percent from its October record through July 15, and has since advanced 6.1 percent.
Birinyi said June 26 that buying and holding U.S. stocks is ``very treacherous'' because share prices are swinging too much. He reiterated that view today.
Birinyi worked more than 10 years on the trading desk at Salomon Brothers Inc. before starting his research and money management firm in 1989. He is known for pioneering money flow analysis, which compares the dollar amounts moving into or out of a stock or index to establish whether it is being more aggressively bought or sold.
To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Matt Miller in New York at mtmiller@bloomberg.net.
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Abitibi, Canadian Natural, FNX, Metro: Canada Stock Preview
By John Kipphoff
Aug. 7 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from the previous close.
The Standard & Poor's/TSX Composite Index gained 1.6 percent to 13,453.51 yesterday in Toronto.
AbitibiBowater Inc. (ABH CN): The world's largest newsprint maker reported a second-quarter loss of $2.60 (C$2.72) a share before certain items, exceeding the $2.32 average loss estimate of analysts in a Bloomberg poll. The shares fell 4.5 percent to C$8.28.
Canadian Natural Resources Ltd. (CNQ CN): The country's fourth-largest energy company by market value said that its C$9.27 billion ($8.85 billion) oil-sands project is behind schedule and over budget, and posted a second-quarter loss on lower values for contracts used to lock in commodity prices.
Canadian Natural's net loss was C$347 million, compared with a profit of C$841 million a year earlier. The shares rose 5.7 percent to C$79.28.
FNX Mining Co. (FNX CN): The nickel and copper producer that sells ore to Cia. Vale do Rio Doce said that second-quarter profit dropped 68 percent to C$11.3 million, or 13 cents a share, because of lower nickel prices. The shares slid 3.8 percent to C$15.66.
GMP Capital Trust (GMP-U CN): The Toronto-based investment bank said that second-quarter profit fell 59 percent to C$15.7 million, or 25 cents per basic unit. GMP didn't provide year- earlier figures, and reduced its monthly cash distribution to 10.4 cents per unit from 14 cents. The shares fell 3 percent to C412.80. GMP is the worst-performing Canadian financial-services stock this year.
Metro Inc. (MRU/A CN): Canada's third-biggest supermarket chain said that profit in the third quarter rose to C$92.6 million, or 82 cents a share, from C$89.3 million, as food retailers eased up on price cuts. Sales in the period ended July 5 advanced to C$3.37 billion. Five analysts surveyed by Bloomberg estimated revenue of C$3.39 billion, on average. The shares rose 0.2 percent to C$25.44.
Manulife Financial Corp. (MFC CN): North America's second- largest insurer by market value may say that second-quarter profit was 70 cents a share before one-time items, the average estimate of 13 analysts surveyed by Bloomberg News. The shares rose 0.2 percent to C$37.60.
Tim Hortons Inc. (THI CN): Canada's biggest coffee-and- doughnut chain may report second-quarter earnings of 40 cents a share before one-time items, the average of 11 analyst estimates compiled by Bloomberg. The shares rose 0.7 percent to C$29.74.
TransAlta Corp. (TA CN): Canada's largest publicly traded electricity producer rejected the C$7.75 billion, C$39-a-share, takeover bid made last month by LS Power Equity Partners and Global Infrastructure Partners as undervaluing the company. The shares fell 0.1 percent to C$36.58.
Yamana Gold Inc. (YRI CN): The company that mines for gold in South America and the U.S. said second-quarter net income fell 20 percent to $42.1 million, after the stronger Brazilian real eroded the benefit of higher metal prices and output.
Profit excluding some one-time items was 15 cents a share, the company said. Thirteen analysts surveyed by Bloomberg estimated per-share earnings excluding one-time items would be 17 cents. The stock added 3.7 percent to C$11.60.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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Aug. 7 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from the previous close.
The Standard & Poor's/TSX Composite Index gained 1.6 percent to 13,453.51 yesterday in Toronto.
AbitibiBowater Inc. (ABH CN): The world's largest newsprint maker reported a second-quarter loss of $2.60 (C$2.72) a share before certain items, exceeding the $2.32 average loss estimate of analysts in a Bloomberg poll. The shares fell 4.5 percent to C$8.28.
Canadian Natural Resources Ltd. (CNQ CN): The country's fourth-largest energy company by market value said that its C$9.27 billion ($8.85 billion) oil-sands project is behind schedule and over budget, and posted a second-quarter loss on lower values for contracts used to lock in commodity prices.
Canadian Natural's net loss was C$347 million, compared with a profit of C$841 million a year earlier. The shares rose 5.7 percent to C$79.28.
FNX Mining Co. (FNX CN): The nickel and copper producer that sells ore to Cia. Vale do Rio Doce said that second-quarter profit dropped 68 percent to C$11.3 million, or 13 cents a share, because of lower nickel prices. The shares slid 3.8 percent to C$15.66.
GMP Capital Trust (GMP-U CN): The Toronto-based investment bank said that second-quarter profit fell 59 percent to C$15.7 million, or 25 cents per basic unit. GMP didn't provide year- earlier figures, and reduced its monthly cash distribution to 10.4 cents per unit from 14 cents. The shares fell 3 percent to C412.80. GMP is the worst-performing Canadian financial-services stock this year.
Metro Inc. (MRU/A CN): Canada's third-biggest supermarket chain said that profit in the third quarter rose to C$92.6 million, or 82 cents a share, from C$89.3 million, as food retailers eased up on price cuts. Sales in the period ended July 5 advanced to C$3.37 billion. Five analysts surveyed by Bloomberg estimated revenue of C$3.39 billion, on average. The shares rose 0.2 percent to C$25.44.
Manulife Financial Corp. (MFC CN): North America's second- largest insurer by market value may say that second-quarter profit was 70 cents a share before one-time items, the average estimate of 13 analysts surveyed by Bloomberg News. The shares rose 0.2 percent to C$37.60.
Tim Hortons Inc. (THI CN): Canada's biggest coffee-and- doughnut chain may report second-quarter earnings of 40 cents a share before one-time items, the average of 11 analyst estimates compiled by Bloomberg. The shares rose 0.7 percent to C$29.74.
TransAlta Corp. (TA CN): Canada's largest publicly traded electricity producer rejected the C$7.75 billion, C$39-a-share, takeover bid made last month by LS Power Equity Partners and Global Infrastructure Partners as undervaluing the company. The shares fell 0.1 percent to C$36.58.
Yamana Gold Inc. (YRI CN): The company that mines for gold in South America and the U.S. said second-quarter net income fell 20 percent to $42.1 million, after the stronger Brazilian real eroded the benefit of higher metal prices and output.
Profit excluding some one-time items was 15 cents a share, the company said. Thirteen analysts surveyed by Bloomberg estimated per-share earnings excluding one-time items would be 17 cents. The stock added 3.7 percent to C$11.60.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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French Stocks: Axa, Dexia, Veolia, Teleperformance, Total
By David Whitehouse
Aug. 7 (Bloomberg) -- France's CAC 40 Index rose for a third day, adding 38.12, or 0.9 percent, to 4,486.45 as of 2:52 p.m. in Paris. The SBF 120 Index advanced 0.8 percent.
The following are among the most active shares in Paris. Stock symbols are in parentheses.
Axa SA (CS FP) jumped 1.04 euros, or 5.1 percent, to 21.42 euros, a third straight increase. Europe's second-biggest insurer said first-half profit declined 32 percent to 2.16 billion euros ($3.3 billion) after falling stock markets curbed sales of savings plans and the company took writedowns on investments. Earnings exceeded the 1.93 billion-euro estimate of 11 analysts surveyed by Bloomberg News.
Bonduelle SA (BON FP) fell 2.85 euros, or 4.5 percent, to 60, snapping a four-day sequence of gains. The canned-food producer reported an 8.3 percent increase in fourth-quarter sales, missing analysts' estimates on a slowdown in consumer spending and a fire that slowed production of pre-packaged fresh salads in Italy.
Bourbon SA (GBB FP) climbed 1.16 euros, or 3.1 percent, to 38.75 euros, its third advance in four sessions. The owner of the world's biggest fleet of supply ships for deep-water oil exploration said second-quarter revenue rose 13 percent to 222 million euros after demand for offshore services compensated for the weaker dollar.
Dexia SA (DX FP) slumped 1.01 euros, or 10 percent, to 9 euros, making it the day's biggest decliner in the CAC 40 index. The world's largest lender to local governments plans to add $300 million to its U.S. bond insurance unit and stop selling coverage for asset-backed debt after the division posted a second-quarter loss.
Le Public Systeme SA (PUS FP) surged 67 cents, or 7.7 percent, to 9.34 euros, its biggest increase since November 2007. The public relations company said first-half revenue rose 19 percent to 60.9 million euros. Profit before tax jumped 25 percent to 19.3 million euros for the same period.
Teleperformance SA (RCF FP) slumped 1.80 euros, or 7.1 percent, to 23.27 euros, its biggest decline for more than five years. The call-center company that operates in 45 countries said the economy is ``challenging'' and its second-half visibility is ``limited.''
Patrick Jousseaume, an analyst at Societe Generale SA in Paris, today removed Teleperformance from Societe Generale's Mid & Small Caps Europe Premium List.
Total SA (FP FP), the share with the biggest weighting on the CAC 40, added 78 cents, or 1.6 percent, to 48.83, gaining for a second day. Crude oil futures rose after Turkey said that a pipeline carrying crude to the country's Mediterranean coast from Azerbaijan may remain shut for at least a week following an explosion.
Crude oil for September delivery rose as much as $3.20, or 2.7 percent, to $121.78 a barrel on the New York Mercantile Exchange. The contract was at $121.05 at 1:26 p.m. London time.
Veolia Environnement SA (VIE FP) added 2.68 euros, or 8.1 percent, to 35.93, its biggest gain since December 2006. The world's biggest water company said first-half profit rose 1.5 percent to 500.5 million euros and that it will increase its dividend for 2008 by 10 percent.
The company also said it would cut costs and sell assets ``with the aim of improving the profitability of the businesses'' and to achieve after-tax return on capital employed targeted at over 10 percent by 2010.
To contact the reporter on this story: David Whitehouse in Paris at dwhitehouse1@bloomberg.net.
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Aug. 7 (Bloomberg) -- France's CAC 40 Index rose for a third day, adding 38.12, or 0.9 percent, to 4,486.45 as of 2:52 p.m. in Paris. The SBF 120 Index advanced 0.8 percent.
The following are among the most active shares in Paris. Stock symbols are in parentheses.
Axa SA (CS FP) jumped 1.04 euros, or 5.1 percent, to 21.42 euros, a third straight increase. Europe's second-biggest insurer said first-half profit declined 32 percent to 2.16 billion euros ($3.3 billion) after falling stock markets curbed sales of savings plans and the company took writedowns on investments. Earnings exceeded the 1.93 billion-euro estimate of 11 analysts surveyed by Bloomberg News.
Bonduelle SA (BON FP) fell 2.85 euros, or 4.5 percent, to 60, snapping a four-day sequence of gains. The canned-food producer reported an 8.3 percent increase in fourth-quarter sales, missing analysts' estimates on a slowdown in consumer spending and a fire that slowed production of pre-packaged fresh salads in Italy.
Bourbon SA (GBB FP) climbed 1.16 euros, or 3.1 percent, to 38.75 euros, its third advance in four sessions. The owner of the world's biggest fleet of supply ships for deep-water oil exploration said second-quarter revenue rose 13 percent to 222 million euros after demand for offshore services compensated for the weaker dollar.
Dexia SA (DX FP) slumped 1.01 euros, or 10 percent, to 9 euros, making it the day's biggest decliner in the CAC 40 index. The world's largest lender to local governments plans to add $300 million to its U.S. bond insurance unit and stop selling coverage for asset-backed debt after the division posted a second-quarter loss.
Le Public Systeme SA (PUS FP) surged 67 cents, or 7.7 percent, to 9.34 euros, its biggest increase since November 2007. The public relations company said first-half revenue rose 19 percent to 60.9 million euros. Profit before tax jumped 25 percent to 19.3 million euros for the same period.
Teleperformance SA (RCF FP) slumped 1.80 euros, or 7.1 percent, to 23.27 euros, its biggest decline for more than five years. The call-center company that operates in 45 countries said the economy is ``challenging'' and its second-half visibility is ``limited.''
Patrick Jousseaume, an analyst at Societe Generale SA in Paris, today removed Teleperformance from Societe Generale's Mid & Small Caps Europe Premium List.
