Stock Market Update - Jan. 3, - Jan. 7, 2011 Gains Seen with Mixed Economic Data
Stock Market Update
Friday, January 7, 2011
Friday, January 7, 2011
USA EQUITY INDEXES: (FRIDAY, JAN. 7; 4:00 PM EST)
(Closing Index Numbers)
Dow Jones 11,674.76 -22.55
Nasdaq 2,703.17 -6.72
S&P 500 1,271.50 -2.35
Dow Jones CLOSING Averages : DJIA 11,674.76 DN 22.55
30 INDUS 11,674.76 DN 22.55 OR 0.19%
20 TRANSP 5,178.45 UP 34.48 OR 0.67%
15 UTILS 407.72 UP 1.29 OR 0.32%
65 STOCKS 4,072.97 UP 6.57 OR 0.16%
US COMMODITY PRICES: (FRIDAY, JAN. 7; 4:05 PM EST)
Crude Oil 88.48 + 0.51%Natural Gas 4.42 +0.12%
Gasoline 2.43 + 0.66%
Heating Oil 2.50 + 0.58%
Gold 1369.42 - 0.12%
Silver 28.76 - 1.03%
Copper 4.27 - 1.25%
US DOLLAR FUTURES INDEX DXY; FRIDAY, JAN. 7, 2011:
4:03PM EST: 81.09 Up 0.30 (0.37%)
U.S. Dollar Edges Higher, Stocks Flat to Lower, Commodities Flat to Lower
FRIDAY: U.S. stocks closed lower Friday. The Dow ended 22.55 points lower to close at 11,674.76. The NASDAQ moved 6.72 points lower to end the session at 2703.17. The S&P closed at 1271.50 losing 2.35 points. For the week, the S&P500 gained 1.1%, and the Dow increased 0.8%. As the choppy dollar gained from Thursday's close, US commodities and equities declined. The Dow Jones Industrial Average fell 10 points to 11687.The Nasdaq Composite slipped 0.1% to 2707. The Standard & Poor's 500 index added 0.1% to 1275. The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.1%.The dollar rose to its highest in nearly four months against the euro on Friday. The euro slipped to $1.2982, from $1.3015 late Thursday.
The U.S. Government FDIC regulators closed additional Banks late Friday and seized all assets.The Federal Deposit Insurance Corp announced it closed additional banks.
Legacy Bank, Scottsdale, AZ., January 7, 2011
First Commercial Bank of Florida, Orlando, FL., Jan. 7, 2011
To see the complete list of failed banks and credit unions visit:
Online Consultancy Network™ Bank Failure List
http://ocnww.blogspot.com/2010/09/bank-failure-list-update-september-1.html
THURSDAY: U.S. equities ended Thursday in lower to mixed fashion, as the dollar gained taking metals and energy issues lower. The Dow closed down 25.58 points to close at 11,697.58. The Nasdaq cloed higher at 2709.89, gaining 7.69 points. The Standard & Poor's 500® index closed losing only 2.71 points to end the session at 1273.85 . The U.S. Dollar Index, which tracks the currency against a basket of others, rose 0.7%. The euro was recently trading at $1.3012, down from $1.3155 late Wednesday in New York.
U.S. BANK FAILURES:
The FDIC Closed Banks Friday After HoursThe U.S. Government FDIC regulators closed additional Banks late Friday and seized all assets.The Federal Deposit Insurance Corp announced it closed additional banks.
Legacy Bank, Scottsdale, AZ., January 7, 2011
First Commercial Bank of Florida, Orlando, FL., Jan. 7, 2011
To see the complete list of failed banks and credit unions visit:
Online Consultancy Network™ Bank Failure List
http://ocnww.blogspot.com/2010/09/bank-failure-list-update-september-1.html
THURSDAY: U.S. equities ended Thursday in lower to mixed fashion, as the dollar gained taking metals and energy issues lower. The Dow closed down 25.58 points to close at 11,697.58. The Nasdaq cloed higher at 2709.89, gaining 7.69 points. The Standard & Poor's 500® index closed losing only 2.71 points to end the session at 1273.85 . The U.S. Dollar Index, which tracks the currency against a basket of others, rose 0.7%. The euro was recently trading at $1.3012, down from $1.3155 late Wednesday in New York.
Choppy trading patterns indicate a mostly unchanged to a lower trading day ahead in tight trading margins. The U.S. dollar strengthened overnight against the euro, but weakened against the yen in early trading. The euro was trading recently at $1.301, down from $1.3150 late Wednesday in New York. The Dow Jones Industrial Average fell 36 points, or 0.3%, to 11688 in recent trading. The Nasdaq Composite edged up 0.1% to 2704. The Standard & Poor's 500-stock index shed 0.3% to 1273.
There is a good chance the US Dollar will rally for a while said analyst Jim Rogers late Wednesday. I own the US dollar at the moment because there have been many-many skeptics on the US dollar. I expect it to rally for a while. I do not know whether I would own it for a week or a month or a year. I just do not know. I do know that as long as there are many-many skeptics, there is a good chance that it will rally, there are some things going on in the US which may cause the rally to go even further.
I am not selling my dollars if it goes down, I might even buy more US dollars, but longer term the US dollars may be in terrible-terrible shape. It is a very flawed currency; I do not plan to own the US dollar 5-10 years from now.
Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.
Stocks came under pressure in late morning trading as the dollar climbed. The U.S. Dollar Index, which tracks the currency against a basket of others, rose 0.7%. The euro fell below a technical level after the expiry of a large option payout prompted heavy selling of the currency. The euro was recently trading at $1.3017, down from $1.3150 late Wednesday in New York.
THURSDAY, BEFORE THE BELL U.S. equities are moving forward to a higher open but stock index futures trimmed gains slightly on Thursday after new jobless claims rose more than expected last week, even as a drop in the four-week average indicated an improving labor market.
S&P 500 futures rose 2.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 34 points and Nasdaq 100 futures added 4.25 points.
WEDNESDAY: U.S. equities closed higher Wednesday. By noon Wednesday, U.S. stocks turned positive as the dollar relaxed it gaining momentum. The Dow Jones Industrial Average added 48 points, or 0.3%, at 11739 after spending much of the morning in negative territory. The Standard & Poor's 500-stock index was up six points at 1276 while the Nasdaq Composite advanced 16 points to 2697.
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Wednesday's muted morning action in equities is due to the rise of the dollar moving off support and resistance points during trades. Leading the declines were materials and energy stocks. U.S. stocks traded flat to marginally lower Wednesday as falling commodity prices offset a pair of somewhat encouraging numbers from the labor market and service sector. The dollar jumped on the economic news to trade higher against all of its major rivals. The U.S. Dollar Index, which tracks the currency against a basket of six others, rose 1%. The euro fell 1.3% against the dollar to $1.3132, while the yen fell to 83.15.
Commodities, continued to be under pressure following a day of steep losses. Copper fell 0.6% while crude oil fell another 0.8% to below $89 a barrel. Gold futures also tumbled, falling 0.8% to 1368 an ounce.
The Dow Jones Industrial Average was off 14 points, or 0.1%, at 11677 in mid-morning trading. The Standard & Poor's 500-stock index was off less than one point at 1270 while the Nasdaq Composite edged up three four points at 2685.
TUESDAY: Tuesday U.S. equities held flat to lower in most sectors in afternoon trading with some Blue Chip equities moving higher in the Dow set. The Dow Jones Industrial Average rose 20 points, or 0.18%, to close at 11,691.18. The dollar strengthened against both the yen and the euro. The U.S. Dollar Index, which tracks the currency against a basket of others, rose 0.4%. The Nasdaq Composite fell 10.3 points to end at 2681.25. The Standard & Poor's 500 stock index shed 0.13% to 1270.20. ABC News Consumer Confidence LDX reported -45 In Jan 2 Week.
At Mid-day Tuesday U.S. stocks edged lower Tuesday in late morning trading as the dollar regained its rise from Mondays close. The dollar strengthened against both the euro and the yen. The euro reversed earlier gains to trade recently at $1.3308, down from $1.3351 late Monday in New York. The U.S. dollar index, which tracks the currency against a basket of others, rose 0.4%.
The Dow Jones Industrial Average recently shed 7 points, or 0.1%, to 11664.The Nasdaq Composite fell 0.4% to 2680. The Standard & Poor's 500-stock index lost 0.3% to 1268.
the market's moves will likely be modest until 2 p.m. EST, when the U.S. Federal Reserve releases the minutes from its latest meeting. .
MONDAY: The Dow Jones Industrial Average closed higher Monday. The Dow closed 93.24 points higher, or 0.81%, to 11670.75. The Nasdaq Composite added 38.65, or 1.46%, to 2691.52. The Standard & Poor's 500-stock index gained 14.23, or 1.13%, to 1271.87.
In afternoon trading US stocks rose to fresh two-year highs Monday, starting 2011 with a bang. The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.4%. ICE Dollar Index trading is firmer on the day but perhaps not firm enough to mount a convincing uptrend, writes Stephen Cox. It is technically strong above the 79.027-78.883 intraday support band, but its strength is tentative.
Stocks are in the strongest leg of a long-term rally. I expect the U.S. dollar to relax gains further that will allow any upcoming weakness in the U.S stock market to be a buying opportunity for long-term followers of the Elliott wave theory of market cycle investing.
The Dow Jones Industrial Average recently jumped 125 points, or 1.1%, to 11702. The Nasdaq Composite added 1.6% to 2695 and reached a three-year intraday high at 2704.86. The Standard & Poor's 500 index gained 1.4% to 1275 after hitting a two-year intraday high at 1276.35.
In morning trades, U.S. stocks were helped by investor optimism about the outlook for U.S. growth. March futures for the S&P 500 index were recently up 0.8%, underpinned by gains for Asian and European stocks. .
The Dow Jones Industrial Average jumped 110 points, or 1%, to 11687. The measure hit 11695.19, its highest intraday level since August 2008. The Nasdaq Composite added 1.8% to 2700. The Standard & Poor's 500 index gained 1.2% to 1268, with its financial sector leading a broad climb. The energy sector was also strong as crude-oil futures moved above $92 a barrel.
The gains in U.S. stocks on Monday followed rallies overseas in Europe and Asia. The Stoxx Europe 600 rose 0.9%, boosted by euro-zone manufacturing data that showed the sector's expansion accelerated more than expected in December, and that industrial output in Spain and Ireland has begun to catch up with that in Germany and France. In Asia, South Korea's main index surged to an all-time high, led by technology and auto companies amid optimism on the global demand outlook.
Monday Outlook: I fully expect the U.S. Dollar index to further decline until Feb 14, 2011, and expect to see equities and commodities to continue to rise until that time period.
FACT:
The Earth's magnetic pole is shifting toward Russia
at 40 miles per year.
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CRUDE OIL:
FRIDAY OIL FUTURES: Nymex Crude Settles Down 35c at $88.03/Bbl
Crude was choppy immediately after Friday's 8:30 a.m. EST jobs report. Initially prices rose, then drifted into negative territory before sustaining a rally above $89 a barrel.
Light, sweet crude for February delivery rose 80 cents, or 0.9%, at $89.18 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 32 cents, or 0.3%, at $94.20 a barrel, paring earlier losses.
Crude was choppy immediately after Friday's 8:30 a.m. EST jobs report. Initially prices rose, then drifted into negative territory before sustaining a rally above $89 a barrel.
Light, sweet crude for February delivery rose 80 cents, or 0.9%, at $89.18 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 32 cents, or 0.3%, at $94.20 a barrel, paring earlier losses.
Oil products were mixed. Front-month February reformulated gasoline blendstock, or RBOB, recently gained 0.28 cent, or 0.1%, at $2.4458 a gallon. February heating oil fell 0.09 cent, or $2.5100 a gallon.
THURSDAY OIL FUTURES: Nymex Crude Settles Down $1.92 at $88.38/Bbl
Light, sweet crude for February delivery tumbled $1.92, or 2.1%, to $88.38 a barrel on the New York Mercantile Exchange, the lowest settlement price since Dec. 20. Brent crude on the ICE futures exchange recently lost $1.10, or 1.2%, to $94.40 a barrel.
Front-month February reformulated gasoline blend-stock, or RBOB, gave up 0.21 cent, or 0.1%, to settle at $2.4430 a gallon. February heating oil gave up 3.10 cents, or 1.2%, to $2.5112 a gallon.
WEDNESDAY OIL FUTURES: Nymex Crude Closes Up 95c at $90.33/Bbl
Oil prices rose Wednesday, reversing course midday, as equities markets turned higher.
Light, sweet crude for February delivery rose 52 cents, or 0.6%, at $89.91 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange added $1.37, or 1.4%, at $94.90 41 cents, or 0.4%, at $93.12 a barrel.
Light, sweet crude for February delivery rose 52 cents, or 0.6%, at $89.91 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange added $1.37, or 1.4%, at $94.90 41 cents, or 0.4%, at $93.12 a barrel.
Dept. of Energy Report
The U.S. Department of Energy said Wednesday U.S. crude stockpiles fell 4.2 million barrels during the week ended Dec. 31. Stockpiles of gasoline and distillates rose more than expected, weighing on crude prices along with the dollar's rise.
Gasoline stockpiles rose 3.3 million barrels last week, the DOE said. Analysts forecast a 600,000-barrel increase. Stocks of distillates, which include heating oil and diesel, rose by 1.2 million barrels, more than the 500,000 barrels seen by analysts.
Refinery utilization rates rose by 0.2 percentage point to 88%. Analysts expected the figure to remain unchanged.
Oil products also lost ground Wednesday. Front-month February reformulated gasoline blend-stock, or RBOB, recently fell 1.86 cents, or 0.8%, at $2.3954 a gallon. February heating oil gave up 0.84 cent, or 0.3%, at $2.4982 a gallon. .
TUESDAY OIL FUTURES: Nymex Crude Settles $2.17 Lower At $89.38/Bbl
Light, sweet crude for February delivery settled down $2.17, or 2.4%, at $89.38 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 20. Brent crude on the ICE futures recently traded down $1.31, or 1.4%, at $95.53 a barrel.
Oil products also declined Tuesday. Front-month February reformulated gasoline blend-stock, or RBOB, fell 1.33 cents, or 0.6%, to settle at $2.4140 a gallon. February heating oil gave up 4.63 cents, or 1.8%, at $2.5065 a gallon.
