Tag Archives: World Markets

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Markets Shored Up by China's 7.5% Growth Rate

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By The Associated Press

markets shored up by china's 7.5 percent growth rate

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APIn this photo taken July 10, 2013, a man walks past the downtown skyline of Shanghai, China.

LONDON (AP) – Relief over China’s economic growth rate helped shore up the mood in financial markets Monday ahead of a raft of U.S. corporate earnings and retail sales figures.

The world’s second-largest economy grew 7.5 percent from a year earlier in the second quarter. Though the figure is down on the previous quarter’s 7.7 percent, there had been fears that it may have fallen below 7 percent in the wake of efforts by the country’s monetary authorities to clamp down on risky lending. A sharp drop would hurt companies around the world that have become increasingly reliant on breakneck Chinese growth to boost earnings.

“China’s growth rate might still be on a steadily declining path, but investors were happy enough to see it come in line with expectations, growing by 7.5 percent in the second quarter,” said Chris Beauchamp, market analyst at IG. “Beijing was keen to emphasise that internal consumption was picking up the slack, and helpfully retail sales rose strongly during June.”

Combined with an easing in tensions over Europe’s financial crisis and diminishing fears about the Federal Reserve’s plans to rein in its monetary stimulus, the figures bode well for markets.

“We could be in for a week of quiet, steady gains for stock markets,” he said.

Following a 1 percent rise in the Shanghai Composite Index to 2,059.39, European stock markets have posted solid gains. The FTSE 100 index of leading British shares was up 0.3 percent at 6,565, while Germany’s DAX rose 0.1 percent to 8,225. The CAC-40 in France was 0.4 percent higher at 3,872.

Wall Street was poised for a solid opening with Dow futures and the broader S&P 500 futures up 0.2 percent.

How they open could hinge on a run of earnings, notably from Citigroup. June retail sales figures will also be closely monitored an hour before the bell on how they affect the debate over when the Fed will start ‘tapering’ its monetary stimulus. The median expectation in the markets is that they rose around 0.8 percent during the month.

“Today’s retail sales data for June could well feed into the tapering debate if we get an improvement in line with recent consumer confidence numbers which have been much better than expected,” said Michael Hewson, senior market analyst at CMC Markets.

For weeks now, the Fed’s monetary stance has been the main driver in markets. The Dow and the S&P 500 struck all-time highs last week partly on an indication from the Fed that the monetary stimulus may be in place for longer than expected. At the moment, the Fed is buying around $85 billion of assets in the markets, and that’s helped prop up stocks for months.

The dollar has faltered in recent days as expectations of …read more

Source: FULL ARTICLE at DailyFinance

Science & Technology

U.S. Crude Oil Inventories Rise to Highest Level Since 1990

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By Reuters

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Damian Dovarganes/AP

By Robert Gibbons

NEW YORK — Oil prices fell more than 2 percent on Wednesday as U.S. crude oil inventories grew to their highest level since 1990 and weak economic data stoked worries about U.S. energy demand.

U.S. crude stocks rose 2.71 million barrels last week, the Energy Information Administration said in its weekly report.

The rise was slightly more than the build of 2.2 million barrels expected in a Reuters survey of analysts and put U.S. commercial inventories at 388.62 million barrels, the most since 1990 and close to the record 391.9 million barrels reached in 1982, the year the EIA started tracking inventories.

“The report is somewhat bearish given the build in crude oil inventories and modest decline in gasoline inventories, which are the focus of the market,” said John Kilduff, partner at Again Capital LLC in New York.

“The rise in the refinery utilization to above 86 percent also signals further easing of the concerns over refined product inventories,” Kilduff said.

U.S. RBOB gasoline futures fell 3 percent, more than 9 cents, after or dropping 6 cents on Tuesday, as the EIA said gasoline stocks fell 572,000 barrels, less than expected and much less than the drop of 5 million barrels reported late on Tuesday by the American Petroleum Institute.

Brent crude was down $2.72 at $107.97 a barrel at 12:52 p.m. EDT, having fallen as low as $107.78.

U.S. crude was down $2.19 at $95 a barrel, having fallen to $94.89, just above the 50-day moving average at $94.64. Brent’s premium to U.S. crude fell back below $13 a barrel on Wednesday, after it reached $14.66 on Tuesday.

The spread between the two contracts had been widened because of expectations that crude stocks at the Cushing, Okla., hub, delivery point for the U.S. crude contract, would be increasing after Exxon Mobil Corp. (XOM) shut its Pegasus pipeline on Friday.

The pipeline moves crude oil from Illinois to the refinery-rich Texas Gulf Coast and a prolonged shut down would curb efforts to relieve the glut of crude oil in the Midwest.