Total SA (FP FP), the share with the biggest weighting on the CAC 40, added 78 cents, or 1.6 percent, to 48.83, gaining for a second day. Crude oil futures rose after Turkey said that a pipeline carrying crude to the country's Mediterranean coast from Azerbaijan may remain shut for at least a week following an explosion.
Crude oil for September delivery rose as much as $3.20, or 2.7 percent, to $121.78 a barrel on the New York Mercantile Exchange. The contract was at $121.05 at 1:26 p.m. London time.
Veolia Environnement SA (VIE FP) added 2.68 euros, or 8.1 percent, to 35.93, its biggest gain since December 2006. The world's biggest water company said first-half profit rose 1.5 percent to 500.5 million euros and that it will increase its dividend for 2008 by 10 percent.
The company also said it would cut costs and sell assets ``with the aim of improving the profitability of the businesses'' and to achieve after-tax return on capital employed targeted at over 10 percent by 2010.
To contact the reporter on this story: David Whitehouse in Paris at dwhitehouse1@bloomberg.net.
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Gol, LLX Logistica, Unibanco, Vale: Brazilian Equity Movers
By Fabio Alves
Aug. 7 (Bloomberg) -- The following companies are having unusual price changes in Brazil trading. Stock symbols are in parentheses, and share prices are as of 9:09 a.m. New York time. Preferred shares are usually the most-traded class of stock.
The Bovespa index rose 0.6 percent to 57,856.92.
Cia. Vale do Rio Doce (VALE5 BS) rose for a third day, gaining 1.7 percent to 37.35 reais. The world's biggest iron-ore producer said yesterday that second-quarter net income rose 22 percent to $5.01 billion, or $1.02 a share. The results topped the average estimate of 91 cents a share from eight analysts surveyed by Bloomberg News. Sales for Rio de Janeiro-based Vale gained 22 percent to $10.6 billion, the company said in a statement to regulators yesterday.
Gol Linhas Aereas Inteligentes SA (GOLL4 BS) sank 1.9 percent, the most since Aug. 1, to 18.55 reais. Brazil's second- biggest airline said it will suspend dividend payments for the rest of 2008 to offset the impact of higher fuel costs. The board approved the measure at a meeting yesterday, Sao Paulo- based Gol said in a statement to Brazil's stock regulator today.
LLX Logistica SA (LLXL3 BS) rose the most since it started trading on Bovespa's so-called New Market, adding 7.6 percent to 3.69 reais. The transportation company controlled by Brazilian billionaire Eike Batista's EBX Group was rated ``buy'' in new coverage by UBS AG analyst Rodrigo Goes, who set a 12-month share-price forecast of 10.40 reais for the stock.
Uniao de Bancos Brasileiros SA (UBBR11 BS) slid for the first time in three days, dropping 0.9 percent to 20.90 reais. Brazil's third-largest non-state bank by assets said profit fell 10 percent because of shrinking fee revenue and a one-time gain that inflated last year's profit. Second-quarter net income was 756 million reais ($480 million), or 27 centavos a share, compared with 841 million reais, or 30 centavos a share, a year earlier.
To contact the reporter on this story: Fabio Alves in New York at falves3@bloomberg.net
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Aug. 7 (Bloomberg) -- The following companies are having unusual price changes in Brazil trading. Stock symbols are in parentheses, and share prices are as of 9:09 a.m. New York time. Preferred shares are usually the most-traded class of stock.
The Bovespa index rose 0.6 percent to 57,856.92.
Cia. Vale do Rio Doce (VALE5 BS) rose for a third day, gaining 1.7 percent to 37.35 reais. The world's biggest iron-ore producer said yesterday that second-quarter net income rose 22 percent to $5.01 billion, or $1.02 a share. The results topped the average estimate of 91 cents a share from eight analysts surveyed by Bloomberg News. Sales for Rio de Janeiro-based Vale gained 22 percent to $10.6 billion, the company said in a statement to regulators yesterday.
Gol Linhas Aereas Inteligentes SA (GOLL4 BS) sank 1.9 percent, the most since Aug. 1, to 18.55 reais. Brazil's second- biggest airline said it will suspend dividend payments for the rest of 2008 to offset the impact of higher fuel costs. The board approved the measure at a meeting yesterday, Sao Paulo- based Gol said in a statement to Brazil's stock regulator today.
LLX Logistica SA (LLXL3 BS) rose the most since it started trading on Bovespa's so-called New Market, adding 7.6 percent to 3.69 reais. The transportation company controlled by Brazilian billionaire Eike Batista's EBX Group was rated ``buy'' in new coverage by UBS AG analyst Rodrigo Goes, who set a 12-month share-price forecast of 10.40 reais for the stock.
Uniao de Bancos Brasileiros SA (UBBR11 BS) slid for the first time in three days, dropping 0.9 percent to 20.90 reais. Brazil's third-largest non-state bank by assets said profit fell 10 percent because of shrinking fee revenue and a one-time gain that inflated last year's profit. Second-quarter net income was 756 million reais ($480 million), or 27 centavos a share, compared with 841 million reais, or 30 centavos a share, a year earlier.
To contact the reporter on this story: Fabio Alves in New York at falves3@bloomberg.net
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AIG, Eagle Bulk, OM, Wal-Mart, Warnaco: U.S. Equity Preview
By Jeff Kearns
Aug. 7 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 9 a.m. in New York.
American International Group Inc. (AIG US) lost 11 percent to $25.95. The world's biggest insurer by assets posted a $5.36 billion loss that was worse than analysts estimated as writedowns tied to the housing slump wiped out profit for a third straight quarter.
Avis Budget Group Inc. (CAR US) rose 5.6 percent to $6.57. The third-largest U.S. car-rental company reported second-quarter profit of 15 cents a share, more than the 6-cent average estimate of analysts surveyed by Bloomberg.
Cardinal Health Inc. (CAH US) slid 3.8 percent to $52.45. The second-largest U.S. distributor of prescription medicines said quarterly profit plunged from a year ago, when the sale of a drug-packing unit inflated earnings. The company said it will consider the spinning off its clinical- and medical-products units to shareholders.
Eagle Bulk Shipping Inc. (EGLE US) added 8.3 percent to $29.90. The company whose ships carry commodities such as coal and iron ore said second-quarter profit rose 25 percent on higher rates and a larger fleet.
Fortress Investment Group LLC (FIG US) lost 11 percent to $10.03. The first U.S. manager of private equity and hedge funds to go public said second-quarter profit unexpectedly declined 59 percent as turmoil in financial markets cut gains from private- equity and hedge funds.
KBR Inc. (KBR US) rose 0.8 percent to $23.96. The U.S. engineering firm that split from Halliburton Co. last year said its board approved a program to repurchase 5 percent of outstanding shares.
Nationwide Financial Services Inc. (NFS US) rose 9.7 percent to $50.95. Nationwide Mutual Insurance Co., the Ohio-based home and auto insurer, agreed to buy the part of Nationwide Financial that it doesn't already hold for $2.4 billion to simplify the company's ownership structure.
OM Group Inc. (OMG US) added 7.7 percent to $32. The world's largest cobalt producer said second-quarter profit rose 22 percent as prices for the metal surged. Net income increased to $1.85 a share from $1.52 a year earlier, OM Group said.
Sunoco Inc. (SUN US) climbed 2.2 percent to $44.25. The largest oil refiner in the U.S. East reported 49 percent more profit than analysts estimated, excluding gains from an insurance recovery and a tax settlement, according to Bloomberg data.
VeriSign Inc. (VRSN US) dropped 14 percent to $29.20. The biggest operator of computers that direct Internet traffic reported a $68 million second-quarter loss as the company worked to sell off its less profitable operations.
Wal-Mart Stores Inc. (WMT US) lost 3.8 percent to $58.45. The world's biggest retailer said U.S. sales rose 3 percent in July and would slow this month because most shoppers have already received their tax rebates.
Warnaco Group Inc. (WRC US) rose 5.6 percent to $45.75. The maker of Chaps and Nautica clothing raised its forecast for the current fiscal year to has high as $2.90 a share. Analysts had expected $2.77 a share, the average of five estimates in a Bloomberg survey.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
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Aug. 7 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 9 a.m. in New York.
American International Group Inc. (AIG US) lost 11 percent to $25.95. The world's biggest insurer by assets posted a $5.36 billion loss that was worse than analysts estimated as writedowns tied to the housing slump wiped out profit for a third straight quarter.
Avis Budget Group Inc. (CAR US) rose 5.6 percent to $6.57. The third-largest U.S. car-rental company reported second-quarter profit of 15 cents a share, more than the 6-cent average estimate of analysts surveyed by Bloomberg.
Cardinal Health Inc. (CAH US) slid 3.8 percent to $52.45. The second-largest U.S. distributor of prescription medicines said quarterly profit plunged from a year ago, when the sale of a drug-packing unit inflated earnings. The company said it will consider the spinning off its clinical- and medical-products units to shareholders.
Eagle Bulk Shipping Inc. (EGLE US) added 8.3 percent to $29.90. The company whose ships carry commodities such as coal and iron ore said second-quarter profit rose 25 percent on higher rates and a larger fleet.
Fortress Investment Group LLC (FIG US) lost 11 percent to $10.03. The first U.S. manager of private equity and hedge funds to go public said second-quarter profit unexpectedly declined 59 percent as turmoil in financial markets cut gains from private- equity and hedge funds.
KBR Inc. (KBR US) rose 0.8 percent to $23.96. The U.S. engineering firm that split from Halliburton Co. last year said its board approved a program to repurchase 5 percent of outstanding shares.
Nationwide Financial Services Inc. (NFS US) rose 9.7 percent to $50.95. Nationwide Mutual Insurance Co., the Ohio-based home and auto insurer, agreed to buy the part of Nationwide Financial that it doesn't already hold for $2.4 billion to simplify the company's ownership structure.
OM Group Inc. (OMG US) added 7.7 percent to $32. The world's largest cobalt producer said second-quarter profit rose 22 percent as prices for the metal surged. Net income increased to $1.85 a share from $1.52 a year earlier, OM Group said.
Sunoco Inc. (SUN US) climbed 2.2 percent to $44.25. The largest oil refiner in the U.S. East reported 49 percent more profit than analysts estimated, excluding gains from an insurance recovery and a tax settlement, according to Bloomberg data.
VeriSign Inc. (VRSN US) dropped 14 percent to $29.20. The biggest operator of computers that direct Internet traffic reported a $68 million second-quarter loss as the company worked to sell off its less profitable operations.
Wal-Mart Stores Inc. (WMT US) lost 3.8 percent to $58.45. The world's biggest retailer said U.S. sales rose 3 percent in July and would slow this month because most shoppers have already received their tax rebates.
Warnaco Group Inc. (WRC US) rose 5.6 percent to $45.75. The maker of Chaps and Nautica clothing raised its forecast for the current fiscal year to has high as $2.90 a share. Analysts had expected $2.77 a share, the average of five estimates in a Bloomberg survey.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
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Mid-Day Report: Euro Gets No Support from Trichet
Market Overview | Written by ActionForex.com | Aug 07 08 13:23 GMT |
ECB left rates unchanged at 4.25% as widely expected. Trichet continued to sound hawkish in the following press conference, emphasizing the upside risks to inflation and ECB's sole mandate of maintain price stability. Trichet expects inflation to remains far above target for protracted period of time. Also, Trichet played down recent weakness in Q2 GDP by saying that it's just a 'technical correction' after exceptionally strong growth in Q1.
However, it's believed that EUR/USD's weakness as the press conference goes is due to the mentioning of "substantial decline in annual M1 growth" which is seen as an important obstacle to further rate hike from ECB. Trichet once again said that ECB has no bias regarding monetary policy for the moment.
Technically speaking, EUR/USD's recovery was limited below 1.5518 minor resistance and thus giving no indication of an intraday low yet. More downside is still expected. EUR/JPY's sharp fall argues that the cross is still bounded in consolidation that started at 169.96 and more choppy trading will likely be seen.
BoE left rates unchanged at 5.00% as widely expected. Focus will turn to inflation report to be published on Aug 13 and minutes to be published on Aug 20.