Crude stockpiles often decline toward the end of the year, as refiners draw down inventories to reduce their tax bill. The American Petroleum Institute, an industry group, said late Tuesday crude stocks fell 7.5 million barrels last week. Gasoline stocks jumped 5.6 million barrels, while distillate stocks rose 2.2 million barrels, API said. Refinery runs fell 0.2 percentage point to 85.4% of capacity.
MONDAY OIL FUTURES: Nymex Crude Settles 17c Higher At $91.55/Bbl
Crude futures headed above $92 a barrel Monday on the first trading day of 2011.
Light, sweet crude for February delivery settled up 17 cents, or 0.2%, at $91.55 a barrel on the New York Mercantile Exchange after climbing to an intraday high of $92.58, the contract's highest level since October 2008. Brent crude on the ICE futures settled up 9 cents, or 0.1%, at $94.84 a barrel.
Front-month February reformulated gasoline blend-stock, or RBOB, fell 0.3 cent, or 0.1%, to settle at $2.4273 a gallon. February heating oil added 1.04 cents, or 0.4%, at $2.5528 a gallon.
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NATURAL GAS:
FRIDAY: Natural Gas: $4.42
FRIDAY US GAS: Futures Settle 0.3% Lower At $4.422/MMBtu
Natural gas for February delivery recently traded 2.6 cents lower, or 0.6%, at $4.408 per one million British thermal units on the New York Mercantile Exchange. Futures earlier Friday fell as low as $4.366/MMBtu, a one-week low. Natural gas in U.S. storage during the week ended Dec. 31 stood at 3.097 trillion cubic feet, 6.5% above the five-year average level on the week, according to the EIA.
THURSDAY US GAS: Futures Settle 0.9% Lower At $4.434/MMBtu
Gas futures increased this morning. The natural gas storage draw increased last week due to cold weather across much of the U.S.Natural gas for February delivery recently traded higher by 10.9 cents, or 2.4%, at $4.582 per million British thermal units on the New York Mercantile Exchange. The benchmark contract had traded nearly flat around $4.48/MMBtu before the report.
The U.S. Energy Information Administration reported that natural gas inventories fell by 135 billion cubic feet last week. Natural gas in U.S. storage during the week ended Dec. 31 stood at 3.097 trillion cubic feet. The storage draw was larger than the five-year average withdrawal of 79 bcf, but less than last year's 149-bcf decline.
WEDNESDAY US GAS: Futures Settle 4.2% Lower At $4.473/MMBtu
Natural gas futures fell Wednesday morning as above-average inventories, a rising dollar and losses across many commodities pressured futures lower. Natural gas for February delivery recently traded 6.9 cents, or 1.5%, lower at $4.600 a million British thermal units on the New York Mercantile Exchange.
TUESDAY US GAS: Futures Settle 0.4% Higher At $4.669/MMBtu
Natural gas for February delivery recently traded 2.9 cents, or 0.6% lower, at $4.621 a million British thermal units on the New York Mercantile Exchange. Futures earlier Tuesday climbed as high $4.707, the highest intraday price since Aug. 5, 2010.
MONDAY US GAS: Futures Settle 5.6% Higher At $4.650/MMBtu
Natural gas for February delivery recently traded 2.6 cents lower, or 0.6%, at $4.408 per one million British thermal units on the New York Mercantile Exchange. Futures earlier Friday fell as low as $4.366/MMBtu, a one-week low. Natural gas in U.S. storage during the week ended Dec. 31 stood at 3.097 trillion cubic feet, 6.5% above the five-year average level on the week, according to the EIA.
THURSDAY US GAS: Futures Settle 0.9% Lower At $4.434/MMBtu
Gas futures increased this morning. The natural gas storage draw increased last week due to cold weather across much of the U.S.Natural gas for February delivery recently traded higher by 10.9 cents, or 2.4%, at $4.582 per million British thermal units on the New York Mercantile Exchange. The benchmark contract had traded nearly flat around $4.48/MMBtu before the report.
The U.S. Energy Information Administration reported that natural gas inventories fell by 135 billion cubic feet last week. Natural gas in U.S. storage during the week ended Dec. 31 stood at 3.097 trillion cubic feet. The storage draw was larger than the five-year average withdrawal of 79 bcf, but less than last year's 149-bcf decline.
WEDNESDAY US GAS: Futures Settle 4.2% Lower At $4.473/MMBtu
Natural gas futures fell Wednesday morning as above-average inventories, a rising dollar and losses across many commodities pressured futures lower. Natural gas for February delivery recently traded 6.9 cents, or 1.5%, lower at $4.600 a million British thermal units on the New York Mercantile Exchange.
TUESDAY US GAS: Futures Settle 0.4% Higher At $4.669/MMBtu
Natural gas for February delivery recently traded 2.9 cents, or 0.6% lower, at $4.621 a million British thermal units on the New York Mercantile Exchange. Futures earlier Tuesday climbed as high $4.707, the highest intraday price since Aug. 5, 2010.
MONDAY US GAS: Futures Settle 5.6% Higher At $4.650/MMBtu
Futures Hit Highest Level Since August
On Cold Weather Forecasts
On Cold Weather Forecasts
Natural gas prices rose Monday as forecasts for colder-than-normal temperatures in January lifted heating demand expectations. Natural gas for February delivery recently traded 23 cents, or 5.2% higher, at $4.635 a million British thermal units on the New York Mercantile Exchange. Futures earlier Monday rose as high as $4.650/MMBtu, the highest intraday price since Aug. 5.
The natural gas market had been bound in choppy trading in recent weeks, rising when forecasts turned colder, but with gains limited by ample stockpiles. The amount of natural gas in U.S. storage as of Dec. 24 stood at 3.232 trillion cubic feet, more than 8% above the five-year average, the Energy Information Administration said last week.
The natural gas market had been bound in choppy trading in recent weeks, rising when forecasts turned colder, but with gains limited by ample stockpiles. The amount of natural gas in U.S. storage as of Dec. 24 stood at 3.232 trillion cubic feet, more than 8% above the five-year average, the Energy Information Administration said last week.
PRECIOUS METALS:
FRIDAY: Gold: $1,370
FRIDAY: Silver: $28.76
Gold Prices Ended Near Steady Friday
The most actively traded contract, for February delivery, was down 0.2%, or $2.80, at $1,368.90 per troy ounce. The thinly traded January delivery contract settled down 0.2%, or $2.90, at $1,368.50 per troy ounce on the Comex division of the New York Mercantile Exchange.Engelhard Corp's base price for industrial gold bullion was $1369.97 per troy ounce, down $1.51 from previous. It's selling price for gold in fabricated form was $1472.72, down $1.62.
Handy & Harman's base price for gold was $1367.00 per troy ounce, down $1.50. The fabricated form price was $1476.36, down $1.62.
Friday Settlements (range includes floor and electronic trading):
London PM Gold Fix: $1,367.00; previous PM $1,368.50
Feb gold $1,368.90, down $2.80; Range $1,352.70-$1,379.00
Mar silver $28.671, down 4.45 cents; Range $28.325-$29.375
Apr platinum $1,738.30, up $3.20; Range $1,719.00-$1,749.90
Mar palladium $755.95, down $6.95; Range $740.00-$767.10
THURSDAY: Gold futures declined against a raising dollar. The most actively traded contract, for February delivery, settled down $2, or 0.15%, at $1,371.70 per troy ounce on the Comex division of the New York Mercantile Exchange. The thinly traded January delivery contract settled down $2, or 0.15%, at $1,371.40 per troy ounce.
Engelhard Corp's base price for industrial gold bullion was $1371.48 per troy ounce, up $.50 from previous. It's selling price for gold in fabricated form was $1474.34, up $.54.
Handy & Harman's base price for gold was $1368.50 per troy ounce, up $.50. The fabricated form price was $1477.98, up $.54.
Thursday Settlements (range includes floor and electronic trading):
London PM Gold Fix: $1,368.50; previous PM $1,368.00
Feb gold $1,371.70, down $2.00; Range $1,364.30-$1,30.00
Mar silver $29.126, down 7.2 cents; Range $28.815-$29.600
Apr platinum $1,735.10, up $1.00; Range $1,727.00-$1,745.30
Mar palladium $762.90, down $12.40; Range $758.50-$778.50
WEDNESDAY: Gold futures fell Wednesday as robust jobs data caused the dollar to gain steam.The most-actively traded gold contract, for February delivery, fell $5.10, or 0.4%, to settle at $1,373.70 a troy ounce on the Comex division of the New York Mercantile Exchange. The thinly-traded nearby January contract also lost $5.10, to $1,373.40.
Wednesday Settlements (range includes floor and electronic trading):
London PM Gold Fix: $1,368.00; previous PM $1,388.50
Feb gold $1,373.70, down $5.10; Range $1,364.00-$1,385.20
Mar silver $29.198, down 31.0 cents; Range $28.580-$29.905
Apr platinum $1,734.10, down $13.30; Range $1,710.60-$1,761.50
Mar palladium $775.30, up $6.25; Range $750.20-$779.05
TUESDAY: Engelhard Corp's base price for industrial gold bullion was $1391.51 per troy ounce, down $30.05 from previous. It's selling price for gold in fabricated form was $1495.87, down $32.31. Handy & Harman's base price for gold was $1388.50 per troy ounce, down $31.80. The fabricated form price was $1499.58, down $34.34.
MONDAY: Gold futures were near steady on the first trading day of 2011 as positive sentiment on the economic recovery sent investors into equities instead.
The most-actively traded gold contract, for February delivery, rose $1.50, or 0.1%, to settle at a record $1,422.90 a troy ounce on the Comex division of the New York Mercantile Exchange. The sparsely traded front-month contract also gained $1.50, to $1,422.60.
Monday, silver gained more strongly than gold and hit a more-than-30-year high amid the positive economic sentiment. Silver is more widely used in industrial applications like electronics than is gold. Comex March silver gained 0.6% to settle at $31.125 an ounce after hitting $31.275 intraday, its strongest price since March 1980. April platinum gained 0.5% while March palladium on the exchange dipped 0.4%.
Monday Settlements (range includes floor and electronic trading):
Feb gold $1,422.90, up $1.50; Range $1,414.50-$1,424.40
Mar silver $31.125, up 18.8 cents; Range $30.620-$31.275
Apr platinum $1,786.40, up $8.20; Range $1,769.00-$1,792.80
Mar palladium $800.40, down $2.90; Range $795.80-$808.90
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BASE METALS:
FRIDAY: Copper $ 4.27 Per Pound
A stronger U.S. dollar weighed on demand for dollar-denominated copper by making it more expensive for foreign buyers. Shortly after copper closed, the ICE Futures U.S. Dollar Index was up 0.3%.
Inventories of copper stored in London Metal Exchange warehouses rose 125 metric tons Friday, leaving them at 379,525. Once-a-week data released on Fridays by the Shanghai Futures Exchange showed a weekly rise of 275 metric tons to 132,166. The most recent Comex inventory data, released late Thursday afternoon, were unchanged at 64,888 short tons.
Copper Futures Lower with Rising Dollar
The most-actively traded contract, for March delivery, fell 4.7 cents, or 1.1%, to settle at $4.2825 a pound on the Comex division of the New York Mercantile Exchange. It slipped 3.7% on the week.A stronger U.S. dollar weighed on demand for dollar-denominated copper by making it more expensive for foreign buyers. Shortly after copper closed, the ICE Futures U.S. Dollar Index was up 0.3%.
Inventories of copper stored in London Metal Exchange warehouses rose 125 metric tons Friday, leaving them at 379,525. Once-a-week data released on Fridays by the Shanghai Futures Exchange showed a weekly rise of 275 metric tons to 132,166. The most recent Comex inventory data, released late Thursday afternoon, were unchanged at 64,888 short tons.
THURSDAY: The most actively traded contract, for March delivery, settled down 1.8%, or 7.85 cents, at $4.3295 per pound on the Comex division of the New York Mercantile Exchange. The metal is down 3.1% from its record settlement of $4.4575 a pound, set Jan. 3. The thinly traded January contract settled down 1.8%, or 8.05 cents, at $4.3210 per pound.
MONDAY U.S. BASE METALS: Comex Copper Settles At Record $4.4575
The most actively traded contact, for March delivery, was down 0.1%, or 0.25 cents, at $4.4445 a pound on the Comex division of the New York Mercantile Exchange. The contract set a fresh intraday record at $4.4980 Monday. It had ended 2010 on a fresh all-time settlement high of $4.4470 a pound. Copper soared further into uncharted territory on the final trading day of 2010.
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U.S. TREASURYS/BONDS:
FRIDAY: Treasurys rallied broadly Friday on a disappointing U.S. jobs report. In late-afternoon trading, the benchmark 10-year note was 20/32 higher to yield 3.324%. Bond prices move inversely to their yields. The yield traded at 3.294% by the end of 2010. The two-year note was 5/32 higher to yield 0.597% and the five-year note was 17/32 higher to yield 1.959%.The five-year note was the best performer as many investors bought this maturity and sold 30-year securities The 30-year bond underperformed as long-dated securities will bear the brunt of the $66 billion in new debt supply in the coming week.
THURSDAY:
Demand for U.S. Treasurys rose, pushing yield on the 10-year note down to 3.40%.
WEDNESDAY:
Treasurys declined in early trading on the reported data, as the brighter picture of the U.S. economy dented the allure of safe-haven assets. The yield on the benchmark 10-year note rose to 3.44%.
TUESDAY: Demand for U.S. Treasurys was mixed after the minutes, with increased interest in the two-year note. But demand fell for the 10-year note, pushing its yield up to 3.34%.
During mid-day trading, demand for U.S. Treasurys increased Tuesday, pushing yield on the 10-year note down to 3.32%. Yields have risen despite Fed buying and market participants will be eager to hear the Fed's take on higher yields. The five-year Treasury note was up by 6/32 to 1.973%, and the 10-year was up 4/32 to 3.319%. The two-year Treasury note was flat to yield 0.593%, while the 30 was lagging behind, down 1/32 to 4.401%. The Fed bought $1.618 billion in Treasury inflation protected securities; $5.168 billion in offers were submitted..
MONDAY: Demand for Treasurys fell, lifting the yield on the the benchmark 10-year note was 14/32 lower, pushing up the yield by about six basis points to 3.344%. The 30-year bond was 14/32 lower to yield 4.405%.