Economic Concerns

Crude stocks at Cushing fell 287,000 barrels in the week to last Friday, the EIA report said.

With the North American heating fuel season waning and crude futures sliding, U.S. heating oil futures, the benchmark distillate contract, also fell and pushed below the 50-day and 100-day moving averages, technical levels monitored by chart watching analysts and traders.

Total distillate stocks fell 2.27 million barrels last week, the EIA said, more than expected, but the inventory drop and data showing demand over the previous four weeks was up 5.5 percent from the year-ago period didn’t prevent heating oil’s price slide.

U.S. companies hired at the weakest pace in five …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Cyprus' President Appoints Judges to Investigate Economic Crash

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By The Associated Press

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Petros Karadjias/AP

NICOSIA, Cyprus — Cyprus‘ president has appointed a panel of three former supreme court judges to investigate how the country ended up nearly bankrupt.

President Nicos Anastasiades said Tuesday that ordinary citizens who are shouldering the burden of “actions and omissions” by officials want to see those responsible punished.

Anastasiades urged the judges to kick off their probe by investigating his family’s business dealings amid an accusation in an opposition newspaper that a company that is said to be co-owned by one of his relatives took money out of Cyprus‘ now defunct second-largest lender, Laiki, days before the country agreed to a €16 billion ($20.5 billion) international rescue.

Under the terms of the bailout with its euro area partners and the International Monetary Fund, big depositors in Laiki are facing big losses.

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Business, Finance, Occupation & Industry

Eurozone Joblessness Rises to a Record 12%

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By The Associated Press

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Paul White/AP Two men on a street in Madrid rummage through old clothes mixed with garbage on Wednesday. Figures released Tuesday showed unemployment across the 17 eurozone countries, including Spain, rose to 12 percent during the first two months of the year.

By PAN PYLAS

LONDON — Unemployment across the 17 European Union countries that use the euro has struck 12 percent for the first time since the currency was launched in 1999, official figures showed Tuesday.

Eurostat, the EU‘s statistics office, said the rate in February was unchanged at the record high after January’s figure was revised up to 12 percent from 11.9 percent.

During the month, a net 33,000 people in the eurozone joined the ranks of the unemployed. Spain and Greece continued to suffer from unemployment rates above 26 percent, and many other countries were seeing their numbers swell to uncomfortable levels.

It’s not all doom and gloom. Germany, Europe‘s biggest economy, has an unemployment rate of only 5.4 percent. That’s even better than the U.S. rate of 7.7 percent.

The February figures came before the recent Cyprus crisis, which has reignited concerns over the future of the euro. Under the terms of its bailout, big depositors in the country’s two top banks are facing hefty losses.

Following Cyprus‘ protracted and chaotic bailout discussions, which saw the country’s banks close for the best part of two week, unemployment on the east Mediterranean island nation is expected to ratchet higher over the months ahead as the economy contracts sharply.

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Many economists are forecasting that the Cypriot economy will shrink by 10 percent this year alone and see unemployment rise up to Greek and Spanish levels. In February, Cyprus‘ unemployment stood at 14 percent.

Prior to the Cypriot crisis, there were signs that Europe‘s debt crisis had calmed. Stock and bond markets had risen for nearly months, boosting confidence in countries’ ability to finance themselves.

But while markets have improved, the eurozone economy has sunk back into recession.

A closely-watched survey released Tuesday indicated that the recession likely continued in the first quarter. The monthly purchasing managers’ index for the manufacturing sector — a gauge of business activity published by financial information company Markit — fell to a 3-month low.

Though the PMI wasn’t as bad as first estimated a couple of weeks back, it fell to 46.8 points in March. Anything below 50 indicates an economic contraction.

The worry in the PMI survey was that manufacturing activity weakened across the eurozone, including Germany, Europe‘s export powerhouse.

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Business, Finance, Occupation & Industry

Stock Market Gains, Economic Recovery Boost U.S. Dollar

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By Reuters

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Federal Reserve Chairman Ben Bernanke has pledged to keep interest rates low for the foreseeable future, which could threaten the dollar’s recent rally. (Carolyn Kaster/AP)

By Wanfeng Zhou

NEW YORK — The stars are aligning for U.S. dollar bulls. For more than a decade, good times in such markets as stocks and real estate were bad news for the greenback. Investors tended to use the U.S. dollar only as a life jacket when storms raged in risky markets.

Now, though, rather than serving as a hiding place, the dollar is benefiting from the stock market‘s surge to new highs and the improvement in U.S. economic data. The dollar nudged down a tad from a seven-month high against a basket of currencies on Thursday even as the Dow Jones industrial average surged to another record high despite interest rates remaining at record lows.