On the data front, US jobless claims jumped again to 455k. Canadian building permits dropped much more than expected by -5.3% in Jun. Germany trade surplus widened more than expected to 19.7b in Jun on strong export growth at 4.2% mom. Germany industrial production climbed 0.2% mom, 1.7% yoy in Jun. UK Halifax house priced dropped -8.8% yoy in Jul, -1.7% mom. Japan Machine orders dropped -2.6% mom in Jun, rose 9.7% yoy. Aussie and Kiwi recovers earlier today after after stronger than expected job report. New Zealand job markets grew 1.2% qoq, 0.7% yoy in Q2, beating expectation of 0.2% qoq, -0.6% yoy. Though, unemployment rate rose more than expected to 3.9%. Australian job market added 10.9% job in Jul, above expectation of 5.0k. Nevertheless, prior month's growth was revised down from 29.8k to 22.k. Unemployment rate was unchanged at 4.3% after upward revision in Jun. However, the support was brief and mild only.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.5366; (P) 1.5440; (R1) 1.5483; More
EUR/USD's recovery from 1.5398 was limited below mentioned 1.5518 minor resistance and fall resumes in early US session by taking out this low. At this point, intraday bias remains on the downside and further decline is still expected to 1.5284/5302 support zone. Above 1.5518 will turn intraday outlook neutral first. Also, considering mild bullish convergence conditions in 4 hours MACD, this could also signal that a short term bottom is in place and bring stronger rebound. But upside should be by 1.5700 resistance and bring fall resumption.
In the bigger picture, 1.6 proves to be an important barrier for the EUR/USD. Current development argues that EUR/USD is either a) still unfolding the sideway consolidation that started at 1.6019; OR, b) developing a double top (1.6019, 1.6038, neckline at 1.5284). Favor is mildly on the latter case considering bearish divergence condition in weekly RSI. Break of the medium term trend line support which EUR/USD adds even more credence to the case that a medium term top is in place. Sustained break of 1.5284 will confirm the double top formation and encourage deeper fall to 1.4309/4966 support zone.
However, strong rebound from 1.5284, followed by break of 1.5700 resistance, will provide the argument for the former case, i.e. sideway consolidation. Though, deceive break of 1.6000/38 resistance zone is still needed to confirm short term bullishness. Otherwise, more choppy trading could still be seen before resuming the up trend.
Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
22:45 NZD NZ Unemployment rate Q2 3.90% 3.80% 3.60%
22:45 NZD NZ Employment change Q/Q Q2 1.20% 0.20% -1.30%
22:45 NZD NZ Employment change Y/Y Q2 0.70% -0.60% -0.20%
23:50 JPY Japan Machine orders M/M Jun -2.60% -9.60% 10.40%
23:50 JPY Japan Machine orders Y/Y Jun 9.70% 2.60% 5.10%
01:30 AUD Australia Employment change Jul 10.9K 5.0K 29.8K 22.2K
01:30 AUD Australia Unemployment rate Jul 4.30% 4.30% 4.20% 4.30%
06:00 EUR German Trade balance (euro) Jun 19.7B 15.0B 14.6B 14.3B
06:00 EUR German Current account Jul 18.5B 12.0B 7.5B 7.7B
06:00 EUR German Import M/M Jun -1.00% 1.40% 0.70% 0.50%
06:00 EUR German Export M/M Jun 4.20% 1.80% -3.20% -3.40%
08:00 GBP U.K. Halifax hse prices 3m Y/YJul -8.80% -8.60% -6.10%
08:00 GBP U.K. Halifax hse prices M/M Jul -1.70% -1.50% -2.00%
10:00 EUR German Ind'l prod'n M/M Jun 0.20% 0.80% -2.40%
10:00 EUR German Ind'l prod'n Y/Y Jun 1.70% 1.50% 0.80%
11:00 GBP BOE rate decision Aug 5.00% 5.00% 5.00%
11:45 EUR ECB rate decision Aug 4.25% 4.25% 4.25%
12:30 EUR ECB press conference
12:30 CAD Canada Building permits Jun -5.30% -1.00% 1.10%
12:30 USD U.S. Jobless claims 455K 420K 448K
14:00 USD U.S. Pending home sales Jun N/A 84.7
14:00 USD U.S. Pending home sales M/M Jun -1.00% -4.70%
Read more...
ECB left rates unchanged at 4.25% as widely expected. Trichet continued to sound hawkish in the following press conference, emphasizing the upside risks to inflation and ECB's sole mandate of maintain price stability. Trichet expects inflation to remains far above target for protracted period of time. Also, Trichet played down recent weakness in Q2 GDP by saying that it's just a 'technical correction' after exceptionally strong growth in Q1.
However, it's believed that EUR/USD's weakness as the press conference goes is due to the mentioning of "substantial decline in annual M1 growth" which is seen as an important obstacle to further rate hike from ECB. Trichet once again said that ECB has no bias regarding monetary policy for the moment.
Technically speaking, EUR/USD's recovery was limited below 1.5518 minor resistance and thus giving no indication of an intraday low yet. More downside is still expected. EUR/JPY's sharp fall argues that the cross is still bounded in consolidation that started at 169.96 and more choppy trading will likely be seen.
BoE left rates unchanged at 5.00% as widely expected. Focus will turn to inflation report to be published on Aug 13 and minutes to be published on Aug 20.
On the data front, US jobless claims jumped again to 455k. Canadian building permits dropped much more than expected by -5.3% in Jun. Germany trade surplus widened more than expected to 19.7b in Jun on strong export growth at 4.2% mom. Germany industrial production climbed 0.2% mom, 1.7% yoy in Jun. UK Halifax house priced dropped -8.8% yoy in Jul, -1.7% mom. Japan Machine orders dropped -2.6% mom in Jun, rose 9.7% yoy. Aussie and Kiwi recovers earlier today after after stronger than expected job report. New Zealand job markets grew 1.2% qoq, 0.7% yoy in Q2, beating expectation of 0.2% qoq, -0.6% yoy. Though, unemployment rate rose more than expected to 3.9%. Australian job market added 10.9% job in Jul, above expectation of 5.0k. Nevertheless, prior month's growth was revised down from 29.8k to 22.k. Unemployment rate was unchanged at 4.3% after upward revision in Jun. However, the support was brief and mild only.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.5366; (P) 1.5440; (R1) 1.5483; More
EUR/USD's recovery from 1.5398 was limited below mentioned 1.5518 minor resistance and fall resumes in early US session by taking out this low. At this point, intraday bias remains on the downside and further decline is still expected to 1.5284/5302 support zone. Above 1.5518 will turn intraday outlook neutral first. Also, considering mild bullish convergence conditions in 4 hours MACD, this could also signal that a short term bottom is in place and bring stronger rebound. But upside should be by 1.5700 resistance and bring fall resumption.
In the bigger picture, 1.6 proves to be an important barrier for the EUR/USD. Current development argues that EUR/USD is either a) still unfolding the sideway consolidation that started at 1.6019; OR, b) developing a double top (1.6019, 1.6038, neckline at 1.5284). Favor is mildly on the latter case considering bearish divergence condition in weekly RSI. Break of the medium term trend line support which EUR/USD adds even more credence to the case that a medium term top is in place. Sustained break of 1.5284 will confirm the double top formation and encourage deeper fall to 1.4309/4966 support zone.
However, strong rebound from 1.5284, followed by break of 1.5700 resistance, will provide the argument for the former case, i.e. sideway consolidation. Though, deceive break of 1.6000/38 resistance zone is still needed to confirm short term bullishness. Otherwise, more choppy trading could still be seen before resuming the up trend.
Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
22:45 NZD NZ Unemployment rate Q2 3.90% 3.80% 3.60%
22:45 NZD NZ Employment change Q/Q Q2 1.20% 0.20% -1.30%
22:45 NZD NZ Employment change Y/Y Q2 0.70% -0.60% -0.20%
23:50 JPY Japan Machine orders M/M Jun -2.60% -9.60% 10.40%
23:50 JPY Japan Machine orders Y/Y Jun 9.70% 2.60% 5.10%
01:30 AUD Australia Employment change Jul 10.9K 5.0K 29.8K 22.2K
01:30 AUD Australia Unemployment rate Jul 4.30% 4.30% 4.20% 4.30%
06:00 EUR German Trade balance (euro) Jun 19.7B 15.0B 14.6B 14.3B
06:00 EUR German Current account Jul 18.5B 12.0B 7.5B 7.7B
06:00 EUR German Import M/M Jun -1.00% 1.40% 0.70% 0.50%
06:00 EUR German Export M/M Jun 4.20% 1.80% -3.20% -3.40%
08:00 GBP U.K. Halifax hse prices 3m Y/YJul -8.80% -8.60% -6.10%
08:00 GBP U.K. Halifax hse prices M/M Jul -1.70% -1.50% -2.00%
10:00 EUR German Ind'l prod'n M/M Jun 0.20% 0.80% -2.40%
10:00 EUR German Ind'l prod'n Y/Y Jun 1.70% 1.50% 0.80%
11:00 GBP BOE rate decision Aug 5.00% 5.00% 5.00%
11:45 EUR ECB rate decision Aug 4.25% 4.25% 4.25%
12:30 EUR ECB press conference
12:30 CAD Canada Building permits Jun -5.30% -1.00% 1.10%
12:30 USD U.S. Jobless claims 455K 420K 448K
14:00 USD U.S. Pending home sales Jun N/A 84.7
14:00 USD U.S. Pending home sales M/M Jun -1.00% -4.70%
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Blah, Blah, Blah = ECB Cut?
Daily Forex Fundamentals | Written by The LFB-Forex.com | Aug 07 08 13:30 GMT |
ECB Press Conference Trichet: ECB has "no bias"
In response to a question from Bloomberg News, ECB President Jean-Claude Trichet has repeated that at present, the ECB has "no bias" with regards to the future path of monetary policy. Commenting on the outlook for growth, Mr. Trichet noted that the "technical correction" seen in the second quarter was a response to the "extraordinarily robust" growth in the first. On the question regarding whether he is concerned about recession, Mr. Trichet said that new growth projections would be presented at the September meeting and that any new estimates in that regard would be made at that time. Mr. Trichet repeated that growth had been expected to slow in the second and third quarters, and declined to comment on growth prospects for future quarters.
Press Conference Analysis: Inflation is still the main problem. Now add lower growth
* Inflation rates are likely to remain well above the price stability levels
* Risks to price stability over the medium term remain on the upside
* Real GDP growth figures for mid-2008 will be substantially weaker
* Weakening in GDP growth due to factors such as slower expansion at the global level and dampening effects from high and volatile oil and food prices
* Growth in the world economy, while moderating, is expected to remain relatively resilient
* Fundamentals of the euro area are sound and the euro area does not suffer from major imbalances
* Household disposable income and consumption, are unlikely to compensate the loss of purchasing power
* Uncertainty surrounding this outlook for economic activity remains high
* Very high and volatile levels of commodity prices and the ongoing tensions in financial markets
* Downside risks continue to relate to the potential for the financial market tensions to affect the real economy more adversely than currently anticipated
* Annual HICP inflation has remained considerably above the level consistent with price stability
* Annual HICP inflation rate is likely to remain well above a level consistent with price stability based on current futures prices for commodities
* Risks to price stability at clearly on the upside and have increased over the past few months
* Monetary analysis confirms the prevailing upside risks to price stability
* growth of broad money and credit aggregates is showing some signs of moderation
* The current yield curve has led to rapid increases in time deposits and to a substantial decline in annual M1 growth
Once again, Mr. Trichet put a lot of pressure on the inflation problem, but at the same time he underlined the fact that the economy will weaken in the second and third quarter. It seems the market had interpreted this detail as a rate cut may be possible. During the speech, the euro fell more than 70 pips, creating a lot of volatility 0n its way down.
The LFB-Forex.com
Read more...
ECB Press Conference Trichet: ECB has "no bias"
In response to a question from Bloomberg News, ECB President Jean-Claude Trichet has repeated that at present, the ECB has "no bias" with regards to the future path of monetary policy. Commenting on the outlook for growth, Mr. Trichet noted that the "technical correction" seen in the second quarter was a response to the "extraordinarily robust" growth in the first. On the question regarding whether he is concerned about recession, Mr. Trichet said that new growth projections would be presented at the September meeting and that any new estimates in that regard would be made at that time. Mr. Trichet repeated that growth had been expected to slow in the second and third quarters, and declined to comment on growth prospects for future quarters.