The 10-year note's yield, a benchmark for consumer and corporate borrowings, has risen more than one percentage point from the trough of 2.332% hit in early October, the lowest level since January 2009. The yield rose to 3.568% on December 16, the highest level since May.
Bonds recouped some losses, moving off the worst levels of the session after the release of a key U.S. manufacturing-sector indicator while the Fed bought $7.79 billion in Treasurys due between February 2018 and November 2020.
The Fed plans to buy Treasurys on each of the trading days this week. They are part of the central bank's $600 billion Treasury-bond buying program launched in early November. By buying Treasurys regularly until June, the Fed hopes to push long-dated borrowing costs lower for consumers and businesses to boost an economic recovery. .
FRIDAY, JAN. 7, 2011; 4:00 PM EST:
3 Month 0.12% -0.01 (-7.69%)
6 Month 0.16% -0.01 (-5.88%)
2 Year 0.59% -0.05 (-7.81%)
5 Year 1.96% -0.07 (-3.45%)
10 Year 3.32% -0.05 (-1.48%)
30 Year 4.49% -0.03 (-0.66%)
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U.S. ECONOMIC NEWS:
FRIDAY:
THE MONEY SUPPLY REPORT
M2 (narrow) "money" supply rose $14.0bn to a record $8.848 TN. Over the past year, "narrow money" grew 3.7%. For the week, Currency declined $2.1bn. Demand and Checkable Deposits surged $38.8bn, while Savings Deposits dropped $25.7bn. Small Denominated Deposits fell $3.7bn. Retail Money Funds added $6.6bn.
The dollar index jumped 2.6% to 81.08. On the upside for the week, the Mexican peso increased 0.9%, the Canadian dollar 0.5%, and the South Korean won 0.3%. On the downside, the euro declined 3.6%, the Danish krone 3.5%, the Swiss franc 3.3%, the Swedish krona 3.3%, the Norwegian krone 2.8%, the Australian dollar 2.7%, the New Zealand dollar 2.6%, the South African rand 2.6%, the Japanese yen 2.4%, the Brazilian real 1.4%, the Singapore dollar 0.8%, the British pound 0.4%, and the Taiwanese dollar 0.2%.
GOLDMAN SAYS S&P 500 COULD HIT 1500
Goldman Sachs sets a new, highly bullish target for the Standard & Poor's 500 index this year in a reflection of the investment bank's upbeat outlook for U.S. economic growth, on sustained earnings growth by U.S. companies.
FED SAYS ...
U.S. Federal Reserve Governor Elizabeth Duke seeks to allay worries that elevated reserve balances could spur inflation in an economy still struggling to recover.
Joseph Tracy, a senior New York Fed official, says the economy is likely to grow and add jobs this year even as a troubled housing market acts as a drag on growth.
The Federal Reserve remains "unwaveringly committed" to maintaining price stability amid an uneven economic recovery that is likely strengthen in the new year, says Chairman Ben Bernanke in his first appearance before Congress this year.
Bernanke : Tax Code Overhaul Should Be Part Of Deficit Debate: U.S. policymakers should consider a long-term overhaul of the U.S. tax code for both individuals and businesses as part of any plan to address the nation's fiscal position, Federal Reserve Chairman Ben Bernanke said Friday.Making his first appearance on Capitol Hill in the new year, Bernanke squarely put the onus on lawmakers and the Obama administration to consider and enact a plan to deal with long-term deficit projections. Putting a "credible plan" in place could bolster the current economic recovery, particularly if it includes providing greater clarity on the future of the country's tax policy, he said.
Alan Greenspan, former chairman of the U.S. Federal Reserve, says the U.S. could face a bond market crisis if politicians don't soon take steps to cut the nation's debt.
BANKS' STAGNANT-LOAN
LOSSES SEEN IMPROVING
The year ended with hopes that the drought in bank lending was subsiding, but residual issues from the financial meltdown continue to overshadow the fourth-quarter results of the nation's big banks.
Rare Earths Shortage Becoming
Problem For Refiners
The skyrocketing cost of rare-earth metals coming out of China is pushing up the cost of gasoline production in the U.S., the latest sign of the wide-reaching impact of Beijing's decision to restrict exports of the minerals. Prices for some of the chemicals refiners use to process gasoline have risen exponentially after China, which controls about 95% of the world's rare-earth supply, said it would slash exports of the metals by 35% in 2011. The increase could raise gasoline production costs by about a penny a gallon and potentially lead some refiners to cut back on fuel production, and is expected to become a topic in many refiners' earnings conference calls in the first quarter of 2011.
Rare earth elements that go into high-tech batteries, television sets and military technology, are also used in the catalyst component of refiners' gasoline-making fluid catalytic cracking units, or FCCUs. Although rare earths account for only up to 4% of catalysts used in these units, their recent price increase has added as much as an extra 25% to catalyst costs, according to the National Petrochemical and Refiners Association, a group representing the sector.
The increase comes just as U.S. refiners were getting back on their feet financially after years of low demand and tight profit margins. Refiners such as Valero Energy Corp. (VLO) and Sunoco Inc. (SUN) sold some of their plants in 2010 to rid themselves of poor-performing assets.
"Any kind of increase, especially in today's markets and conditions, is significant," said NPRA President Charlie Drevna.
There are about 100 FCCUs amid the country's 150 refineries, ranging in capacity from more than 100,000 barrels of oil a day to less than 10,000. The typical 50,000 barrel-a-day FCCU uses an average of seven tons a day of catalyst to help remove impurities from what will become gasoline and diesel, with the increase in rare-earth prices costing its owner an extra $147,000 a month.
That would add about a penny to the production cost of each gallon of gasoline made--not enough to make the consumer notice, but enough to make some refiners think about scaling back production, analysts say. Adding to the cost is the U.S. drive for cleaner-burning gasoline and diesel, which requires refiners to use more catalysts.
Refiners acknowledged that catalyst costs were growing but declined to elaborate. Valero, which is the largest U.S. independent refiner and operates 12 FCCUs ranging in capacity from 24,000 to 100,000 barrels of oil a day, will probably address the issue during its fourth-quarter earnings conference call, company spokesman Bill Day said.
"Catalyst costs are something that Valero is monitoring closely," Day said.
Tesoro Corp. (TSO) said it has included the rising cost of rare earths into its 2011 budget but declined to say how much extra money it was paying for catalysts. The company, which runs five FCCUs, was seeking ways to mitigate the damage done to its bottom line, Tesoro spokesman Mike Marcy said. "There may be ways to adjust catalyst blends to reduce the impact of cost increases," Marcy said.
How long rare-earth prices will continue to climb is in question as companies outside China hustle to make more of the metals available. U.S.-based Molycorp Inc. (MCP) said it plans to spend $531 million to mine and process rare earths from a Mojave desert mine that used to produce the material until it was shut in 2002. Lynas Corp. Ltd. (LYC), a rare-earth supplier based in Australia, said it plans to start mining rare earths from Mount Weld in western Australia for expected production in the third quarter of 2011.
Until those projects come online, rare-earth prices will likely continue to increase, however. Chemical companies, which supply catalysts to refiners, have started indexing the cost of their product to rare-earth price movements, said Ed Morrison, president of consulting firm Global Catalyst & Process Technology Management PLLC.
"They are passing the price on to the oil refiner," Morrison said.
Top Massachusetts Court Rules
Against Foreclosing Banks
Massachusetts' highest court voided foreclosures on two homes. This now sets the legal precedent throughout the US. J.P. Morgan Chase slipped 2.9% and Bank of America fell 2.3%, after the Massachusetts State Supreme Judicial Court upheld a decision that two foreclosures from U.S. Bancorp and Wells Fargo were invalid because the banks failed to show they held the mortgages at the time of the foreclosure..
U.S. Employment RA RA
U.S. stocks fell Friday as investors were disappointed by a smaller-than-expected increase in non-farm payrolls for December. "It just reflects people getting totally disgusted and discouraged by the job market and pulling out of the search process," said Peter Tuz, president of Chase Investment Counsel. Tuz added that he would rather have seen a rise in the unemployment rate with an increase of 150,000 in non-farm payrolls, as that would indicate more people were entering the workforce.
Mixed and falsified data to promote a blind population of followers, is emblematic of the Governments slow and uneven path through economic survival. So, in case you are wondering why I have not bothered to post the ridiculous banter of how great it is, that long term unemployed who have been dropped off the numbers to make things look better than they really are in the U.S., or why low paid temporary holiday sales and warehouse jobs and government subsidized jobs and "seasonally adjusted" numbers, and birth and death numbers influences are now considered good "employed numbers", well, perhaps you should do some homework, or maybe some math.
"People are writing off the unemployment rate because a lot of that is seasonal retail hiring, which is only temporary," said Tom Pawlicki, analyst with MF Global. "We may see more disappointing data as we go further, and that's offering an upside push to gold," Pawlicki said.
The U.S. economy adds fewer jobs than expected and more Americans drop out of the workforce in December.
Debt Ceiling And The Stock Market
The nightmare prospect of a government shutdown later this year due to the increasingly likely possibility that political gridlock in Washington will result in a failure to raise the federal government's debt ceiling, writes Mark Hulbert.
THURSDAY:
DECEMBER RETAIL SALES DECLINED
Department store operators were largely lower after same-store figures missed analysts' expectations. Of the retailers reporting same-store sales so far Thursday, about half have missed analysts' expectations for the holiday month's same-store sales, including Costco Wholesale. Macy's fell 3.1%, while Kohl's shed 1.2% after missing Street expectations, though the retailer raised the low end of its earnings forecast for the fourth quarter. Target fell 5.9% after same-store sales increased 0.9% last month, falling far short of analysts' estimates.
A handful of teen retailers also came in below Street forecasts, including Zumiez, which plunged 12% and Wet Seal, down 13%.
AT LEAST 409,000 THOUSAND AMERICAN'S
LOST THEIR JOBS LAST WEEK
New claims for unemployment benefits rose more than expected last week, but a decline in the four-week average to a fresh low in more than two years indicated the labor market improvement remained intact.
Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 409,000, the Labor Department said on Thursday, above economists' expectations for 400,000. The prior week's figure was revised up to 391,000 from the previously reported 388,000.
The data falls outside the survey period for the government's closely watched employment report for December. The government is expected to report on Friday that non-farm payrolls increased 175,000 last month after November's surprisingly small 39,000 gain.
The unemployment rate is expected to have edged down to 9.7 percent from 9.8 percent in November. A Labor Department official said there was nothing unusual in the state-level data and noted that the long-term trend in jobless claims remained to the downside.
The four-week moving average of unemployment claims -- a better measure of underlying trends, fell 3,500 to 410,750, the lowest level since late July 2008.
The spike in weekly claims does little to change perceptions the economy is now on a sustainable growth path, as flagged by sturdy data on consumer spending, trade and manufacturing.
The number of people still receiving benefits under regular state programs after an initial week of aid fell 47,000 to 4.10 million in the week ended December 25. That was in line with market expectations, and the prior week's number for the so-called continuing claims was revised up to 4.15 million from 4.13 million.
The number of people on emergency unemployment benefits fell 133,625 to 3.58 million in the week ended December 18, the latest week for which data is available. A total of 8.77 million people were claiming unemployment benefits during that period under all programs.
GEITHNER URGES CONGRESS
TO RAISE NATIONAL DEBT LIMIT
Treasury Secretary Timothy Geithner a former Goldman Sacks executive, is pushing U.S. lawmakers to lift the U.S. National debt ceiling for the sixth time in less than four years as the U.S. approaches its debt limit of nearly $14.3 trillion. According to him, the U.S. Government will have to default on its interest payments after March of 2011 if the debt is not raised.
MORTGAGE RATE;
30-YEAR FIXED AT 4.77%
Mortgage rates ease in the latest week, falling slightly after several weeks that saw mostly sharp increases. The 30-year fixed-rate mortgage averages 4.77% for the week ended Thursday, down from the prior week's 4.86% average.
VOLCKER QUITTING AS
ECONOMIC COUNCIL HEAD
Former Fed Chairman Paul Volcker is expected to step down as head of a panel that advises President Barack Obama on economic issues, according to two people familiar with the matter.COMPANIES SHOULD BORROW
WHILE THEY STILL CAN
Borrowers are rightly taking advantage of current good economic news and increased risk appetite to issue while the going is good. But these borrower-friendly times may not last, Richard Barley writes. By the end of Wednesday, just three business days into the year, investment-grade bond issuance in the U.S. stood at just over $27 billion, according to Barclays Capital. The recent run of covered bond issuance continues to surge, with six new deals announced in what has been the busiest week for the asset class since 2006, Art Patnaude writes.
Banks have understandably been among the biggest issuers. Regulators and central bankers are concerned about the wall of refinancing that comes due, particularly as government-guaranteed bonds sold at the height of the crisis mature. Banks are particularly exposed to the risk of new turmoil in the government bond markets: senior bank debt issuance shut down in May and was severely hampered in November in Europe
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WEDNESDAY:
US Service Sectors Show Minor Gains
New orders moved to 63.0, from 57.7. Inflation quickened its pace, with the prices index at 70.0, versus November's 63.2. In the ISM report, hiring gains lost momentum, with the employment index at 50.5, from 52.7.
The ISM said its overall index of non-manufacturing activity, which comprises most of American economic output, moved to 57.1, from 55.0 in November and 54.3 in October.
The U.S. service sector picked up steam in the final month of 2010, ending the year on a strong note, although hiring gains slowed down and price pressures grew, according to a report Wednesday from the Institute for Supply Management.
The report came on the heels earlier this week of the private research group's manufacturing survey, which also suggested economic strength and good momentum into the start of the New Year.
The report came on the heels earlier this week of the private research group's manufacturing survey, which also suggested economic strength and good momentum into the start of the New Year.
US Holiday Online Retail Spending Rose
Online retail spending during the most recent holiday season jumped 12% from a year earlier, hitting an all-time record, according to online researcher comScore Inc. The company said spending in November and December of last year totaled $32.59 billion, up from 2009's $29.08 billion.PRIVATE-SECTOR JOBS SHOW INCREASE
The core private-sector job creation has been 51,000 a month, that comes to 16 jobs per
county as compared to more than 5,000 job seekers per county.