For instance, the dollar has gained fairly steadily against the yen. In January, it was trading at 86.67 yen to the dollar. On Thursday it was trading at 96.06 to the dollar. Likewise, the British pound has fallen from 1.62 to 1.51 to the dollar so far this year.

The moves suggests the dollar has entered a multi-year bull cycle, and marks a major shift in its behavior against other asset classes.

“Certainly, all the pieces are slowly coming into place for a bull market for the dollar,” said Paresh Upadhyaya, director of currency at Pioneer Investments in Boston, which had assets under management of $204 billion as of the end of last year.

The dollar has outperformed eight out of nine major G-10 currencies so far this year. Political uncertainty in Italy has re-ignited fear about the euro zone’s ongoing debt crisis. Weak economic growth and the prospects of aggressive monetary easing in Japan and Britain have driven the yen and sterling to multi-year lows.

To be sure, there are those who caution that spending cuts from Washington could put a damper on economic growth and the Federal Reserve has pledged to keep interest rates low for the foreseeable future.

Still, capital flows and futures positioning bears out the attitude to U.S. assets.

Cross-border inflows into U.S. stocks are tracking at about $100 billion to $150 billion for 2013, compared with a net neutral level in recent years, according to Nomura Securities. Futures activity shows increased bets on the dollar from speculators.

Commercial Property Sales Affected

And stocks aren’t the only U.S. asset drawing in overseas capital. A recovering commercial property market, where transactions have rebounded by more than four-fold from their post crisis-low in 2009, is also enticing foreign investment.

Purchases of commercial real estate by foreign buyers totaled $24.18 billion in 2012, according to Real Capital Analytics, which tracks the commercial real estate market. That’s up 1.6 percent from the year before …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

China's Economic Woes Weigh On Asia Stock Markets

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By The Associated Press

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By AMELA SAMPSON

BANGKOK — World stock markets edged off recent highs in uneven trading Tuesday as worries grew about China‘s recovery and Europe‘s doldrums.

Japan‘s Nikkei 225 did an about-face after spurting higher in the morning. After hitting 12,461.97, an intraday high not seen in more than four years, the benchmark sank 0.3 percent to close at 12,314.81. That finish put an end to an eight-day winning streak.

The index has been boosted recently by the weakness of its currency against the greenback and expectations of action by the Bank of Japan to shore up the country’s stalling economy once a new bank chief is installed.

The Dow, which has closed every trading session higher since March 1, also appeared to be losing steam. Dow Jones industrial futures fell 0.1 percent to 14,362. S&P 500 futures fell 0.1 percent at 1,549. European stocks were almost flat in early trading. Britain’s FTSE 100 rose slightly to 6,505.36. Germany’s DAX was nearly unchanged at 7,985.99. France’s CAC-40 dipped less than 0.1 percent to 3,835.57.

Evan Lucas, strategist at IG Markets in Melbourne, said Australia‘s resource and mining stocks took a hit from falling commodities prices and data suggesting that China‘s economic growth is choppy also didn’t help. OZ Minerals fell 2.5 percent. Fortescue Metals Group dropped 3 percent.

Chinese economic figures over the weekend were largely disappointing and prompted many investors to book some recent gains and take to the sidelines after a rally that’s seen many stock indexes around the world push up to multi-year highs.

“It does feel like an off day and people feel like taking profits,” Lucas said.

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The soft Chinese industrial production and retail sales figures stoked some concerns that the recent pick-up in the country’s growth rate may have stalled. In addition, higher-than-expected inflation of 3.2 percent in February raised questions about the government‘s ability to do more to shore up the world’s second-largest economy.

Hong Kong‘s Hang Seng fell 0.9 percent to 22,890.60. Australia‘s S&P/ASX dropped 0.6 percent to 5,117.90. South Korea’s Kospi shed 0.5 percent to 1,993.34.

“It’s been a tepid start to the week after weekend Chinese economic data came in on the weaker side of expectations, while investors absorb the latest Italian downgrade, as well as a surprise dive in manufacturing and industrial output in the French economy,” Michael Hewson, senior analyst at CMC Markets, said in an email commentary.

Among individual stocks, China Railway Construction Group fell 6.5 percent in Hong Kong. China Railway Group shed 5.1 percent. The declines come days after the government announced it would dismantle the railways ministry and move its operations into a newly created company. The ministry had been under criticism for heavy debt and corruption.

The Dow Jones industrial average posted its seventh straight day of gains on Monday. The streak began …read more
Source: FULL ARTICLE at DailyFinance