Press Conference Analysis: Inflation is still the main problem. Now add lower growth
* Inflation rates are likely to remain well above the price stability levels
* Risks to price stability over the medium term remain on the upside
* Real GDP growth figures for mid-2008 will be substantially weaker
* Weakening in GDP growth due to factors such as slower expansion at the global level and dampening effects from high and volatile oil and food prices
* Growth in the world economy, while moderating, is expected to remain relatively resilient
* Fundamentals of the euro area are sound and the euro area does not suffer from major imbalances
* Household disposable income and consumption, are unlikely to compensate the loss of purchasing power
* Uncertainty surrounding this outlook for economic activity remains high
* Very high and volatile levels of commodity prices and the ongoing tensions in financial markets
* Downside risks continue to relate to the potential for the financial market tensions to affect the real economy more adversely than currently anticipated
* Annual HICP inflation has remained considerably above the level consistent with price stability
* Annual HICP inflation rate is likely to remain well above a level consistent with price stability based on current futures prices for commodities
* Risks to price stability at clearly on the upside and have increased over the past few months
* Monetary analysis confirms the prevailing upside risks to price stability
* growth of broad money and credit aggregates is showing some signs of moderation
* The current yield curve has led to rapid increases in time deposits and to a substantial decline in annual M1 growth
Once again, Mr. Trichet put a lot of pressure on the inflation problem, but at the same time he underlined the fact that the economy will weaken in the second and third quarter. It seems the market had interpreted this detail as a rate cut may be possible. During the speech, the euro fell more than 70 pips, creating a lot of volatility 0n its way down.
The LFB-Forex.com
Read more...
Euro Drops As ECB Leaves Rates at 4.25%, Trichet Increasingly Bearish On Economy
Daily Forex Fundamentals | Written by DailyFX | Aug 07 08 13:12 GMT |
The European Central Bank left rates unchanged at 4.25 percent as expected, but the Euro has pulled back sharply as ECB President Jean-Claude Trichet appears to be turning his focus toward the downside risks to growth. As a result, traders are starting to consider the potential for a rate cut by the central bank within the next year.
Indeed, Mr. Trichet said that recent economic data pointed toward "a weakening of real GDP growth in mid-2008" following strong growth during Q1, and with Euro-zone Q2 GDP scheduled to be released on August 14, there are concerns that the economy actually contracted. Mr. Trichet went on to say that this slowdown reflected global growth conditions, thanks to high oil prices. Meanwhile, the ECB remains particularly hawkish on inflation, saying that CPI would remain above 2 percent for "some time" and that the recent data supported the latest rate hike in July. Since price stability is the ECB's primary mandate, the central bank will have limited ability to completely brush off the inflation data on hand in order to make monetary policy more accomodative. Nevertheless, the markets have taken the bearish notes on growth to heart, as overnight index swaps are now pricing in 25bps worth of rate cuts within the next year. Given this news, there is potential for EUR/USD to drop below near-term support at 1.54.
DailyFX
Disclaimer
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
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The European Central Bank left rates unchanged at 4.25 percent as expected, but the Euro has pulled back sharply as ECB President Jean-Claude Trichet appears to be turning his focus toward the downside risks to growth. As a result, traders are starting to consider the potential for a rate cut by the central bank within the next year.
Indeed, Mr. Trichet said that recent economic data pointed toward "a weakening of real GDP growth in mid-2008" following strong growth during Q1, and with Euro-zone Q2 GDP scheduled to be released on August 14, there are concerns that the economy actually contracted. Mr. Trichet went on to say that this slowdown reflected global growth conditions, thanks to high oil prices. Meanwhile, the ECB remains particularly hawkish on inflation, saying that CPI would remain above 2 percent for "some time" and that the recent data supported the latest rate hike in July. Since price stability is the ECB's primary mandate, the central bank will have limited ability to completely brush off the inflation data on hand in order to make monetary policy more accomodative. Nevertheless, the markets have taken the bearish notes on growth to heart, as overnight index swaps are now pricing in 25bps worth of rate cuts within the next year. Given this news, there is potential for EUR/USD to drop below near-term support at 1.54.
DailyFX
Disclaimer
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
Read more...
Unemployment Claims (Weekly)
Daily Forex Fundamentals | Written by The LFB-Forex.com | Aug 07 08 12:46 GMT |
Actual 455k, Expected 420k, Previous 448k
Release Explanation: The number of workers filing new claims for unemployment benefits. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. This report also provides the number of weekly continuing claims as well as 4 week moving averages of new and continuing claims, which most economists prefer to use.
Trade Desk Thoughts: Today's number certainly indicates the labor market is deteriorating, as all of the metrics contained in today's report worsened. The 4-week moving average of new claims increased sharply to 419,500, an increase of 26,750 from the previous week's revised average of 392,750. The number of people continuing to receive claims was 3,311,000, an increase of 31,000 from the preceding week's revised level of 3,280,000. The 4-week moving average of continuing claims was 3,201,000, an increase of 27,000 from the preceding week's revised average of 3,174,000.
Forex Technical Reaction: The dollar had weakened in the overnight session against most major currencies, while S&P futures were down 0.4% and oil was up 2%. S&P futures declined to a loss of 0.7% after the release and the dollar weakened further against the other currencies.
The LFB-Forex.com
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Actual 455k, Expected 420k, Previous 448k
Release Explanation: The number of workers filing new claims for unemployment benefits. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. This report also provides the number of weekly continuing claims as well as 4 week moving averages of new and continuing claims, which most economists prefer to use.
Trade Desk Thoughts: Today's number certainly indicates the labor market is deteriorating, as all of the metrics contained in today's report worsened. The 4-week moving average of new claims increased sharply to 419,500, an increase of 26,750 from the previous week's revised average of 392,750. The number of people continuing to receive claims was 3,311,000, an increase of 31,000 from the preceding week's revised level of 3,280,000. The 4-week moving average of continuing claims was 3,201,000, an increase of 27,000 from the preceding week's revised average of 3,174,000.
Forex Technical Reaction: The dollar had weakened in the overnight session against most major currencies, while S&P futures were down 0.4% and oil was up 2%. S&P futures declined to a loss of 0.7% after the release and the dollar weakened further against the other currencies.
The LFB-Forex.com
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FX Thoughts for the Day
Daily Forex Technicals | Written by Kshitij Consultancy Services | Aug 07 08 11:09 GMT |
USD-CHF @ 1.0550/55.... Could trade between 1.0550-600
R: 1.0600 / 1.0625 / 1.0650
S: 1.0550 / 1.0500 / 1.0470 / 1.0450
The pair is not being able to sustain at levels close to or above 1.0600 and as result the pair has come down to touch the Support at 1.0550. However, from here it is difficult to anticipate the immediate future, as there remains a level of uncertainty.
The pair could continue to vacillate in the tight 50-pip range of 1.0550-1.0600 till later in the US session where a break out may be seen on the upside.
Till then keep a close eye on Euro, which has a good negative correlation with USD-CHF.
GBP-USD @ 1.9511/15... BOE ahead
R: 1.9535-50 / 1.9600-20 / 1.9650
S: 1.9450-35 / 1.9400 / 1.9366
Just ahead of the BOE meeting the pair seems to be building up a possibility of a rise towards 1.96. This could sound strange, however, the rise is only expected to be a spike on the bigger picture which otherwise continues to remain bearish overall.
With a change in rates completely ruled out, the pair could react in a positive manner to a neutral statement as well. Till now the market has been discounting a dovish statement from the BOE as the economy is on the verge of a recession. As the economic releases are going from bad to worse and the housing crisis continues to grow, while the economy itself is stagnant, there is little hope that the recession could be avoided.
In the day, expect Resistance on a rise to 1.9597, also the Max High for the day. A rise beyond it, if seen, could be checked at 1.9650, the Support turned Resistance. A dovish statement could result in a further dip in the pair and result in a test of longer term Support at 1.9400-1.9393, also the Max Low for the day.
To see the Interest Rate chart/ BOE announcement click on: http://www.kshitij.com/fundamentals/funcharts/ukboe.shtml
AUD-USD @ 0.9110/14... Expect a dip till 0.9135 holds as Resistance
R: 0.9150-65 / 0.9200 / 0.9235-50
S: 0.9100 / 0.9043 / 0.90
Overall bearish bias is prevalent, however, the pair seems to have paused to take a breath before continuing its bear run.
In the day, it continues to face Resistance at 0.9120-33, however, the dip that we have been looking out for has not materialized. A break of Support at 0.9100 would be very bearish and target 0.9043 over the rest of the day. In an unlikely move, if the Resistance at 0.9130 breaks, a rise towards 0.9175-0.92 could be seen.
To see the chart of AUD-USD on our website click on:
http://www.kshitij.com/graphgallery/audcandle.shtml
http://www.kshitij.com/graphgallery/audma.shtml
Holding:
* Short 10K USD at 0.9102, SL 0.9165, TP 0.9053
Kshitij Consultancy Service
http://www.fxthoughts.com
Legal disclaimer and risk disclosure
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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USD-CHF @ 1.0550/55.... Could trade between 1.0550-600
R: 1.0600 / 1.0625 / 1.0650
S: 1.0550 / 1.0500 / 1.0470 / 1.0450
The pair is not being able to sustain at levels close to or above 1.0600 and as result the pair has come down to touch the Support at 1.0550. However, from here it is difficult to anticipate the immediate future, as there remains a level of uncertainty.
The pair could continue to vacillate in the tight 50-pip range of 1.0550-1.0600 till later in the US session where a break out may be seen on the upside.
Till then keep a close eye on Euro, which has a good negative correlation with USD-CHF.
GBP-USD @ 1.9511/15... BOE ahead
R: 1.9535-50 / 1.9600-20 / 1.9650
S: 1.9450-35 / 1.9400 / 1.9366
Just ahead of the BOE meeting the pair seems to be building up a possibility of a rise towards 1.96. This could sound strange, however, the rise is only expected to be a spike on the bigger picture which otherwise continues to remain bearish overall.
With a change in rates completely ruled out, the pair could react in a positive manner to a neutral statement as well. Till now the market has been discounting a dovish statement from the BOE as the economy is on the verge of a recession. As the economic releases are going from bad to worse and the housing crisis continues to grow, while the economy itself is stagnant, there is little hope that the recession could be avoided.
In the day, expect Resistance on a rise to 1.9597, also the Max High for the day. A rise beyond it, if seen, could be checked at 1.9650, the Support turned Resistance. A dovish statement could result in a further dip in the pair and result in a test of longer term Support at 1.9400-1.9393, also the Max Low for the day.
To see the Interest Rate chart/ BOE announcement click on: http://www.kshitij.com/fundamentals/funcharts/ukboe.shtml
AUD-USD @ 0.9110/14... Expect a dip till 0.9135 holds as Resistance
R: 0.9150-65 / 0.9200 / 0.9235-50
S: 0.9100 / 0.9043 / 0.90
Overall bearish bias is prevalent, however, the pair seems to have paused to take a breath before continuing its bear run.
In the day, it continues to face Resistance at 0.9120-33, however, the dip that we have been looking out for has not materialized. A break of Support at 0.9100 would be very bearish and target 0.9043 over the rest of the day. In an unlikely move, if the Resistance at 0.9130 breaks, a rise towards 0.9175-0.92 could be seen.
To see the chart of AUD-USD on our website click on:
http://www.kshitij.com/graphgallery/audcandle.shtml
http://www.kshitij.com/graphgallery/audma.shtml
Holding:
* Short 10K USD at 0.9102, SL 0.9165, TP 0.9053
Kshitij Consultancy Service
http://www.fxthoughts.com
Legal disclaimer and risk disclosure
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
Read more...
U.S. Stock-Index Futures Retreat on AIG's Loss, Wal-Mart Sales
By Adam Haigh and Elizabeth Stanton
Aug. 7 (Bloomberg) -- U.S. stock futures declined after American International Group Inc. reported a wider-than-estimated loss and Wal-Mart Stores Inc. forecast slower sales growth.
AIG, the world's largest insurer, slumped as housing-related writedowns wiped out profit and spurred concern that financial firms will need to raise more capital. JPMorgan Chase & Co. and Citigroup Inc. also declined. Wal-Mart, the world's biggest retailer, retreated more than 3 percent, while Costco Wholesale Corp. also fell. Futures extended declines after the government reported a bigger-than-forecast increase in jobless claims.
Futures on the Standard & Poor's 500 Index expiring in September slipped 9, or 0.7 percent, to 1,278.7 at 9:15 a.m. in New York. Dow Jones Industrial Average futures lost 94 to 11,537. Nasdaq-100 Index futures slid 10.75 to 1,885.5.