The report shows that private-sector jobs in the U.S. "surged by 297,000 in December", according to payroll giant ADP, suggesting Friday's payroll data could beat current expectations. Most jobs are in the temporary sector and don't really show what the outlook is for longer term employment in the U.S.
Most of those "jobs" have been in government subsidized health care and social services,
and temporary business services.
Economists expect the Labor Department to report the economy added 140,000 jobs in
December, barely enough to hold unemployment steady at about 9.8% and far less than
should be expected 18 months into an economic recovery..
UN FOOD PRICE INDEX HITS RECORD HIGH
Global food prices rise to a record high in December, according to the monthly Food Price Index published by the United Nations Food and Agriculture Organization, above a previous high in 2008.
TUESDAY:
FOMC Minutes Report
Fed Sees Rapid Increase In Energy Prices Raising Inflation
The Federal Reserve believes a stronger U.S. economy is among the reasons behind the rise in government bond yields, which may undermine its efforts to keep the recovery going via low interest rates.
In minutes of the central bank's Dec. 14 meeting, released with the customary lag on Tuesday, Fed officials offered several explanations on why U.S. Treasury yields have been increasing despite their $600 billion bond purchase program.
Investors' downward revision of the ultimate size of the program, the improved economic outlook, and the impact of the recent tax-cut deal on the budget deficit were all factors behind the rise in yields, Fed officials said. Some noted the backup in rates may have even been amplified by year-end positioning.
But despite the improvement in the economy, Fed officials "generally felt that the change in the outlook was not sufficient to warrant any adjustments to the asset-purchase program, and some noted that more time was needed to accumulate information on the economy," the minutes showed.
The bond-purchase program was supposed to help the economy by, among other things, keeping borrowing rates low. But interest rates charged on consumers and companies that borrow to spend and invest have actually been rising since the Fed Nov. 3 annouced its plan to buy $600 billion government bonds through June 2011. The yield on the 10-year Treasury note, used as a benchmark for several interest rates, currently stands around 3.35%, up from 2.48% Nov. 4.
The minutes show that Fed officials were more optimistic on the growth outlook, with risks of deflation having receded. But they noted there are still lots of downside risks, most notably in housing and from Europe's continued debt crisis.
The U.S. economy's recovery from the severe 2008-2009 recession was already gathering pace when the Fed last met three weeks ago. Since then, signs have grown that the feeble jobs market is improving and President Barack Obama signed a bipartisan tax package into law that is expected to boost the economy further in 2011 -- at the cost of increasing an already large budget deficit. The improved outlook, together with concerns the economy may eventually overheat and bring high inflation, led investors to sell government bonds, bringing lower prices and higher yields.
Critics of the central bank point to the interest rates increase to say the Fed's strategy is not working. Fed officials counter in the minutes that bond yields would be even higher without them.
Supporters of the Fed's policy also note the bond purchases help the economy in other ways: by driving investors into riskier securities, thus contributing to the rise in stocks; and by keeping the U.S. dollar value against other currencies low, thereby boosting exports.
US AUTO SALES RISE
U.S. auto sales likely hit their strongest pace of the year as General Motors and Ford report solid increases for the December, while Chrysler says sales of cars and light trucks jumped 16%. U.S. FACTORY ORDERS REPORT SHOW INCREASE
Factory orders increased 0.3% in November.
U.S. factory goods orders unexpectedly rose in November, giving another indication of solid momentum in manufacturing amid a growing economy.
Orders for manufactured goods rose 0.7% to $423.85 billion from the prior month, the Commerce Department said Tuesday. Economists surveyed by Dow Jones Newswires had forecast a 0.1% decline in November factory goods.
Non-defense capital goods orders excluding aircraft increased 2.6% in November, after falling 3.2% the month before. Those orders are considered an indicator of capital spending by businesses.
The economy grew 2.6% in third quarter, pushed along by modest consumer spending. Some manufacturers are projecting higher profits as orders increase.
Last month Nike Inc.'s (NKE) said its fiscal second-quarter earnings rose a better-than-expected 22%, as the athletic-shoe maker continues to see strong interest in future orders.
The U.S. manufacturing sector is growing. This week, the Institute for Supply Management reported its December index of manufacturing activity moved to 57.0 from 56.6 in November and 56.9 in October. Any reading in the ISM survey above 50 indicates growth. The relatively strong momentum is allowing the industry to recover from the deep recession.
Tuesday's data showed demand for factory goods that are made to last at least three years fell 0.3% in November, revised from a previously reported 1.3% drop. These so-called durable goods plunged 3.1% in October.
Non-durable goods factory orders climbed 1.7% in November, after increasing 1.5% in October.
A sharp drop in civilian airplane demand restrained the increase in overall factory orders in November. Orders for goods made in the transportation sector fell 11.1%, after dropping 6.2% in October. Excluding the transportation sector, factory orders shot 2.4% higher in November, following a 0.1% rise the previous month. Orders rose for metals, computers, and electrical equipment.
Capital goods orders fell 4.4% in November. Defense capital-goods orders rose 17.5%. Demand for all non-defense capital goods declined 6.8%.
Excluding defense orders, overall factory orders increased 0.3% in November. The report showed November factory shipments climbed 0.8%. Unfilled orders, a sign of future demand, rose 0.6%. Inventories went up 0.8%. Overall factory orders in October fell 0.7%, revised up from a previously reported decrease of 0.9%. September orders jumped 3.0%.
U.S. CHAIN STORE SALES RISE 0.4%
Goldman Sachs same store sales report showed a minor increase the last week in December. Despite a major snow storm along the East Coast at the beginning of the week, a warming trend by week's end helps lift store traffic and recover some lost post-Christmas sales, according to a report from ICSC/Goldman Sachs.
U.S. PERSONAL BANKRUPTCIES JUMP 9%
The number of Americans filing for personal bankruptcy topped 1.5 million last year, as households buckled under debt loads and turned to the courts to lighten the burden. Personal bankruptcies rose to 1,530,078, up 9% from 2009.
U.S. OFFERS FLOOD AID TO AUSTRALIA
The U.S. government offered aid Tuesday to an estimated 200,000 people hit by record floods in Australia, as rising waters threatened to cut off the tropical city of Rockhampton in Queensland state.
CHINESE FOREIGN MINISTER
HOLDING TALKS IN U.S.
U.S. Treasury Secretary Timothy Geithner will host bilateral talks with China's top diplomat Tuesday in Washington amid preparations for the upcoming state visit of Chinese President Hu Jintao.
U.S. President Barack Obama is to host Hu in the White House on Jan. 19 as the two major powers address diplomatic ties strained by trade and currency, security and human rights issues.
Geithner and Chinese Foreign Minister Yang Jiechi will hold closed-door discussions on Tuesday afternoon, a U.S. Treasury Department statement said.
In recent weeks there have been signs that Chinese authorities have been allowing the yuan to slowly appreciate ahead of Hu's visit, likely to feature prominent coverage of trade and currency tensions.
The People's Bank of China set the yuan central parity rate -- the middle of the currency's allowed trading band -- at 6.6227 to the dollar Friday, meaning it has appreciated about 3% against the greenback since June 19.
Obama and Hu last met in Seoul on the fringes of the Group of 20 summit in November, and are due to hold talks at the White House and a state dinner during the Chinese president's visit to Washington.
But serious divisions between the two largest economies will simmer beneath the diplomatic pageantry, including Washington's desire for a bigger Chinese effort to influence North Korea, amid high tensions on the peninsula following Pyongyang's assault on a South Korean island in November.
Hu's visit will be the culmination of a flurry of preparatory diplomacy by top officials from both sides.
U.S. Secretary of Defense Robert Gates is due to visit China between Jan. 9 to 12, a year after Beijing snapped off military relations with Washington in protest against a multibillion-dollar U.S. arms package for Taiwan..
MONDAY:
Dow Jones Economic Sentiment Indicator
Dec 46.1 Vs Nov 43.9
The Dow Jones Economic Sentiment Indicator posted a sharp rise for December, a sign that shows the upbeat economic data that closed out 2010 may be the start of an upswing. The indicator rose 2.2 points to 46.1, following two months stuck at 43.9, bringing it closer to the levels of late 2007.
The Dow Jones ESI aims to predict the health of the economy by analyzing the contents of 15 major daily American newspapers, using a proprietary algorithm to look for positive and negative sentiment about the economy in every article. Although less volatile than other confidence indicators, historical back-testing has shown that for a rise to be considered significant it needs to be sustained over more than one month.
The indicator's rise in December was only modestly boosted by coverage of the relatively strong holiday retail sales. Most of its strength was drawn from a wide range of upbeat economic newspaper articles reporting improved economic activity across the nation, from car dealerships in Dallas to grain elevators in the Twin Ports.The late burst of upbeat economic data at the end of 2010--most notably the sharp fall in jobless claims announced Dec. 30--had a multiplied effect on sentiment because they added an upbeat final tone to many year-end economic round-ups..
The indicator's rise in December was only modestly boosted by coverage of the relatively strong holiday retail sales. Most of its strength was drawn from a wide range of upbeat economic newspaper articles reporting improved economic activity across the nation, from car dealerships in Dallas to grain elevators in the Twin Ports.The late burst of upbeat economic data at the end of 2010--most notably the sharp fall in jobless claims announced Dec. 30--had a multiplied effect on sentiment because they added an upbeat final tone to many year-end economic round-ups..
Factory Sector Sees 'Significant Recovery' In 2010
ISM Manufacturing Pops to 57.0 from 56.6 Matching Expectations
The Institute for Supply Management (ISM) reported significant gains are to be seen in 2011, as the economy is expected to recover. A significant recovery was seen in 2010. Today's ISM Manufacturing figure came in line with expectations at 57.0 with prices paid up 3 points (72.5 from 69.5) and new orders up 4.3 points (60.9 from 56.6).
US November Construction Spending Up
U.S. construction spending rose a third consecutive time during November, a sign the industry is recovering despite unemployment and difficulty getting financing.
Spending on construction projects increased by 0.4% to a seasonally adjusted annual rate of $810.23 billion compared to the prior month, the Commerce Department said Monday.
Spending rose 0.7% in October and 1.2% in September.
November's bigger-than-expected gain was supported by increases in all the major categories of the construction report.
Spending on U.S. residential projects, for instance, climbed 0.7% to $246.78 billion after rising 3.7% in October. The housing sector is struggling to recover but high unemployment, foreclosures, tightened mortgage loan standards, and uncertainty about home prices are thwarting a comeback. The latest government data show new-home sales down more than 20% from a year ago.
Spending on non-residential projects in November rose by 0.3%. But over the past year, non-residential project outlays were down 6.8%, with big drops in hotel and other commercial construction spending as the economy recovers slowly from recession. Builders are having trouble getting loans to start new projects. Labor Department data on payroll employment show the construction industry shed 5,000 jobs in November.
The report Monday said U.S. private-sector construction spending rose by 0.3% in November to $491.76 billion. Public-sector spending increased by 0.7% to $318.47 billion. Federal spending jumped 8.2%; outlays of state and local governments, however, dipped 0.1%.
The recession's effects continue being felt by municipal governments. According to the National League of Cities' latest annual report on cities' fiscal conditions, financial officers report the largest spending cuts and loss of revenue in the 25-year history of the survey.
New Jersey Gov. Chris Christie in October halted a $9 billion project to build a rail tunnel under the Hudson River because of high costs. Part of the funding came from the federal government.
Just after Election Day, the Obama administration warned that Wisconsin and Ohio would lose hundreds of millions of dollars in federal stimulus money if their incoming Republican governors keep campaign promises to halt intercity passenger-rail projects.
The Commerce Department report on construction spending can be found at: http://www.census.gov/const/C30/release.pdf.
INVESTMENT BANKERS SEE
MORE IPO GROWTH
U.S. investment bank executives expect that there will be continued growth in initial public offerings on American exchanges in 2011, according to a national survey.
GLOBAL CHIP SALES EASE DURING NOVEMBER
Global chip sales ease 0.9% in November from a month earlier, the second straight month of declines, with sequential drops in all its geographic regions except Europe, according to the Semiconductor Industry Association.
US BANKRUPTCY BOOM MAY FADE IN 2011
After two years punctuated by a historic economic downturn, a rash of mega-bankruptcy cases and sky-rocketing default rates, 2010 appears to have ushered in a new era of normalcy when it comes to corporate restructuring in the U.S.
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U.S. EQUITY NEWS:
FRIDAY:
President Barack Obama on Tuesday will visit the birthplace of General Electric Co. (GE) in its birthplace of Schenectady, N.Y., with GE Chief Executive Jeffrey Immelt as part of a new effort to mend relations with the private sector. The president will tour the company's largest energy division, according to a White House official.
Liz Claiborne tumbled 14% after the apparel maker cut its operating income forecast for the second half of 2010, citing "clearly disappointing" direct-to-consumer sales in December.
Wall Street banks J.P. Morgan Chase and Morgan Stanley win approval from China to underwrite deals in China's fast-growing securities market with local partners.
AIG, which is trying to end a long-running case over alleged under-reporting of premiums on workers' compensation policies, agrees in principle to pay $450 million to settle litigation with rival insurance companies. Shares rise 4%.
The giant consumer-electronics seller's sales drop to $8.4 billion as same-store sales decline 4%. Domestic segment revenue decreases 3.2% from a year earlier, hurt by softer TV and entertainment-software sales. Shares up 1%.
KB Home's 4Q profit slides 83% to $17.4 million, or 23c a share, though results were better than analysts had feared, as revenue falls by one-third and the company records a significantly lower tax benefit than a year earlier. Shares rise 6%.
Apple says more than one million apps for its Macintosh computers were downloaded the day it took the wraps off its newest online store to sell the apps. Apple will take a 30% cut of app revenue.
.
THURSDAY:
Graphic-chip maker Nvidia rallied 2.35, or 14%, to 19.33, after saying late Wednesday that it is developing its first computer processor aimed at mainstream computing, a move that makes the company a direct challenger to Intel and Advanced Micro Devices.
Shares of Intel eased 17 cents, or 0.8%, to 20.77, while AMD slid 22 cents, or 2.5%, to 8.69.
TJX, parent of off-price chains T.J. Maxx and Marshalls, gained 2.52, or 5.9%, to 45.52, after raising its earnings outlook for the fourth quarter, pointing to growth in the number of customer transactions.
TJX, parent of off-price chains T.J. Maxx and Marshalls, gained 2.52, or 5.9%, to 45.52, after raising its earnings outlook for the fourth quarter, pointing to growth in the number of customer transactions.