``I don't think the environment is going to lend itself to growing financial sector earnings any time soon,'' David Joy, chief market strategist at RiverSource Investments LLC in Minneapolis, said on Bloomberg Television. ``We think it's a little too early to be moving back into the financials.'' RiverSource manages $160 billion.
The S&P 500 has fallen 12 percent this year as credit losses and asset writedowns at financial firms worldwide approach $500 billion. Last month, the International Monetary Fund stood by its April forecast for about $1 trillion in losses stemming from the U.S. mortgage crisis.
Initial jobless claims increased by 7,000 to 455,000 in the week ended Aug. 2, the most since March 2002, from 448,000 the prior week. The number of continuing claims increased to a four- year high.
Earnings Watch
Second-quarter earnings at S&P 500 companies that released results through yesterday are down 20 percent on average from a year earlier, according to data compiled by Bloomberg. Financial company earnings have retreated 83 percent and profits at consumer discretionary companies have declined 74 percent.
Profits fell from the year-earlier period in each of the past three quarters, the longest stretch of declines since 2002, as the combination of falling home values and record fuel prices slow economic growth.
Stocks in the U.S. rose for a second day yesterday, sending benchmark indexes to a six-week high, as better-than-estimated earnings at Cisco Systems Inc. spurred a rally in technology shares and falling gasoline inventories boosted fuel refiners.
Crude oil, whose 18 percent drop from a record $145.29 a barrel as of yesterday was a balm for stocks, rose for the first time in three days. Oil for September delivery added 2.7 percent to $121.78 after an explosion temporarily closed a pipeline in Turkey.
European shares still climbed today as better-than-estimated earnings from Axa SA and Barclays Plc and a plan to cut costs at Veolia Environnement SA eased concern the economic slowdown will stifle profits. Asian stocks fell.
AIG Slumps
AIG retreated $3.59 to $25.50. Excluding the declines in the value of some investments, AIG's loss was $1.32 billion, or 51 cents a share, missing by $1.28 the average estimate of 19 analysts surveyed by Bloomberg.
The results intensify pressure on Chief Executive Officer Robert Willumstad to turn around AIG, which posted three quarterly losses totaling more than $18 billion. The shares declined 50 percent in New York trading this year before today.
`Dims Growth'
``There is going to be quite a lot more capital raising going on and it is going to become more difficult to do this,'' said David Hart, a senior equity analyst at London-based investment adviser Fat Prophets U.K. Ltd. ``The writedowns are related to the property market where things are going to continue to deteriorate as the lack of credit dims growth.''
JPMorgan, the second-largest U.S. bank by assets, fell 28 cents to $41.11 in Germany, while Citigroup slipped 18 cents to $19.52.
Wal-Mart fell $2.14 to $58.62. Sales at stores open at least a year may increase 1 percent to 2 percent in August, following an increase of 3 percent in July, the Bentonville, Arkansas-based company said.
Sunoco Inc. gained $1.62 to $44.90 in trading after the official close of U.S. exchanges. Profit, excluding gains from an insurance recovery and a tax settlement, was 52 cents a share, more than the 35-cent average estimate of 15 analysts surveyed by Bloomberg. The shares didn't trade in Europe.
Avis Budget Group Inc. may be active. The third-largest U.S. car-rental company reported second-quarter profit of 15 cents a share, more than the 6-cent average estimate of analysts surveyed by Bloomberg. The stock didn't trade in Europe.
The Bank of England today decided to keep interest rates on hold. The European Central Bank is due to announce its decision on borrowing costs today. Economists also forecast rates to maintain rates at the present 4.25 percent level.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
Read more...
Aug. 7 (Bloomberg) -- U.S. stock futures declined after American International Group Inc. reported a wider-than-estimated loss and Wal-Mart Stores Inc. forecast slower sales growth.
AIG, the world's largest insurer, slumped as housing-related writedowns wiped out profit and spurred concern that financial firms will need to raise more capital. JPMorgan Chase & Co. and Citigroup Inc. also declined. Wal-Mart, the world's biggest retailer, retreated more than 3 percent, while Costco Wholesale Corp. also fell. Futures extended declines after the government reported a bigger-than-forecast increase in jobless claims.
Futures on the Standard & Poor's 500 Index expiring in September slipped 9, or 0.7 percent, to 1,278.7 at 9:15 a.m. in New York. Dow Jones Industrial Average futures lost 94 to 11,537. Nasdaq-100 Index futures slid 10.75 to 1,885.5.
``I don't think the environment is going to lend itself to growing financial sector earnings any time soon,'' David Joy, chief market strategist at RiverSource Investments LLC in Minneapolis, said on Bloomberg Television. ``We think it's a little too early to be moving back into the financials.'' RiverSource manages $160 billion.
The S&P 500 has fallen 12 percent this year as credit losses and asset writedowns at financial firms worldwide approach $500 billion. Last month, the International Monetary Fund stood by its April forecast for about $1 trillion in losses stemming from the U.S. mortgage crisis.
Initial jobless claims increased by 7,000 to 455,000 in the week ended Aug. 2, the most since March 2002, from 448,000 the prior week. The number of continuing claims increased to a four- year high.
Earnings Watch
Second-quarter earnings at S&P 500 companies that released results through yesterday are down 20 percent on average from a year earlier, according to data compiled by Bloomberg. Financial company earnings have retreated 83 percent and profits at consumer discretionary companies have declined 74 percent.
Profits fell from the year-earlier period in each of the past three quarters, the longest stretch of declines since 2002, as the combination of falling home values and record fuel prices slow economic growth.
Stocks in the U.S. rose for a second day yesterday, sending benchmark indexes to a six-week high, as better-than-estimated earnings at Cisco Systems Inc. spurred a rally in technology shares and falling gasoline inventories boosted fuel refiners.
Crude oil, whose 18 percent drop from a record $145.29 a barrel as of yesterday was a balm for stocks, rose for the first time in three days. Oil for September delivery added 2.7 percent to $121.78 after an explosion temporarily closed a pipeline in Turkey.
European shares still climbed today as better-than-estimated earnings from Axa SA and Barclays Plc and a plan to cut costs at Veolia Environnement SA eased concern the economic slowdown will stifle profits. Asian stocks fell.
AIG Slumps
AIG retreated $3.59 to $25.50. Excluding the declines in the value of some investments, AIG's loss was $1.32 billion, or 51 cents a share, missing by $1.28 the average estimate of 19 analysts surveyed by Bloomberg.
The results intensify pressure on Chief Executive Officer Robert Willumstad to turn around AIG, which posted three quarterly losses totaling more than $18 billion. The shares declined 50 percent in New York trading this year before today.
`Dims Growth'
``There is going to be quite a lot more capital raising going on and it is going to become more difficult to do this,'' said David Hart, a senior equity analyst at London-based investment adviser Fat Prophets U.K. Ltd. ``The writedowns are related to the property market where things are going to continue to deteriorate as the lack of credit dims growth.''
JPMorgan, the second-largest U.S. bank by assets, fell 28 cents to $41.11 in Germany, while Citigroup slipped 18 cents to $19.52.
Wal-Mart fell $2.14 to $58.62. Sales at stores open at least a year may increase 1 percent to 2 percent in August, following an increase of 3 percent in July, the Bentonville, Arkansas-based company said.
Sunoco Inc. gained $1.62 to $44.90 in trading after the official close of U.S. exchanges. Profit, excluding gains from an insurance recovery and a tax settlement, was 52 cents a share, more than the 35-cent average estimate of 15 analysts surveyed by Bloomberg. The shares didn't trade in Europe.
Avis Budget Group Inc. may be active. The third-largest U.S. car-rental company reported second-quarter profit of 15 cents a share, more than the 6-cent average estimate of analysts surveyed by Bloomberg. The stock didn't trade in Europe.
The Bank of England today decided to keep interest rates on hold. The European Central Bank is due to announce its decision on borrowing costs today. Economists also forecast rates to maintain rates at the present 4.25 percent level.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
Read more...
Elliott Wave - EUR/USD, GBP/USD
Daily Forex Technicals | Written by The LFB-Forex.com | Aug 07 08 11:50 GMT |
Welcome Traders. On Tuesday we saw Eur/Gbp analysis that mentioned the 0.7915 level as a potential long break-out zone. The main reason for no volume on this pair is linked to the consolidation moves from both the Eur/Usd and Gbp/Usd. We saw a move down on both pairs and with a stronger dollar against both the euro and sterling means that Eur/Gbp has nowhere to move, and will probably be caught in the range. In the Tokyo session we saw a move up to the 0.7930 level and that will probably continue higher throughout the London session, further on to possible targets around 0.7980 if today’s ECB press conference allows for stability in Euro-zone rates, and at worst no increase from the Bank of England. Positions that are still long on this pair from Tuesday should trail the stops higher before the news releases.
Today's Charts
EUR/USD
I have two possible wave counts for this pair. On the picture below there is an A-B-C flat in black wave 4), with an ending diagonal in wave 5) with the “throw-over”. Attention is directed to the levels around 1.5300, which, if unable to hold, looks to lead down to the 1.5000 area. There are resistance levels around 1.5611 where the daily trend-line becomes a significant resistance area for those looking for new lows in the next few weeks. It seems that 1.5611-1.5640 will be very interesting zone for the sellers.
On the chart below there is a wave count, wave 4) in place since March 08, offering a 700 pip range with buyers coming in at support and sellers moving in on the resistance points. We have two flat A-B-C moves with exactly the same numbers of bars that may indicate a near-term bottom may have been seen. Traders going long here should realize that this is a high contra trend trade; the dollar is still bullish. However, if this wave count is correct, then we should see a move limit move from the 1.5300 area back to test topside areas around the 1.6000 again. Time will tell, and that will all be in the hands of the ECB today.
GBP/USD
There has been nothing to take in the pound for nearly two months now, outside of some near-term bouncing around. There is a possible triangle count from the beginning of 2008 that may shake the pound out of its demise. The first zig-zag is in blue wave A) and also the zig-zags are in wave B) and C), from where we should see another move up from current prices in to the wave E). Today’s rates decision will have a high influence on this count.
Above we have a flat pattern which is already complete, and now the markets look to be waiting on a correction move before momentum increases. The confirmation of the wave count will be when the price breaks down through the support area from 1.9350-1.9415, which could lead us to the 1.9000 level. The sellers could be around 1.9648 where they will find resistance in the black wave iv of C), and also the upper trend-line of the last move down.
The LFB-Forex.com
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Welcome Traders. On Tuesday we saw Eur/Gbp analysis that mentioned the 0.7915 level as a potential long break-out zone. The main reason for no volume on this pair is linked to the consolidation moves from both the Eur/Usd and Gbp/Usd. We saw a move down on both pairs and with a stronger dollar against both the euro and sterling means that Eur/Gbp has nowhere to move, and will probably be caught in the range. In the Tokyo session we saw a move up to the 0.7930 level and that will probably continue higher throughout the London session, further on to possible targets around 0.7980 if today’s ECB press conference allows for stability in Euro-zone rates, and at worst no increase from the Bank of England. Positions that are still long on this pair from Tuesday should trail the stops higher before the news releases.
Today's Charts
EUR/USD
I have two possible wave counts for this pair. On the picture below there is an A-B-C flat in black wave 4), with an ending diagonal in wave 5) with the “throw-over”. Attention is directed to the levels around 1.5300, which, if unable to hold, looks to lead down to the 1.5000 area. There are resistance levels around 1.5611 where the daily trend-line becomes a significant resistance area for those looking for new lows in the next few weeks. It seems that 1.5611-1.5640 will be very interesting zone for the sellers.
On the chart below there is a wave count, wave 4) in place since March 08, offering a 700 pip range with buyers coming in at support and sellers moving in on the resistance points. We have two flat A-B-C moves with exactly the same numbers of bars that may indicate a near-term bottom may have been seen. Traders going long here should realize that this is a high contra trend trade; the dollar is still bullish. However, if this wave count is correct, then we should see a move limit move from the 1.5300 area back to test topside areas around the 1.6000 again. Time will tell, and that will all be in the hands of the ECB today.
GBP/USD
There has been nothing to take in the pound for nearly two months now, outside of some near-term bouncing around. There is a possible triangle count from the beginning of 2008 that may shake the pound out of its demise. The first zig-zag is in blue wave A) and also the zig-zags are in wave B) and C), from where we should see another move up from current prices in to the wave E). Today’s rates decision will have a high influence on this count.
Above we have a flat pattern which is already complete, and now the markets look to be waiting on a correction move before momentum increases. The confirmation of the wave count will be when the price breaks down through the support area from 1.9350-1.9415, which could lead us to the 1.9000 level. The sellers could be around 1.9648 where they will find resistance in the black wave iv of C), and also the upper trend-line of the last move down.
The LFB-Forex.com
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Asia-Pacific Market Recap: Aussie Bonds Higher, JP Bonds Flat After Aussie Empl
Market Updates | Written by CEP News | Aug 07 08 11:52 GMT |
(CEP News) - Following a weak assessment of the Japanese economy and stronger-than-expected results in Australian employment, Asia-Pacific fixed income markets are gaining and equities closed mixed with yields on Australian 10-year bonds down 7.2 bps to 5.98% and Japanese 10-year government bonds flat at 1.53%.
Seasonally adjusted labour force figures released by the Australian Bureau of Statistics (ABS) indicate that employment in Australia increased by 10,900 to 10,721,500 in July 2008. Full-time employment increased by 53,700 to 7,718,400, with part-time employment rising by 42,800 to 3,003,100.
The unemployment rate for the nation remained steady at 4.3%. The male unemployment rate decreased by 0.1 percentage point to 3.9%, with the female unemployment rate increasing by 0.2 percentage points to 4.8%.
Following the release of its monthly economic assessment report, the Japanese government stressed that the economy was "weakening" for the first time since May 2001, the last time the country was in a recession. In its report, the Japanese government revised down its employment, export and production assessments. These revisions come one day after acknowledging that the strongest postwar economic expansion was over. "Exports are in a weak tone," the government said. "Industrial production is decreasing moderately."
Sydney's S&P ASX 200 closed up 14.20 points to 4983.3. The Japanese Nikkei closed down 129.90 points to 13124.99 and the Hang Seng closed up 154.45 points to 22104.2.
Yields on three-year Australian bonds were down 1.9 bps to 6.83 and the Australian 90-day March 09 contract was up 2.0 ticks to 93.19.
The Euroyen March 09 contract was up 3.5 ticks to 99.20.
The Australian dollar was up 0.24 cents to 0.9107 against the USD and up 0.09 cents to 0.9539 against the Canadian dollar.
Against the yen, the U.S. dollar was down 0.38 points to 109.42 and the Canadian dollar was down 0.22 points to 104.45.
The euro was up 0.60 cents to 1.5469 USD.
All data taken at 7:50 a.m. EDT.
Generated by CEP Newswires, edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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(CEP News) - Following a weak assessment of the Japanese economy and stronger-than-expected results in Australian employment, Asia-Pacific fixed income markets are gaining and equities closed mixed with yields on Australian 10-year bonds down 7.2 bps to 5.98% and Japanese 10-year government bonds flat at 1.53%.
Seasonally adjusted labour force figures released by the Australian Bureau of Statistics (ABS) indicate that employment in Australia increased by 10,900 to 10,721,500 in July 2008. Full-time employment increased by 53,700 to 7,718,400, with part-time employment rising by 42,800 to 3,003,100.
The unemployment rate for the nation remained steady at 4.3%. The male unemployment rate decreased by 0.1 percentage point to 3.9%, with the female unemployment rate increasing by 0.2 percentage points to 4.8%.
Following the release of its monthly economic assessment report, the Japanese government stressed that the economy was "weakening" for the first time since May 2001, the last time the country was in a recession. In its report, the Japanese government revised down its employment, export and production assessments. These revisions come one day after acknowledging that the strongest postwar economic expansion was over. "Exports are in a weak tone," the government said. "Industrial production is decreasing moderately."
Sydney's S&P ASX 200 closed up 14.20 points to 4983.3. The Japanese Nikkei closed down 129.90 points to 13124.99 and the Hang Seng closed up 154.45 points to 22104.2.
Yields on three-year Australian bonds were down 1.9 bps to 6.83 and the Australian 90-day March 09 contract was up 2.0 ticks to 93.19.
The Euroyen March 09 contract was up 3.5 ticks to 99.20.
The Australian dollar was up 0.24 cents to 0.9107 against the USD and up 0.09 cents to 0.9539 against the Canadian dollar.
Against the yen, the U.S. dollar was down 0.38 points to 109.42 and the Canadian dollar was down 0.22 points to 104.45.
The euro was up 0.60 cents to 1.5469 USD.
All data taken at 7:50 a.m. EDT.
Generated by CEP Newswires, edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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Overnight News Recap: Slew of European Figures Ahead of ECB & BOE Rate Decisions
News Recap | Written by CEP News | Aug 07 08 10:33 GMT |
(CEP News) - A slew of economic news and macroeconomic data hit the European markets on Thursday, including German industrial production, German and French trade balance, Irish and Dutch CPI, and the Halifax Bank of Scotland's house price index for the UK to name a few. This comes just ahead of the Bank of England and European Central Bank rate decision later this morning.
Meanwhile, Asia-Pacific received a stronger-than-expected employment report from Australia and a negative outlook on the Japanese economy from officials.
On Thursday, the German Economic Ministry reported that German industrial production rose 1.7% in June on an annualized basis, up from both the 1.5% gain expected and the 0.8% increase seen in May. In seasonally adjusted terms, industrial output rose 0.2% in June month-over-month after falling 2.4% in May. However, economists had been more optimistic and were expecting a 0.8% gain in output.
Destatis reported that Germany's external trade surplus rose to €19.7 billion in June from the previous month's €14.3 billion. Economists had expected a less pronounced rise to €15.5 billion while May's figure was revised down from €14.4 billion. The German current account surplus also saw an increase in the month, rising to €18.5 billion, according to the Bundesbank. June's current account surplus more than doubled the previous month's €7.7 billion figure, which was revised up from €7.5 billion. Economists had expected a surplus of €12.0 billion.
On Thursday, the French Finance Ministry reported that the trade deficit increased to €5.6 billion in June. Economists had expected the figure to fall to a deficit level of €4.6 billion after seeing a deficit of €4.7 billion in May.
The Dutch consumer price index grew 3.2% in July on an annualized basis, up from both the 3.1% growth rate expected and the 2.6% rise seen in May, according to data released by Statistics Netherlands. On a monthly basis, Dutch prices rose 0.1% as expected after contracting 0.2% in the previous period.
According to the Central Statistics Office (CSO), Irish inflation slowed to 4.4% year-over-year in July from June's 5.0% rate. Economists had expected a more modest deceleration to 4.8% for the month. On a monthly basis, the Irish consumer price index fell 0.3% despite forecasts calling for no change in the index level. May had recorded a 0.5% increase in Irish CPI.
In EU harmonized terms, inflation in Ireland fell to 3.6% on an annualized basis from June's 3.9% print. Expectations had been for an acceleration in the inflation rate to 4.1%. In monthly terms, Irish HICP decreased 0.5%, down from the 0.1% decline expected after rising 0.5% in the previous period.
The National Institute of Statistics (ISTAT) reported that Italian industrial production fell 1.8% year-over-year in weighted daily average terms in June. However, this came in higher than the consensus forecast for a more pronounced fall of 2.0%.
According to the Halifax Bank of Scotland (HBOS), house prices in the UK fell 8.8% in July year-over-year to an average price of £177,351. Economists had expected a decline of 8.6% following the 6.1% decline seen in June. In monthly terms, house prices slipped 1.7%, adding to the 1.9% decline seen in the previous month. Economist had called for a 1.5% fall while June's reading was revised up slightly from -2.0%.
According to Statistics Sweden, price growth in the Scandinavian country reached 4.4% year-over-year in July, in line with expectations and up from June's 4.3% growth rate. In monthly terms, the Swedish consumer price index fell 0.1% as expected following May's 0.5% gain. The underlying inflation rate in Sweden remained unchanged at 3.2% year-over-year in June, down from the 3.3% print expected. Meanwhile, underlying prices fell 0.3% on a monthly basis following May's 0.4% increase. Economists had expected a 0.2% loss in prices.
The Swedish National Debt Office reported that the government's budget surplus rose to SEK 51.5 billion in July 2008, up from both the SEK 13.8 billion recorded in June and the SEK 12.4 billion seen in July 2007. The Debt Office also reported that interest payments in loans fell to SEK 1.1 billion from SEK 1.5 billion in June.
According to Statistics Norway, Norwegian industrial production rose 5.9% on an annualized basis in June, overshadowing the 2.8% gain registered in May. In monthly terms, industrial output declined 0.7% after rising 1.6% in the previous period. Meanwhile, manufacturing production fell 1.2%, deepening the 0.7% decline seen in May. However, economists had predicted an even stronger drop of 1.3% for the month.
Seasonally adjusted labour force figures released by the Australian Bureau of Statistics (ABS) indicate that employment in Australia increased by 10,900 to 10,721,500 in July 2008. Full-time employment increased by 53,700 to 7,718,400, with part-time employment rising by 42,800 to 3,003,100.
The unemployment rate for the nation remained steady at 4.3%. The male unemployment rate decreased by 0.1 percentage point to 3.9%, with the female unemployment rate increasing by 0.2 percentage points to 4.8%.
AiG's performance of Australian construction index increased to a reading of 41.6 in July from 40.3 in May; however, the index remains in sub-fifty territory, suggesting a contraction.
Following the release of its monthly economic assessment report, the Japanese government stressed that the economy was "weakening" for the first time since May 2001, the last time the country was in a recession. In its report, the Japanese government revised down its employment, export and production assessments. These revisions come one day after acknowledging that the strongest postwar economic expansion was over. "Exports are in a weak tone," the government said. "Industrial production is decreasing moderately."
Japanese machine orders declined 2.6% month-over-month in June despite forecasts for a 9.9% contraction and the previous month's 10.4% gain, while annual order rose 9.7% compared to forecasts for a 2.6% increase and the previous month's 5.1% rise.
Official reserve assets in Japan rose to $1.0047 trillion in July compared to June's $1.0015 trillion level.
The foreign purchase of Japanese stocks fell ¥382.7 billion in the week ending Aug. 1 after selling off ¥32.0 billion in the previous week. Buying of bonds rose ¥207.4 billion following the previous week's ¥72.8 billion sell-off. Meanwhile, the Japanese bought ¥135.2 billion in foreign stocks following the ¥3.5 billion sold in the prior week. The Japanese also purchased ¥176.0 billion in foreign bonds following the previous week's ¥343.2 billion buy-up.
AU AiG Performance of Construction Index July +41.6 vs. Prior: +40.3
JP Machine Orders (M/M) June -2.6% vs. Exp: -9.9% Prior: +10.4%
JP Machine Orders (Y/Y) June +9.7% vs. Exp: +2.6% Prior: +5.1%
JP Official Reserve Assets July $1004.7B vs. Prior: $1001.5B
JP Foreign Buying Japan Bonds 1-August +¥207.4B vs. Revised: -¥32.0B Prior: -¥39.7B
JP Foreign Buying Japan Stocks 1-August -¥382.7B vs. Prior: -¥72.8B
JP Japan Buying Foreign Stocks 1-August +¥135.2B vs. Prior: -¥3.5B
JP Japan Buying Foreign Bonds 1-August -¥176.0B vs. Revised: +¥343.2B Prior: +¥347.9B
AU Employment Change July +10.9K vs. Exp: +5.0K Revised: +22.2K Prior: +29.8K
AU Unemployment Rate July 4.3% vs. Exp: 4.3% Revised: 4.3% Prior: 4.2%
AU Participation Rate July 65.3% vs. Exp: 65.3% Prior: 65.3%
DE Trade Balance June +€19.7B vs. Exp: +€15.5B Revised: +€14.3B Prior: +€14.4B
DE Current Account June +€18.5B vs. Exp: +€12.0B Revised: +€7.7B Prior: +€7.5B
DE Imports SA (M/M) June -0.1% vs. Exp: +1.8% Revised: +0.5% Prior: +0.7%
DE Exports SA (M/M) June +4.2% vs. Exp: +1.8% Revised: -3.4% Prior: -3.2%
FR Trade Balance June -€5.6B vs. Exp:-€4.6B Prior:-€4.7B
IT Industrial Production (M/M) (SA) June +0.1% vs. Exp: +0.3% Prior: -1.4%
IT Industrial Production (Y/Y) (WDA) June -1.8% vs. Exp: -2.0% Revised: -4.0% Prior: -4.1%
IT Industrial Production (Y/Y) (NSA) June -4.4% vs. Exp: -4.5% Revised: -6.5% Prior: -6.6%
GB HBOS House Price 3Mths/Year July -8.8% vs. Exp: -8.6% Prior: -6.1%
GB HBOS Plc house prices (M/M) (SA) July -1.7% vs. Exp: -1.5% Revised: -1.9% Prior: -2.0%
DE Industrial Production (Y/Y) (NSA WDA) June +1.7% vs. Exp: +1.5% Revised: +1.1% Prior: +0.8%
DE Industrial Production (M/M) (SA) June +0.2% vs. Exp: +0.8% Revised: -1.8% vs. Prior: -2.4%
By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it with contributions from Tim Stackpool, tstackpool@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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(CEP News) - A slew of economic news and macroeconomic data hit the European markets on Thursday, including German industrial production, German and French trade balance, Irish and Dutch CPI, and the Halifax Bank of Scotland's house price index for the UK to name a few. This comes just ahead of the Bank of England and European Central Bank rate decision later this morning.