Constellation Brands' fiscal 3Q profit more than triples to $139.3 million, or 65c a class A share, as the company benefits from a lower tax rate and as fewer charges dented its bottom line. Shares slip 3%.
Gap fell 1.53, or 6.9%, to 20.70, after reporting a surprise drop in December sales, with particular weakness at its namesake stores in North America.
Target dropped 4.01, or 6.8%, to 54.93, after its same-store sales increased only 0.9% last month, falling far short of analysts' estimates.
Macy's fell 1.00, or 4%, to 23.97, while Kohl's shed 1.67, or 3.1%, to 52.23, after missing Street expectations, though the retailer raised the low end of its earnings forecast for the fourth quarter.
Zumiez plunged 2.23, or 8.4%, to 24.44, and Wet Seal, down 45 cents, or 12%, to 3.46.
Gap fell 1.53, or 6.9%, to 20.70, after reporting a surprise drop in December sales, with particular weakness at its namesake stores in North America.
Target dropped 4.01, or 6.8%, to 54.93, after its same-store sales increased only 0.9% last month, falling far short of analysts' estimates.
Macy's fell 1.00, or 4%, to 23.97, while Kohl's shed 1.67, or 3.1%, to 52.23, after missing Street expectations, though the retailer raised the low end of its earnings forecast for the fourth quarter.
Zumiez plunged 2.23, or 8.4%, to 24.44, and Wet Seal, down 45 cents, or 12%, to 3.46.
Boeing's 4Q commercial aircraft deliveries decline 4.9% to 116 from a year earlier, when the figure more than doubled after one of the worst years on record.
Shares in BP rise, as investors conclude that the report of a U.S. presidential commission into last year's Gulf oil spill reduced the likelihood that the company would be found guilty of gross negligence.
AT&T cuts its price for Apple's iPhone 3GS to $49 from $99 as the carrier prepares for heightened competition from a Verizon Wireless iPhone launch expected early this year. The iPhone 4, released in June, sells for $299.
MetroPCS Communications tumbled 96 cents, or 6.7%, to $13.30, after the prepaid wireless provider disclosed its fourth-quarter subscriber growth slowed from the prior period.
AT&T shed 40 cents, or 1.4%, to 29.15, after cutting its price for Apple Inc.'s iPhone 3GS to $49 from $99 as the carrier prepares for heightened competition from a Verizon Wireless iPhone launch expected early this year.
Verizon Communications, which operates Verizon Wireless as a joint venture with Vodafone Group, slid 95 cents, or 2.6%, to 36.23.
MetroPCS Communications tumbled 96 cents, or 6.7%, to $13.30, after the prepaid wireless provider disclosed its fourth-quarter subscriber growth slowed from the prior period.
AT&T shed 40 cents, or 1.4%, to 29.15, after cutting its price for Apple Inc.'s iPhone 3GS to $49 from $99 as the carrier prepares for heightened competition from a Verizon Wireless iPhone launch expected early this year.
Verizon Communications, which operates Verizon Wireless as a joint venture with Vodafone Group, slid 95 cents, or 2.6%, to 36.23.
Inundated with demand, Goldman Sachs will stop taking orders for shares of Facebook, and it will give some investors a small fraction of their requested shares, people familiar with the situation tell The Wall Street Journal.
Monsanto swings to fiscal 1Q profit of $6 million, or a penny a share, as its seeds and genomics business turns in sales growth of 13% and the agribusiness giant recovers from a sharp drop in sales of its Roundup and other herbicides.
Bank of America will soon begin testing fees of roughly $6 per month on its most basic account and customers will have no waiver options, a person familiar with the plan tells The Wall Street Journal.
In an Oct. 20 letter to AIG, the SEC asked the company to explain whether a U.S. regulatory filing from two days earlier should be interpreted as an offering to sell the shares of its Asian life insurance unit AIA Group to U.S. investors..
WEDNESDAY:
China Shen Zhou Mining (SHZ) Files $50M Mixed Securities Shelf . stock raised 0.37 to $10.20 a share under heavy volume.
Online health insurance marketer eHealth Inc. (EHTH) will probably miss Street's 4Q EPS view and offer 2011 guidance "meaningfully below" expectations, Citi says. The stock surged more than 60% in late 2010, but down 7.4% to $12.68 in recent trade.
Qualcomm rose 2% after it agreed to acquire Atheros Communications for $3.1 billion in cash as the suitor seeks to fill a hole in its chip-making operations. Atheros's shares rose 1.3% to $44.55 per share, below the $45 per share offer price, after surging 19% the day before.
Family Dollar Stores slid 7.2% as the discount retailer cut its earnings outlook for the current quarter. Fiscal first-quarter earnings rose 9.9% as the company continued to report increased customer traffic and sales. Rivals Dollar General and Dollar Tree fell 2.9% and 4% respectively.
BJ's Wholesale Club fell 1.1% after the discount retailer said it would close five under performing stores and restructure its home office. At the same time, December same-store sales increased 3.8%, short of expectations of a 4.4% increase.
Shares in Mosaic rose 2% after the fertilizer producer late Tuesday reported fiscal second-quarter sales and earnings that were both comfortably ahead of market expectations.
US Airways Group rose 2.8% after the low-cost carrier said traffic rose 6% in December from a year earlier, continuing an industry-wide trend of growth even as last month's foul weather hampered airlines.
Worthington Industries fell 2.2% after the steel-processing and metal products company saw fiscal second-quarter profit fall 38% amid higher costs.
Qiao Xing Universal Resources jumped 21% after the company said it acquired a 34.5% equity interest in a Chinese copper-molybdenum mining company for 185 million yuan ($27.9 million) from a local Chinese government agency.
.
TUESDAY:
China's Zuoan Limited Plans IPO Of Up To $100 Mln ADSs.The company has applied to list its ADS on the New York Stock Exchange under the symbol ZA. China's Zuoan Fashion Ltd. said it plans to sell up to $100 million of American depositary shares in an initial public offering, as the menswear company looks to fund store openings and enhance its advertising and promotions.
The IPO market has generated large interest in Chinese companies, with many among the most well-received by investors in 2010. Zuoan Fashion sells its products through a distribution network covering 27 of China's provinces and centrally administered municipalities, as well as through direct stores. It mostly targets urban males between the ages of 20 and 40.
The company said, according to Frost & Sullivan Report, Zuoan-branded products ranked second in China within the casual menswear market, with a 5.4% market share.
According to a filing with the U.S. Securities and Exchange Commission, Zuoan Fashion intends to use proceeds from the offering to open its directly operated flagship stores in China, which incorporates the company's current plan to open 50 of those locations by 2012. For the first nine months of 2010, Zuoan's reported revenue climbed 25% to CNY613.9 million ($91.8 million), helping profit rise 11%.
Macy's moved up today as retail stocks received a boost today, as analysts forecast their projections for December retail sales.
Dell Inc. (DELL) has agreed to acquire information-security company SecureWorks Inc., bolstering its offerings in on-demand information technology services.
Food retailers in the S&P 500 fell Tuesday after Bank of Montreal downgraded Safeway, Vitamin Shoppe, and Whole Foods to marketperform from outperform, noting limited upside. Shares of Safeway fell 3.9%, Vitamin Shoppe was off 4.9% and Whole Foods shed 3.3%. BMO also reduced its estimates for Supervalu, noting the chain's inability to drive traffic, and Kroger, saying the fiscal year 2011 consensus could be too high given the challenging environment. Supervalu tumbled 8.5%, while Kroger lost 2%. Morgan Stanley also cut Safeway and Supervalu to underweight from equalweight, noting Supervalu's strategy to reduce prices will collide with inflationary food costs.
Qualcomm is near an agreement to buy semiconductor manufacturer Atheros Communications, the New York Times reports. Deal would be for about $3.5 billion, or about $45 a share. Atheros shares jump 17%.
Archer Daniels Midland Co. (ADM) has bought out its partner in Golden Peanut Co. LLC, giving it full control of the largest peanut processor and exporter in the U.S.The peanut company's operations include seven handling facilities in the U.S. and one in Argentina. It is also the largest peanut sheller and peanut-oil refiner in the U.S.
Borders Group plunged 9.4% after the book retailer's Counsel Thomas Carney and Chief Information Officer D. Scott Laverty resigned.
Shares of Motorola Mobility Holdings rose 7.8% and Motorola Solutions gained 0.2% as Motorola's long-awaited split into two entities officially took place Tuesday.
Seven insurance companies have filed lawsuits against Toyota seeking a total of $230,000 to cover cost of claims paid for accidents related to the unintended acceleration problems identified in Toyota vehicles in the last several years.
MONDAY:
Motorola Inc.'s (MOT) long-awaited split into two entities is set to take place formally Tuesday.
The two spinoffs will be Motorola Mobility Holdings Inc. (MMI), consisting of its consumer-focused smartphone and set-top box business, and Motorola Solutions Inc. (MSI), focusing on public safety radios and handheld scanners.
Goldman Sachs and Russia's Digital Sky Technologies have invested $500 million in Facebook in a deal that gives the social networking site a valuation of $50 billion.
Ruby Tuesday (RT) jumps 7% to $13.98 as Morgan Keegan expresses confidence in the casual-dining chain's plan to further improve results at its namesake brand, convert underperforming Ruby Tuesdays to other flags and have Lime Mexican Grill become a new growth driver. Firm upgrades RT to outperform from market perform ahead of Wednesday's release of 2Q results and boosts price target to $15 from $13 as shares have surged nearly 55% since late August.
Clorox Co. (CLX) shares fell about 3% as weak sales of disinfectants, bleach and cat litter in the U.S. caused the household products giant to project disappointing fiscal second-quarter earnings. Clorox also moderated the growth trajectory of its Burt's Bees personal-care business, leading to a goodwill write down of between $250 million to $255 million related to a 2007 purchase of the brand for $925 million. Clorox's warnings reflect lingering challenges for household products companies to sell products amid still-weak consumer spending.
Ann Taylor Stores (ANN) Cut To Neutral From Overweight By Piper Jaffray Barnes & Noble climbed 6% after the bookseller said its preliminary holiday same-store sales surged 9.7%, partly thanks to strong sales of its Nook e-reader device. The company said last week that the Nook had become the best-selling product in its nearly 40-year history.
Tyson Foods (NYSE: TSN) opened at $17.17. The stock touched a low of $16.65 and a high of $17.21. TSN is now trading at $16.67, down $0.55.
Berkshire is prepping a $1.5 billion sale of three- and 10-year senior unsecured notes. The three-year piece will consist of fixed and/or floating-rate notes, while the 10-year will be a fixed-rate piece.
Berkshire is prepping a $1.5 billion sale of three- and 10-year senior unsecured notes. The three-year piece will consist of fixed and/or floating-rate notes, while the 10-year will be a fixed-rate piece.
Taxation issues are holding up a deal that will lead to a consortium of iGATE and Apax Partners buying a controlling stake in Patni Computer Systems from the company's founders and private equity firm General Atlantic.
Coach (NYSE: COH) opened at $54.79. Coach stock has hit a low of $54.20 and a high of $55.03. COH is now trading at $54.75, down $0.56.
Bank of America said it expects to take a provision of about $3 billion in the fourth quarter to buy back bad loans from Freddie Mac and Fannie Mae that were issued by its troubled Countrywide Financial unit.
Alcoa and Boeing were also strong, boosted by upgrades from analysts. Alcoa climbed 4.2% after Deutsche Bank raised its investment rating on the aluminum giant's stock to buy from hold, citing "growing optimism" on the likelihood for higher aluminum prices and a belief that "Alcoa has turned the corner from an operational point of view." Boeing climbed 1.5% after J.P. Morgan upgraded its investment rating on the stock to overweight from neutral, saying its outlook for "core commercial aircraft business continues to improve."
Intel fell 0.5%. Piper Jaffray cut its investment rating on the stock to neutral from overweight, saying Intel is missing the wave of "ultramobile devices," and it expects PC unit growth to decline.
Canadian Market:
FRIDAY:
Toronto Stocks Lower Friday
Toronto stocks closed lower Friday, capping a week of steady declines, after a fire at the Canadian Natural Resources' Horizon oil-sands plant,.a major oil-sands facility, further battered sentiment on the energy sector. The S&P/TSX Composite Index fell 39.37 points, or 0.3%, to 13,272.30. Decliners outweighed advancers 851 to 790. Trading volume was 513.1 million shares, down from Thursday's total of 563.0 million shares. The S&P/TSX 60 Index closed down 2.72 points, or 0.4%, to 759.87.
Canadian Natural Resources diving C$2.35 to C$40.60 amid uncertainty over the effect the fire will have on its production, the bearishness appeared to spread to other producers. Suncor Energy ended 0.16 lower to 36.98 and EnCana Corp. lost 0.32 to 28.47. Overall, the energy index lost 1.10%.
Other decliners included the materials group, which fell 0.64% as investors continued to trim profits from the sector, one of 2010's big winners. The information technology group slipped 0.61%.
The financials group added 0.37% on the good employment numbers, and industrials rose 0.27%. Royal Bank of Canada rose 0.41 to 52.02, Potash Corp. slipped 2.88 to 165.88 and Manulife Financial lost 0.05 to 17.63.
The stock market was weaker at midday Friday, hurt by softness in the energy and materials sectors after Canadian National Resources shut down production at its Horizon oil-sands plant in Alberta and investors sold the stock in response. Canadian dollar opened on Friday at 100.37 cents US, up 0.06 of a cent. TSX Venture Exchange stood at 2,221.06, up 3.88 points at noon on Friday. Toronto gold quoted at C$1,360 bid, C$1,361 asked in mid-morning trading. The Canadian dollar advanced Friday morning as traders took in a strong employment report for December.
The loonie was off early highs by late morning but still up 0.33 of a cent at 100.64 cents US as Statistics Canada reported that Canada's economy added 22,000 jobs in December, while the unemployment rate stayed unchanged at 7.6 per cent from the previous month as more people entered the workforce.
At mid-day, the S&P/TSX Composite Index was down 25.75 points, or 0.19%, at 13285.92 and declines led advances 741 to 645. Trading volume was 231.10 million shares. The S&P/TSX 60 Index was down 1.73 points, or 0.23%, to 760.86 points.
Toronto Indexes, Volume Friday; CLOSING Composite Down 39.37
S&P/TSX Composite 13272.30 off 39.37 or 0.3%
S&P/TSX 60 Index 759.87 off 2.72 or 0.4%
Financials 183.68 up 0.67 or 0.4%
Materials 428.96 off 2.76 or 0.6%
Energy 314.26 off 3.48 or 1.1%
Industrials 111.81 up 0.30 or 0.3%
IT 31.10 off 0.19 or 0.6%
Volume Friday Thursday
9:30-5 515.40 563.5M
ECONOMIC NEWS:
CANADA JOBS UP, RECORD
GAIN IN MANUFACTURING
Canadian job creation modestly exceeds expectations in December as employers, primarily in the private sector, filled full-time positions and eliminated part-time workers, leaving the jobless rate steady at a near two-year low. The national unemployment rate was 7.6 per cent in December. Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities and provinces but cautions the figures may fluctuate widely because they are based on small statistical samples.
Canada's Bankruptcy Debt Warnings
Canada's Superintendent of Bankruptcy issued a warning to Canadians about the dangers of high household debt Friday, adding his voice to the chorus from officials concerned about the amount of leverage the average resident now has. In a letter attached to the latest report on bankruptcy statistics, James Callon said it was "important for Canadians to be aware of the risks and possible consequences of taking on a large amount of debt."
He noted that a significant event - a change in employment such as job loss, or a change in family status such as a divorce, or a serious illness - "can cause a huge drain on finances." If such an event were to suddenly occur in a household carrying a large amount of debt, that could lead to "the harsh realities of insolvency," Callon said.
The number of consumer insolvencies filed in Canada in October 2010 was 22.5% higher than in 2007-08, before the economic crisis that led to the recent recession.
Household debt in Canada reached a record C$1.41 trillion in December. According to Statistics Canada, debt to household income levels has reached a record 148%, rising above comparable U.S. figures for the first time since the late 1990s.
Bank of Canada Governor Mark Carney recently warned that a growing number of Canadian households were vulnerable to adverse shocks, and more would become vulnerable if interest rates go up from record low levels as expected. Finance Minister Jim Flaherty has also sounded numerous warnings on household debt levels in recent months.
THURSDAY:
Toronto Stocks Closed Lower Thursday
The S&P/TSX Composite Index closed 84.32 points lower, or 0.63%, to 1331.67, declines exceeded advances 913 to 726 and trading volume was 563.00 million shares, up from Wednesday's total of 524.70 million shares. The S&P/TSX 60 Index closed down 4.13 points, or 0.54%, to 762.59.
The TSX Venture Exchange was trading at 2,236.69 on Thursday, down 25.79 points. The volume at noon was at 25.79 million shares.Canadian dollar is down 0.13 of a cent to 100.23 cents US at 11 a.m. ET Thursday.Toronto gold quoted at C$1,363 bid, C$1,364 asked in mid-morning trading.
The stock market was lower at midday Thursday, led by weakness in the energy, and materials sectors. At 11:45 a.m. EST (1645 GMT), the S&P/TSX Composite Index was down 70.79 points, or 0.53%, at 13325.20 and declines led advances 827 to 591. Trading volume was 272.60 million shares. The S&P/TSX 60 Index was down 4.07 points, or 0.53%, to 762.65 points. The TSX Venture Exchange opened on Thursday at 2,253.15, down 9.32 points..
S&P/TSX Composite 13311.67 off 84.32 or 0.6%
S&P/TSX 60 Index 762.52 off 4.13 or 0.5%
Financials 183.01 off 0.52 or 0.3%
Materials 431.72 off 5.05 or 1.2%
Energy 317.74 off 5.58 or 1.7%
Industrials 111.51 up 0.96 or 0.9%
IT 31.29 up 0.02 or 0.1%
Volume Thursday Wednesday
9:30-5 563.5M 527.1M
ECONOMIC NEWS:
Ivey Purchasing Managers Index At 50.0
The Ivey Purchasing Managers Index was at 50.0 in December, indicating that purchasing activity in Canada was unchanged from a month earlier.
The Ivey PMI is compiled by the Purchasing Management Association of Canada and the Richard Ivey School of Business and measures changes in dollars of purchases as indicated by a panel of 175 purchasing managers from across the country. It includes both the manufacturing and non-manufacturing sectors, and isn't seasonally adjusted.
The Canadian dollar modestly weakened versus its U.S. rival following the report. The U.S. dollar rose to C$0.9979, from C$0.9959 just before the release and C$0.9960 late Wednesday, according to data provider CQG.
The report's one disappointment, was the employment index, which was at 47.3 for December, indicating employment was lower than in the previous month.
The inventories index was at 54.1 in December, indicating inventories were higher than in the previous month. The prices index was at 62.3, indicating prices were higher than in November. The supplier deliveries index was at 40.4, indicating supplier deliveries were slower than in November.
Economic Club of Canada survey says Canadians less optimistic about economy
Read the entire article at the Winnipeg Free Press:
http://www.winnipegfreepress.com/business/breakingnews/economic-club-of-canada-survey-says-canadians-less-optimistic-about-economy-113000849.html
The Ivey PMI is compiled by the Purchasing Management Association of Canada and the Richard Ivey School of Business and measures changes in dollars of purchases as indicated by a panel of 175 purchasing managers from across the country. It includes both the manufacturing and non-manufacturing sectors, and isn't seasonally adjusted.
The Canadian dollar modestly weakened versus its U.S. rival following the report. The U.S. dollar rose to C$0.9979, from C$0.9959 just before the release and C$0.9960 late Wednesday, according to data provider CQG.
The report's one disappointment, was the employment index, which was at 47.3 for December, indicating employment was lower than in the previous month.
The inventories index was at 54.1 in December, indicating inventories were higher than in the previous month. The prices index was at 62.3, indicating prices were higher than in November. The supplier deliveries index was at 40.4, indicating supplier deliveries were slower than in November.
Economic Club of Canada survey says Canadians less optimistic about economy
The chief economists of Canada's big five banks gave their predictions for moderate Canadian growth Thursday at a panel discussion sponsored by the Economic Club of Canada.
About an hour before the economists took the stage in Toronto, the Economic Club released the bleak results of a survey that showed 65 per cent of respondents still believe Canada is in a recession.
Economists officially declared the recession had come to an end in mid-2009.
"The perceptions don't reflect the fact that things have been getting better for now a year and a half," TD's chief economist Craig Alexander told the Toronto audience.
"There's no question that the recession is over, so how do you actually reconcile the poll results with what the economic forecasters are talking about?"
Avery Shenfeld, chief economist at CIBC, said the difference of opinion stems from semantics.
"Canadians are reflecting, rightly, that the job market isn't as good as it was when times were good and they say 'we're in recession' because of that, where economists say 'we're in recovery' because we're not as bad as we were during the recession."
Canada has churned out six quarters of economic growth, and the economy has recovered all of the jobs lost during the recession, but the Economic Club and Pollara survey suggests that Canadians are less optimistic about the state of the economy than they were a year ago.
The poll found that about 38 per cent of respondents feel the Canadian economy will improve in the next few months, compared to 54 per cent who felt that way a year ago.
Read the entire article at the Winnipeg Free Press:
http://www.winnipegfreepress.com/business/breakingnews/economic-club-of-canada-survey-says-canadians-less-optimistic-about-economy-113000849.html
Capital Investment at Domtar Mill in Quebec
Prime Minister Stephen Harper has announced about $25 million in investment for paper manufacturer Domtar (TSX:UFS). Harper made the announcement today alongside Natural Resources Minister Christain Paradis at the company's plant in Windsor, Que.
The Montreal-based pulp and paper producer was granted $143.5 million in credits in 2009 as part of the Pulp and Paper Green Transformation Program — the largest amount given to a single company. Today's final investment is for $24.8 million.
Harper heads to the Quebec town of Victoriaville this afternoon for an economic roundtable meeting at the offices of Norampac, a containerboard producer and affiliate of Cascades (TSX:CAS).
MARKET NEWS:
Franco-Nevada Reaches Definitive Deal To Buy Gold Wheaton
Franco-Nevada Corp. (FNV.T) and Gold Wheaton Gold Corp. (GLW.T) have, as expected, signed a definitive deal under which Franco-Nevada will purchase Gold Wheaton for about C$5.20 a share.
WEDNESDAY:
Toronto Stocks End Lower Wednesday
Toronto stocks ended slightly lower, as strength in technology stocks wasn't quite enough to offset weakness in gold issues and to a lesser degree energy, particularly among small and mid cap stocks.
The S&P/TSX Composite Index fell 6.32 points, or 0.05%, to 13395.99, declines exceeded advances 868 to 770 and trading volume was 524.70 million shares, down from Tuesday's total of 552.30 million shares. The big-cap S&P/TSX 60 Index closed up 0.64 points, or 0.08%, to 766.72.
Commodity prices weakened in response to the stronger U.S. dollar following the release of some bullish U.S. economic data. Gold spot price was quoted at C$1,366 bid (US$1,374) and C$1,367 asked (US$1,375) at the close of trading Wednesday at Travelex Canada Ltd..
MARKET NEWS:
Plutonic Power Corp. (TSX: PCC) and a subsidiary of GE (NYSE:GE) have agreed to buy three solar-electric facilities to be built in Ontario. Plutonic will be the managing partner of the projects, which will have the capacity to generate up to 50 megawatts of electricity. Project debt will be arranged by the seller, First Solar Inc. (Nasdaq:FSLR).
The S&P/TSX Composite Index fell 6.32 points, or 0.05%, to 13395.99, declines exceeded advances 868 to 770 and trading volume was 524.70 million shares, down from Tuesday's total of 552.30 million shares. The big-cap S&P/TSX 60 Index closed up 0.64 points, or 0.08%, to 766.72.
Commodity prices weakened in response to the stronger U.S. dollar following the release of some bullish U.S. economic data. Gold spot price was quoted at C$1,366 bid (US$1,374) and C$1,367 asked (US$1,375) at the close of trading Wednesday at Travelex Canada Ltd..
MARKET NEWS:
Plutonic Power Corp. (TSX: PCC) and a subsidiary of GE (NYSE:GE) have agreed to buy three solar-electric facilities to be built in Ontario. Plutonic will be the managing partner of the projects, which will have the capacity to generate up to 50 megawatts of electricity. Project debt will be arranged by the seller, First Solar Inc. (Nasdaq:FSLR).
Canada Small Business Confidence Higher
An index of Canadian small business confidence rebounded strongly in December to the highest level since March, which the Canadian Federation of Independent Business Wednesday said was a signal the economy is "at last finding some firmer footing."
The CFIB's Business Barometer Index rose to 69.3 from 64.0 in November, edging close to the post-recession high of 69.9 reached in March.
"Interestingly, it wasn't holiday retail spending that accounted for the brighter sentiment," CFIB vice-president and chief economist Ted Mallett said in a report. "Instead, a large improvement in optimism among manufacturers, natural resource businesses, financial services and personal services firms pushed the overall index upward."
Business confidence improved in 10 of the 13 sectors, led by manufacturing which scored 78.5 points. Optimism among retailers improved slightly, but the index was still almost 4 points below the overall average, the CFIB said.
The report said business metrics such as inventory levels, new orders and overtime are "staying on their improving trend lines." Also, capital investment, particularly on computer and communications equipment is on an upward track.
Only about 14% of business owners plan to add to full-time staff in the next three months, while another 14% are planning lay-offs. Meanwhile, 13% are planning to raise part-time employment versus 17% who are planning cut-backs.
Among provinces, Ontario's score was 69.5, its strongest showing since March. Sentiment also improved in Manitoba and Quebec.
For more information visit their website: http://www.cfib.ca
The CFIB's Business Barometer Index rose to 69.3 from 64.0 in November, edging close to the post-recession high of 69.9 reached in March.
"Interestingly, it wasn't holiday retail spending that accounted for the brighter sentiment," CFIB vice-president and chief economist Ted Mallett said in a report. "Instead, a large improvement in optimism among manufacturers, natural resource businesses, financial services and personal services firms pushed the overall index upward."
Business confidence improved in 10 of the 13 sectors, led by manufacturing which scored 78.5 points. Optimism among retailers improved slightly, but the index was still almost 4 points below the overall average, the CFIB said.
The report said business metrics such as inventory levels, new orders and overtime are "staying on their improving trend lines." Also, capital investment, particularly on computer and communications equipment is on an upward track.
Only about 14% of business owners plan to add to full-time staff in the next three months, while another 14% are planning lay-offs. Meanwhile, 13% are planning to raise part-time employment versus 17% who are planning cut-backs.
Among provinces, Ontario's score was 69.5, its strongest showing since March. Sentiment also improved in Manitoba and Quebec.
For more information visit their website: http://www.cfib.ca
TUESDAY:
Toronto Stocks Mixed Lower Tuesday
The S&P/TSX Composite Index fell 40.91 points, or 0.30%, to 13402.31, declines exceeded advances 868 to 816 and trading volume was 552.30 million shares, up from Friday's total of 102 million. The market was closed Monday and only open a half day Friday in observance of New Year's day, which fell on Saturday. The S&P/TSX 60 Index closed down 2.57 points, or 0.33%, to 766.08.
TSX Venture Exchange opened on Tuesday at 2,311.48, up 23.63 points. The Canadian dollar opened the year above parity with the U.S. dollar, but gave back 0.43 cents to 100.11 cents US as commodities moved lower. The Canadian dollar is now down 0.44 of a cent to 100.10 cents US at 11 a.m. ET Tuesday
The market turned mixed at midday Tuesday, partially weighed down by precious metals adn energy issues. At 11:45 a.m. EST (1645 GMT), the S&P/TSX Composite Index was down 30.87 points, or 0.23%, at 13412.35 but advances had edged declines 744 to 743. Trading volume was 277.80 million shares. The S&P/TSX 60 Index was down 1.96 points, or 0.25%, to 766.69 points.
The Canadian Loonie (dollar) kicked off the new year above parity, but fell slightly from Friday's two-year high as commodity prices pulled back from record territory. The loonie gave back 0.39 cents to close the trading day at 100.15 cents U.S.
. MARKET NEWS:
In corporate developments, Bombardier Aerospace (TSX:BBD.B) says it has received firm orders for four CRJ700 NextGen regional jets from SkyWest Inc. in a transaction valued at US$148 million. Shares were up five cents to $5.05.