Meanwhile, Asia-Pacific received a stronger-than-expected employment report from Australia and a negative outlook on the Japanese economy from officials.
On Thursday, the German Economic Ministry reported that German industrial production rose 1.7% in June on an annualized basis, up from both the 1.5% gain expected and the 0.8% increase seen in May. In seasonally adjusted terms, industrial output rose 0.2% in June month-over-month after falling 2.4% in May. However, economists had been more optimistic and were expecting a 0.8% gain in output.
Destatis reported that Germany's external trade surplus rose to €19.7 billion in June from the previous month's €14.3 billion. Economists had expected a less pronounced rise to €15.5 billion while May's figure was revised down from €14.4 billion. The German current account surplus also saw an increase in the month, rising to €18.5 billion, according to the Bundesbank. June's current account surplus more than doubled the previous month's €7.7 billion figure, which was revised up from €7.5 billion. Economists had expected a surplus of €12.0 billion.
On Thursday, the French Finance Ministry reported that the trade deficit increased to €5.6 billion in June. Economists had expected the figure to fall to a deficit level of €4.6 billion after seeing a deficit of €4.7 billion in May.
The Dutch consumer price index grew 3.2% in July on an annualized basis, up from both the 3.1% growth rate expected and the 2.6% rise seen in May, according to data released by Statistics Netherlands. On a monthly basis, Dutch prices rose 0.1% as expected after contracting 0.2% in the previous period.
According to the Central Statistics Office (CSO), Irish inflation slowed to 4.4% year-over-year in July from June's 5.0% rate. Economists had expected a more modest deceleration to 4.8% for the month. On a monthly basis, the Irish consumer price index fell 0.3% despite forecasts calling for no change in the index level. May had recorded a 0.5% increase in Irish CPI.
In EU harmonized terms, inflation in Ireland fell to 3.6% on an annualized basis from June's 3.9% print. Expectations had been for an acceleration in the inflation rate to 4.1%. In monthly terms, Irish HICP decreased 0.5%, down from the 0.1% decline expected after rising 0.5% in the previous period.
The National Institute of Statistics (ISTAT) reported that Italian industrial production fell 1.8% year-over-year in weighted daily average terms in June. However, this came in higher than the consensus forecast for a more pronounced fall of 2.0%.
According to the Halifax Bank of Scotland (HBOS), house prices in the UK fell 8.8% in July year-over-year to an average price of £177,351. Economists had expected a decline of 8.6% following the 6.1% decline seen in June. In monthly terms, house prices slipped 1.7%, adding to the 1.9% decline seen in the previous month. Economist had called for a 1.5% fall while June's reading was revised up slightly from -2.0%.
According to Statistics Sweden, price growth in the Scandinavian country reached 4.4% year-over-year in July, in line with expectations and up from June's 4.3% growth rate. In monthly terms, the Swedish consumer price index fell 0.1% as expected following May's 0.5% gain. The underlying inflation rate in Sweden remained unchanged at 3.2% year-over-year in June, down from the 3.3% print expected. Meanwhile, underlying prices fell 0.3% on a monthly basis following May's 0.4% increase. Economists had expected a 0.2% loss in prices.
The Swedish National Debt Office reported that the government's budget surplus rose to SEK 51.5 billion in July 2008, up from both the SEK 13.8 billion recorded in June and the SEK 12.4 billion seen in July 2007. The Debt Office also reported that interest payments in loans fell to SEK 1.1 billion from SEK 1.5 billion in June.
According to Statistics Norway, Norwegian industrial production rose 5.9% on an annualized basis in June, overshadowing the 2.8% gain registered in May. In monthly terms, industrial output declined 0.7% after rising 1.6% in the previous period. Meanwhile, manufacturing production fell 1.2%, deepening the 0.7% decline seen in May. However, economists had predicted an even stronger drop of 1.3% for the month.
Seasonally adjusted labour force figures released by the Australian Bureau of Statistics (ABS) indicate that employment in Australia increased by 10,900 to 10,721,500 in July 2008. Full-time employment increased by 53,700 to 7,718,400, with part-time employment rising by 42,800 to 3,003,100.
The unemployment rate for the nation remained steady at 4.3%. The male unemployment rate decreased by 0.1 percentage point to 3.9%, with the female unemployment rate increasing by 0.2 percentage points to 4.8%.
AiG's performance of Australian construction index increased to a reading of 41.6 in July from 40.3 in May; however, the index remains in sub-fifty territory, suggesting a contraction.
Following the release of its monthly economic assessment report, the Japanese government stressed that the economy was "weakening" for the first time since May 2001, the last time the country was in a recession. In its report, the Japanese government revised down its employment, export and production assessments. These revisions come one day after acknowledging that the strongest postwar economic expansion was over. "Exports are in a weak tone," the government said. "Industrial production is decreasing moderately."
Japanese machine orders declined 2.6% month-over-month in June despite forecasts for a 9.9% contraction and the previous month's 10.4% gain, while annual order rose 9.7% compared to forecasts for a 2.6% increase and the previous month's 5.1% rise.
Official reserve assets in Japan rose to $1.0047 trillion in July compared to June's $1.0015 trillion level.
The foreign purchase of Japanese stocks fell ¥382.7 billion in the week ending Aug. 1 after selling off ¥32.0 billion in the previous week. Buying of bonds rose ¥207.4 billion following the previous week's ¥72.8 billion sell-off. Meanwhile, the Japanese bought ¥135.2 billion in foreign stocks following the ¥3.5 billion sold in the prior week. The Japanese also purchased ¥176.0 billion in foreign bonds following the previous week's ¥343.2 billion buy-up.
AU AiG Performance of Construction Index July +41.6 vs. Prior: +40.3
JP Machine Orders (M/M) June -2.6% vs. Exp: -9.9% Prior: +10.4%
JP Machine Orders (Y/Y) June +9.7% vs. Exp: +2.6% Prior: +5.1%
JP Official Reserve Assets July $1004.7B vs. Prior: $1001.5B
JP Foreign Buying Japan Bonds 1-August +¥207.4B vs. Revised: -¥32.0B Prior: -¥39.7B
JP Foreign Buying Japan Stocks 1-August -¥382.7B vs. Prior: -¥72.8B
JP Japan Buying Foreign Stocks 1-August +¥135.2B vs. Prior: -¥3.5B
JP Japan Buying Foreign Bonds 1-August -¥176.0B vs. Revised: +¥343.2B Prior: +¥347.9B
AU Employment Change July +10.9K vs. Exp: +5.0K Revised: +22.2K Prior: +29.8K
AU Unemployment Rate July 4.3% vs. Exp: 4.3% Revised: 4.3% Prior: 4.2%
AU Participation Rate July 65.3% vs. Exp: 65.3% Prior: 65.3%
DE Trade Balance June +€19.7B vs. Exp: +€15.5B Revised: +€14.3B Prior: +€14.4B
DE Current Account June +€18.5B vs. Exp: +€12.0B Revised: +€7.7B Prior: +€7.5B
DE Imports SA (M/M) June -0.1% vs. Exp: +1.8% Revised: +0.5% Prior: +0.7%
DE Exports SA (M/M) June +4.2% vs. Exp: +1.8% Revised: -3.4% Prior: -3.2%
FR Trade Balance June -€5.6B vs. Exp:-€4.6B Prior:-€4.7B
IT Industrial Production (M/M) (SA) June +0.1% vs. Exp: +0.3% Prior: -1.4%
IT Industrial Production (Y/Y) (WDA) June -1.8% vs. Exp: -2.0% Revised: -4.0% Prior: -4.1%
IT Industrial Production (Y/Y) (NSA) June -4.4% vs. Exp: -4.5% Revised: -6.5% Prior: -6.6%
GB HBOS House Price 3Mths/Year July -8.8% vs. Exp: -8.6% Prior: -6.1%
GB HBOS Plc house prices (M/M) (SA) July -1.7% vs. Exp: -1.5% Revised: -1.9% Prior: -2.0%
DE Industrial Production (Y/Y) (NSA WDA) June +1.7% vs. Exp: +1.5% Revised: +1.1% Prior: +0.8%
DE Industrial Production (M/M) (SA) June +0.2% vs. Exp: +0.8% Revised: -1.8% vs. Prior: -2.4%
By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, twailoo@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it with contributions from Tim Stackpool, tstackpool@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it
CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
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Asia stocks fall on deepening growth fears
Thu Aug 7, 2008 2:55am EDT
By Kevin Plumberg
HONG KONG (Reuters) - Asian stocks fell on Thursday, as a sustained decline in oil prices could not shake a sense of gloom among investors about financial sector instability and the worsening global growth outlook.
European stock markets were expected to open as much as 0.5 percent lower, according to futures markets, after European insurer Allianz (ALVG.DE: Quote, Profile, Research, Stock Buzz) warned about its profit forecast for 2009 and the world's largest insurer American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) chalked up a quarterly net loss of $5 billion.
Dealers expected Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) to fall as much as 3 percent at the open after the bank said first-half profits fell 33 percent on $4 billion of write downs, though that was not as bad as expected.
The U.S. dollar slipped against the yen after jumping to a seven-month high on Wednesday. It was also slightly weaker against the euro ahead of a European Central Bank policy decision due later, widely expected to keep interest rates on hold at 4.25 percent.
Crude oil was trading just below $119 a barrel, having tumbled nearly 20 percent from July's record high, as expectations for U.S. energy demand continue to deteriorate.
Concerns about wavering demand in China, whose economy has devoured natural resources for the last decade and pushed up commodity prices, also weighed on copper prices.
Lower oil prices could be interpreted as relief for U.S. consumers, on whom Asia depends for export demand. But inflation was still a global threat, bad loans continued to dog banks and insurers, and investors faced the prospect that all of the Group of Seven rich nations could slip into recession.
As a result, optimism was in short supply.
"Certainly the environment is one that should be positive, with the weaker yen and lower oil prices," said Hideyuki Ishiguro, supervisor at the investment strategy department at Okasan Securities in Tokyo. "But the idea that Japan's economy isn't good is spreading."
Japan's Nikkei share average .N225 fell about 1 percent, led by an 11 percent drop in shares of air-conditioner maker Daikin Industries Ltd (6367.T: Quote, Profile, Research, Stock Buzz) after the company cut its earnings outlook because of sluggish sales in Europe.
Shortly after the market closed in Japan, Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), the world's biggest car maker, said quarterly net profit fell 28 percent but it kept its forecasts unchanged.
Outside Japan, Asia-Pacific stocks .MIAPJ0000PUS were largely unchanged, but within sight of a 16-month low plumbed on Tuesday.
Hong Kong's Hang Seng index .HSI rose 0.6 percent, lifted by a 1.7 percent rise in shares of HSBC Holdings (0005.HK: Quote, Profile, Research, Stock Buzz).
Cathay Pacific Airways (0293.HK: Quote, Profile, Research, Stock Buzz) was the top percentage decliner on the index, down 4.6 percent, after the airline on Wednesday posted its first interim loss in five years.
CENTRAL BANK DILEMMA
South Korea's benchmark KOSPI dropped 0.9 percent, weighed down by the financial sector after the Bank of Korea on Thursday raised its main interest rate by a quarter percentage point to its highest in 7-½ years to battle price pressures.
"Clearly inflation is up, but there are massive growth risks for the Korean economy. The entire household sector and small and medium-sized enterprise sector are hugely leveraged. There is likely to be a downturn in economic growth," said Frederic Neumann, Asia Pacific economist with HSBC in Hong Kong.
Other central banks around the world face the same dilemma -- whether to tighten borrowing conditions now to stem inflation and risk a sharper economic slowdown.