Atrium Innovations says it has acquired dietary supplement marketer Seroyal International for US$110 million in cash. Shares in the Quebec-based manufacturer and seller of supplements gained six per cent or 95 cents at $16.17.
Torstar (TSX:TS.B) said it has received $40 million in connection the Woodbridge Company Ltd.'s move to increase its stake in the Globe and Mail to 85 per cent. Shares in Torstar fell 10 cents to $12.20.
Baffinland Iron Mines Corp. (TSX:BIM). Miner. Up two cents, or 1.40 per cent, at $1.45 on 3,832,079 shares. European steel giant ArcelorMittal says it won't increase its offer for the Canadian company beyond $1.40 per common share. ArcelorMittal's bid for all of Baffinland matched the price offered by rival Nunavut Iron Ore Acquisition Inc.
Enbridge Inc. (TSX:ENB). Pipeline. Down 56 cents, or one per cent, at $55.71 on 647,317 shares. The Calgary-based company plans to shut down a crude oil pipeline in the U.S. Midwest for about five days in February and March for repair.
Members of Saskatchewan First Nation concerned about deal to build potash mine
Some members of a Saskatchewan First Nation say there are more questions than answers about the development of a potash mine on reserve land.
The Muskowekwan First Nation announced last fall that it had signed an agreement with Vancouver-based Encanto Potash Corp. (TSX:V:EPO) to develop the mine on the reserve, about 75 kilometres northeast of Regina.
Band member Pamela Blondeau says people haven't been given enough information to know if they should support the deal.
.Members of Saskatchewan First Nation concerned about deal to build potash mine
Some members of a Saskatchewan First Nation say there are more questions than answers about the development of a potash mine on reserve land.
The Muskowekwan First Nation announced last fall that it had signed an agreement with Vancouver-based Encanto Potash Corp. (TSX:V:EPO) to develop the mine on the reserve, about 75 kilometres northeast of Regina.
Band member Pamela Blondeau says people haven't been given enough information to know if they should support the deal.
ECONOMIC NEWS:
Canada PM Names New Environment Minister
Canadian Prime Minister Stephen Harper named his fourth environment minister in five years in a minor cabinet shuffle which involved the promotion of four lawmakers, including a newly elected member of parliament.
Peter Kent becomes the new environment minister, filling the vacancy created by the surprise resignation of Jim Prentice in November to take up a top banking position in the private sector. It's a promotion for Kent, who was junior minister of foreign affairs.
Toronto: Canadian financial markets and institutions were closed Monday.
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South American Markets:
BRAZIL:
FRIDAY:
Brazil Stocks Lower Friday
Brazil's blue-chip stocks were mixed in Friday trading.
Brazilian stocks dropped Friday as slower-than-expected job creation in the U.S. and the prospect of rising interest rates at home overwhelmed optimistic expectations for gains by Brazil's steel stocks.
The benchmark Ibovespa stock index slipped to 70057 from Thursday's close of 70578 points. The index has gained 1.1% this year.
In Brazil, higher-than-expected inflation in December reinforced the view that the central bank's monetary policy committee will raise rates at its next meeting this month.
Consumer inflation as measured by Brazil's official IPCA index, rose 0.63%, slightly above the median estimate of a 0.60% advance made by 10 analysts polled by Dow Jones Newswires. The December gain pushed the yearly increase to 5.91% in 2010, the fastest rate of inflation since 2004.
Interest-rate-sensitive stocks posted big losses on the index, with the investment unit of Brazil's biggest non-state bank leading declines. Itausa Investimentos Itau (ITSA4.BR) slumped 2.94% to BRL12.87, while parent company Itau Unibanco Banco Multiplo SA (ITUB, ITUB4.BR) dropped 2.37% to BRL30.95. Leading lenders Banco do Brasil SA (BDORY. BBAS3.BR) and Banco Bradesco SA (BBD, BBDC4.BR) fell more than 1.6% each.
Brazil's biggest retailer, Cia. Brasileira de Distribuicao Grupo Pao de Acucar (PCAR5.BR) dropped 2.79%, while home builder Gafisa SA (GFA, GFSA3.BR) fell 2.71%.
Utilities, whose electric rates are usually adjusted to match inflation, posted strong performances, with Cia. Energetica de Minas Gerais (CMIG4.BR) leading gains on the index. Cemig, as the state-controlled electric company is known, jumped 2.5% to BRL28.24.
Usinas Siderurgicas de Minas Gerais (USNZY, USIM5.BR) led the industry after the flat-steel maker was raised to buy at BTG Pactual. The brokerage said the country's steel stocks have bottomed and should show improvement after the first quarter.
Usiminas rose 1.73% to BRL20.60, while rival steelmaker Metalurgica Gerdau SA (GOAU4.BR) rose 0.28% to BRL28.59.
"Brazilian steel stocks have also bottomed," BTG analyst Edmo Chagas wrote. "We do not expect domestic steel prices to deteriorate much further as we see real demand improving and potential de-stocking through [the first quarter]. Coupled with the expected decline in imports, this should help drive double-digit [11%] volume growth in 2011, with local companies clearly benefiting from this trend."
Iron-ore producer Vale SA (VALE, VALE5.BR) fell 0.75% to BRL51.20. State-controlled oil company Petroleo Brasileiro SA (PBR, PETR4.BR) fell 1.4% to BRL26.73. Telephone company Tele Norte Leste SA (TNE, TNLP4.BR), or Oi, advanced 0.04% to BRL25.71. Aircraft manufacturer Empresa Brasileira de Aeronautica (ERJ, EMBR3.BR), or Embraer, slipped 0.9% to BRL12.14.
THURSDAY:
Brazil Stocks Trade Lower Thursday
Brazilian stocks traded lower early Thursday, as the market digested new foreign exchange measures announced by Brazil's Central Bank.
The measures, which raise local banks' reserve requirements for short dollar positions, hurt banks' share prices. However, traders said the measures should favor exporting companies as they may curb the real's strength.
The Ibovespa index of blue-chip companies opened at 71,092 points, marginally higher than Wednesday's close of 71,091 points. However, within minutes the index moved into negative territory, hovering at around 70,798 points during the first trading hour.
The central bank early Thursday announced a new reserve requirement for banks with short-term dollar positions of over $3 billion. Under the new rules, effective April, banks must deposit the equivalent of 60% of these positions with the central bank, at zero interest rates. The move is designed to create local demand for dollars and curb the appreciation of the real, which has in recent months hit the international competitiveness of Brazilian exporters.
Bank shares responded negatively to the news. Banco Bradesco SA (BBDC4.BR) fell 1.06% to BRL33.59 ($19.99), while Bradesco's investments unit Braadespar SA (BRAP4.BR) shed 0.57% to BRL46.85.
Banco do Brasil SA (BBAS3.BR) slipped 0.25% to BRL31.90. Banco Santander Brazil Unit (SANB11.BR) fell 0.35% to BRL22.48, while Itau Unibanco Banco Multiplo SA (ITUB4.BR) shed 1.01% to BRL40.19.
Most other stocks were also down, including oil and gas giant Petroleo Brasileiro SA (PBR. PETR4.BR), which shed 0.11% to BRL27.18, and utility Eletrobras SA (ELET3.BR) which dived 1.30% to BRL23.56.
One of the positive performers was miner Vale SA (VALE, VALE5.BR), which gained a marginal 0.06% over Wednesday's close to BRL51.59.
Central Bank Measures Ease Pressure On Real
Brazilian Finance Minister Guido Mantega said Thursday the central bank's increase in reserves that banks must hold to cover their currency bets will alleviate pressure on the real, though it may not reverse the currency's climb against the dollar.
The central bank's move "is a step in the right direction by limiting short positions and, therefore, the pressure on the real to gain decreases," Mantega said in Brasilia.
The Finance Ministry will follow the effect of the measure to determine if additional action is necessary to contain the real's gain, Mantega said. Brazil has stepped up action to weaken the real on concern that the country's exporters are becoming less competitive.
The government didn't raise reserve requirements on currency bets earlier because the jump in short dollar positions, which indicates investors expect the dollar to weaken, happened only in recent months, Mantega said..
The central bank's move "is a step in the right direction by limiting short positions and, therefore, the pressure on the real to gain decreases," Mantega said in Brasilia.
The Finance Ministry will follow the effect of the measure to determine if additional action is necessary to contain the real's gain, Mantega said. Brazil has stepped up action to weaken the real on concern that the country's exporters are becoming less competitive.
The government didn't raise reserve requirements on currency bets earlier because the jump in short dollar positions, which indicates investors expect the dollar to weaken, happened only in recent months, Mantega said..
WEDNESDAY:
Brazilian Stocks Climbed Wednesday
TUESDAY:
Brazil Stocks Gained Tuesday
Brazilian stocks climbed Tuesday, rising for a fifth session, as investors bet that global growth will drive demand for the country's commodities, and on speculation that state-controlled utility known as Cesp may be privatized.
The benchmark Ibovespa stock index settled at 70318 points, a 0.5% gain from Monday's close of 69962 points.
Recovering growth in the world's major economies and continued demand from China will likely boost demand for raw materials. Domestically, high inflation and rising interest rates are already priced in and the stock index offers some cheap stocks that will protect against rising prices, BTG Pactual analyst Carlos Sequeira wrote in a note.
"We believe that all the cheap money being thrown into the global economy may eventually produce some inflation and support commodity prices," Sequeira wrote. "Measures to restrict credit expansion and curb economic growth may impact Brazil's GDP growth in 2011, (but) we believe they could keep GDP growth within the 4-5% range."
The economy is expected to have grown 7.6% in 2010 and to expand 4.5% this year, according to economist surveyed by Brazil's central bank.
Cesp, as Cia. Energetica de Sao Paulo is known, jumped 6.2% to BRL28.50. The energy secretary of the state of Sao Paulo said after assuming his post Monday that the government may put up Cesp for sale, Estado de S. Paulo reported. The government tried to sell the company in the past but had to cancel the auctions due to lack of buyers.
Gains in the index were offset by a decline in Petroleo Brasileiro SA (PBR, PETR4.BR), which confirmed it is studying the purchase of Italian oil major Eni SpA's (E, ENI.MI) 33% stake in Portuguese energy company Galp Energia SGPS (GALP.LB).
The state-controlled oil company reportedly offered EUR3.5 billion ($4.69 billion) to buy all of Eni's stake in Galp Energia, according to Portugal's daily Diario Economico. Petrobras fell 0.4% to BRL26.90 and traded as low as BRL26.40.
Credit- and debit-card companies Redecard SA (RDCD3.BR) and Cielo SA (CIEL3.BR) both slumped, falling more than 2% each on a Valor Economico report Global Payments Inc. (GPN) will start a credit- and debit-card processing service in Brazil this year.
Brazil's blue chip stocks were mostly higher in Tuesday trading.
Vale SA (VALE, VALE5.BR), the world's biggest iron-ore producer, jumped 1.9% to BRL50.83.
Usinas Siderurgicas de Minas Gerais (USNZY, USIM5.BR), Brazil's biggest maker of flat steel for the automotive industry, was up 4% to BRL19.94.
Telephone giant Tele Norte Leste SA (TNE, TNLP4.BR), or Oi, added 0.5% to BRL24.98.
Minas Gerais utility Cemig (CIG, CMIG4.BR) rose 0.3% to BRL27.51.
Gol Linhas Aereas Inteligentes (GOL, GOLL4.BR) jumped after saying it expects an increase of up to 15% of domestic traffic in 2011. Brazil's second-biggest airline rose 2.2% to BRL26.48.
Aircraft manufacturer Empresa Brasileira de Aeronautica (ERJ, EMBR3.BR), or Embraer, climbed 1.93% to BRL12.13.
MONDAY:
Brazil Stocks Start Year With Enthusiasm - End Higher Monday
The main Ibovespa stocks index ended 0.95% higher, at 69962.32 points, falling back from a break above 70000 late in the session.
In Brazil's capital, Brasilia, as key members of Rousseff's cabinet gave their inaugural speeches, Brazil's stocks kicked off the new year on an enthusiastic note, as investors digested the first signals from the new administration of President Dilma Rousseff.
One difference was highlighted by the new Trade and Development Minister Fernando Pimentel, who said Rousseff would talk to China about concerns that the yuan is undervalued--a topic which hadn't been addressed much, at least in public, by Lula's team. The minister also said Rousseff will debate other protectionism issues on her visit to China.
In his inaugural speech, Pimentel said the ongoing "currency war" is one of the big challenges that Brazil's new government will face, along with high domestic interest rates and taxes, and low investment levels in infrastructure and education.
In his inaugural speech, Pimentel said the ongoing "currency war" is one of the big challenges that Brazil's new government will face, along with high domestic interest rates and taxes, and low investment levels in infrastructure and education.
Most stocks were in positive territory, although the two main blue chips diverged. Mining giant Vale SA (VALE5.BR, VALE) was up 2.9% at BRL49.90 while oil company Petroleo Brasileiro SA (PETR4.BR, PBR), or Petrobras, was down 1.1% at BRL27.00.
Brazil's two largest airlines moved higher amid signs that a threatened strike by employees, may not materialize. Gol Linhas Aereas Inteligentes SA (GOLL4.BR) was the biggest gainer early on, rising 3.2% to BRL25.90, while TAM SA (TAMM4.BR, TAM) was up 1.1% at BRL39.4.
Brazil's two largest airlines moved higher amid signs that a threatened strike by employees, may not materialize. Gol Linhas Aereas Inteligentes SA (GOLL4.BR) was the biggest gainer early on, rising 3.2% to BRL25.90, while TAM SA (TAMM4.BR, TAM) was up 1.1% at BRL39.4.
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Brazil's 2010 Trade Surplus Narrows On Imports
Brazil's foreign trade surplus narrowed in 2010 as the booming Brazilian economy and the strong appreciation of Brazil's real led to a surge in imports, the Trade and Development Ministry said Monday.
Brazil's 2010 foreign trade surplus of $20.1 billion narrowed from the 2009 surplus of $24.62 billion, the ministry said. Despite the reduction, the trade surplus was above government expectation of $15 billion for the entire year.
Exports in 2010 totaled $201.9 billion, up from $152.2 billion seen in 2009. Exports in 2010 surpass the previous annual record saw in 2008 of $198 billion.
Exports accelerated as global demand fueled world prices for many of the country's commodities.