Earlier this week, Indonesia's central bank raised rates by 25 basis points for the fourth time this year, but the Reserve Bank of Australia kept its rates on hold.
The U.S. Federal Reserve held rates steady at 2 percent on Tuesday, expressing concerns about both the slowing economy and rising inflation. The Fed indicated it is in no rush to push borrowing costs higher.
That has helped to spur investors' willingness to take risks, a primary driver in boosting the U.S. dollar to its highest level against the yen in seven months on Wednesday.
The dollar was down 0.1 percent against the yen at 109.50 yen. The euro edged up 0.3 percent to around $1.5457 ahead of the ECB's meeting later in the day.
The potential for a global recession was lurking in the minds of many investors, with a steady stream of bad news out of the corporate sector and economic data indicating a recovery has not arrived yet.
"All the G7 economies are now in a recession or headed in the short run towards a recessionary hard landing," said Nouriel Roubini, chairman of RGE Monitor, a New York economics research firm, in a blog posting on Wednesday.
"While the world will technically avoid a global recession (defined by the IMF as global growth below 2.5 percent) it will get quite close to it by mid-2009 as global growth will slow down to a near recessionary 3 percent."
Japanese government bond futures briefly hit a four-month high on concerns about the outlook for Japan's economy and due to a fall in Tokyo share prices.
September 10-year JGB futures were down 0.08 point after earlier rising as high as 137.46, the highest level for a lead futures contract since late April.
Gold was up 0.6 percent at $883.95 an ounce, but still more than $100 cheaper than in the middle of last month.
Read more...
By Kevin Plumberg
HONG KONG (Reuters) - Asian stocks fell on Thursday, as a sustained decline in oil prices could not shake a sense of gloom among investors about financial sector instability and the worsening global growth outlook.
European stock markets were expected to open as much as 0.5 percent lower, according to futures markets, after European insurer Allianz (ALVG.DE: Quote, Profile, Research, Stock Buzz) warned about its profit forecast for 2009 and the world's largest insurer American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) chalked up a quarterly net loss of $5 billion.
Dealers expected Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) to fall as much as 3 percent at the open after the bank said first-half profits fell 33 percent on $4 billion of write downs, though that was not as bad as expected.
The U.S. dollar slipped against the yen after jumping to a seven-month high on Wednesday. It was also slightly weaker against the euro ahead of a European Central Bank policy decision due later, widely expected to keep interest rates on hold at 4.25 percent.
Crude oil was trading just below $119 a barrel, having tumbled nearly 20 percent from July's record high, as expectations for U.S. energy demand continue to deteriorate.
Concerns about wavering demand in China, whose economy has devoured natural resources for the last decade and pushed up commodity prices, also weighed on copper prices.
Lower oil prices could be interpreted as relief for U.S. consumers, on whom Asia depends for export demand. But inflation was still a global threat, bad loans continued to dog banks and insurers, and investors faced the prospect that all of the Group of Seven rich nations could slip into recession.
As a result, optimism was in short supply.
"Certainly the environment is one that should be positive, with the weaker yen and lower oil prices," said Hideyuki Ishiguro, supervisor at the investment strategy department at Okasan Securities in Tokyo. "But the idea that Japan's economy isn't good is spreading."
Japan's Nikkei share average .N225 fell about 1 percent, led by an 11 percent drop in shares of air-conditioner maker Daikin Industries Ltd (6367.T: Quote, Profile, Research, Stock Buzz) after the company cut its earnings outlook because of sluggish sales in Europe.
Shortly after the market closed in Japan, Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), the world's biggest car maker, said quarterly net profit fell 28 percent but it kept its forecasts unchanged.
Outside Japan, Asia-Pacific stocks .MIAPJ0000PUS were largely unchanged, but within sight of a 16-month low plumbed on Tuesday.
Hong Kong's Hang Seng index .HSI rose 0.6 percent, lifted by a 1.7 percent rise in shares of HSBC Holdings (0005.HK: Quote, Profile, Research, Stock Buzz).
Cathay Pacific Airways (0293.HK: Quote, Profile, Research, Stock Buzz) was the top percentage decliner on the index, down 4.6 percent, after the airline on Wednesday posted its first interim loss in five years.
CENTRAL BANK DILEMMA
South Korea's benchmark KOSPI dropped 0.9 percent, weighed down by the financial sector after the Bank of Korea on Thursday raised its main interest rate by a quarter percentage point to its highest in 7-½ years to battle price pressures.
"Clearly inflation is up, but there are massive growth risks for the Korean economy. The entire household sector and small and medium-sized enterprise sector are hugely leveraged. There is likely to be a downturn in economic growth," said Frederic Neumann, Asia Pacific economist with HSBC in Hong Kong.
Other central banks around the world face the same dilemma -- whether to tighten borrowing conditions now to stem inflation and risk a sharper economic slowdown.
Earlier this week, Indonesia's central bank raised rates by 25 basis points for the fourth time this year, but the Reserve Bank of Australia kept its rates on hold.
The U.S. Federal Reserve held rates steady at 2 percent on Tuesday, expressing concerns about both the slowing economy and rising inflation. The Fed indicated it is in no rush to push borrowing costs higher.
That has helped to spur investors' willingness to take risks, a primary driver in boosting the U.S. dollar to its highest level against the yen in seven months on Wednesday.
The dollar was down 0.1 percent against the yen at 109.50 yen. The euro edged up 0.3 percent to around $1.5457 ahead of the ECB's meeting later in the day.
The potential for a global recession was lurking in the minds of many investors, with a steady stream of bad news out of the corporate sector and economic data indicating a recovery has not arrived yet.
"All the G7 economies are now in a recession or headed in the short run towards a recessionary hard landing," said Nouriel Roubini, chairman of RGE Monitor, a New York economics research firm, in a blog posting on Wednesday.
"While the world will technically avoid a global recession (defined by the IMF as global growth below 2.5 percent) it will get quite close to it by mid-2009 as global growth will slow down to a near recessionary 3 percent."
Japanese government bond futures briefly hit a four-month high on concerns about the outlook for Japan's economy and due to a fall in Tokyo share prices.
September 10-year JGB futures were down 0.08 point after earlier rising as high as 137.46, the highest level for a lead futures contract since late April.
Gold was up 0.6 percent at $883.95 an ounce, but still more than $100 cheaper than in the middle of last month.
Read more...
Nikkei down 1 pct on gloom about economy, earnings
Thu Aug 7, 2008 4:01am EDT
By Taiga Uranaka
TOKYO (Reuters) - The Nikkei stock average fell 1 percent on Thursday, with potentially positive factors such as a softer yen overshadowed by gloom over the economy and corporate earnings, while banks were sold after disappointing results from their U.S. peers.
Air-conditioner maker Daikin Industries Ltd made its biggest one-day fall in 16 years after it cut its profit outlook on sluggish sales in Europe, which prompted a sharp brokerage downgrade.
The day's fall, following a strong rally in the previous day, came despite a raft of factors that usually lift the Tokyo market, including overnight gains on Wall Street.
"Concerns about the financial sector are still lingering, with AIG shares falling after-market trading following its earnings," said Yukio Takahashi, market analyst at Shinko Securities.
"And the other problem is that the yen's fall is a bad one, caused by the deteriorating Japanese economy," he said.
A weaker yen usually gives a lift to the market as it boosts Japanese exporters by making their goods more competitive overseas and increasing profits when repatriated.
Government figures showed on Wednesday that Japan's longest post-war economic expansion may be over, as an index of indicators including industrial output and corporate profits sank in June.
"There were few willing to build new positions. Slowdown in the global economy has been become more clear," said Norio Shimura, deputy head of equity department at Chuo Securities.
"So, it's an absence of buyers, rather than selling overwhelming the market," he said.
The benchmark Nikkei .N225 ended down 129.90 points at 13,124.99 while the broader Topix fell 1.6 percent to 1,258.81.
SENSE OF SLOWDOWN
Investors were cautious ahead of quarterly results by Toyota Motor Corp after the close, with the market waiting to see if the automaker will cut its profit outlook after revising down its sales target. Toyota ended down 1.3 percent at 4,580 yen.
Banks dragged on the market after American International Group Inc , the world's largest insurer, posted its third consecutive quarterly net loss on Wednesday, hurt again by the write-down of derivatives linked to bad mortgage investments.
Top lender Mitsubishi UFJ Financial Group fell 3.9 percent to 869 yen, while No. 2 Mizuho Financial Group sank 3.5 percent to 476,000 yen.
Daikin plunged 11.1 percent to 4,010 yen, down by its daily limit, after the air-conditioner maker cut its full-year outlook and Credit Suisse cut its rating to "underperform" from "outperform".
The company's downward revision came after it posted a 24.6 percent drop in first-quarter operating profit, hurt by slower demand in Europe due to a weaker economy and unseasonable weather.
On a positive note, Kubota Corp soared 15.2 percent to 759 yen after the farm equipment maker's first-quarter profit fell less than expected and Goldman Sachs said the firm was likely to raise its full-year outlook.
Inpex Holdings jumped 6.3 percent to 1.08 million yen after Nikko Citi raised its rating to "buy/high risk" from "hold/high risk," saying the oil and gas field developer was likely to report strong earnings and raise its outlook when it announces first-quarter results on Friday.
Trade picked up, with 2.03 billion shares changing hands, compared with last week's daily average of 1.84 billion.
Declining shares beat advancing ones by nearly five to one.
(Editing by Ben Tan)
Read more...
By Taiga Uranaka
TOKYO (Reuters) - The Nikkei stock average fell 1 percent on Thursday, with potentially positive factors such as a softer yen overshadowed by gloom over the economy and corporate earnings, while banks were sold after disappointing results from their U.S. peers.
Air-conditioner maker Daikin Industries Ltd made its biggest one-day fall in 16 years after it cut its profit outlook on sluggish sales in Europe, which prompted a sharp brokerage downgrade.
The day's fall, following a strong rally in the previous day, came despite a raft of factors that usually lift the Tokyo market, including overnight gains on Wall Street.
"Concerns about the financial sector are still lingering, with AIG shares falling after-market trading following its earnings," said Yukio Takahashi, market analyst at Shinko Securities.
"And the other problem is that the yen's fall is a bad one, caused by the deteriorating Japanese economy," he said.
A weaker yen usually gives a lift to the market as it boosts Japanese exporters by making their goods more competitive overseas and increasing profits when repatriated.
Government figures showed on Wednesday that Japan's longest post-war economic expansion may be over, as an index of indicators including industrial output and corporate profits sank in June.
"There were few willing to build new positions. Slowdown in the global economy has been become more clear," said Norio Shimura, deputy head of equity department at Chuo Securities.
"So, it's an absence of buyers, rather than selling overwhelming the market," he said.
The benchmark Nikkei .N225 ended down 129.90 points at 13,124.99 while the broader Topix fell 1.6 percent to 1,258.81.
SENSE OF SLOWDOWN
Investors were cautious ahead of quarterly results by Toyota Motor Corp after the close, with the market waiting to see if the automaker will cut its profit outlook after revising down its sales target. Toyota ended down 1.3 percent at 4,580 yen.
Banks dragged on the market after American International Group Inc , the world's largest insurer, posted its third consecutive quarterly net loss on Wednesday, hurt again by the write-down of derivatives linked to bad mortgage investments.
Top lender Mitsubishi UFJ Financial Group fell 3.9 percent to 869 yen, while No. 2 Mizuho Financial Group sank 3.5 percent to 476,000 yen.
Daikin plunged 11.1 percent to 4,010 yen, down by its daily limit, after the air-conditioner maker cut its full-year outlook and Credit Suisse cut its rating to "underperform" from "outperform".
The company's downward revision came after it posted a 24.6 percent drop in first-quarter operating profit, hurt by slower demand in Europe due to a weaker economy and unseasonable weather.
On a positive note, Kubota Corp soared 15.2 percent to 759 yen after the farm equipment maker's first-quarter profit fell less than expected and Goldman Sachs said the firm was likely to raise its full-year outlook.
Inpex Holdings jumped 6.3 percent to 1.08 million yen after Nikko Citi raised its rating to "buy/high risk" from "hold/high risk," saying the oil and gas field developer was likely to report strong earnings and raise its outlook when it announces first-quarter results on Friday.
Trade picked up, with 2.03 billion shares changing hands, compared with last week's daily average of 1.84 billion.
Declining shares beat advancing ones by nearly five to one.
(Editing by Ben Tan)
Read more...
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