In the meantime, imports expanded at a higher pace. Imports were $181.8 billion in 2010, up from $127.64 billion in 2009.
Brazil's trade surplus began to deteriorate in the second half of 2009 as demand for imports rose, the economy started to recover from the global financial and economic crisis, and the currency began to appreciate.
After a decline of 0.6% in gross domestic product in 2009, Brazil's economy is expected to increase by more than 7.5% this year, and is expected to grow 4.5% next year.
The real made most of its gains versus the dollar in late 2009, but the real impact was felt this year, as economic growth caught up. The real strengthened 34% against the dollar in 2009, and is a further 4.4% stronger in 2010.
BRAZIL TO FREEZE SPENDING
Brazil's government will freeze a portion of spending this year, incoming Planning Minister Miriam Belchior said Monday, without revealing by how much.
"We will have a budget freeze this year because revenues are estimated above what we think we're going to receive," Belchior said in her inaugural speech. "We're going to talk to the cabinet ministers right away to see how we can do more with less."
Local press have reported in recent days that because the budget approved by Congress doesn't add up, the new administration of President Dilma Rousseff, who took office Saturday, would cut some 20 billion Brazilian reais ($12.1 billion) to BRL30 billion.
Belchior, who takes over from Paulo Bernardo at the planning ministry, didn't provide details of the size of the cutsLocal press have reported in recent days that because the budget approved by Congress doesn't add up, the new administration of President Dilma Rousseff, who took office Saturday, would cut some 20 billion Brazilian reais ($12.1 billion) to BRL30 billion.
Belchior, who takes over from Paulo Bernardo at the planning ministry, didn't provide details of the size of the cuts.
MEXICO:
FRIDAY:
Mexico's Stocks Close Higher Friday
Mexican stocks ended marginally higher Friday in a late session turnaround. The IPC index of key stocks rose 11 points, or 0.03%, to 38,601 points. Volume was 144.1 million shares worth 4.10 billion pesos ($335.1 million). The index ended 2010 at a record close for the year at 38,551 points, and hit a new all-time high on Wednesday at 38,696 points.
An afternoon round of profit-taking was followed by the IPC's steady climb upwards in the final hour. Market analysts said next week should be volatile as well, as investors decide whether to take money from the table or hang on for an expected medium-term upside.
Market bellwether America Movil (AMX,AMX.MX) L shares rose 0.4% to MXN36.17, and cement and building-materials maker Cemex (CX, CEMEX.MX) CPO shares were 0.8% higher at MXN13.17.
Newly listed mining company Minera Frisco (MFRISCO) A-1 shares gained 5.8% to MXN40.27. Frisco, a spinoff of billionaire Carlos Slim's conglomerate Grupo Carso (GPOVY, GCARSO.MX), began trading Thursday at MXN30.14 and gained 26% in its first session.
Mexico's biggest retailer Wal-Mart de Mexico (WMMVY) V shares rose 0.3% to MXN35.86 after filing a positive same-store sales report for 2010 and for the month of December after the market close Thursday.
Silver miner Penoles (PE&OLES.MX) shares shed 2% to MXN422.86. The issue had risen 61% last year. Penoles is the parent company of London-listed Fresnillo PLC (FRES.LN), the world's biggest primary silver producer.
Mexico Inflation Ends 2010 At 4.4%
Mexican consumer prices rose more than expected in December, pushing inflation for the full year to 4.4%, up from 2009 when the economy suffered a deep recession.
The Bank of Mexico said Friday that the consumer price index rose 0.50% last month, as higher prices of cigarettes, tortillas, limes and package tours outweighed declines in prices of tomatoes, cars, and others.
The increase was above the 0.39% median estimate in a Dow Jones Newswires survey of 11 economists. Annual inflation was up from 4.32% at the end of November and from 3.57% in 2009. The core index, which excludes energy and fresh fruit and vegetables, rose 0.47% in December, compared with expectations of 0.43%, and ended the year at an annual 3.61%, down from 4.46% in 2009.
"While core and non-core measures of inflation increased in December by more than the market expected, a closer look at inflation dynamics reveals that inflation pressures remain low," Benito Berber of Nomura Securities said in a note. "We still believe Banxico (the Bank of Mexico) will not raise the policy rate until Q1 2012."
After spiking higher in the first quarter of 2010, inflation eased on favorable produce prices and a smaller-than expected impact from last year's increase in consumer taxes.
The Bank of Mexico expects annual inflation will continue to move lower in the first quarter of this year, and by the third quarter approach its 3% plus-or-minus one percentage point target range.
With inflation seen remaining tame, market expectations are that the Bank of Mexico will leave its overnight lending rate target unchanged in 2011 at the current 4.5%, and begin raising interest rates in 2012.
Citigroup unit Banamex said that while processed food prices accelerated last month, there was a slowdown in annual increases for core services, reflecting a still-sluggish recovery in demand and a stable exchange rate.
THURSDAY:
Mexico Stocks Close Lower Thursday
Mexican stocks closed lower Thursday as soft U.S. retail sales led to some profit-taking. Mining concern Minera Frisco (MFRISCO.MX) soared 26% in its market debut after being spun off by billionaire Carlos Slim's Grupo Carso (GCARSO.MX, GPOVY) conglomerate.
The market's key IPC index fell 0.3% to 38,590 points on volume of 145.7 million shares worth 4.7 billion pesos ($386 million). The market had a record close in the previous session and was ripe for profit-taking.
Cement and building-materials giant Cemex (CX, CEMEX.MX) CPO shares fell 2.2% to MXN13.06. The stock had been edging up since mid-October. Mexico's biggest broadcaster Grupo Televisa (TLEVISA.MX) CPO shares dropped 0.7% to MXN62.69.
Bread maker Grupo Bimbo (BIMBO.MX) A shares fell 0.6% to MXN105.82, and Mexico's biggest retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares gained 0.2% to MXN35.76.
The IPC got knocked off its record perch by U.S. holiday same-store sales that weren't as strong as expected, even as initial jobless claims came in slightly less than forecast. Traders and investors will be looking closely at U.S. nonfarm payroll numbers coming out Friday. One local trader said unemployment in the U.S. is a key worry in Mexico, which sends 80% of its exports to its northern neighbor.
Much of the trading action was in the mining sector, which got a new player in Minera Frisco (MFRISCO.MX), raising to four the number of mining firms in the local stock market. Frisco's A-1 shares jumped from their pre-market auction price of MXN30.14 at the session's start and climbed throughout the day to close at MXN38.07 on volume of 6.47 million shares.
Frisco's principal products--gold, silver, lead and copper---have seen rising prices on demand in China for industrial metals, and general investor demand for precious metals.
Copper miner Grupo Mexico (GMEXICO.MX) B shares fell 0.9% to MXN49.40. Grupo Mexico shares were among the top 2010 performers, rising 69% in the year. Silver miner Industrias Penoles (PE&OLES.MX) shares slipped 3% to MXN431.61. The issue had risen 61% last year. Penoles is the parent company of London-listed Fresnillo PLC (FRES.LN), the world's biggest primary silver producer. Manganese and ferro-alloys firm Autlan (AUTLAN.MX) B shares fell 0.8% to MXN32.18.
Grupo Carso A1 shares were up 0.8% at MXN34.70. The conglomerate retained its retail and industrial sectors while spinning off Frisco and its real estate holdings, Inmuebles Carso (INCARSO.MX), which had its B-1 shares crash 16% to MXN11.27, after pricing in the pre-market auction at MXN13.43.
WEDNESDAY:
Mexican Stocks Rise Wednesday
New Record Close On US Data; IPC Up 0.4%
Mexican stocks ended Wednesday at an all-time high as positive U.S. data on jobs and the services sector outweighed a short-lived slip in commodity prices that had been holding markets back.
The IPC index of the 35 most-traded stocks rose 0.4% to 38,696 points on volume of 144.8 million shares worth 5.01 billion pesos ($411 million.) Leading the charge back to record levels after a dip in the previous session were two IPC heavyweights in the telecom and retail sectors.
Latin America's biggest wireless provider America Movil (AMX, AMX.MX) L shares rose 1.2% to MXN35.99. The cellular giant is the most heavily weighted stock on the index.
Mexico's largest retailer Wal-Mart de Mexico (WMMVY, WALMEX.MX) V shares gained 1.6% to MXN35.68. The market bellwether is expected to benefit from an uptick in consumer spending this year. Also, pharmaceuticals firm Genomma Lab (LAB.MX) B shares rose 2.7% to MXN30.99.
Top metals stocks slipped. Copper miner Grupo Mexico (GMEXICO.MX) B shares fell 0.2% to MXN49.85, and silver miner Industrias Penoles (PE&OLES) slipped 2.6% to MXN444.93. Both mining firms had seen a run-up on their prices as metals prices hit record highs in recent days.
TUESDAY:
Mexico's Stocks Edge Lower Tuesday
Mexico's Stocks Close Lower, Retreating From Record High
Mexican stocks beat a modest retreat Tuesday after a record-setting start to the year, led by declines in copper miner Grupo Mexico and cement company Cemex. The market's IPC index of leading issues closed down 0.2%, or 64 points, at 38,542, after a string of record-high closes including an all-time intraday high on Monday. Volume showed signs of picking up after the holiday lull, with 131.4 million shares traded worth 4.61 billion pesos ($377 million).
Cemex CPO shares fell 0.4% to MXN13.37 as the company went to market to place a benchmark amount of seven-year global bonds, according to a person familiar with the deal.
In a filing with the U.S. Securities and Exchange Commission, Cemex said that in December it prepaid $100 million in debt under its 2009 financing agreement, bringing the outstanding amount under the $15 billion agreement to about $9.6 billion. Cemex shares have risen in recent sessions on optimism about the U.S. economic recovery, which could help the company's earnings recovery.
Grupo Mexico B shares fell 1.7% as copper prices slipped from record highs. Bellwether America Movil L shares closed up 0.2% at MXN35.58.
Conglomerate Grupo Carso A1 shares fell 0.7% to MXN77.40 as the company prepares to spin off its mining and real estate units--Minera Frisco and Inmuebles Carso--with the units to begin trading separately on Thursday. Carso shareholders will receive one share in the each of the new companies for each Carso share held. The prices will be determined in a pre-market auction, according to the stock exchange.
Retailer Wal-Mart de Mexico, or Walmex, V shares edged up 0.1% to MXN35.13. Walmex plans to report its December sales for Mexico and Central America on Thursday after the market close. Citigroup unit Banamex said in a report it expects Walmex to report 3% year-on-year growth in same-store sales for Mexico as higher average spending per customer was offset by a small decrease in store traffic.
Latin America's largest wireless provider and market bellwether America Movil (AMX, AMX.MX) L shares were rising 0.2% to MXN35.58. Mexico's largest broadcaster Grupo Televisa (TV, TLEVISA.MX) CPO shares were falling 0.6% to MXN64.60.
Mexico's Key Oil-Exporting Ports Reopen
All three principal ports used by Mexico's state-owned oil company Petroleos Mexicanos, or Pemex, for exporting crude oil were open on Tuesday after bad weather along the Gulf of Mexico had closed them in recent days, the Transport and Communications Ministry said.The transport ministry said it was on the alert for another cold front that could move into the Gulf of Mexico on Wednesday afternoon.
The Dos Bocas port was the last to reopen after closing on Sunday due to bad weather. Pemex's No. 1 crude export terminal at the port of Cayo Arcas, along with another at the Coatzacoalcos port, was closed early Monday but opened later in the day.
Temporary closures of Pemex ports, usually during cold winter months and the hurricane season, rarely affect overall crude exports due to storage capacity.
Mexico's Foreign Reserves End 2010
At Record $113.6 Billion
Mexico's foreign reserves rose by $22.6 billion in 2010 to end the year at a record $113.6 billion, bolstered by inflows from oil exports and the central bank's dollar purchases as the peso appreciated last year against the U.S. currency.
The Bank of Mexico said reserves rose by $601 million in the last week of the year as a result of dollars bought from the federal government and other transactions.
Higher-than expected oil prices in 2010 contributed to the rise in reserves as the Bank of Mexico changes dollars for state oil monopoly Petroleos Mexicanos. The central bank also bought about $4.6 billion from commercial banks under a system of put options that were designed to bolster reserves when the peso is appreciating against the dollar.
The Bank of Mexico sells $600 million in options each month, which can be exercised on days when the peso is stronger than its 20-day average.
Banks have already exercised $592 million of the $600 million in options for January, selling the dollars Monday as the peso rallied at the start of the year. The peso was recently quoted in Mexico at MXN12.2535 to the dollar, according to Infosel, compared with MXN12.3650 at the end of 2010.
Mexico's decision last month to request an extension and expansion to $73 billion from $48 billion of its flexible credit line with the International Monetary Fund was seen by some as a sign that it could consider lowering the amount of dollar options in 2011, since the reserve build carries a financial cost with domestic interest rates above those of U.S. Treasurys.
MONDAY:
Mexico's stocks opened higher Monday, starting out 2011 as they ended 2010 by setting new records. The market's IPC index of leading issues was up 0.8% at 38,859 points around 11:30 a.m. EST, adding to its record-high close last Friday. The IPC also set a new intraday high of 38,869 points. Volume was 38.4 million shares worth 1.06 billion pesos ($86.5 million).
Bellwether America Movil L shares were up 0.8% to MXN35.76, cement maker Cemex CPO shares were gaining 2.5% to MXN13.50, and fixed-line phone company Telmex L shares were up 0.2% to MXN10.03.
Mexican state-owned oil company Petroleos Mexicanos, or Pemex, missed its own 2010 target for crude oil production, with December output averaging 2.573 million barrels a day, according to preliminary figures posted Monday on the company's website. In this year's federal budget, the crude production estimate is 2.55 million barrels a day, with 1.149 million barrels a day to be exported. The price estimate for 2011 used in the budget is $65.40.
In Pemex's preliminary report Monday, which covers the Dec. 1 to Dec. 31 period, production at the Ku-Maloob-Zapp offshore fields remained near record levels at 852,000 barrels a day. Cantarell output was steady at 467,000 barrels a day when compared with October and November.
The IPC rose 20% in 2010, and 27% in dollar terms as the peso appreciated against the dollar. Analysts expect more gains in 2011 as the economy continues to expand, helped by monetary and fiscal stimulus in the U.S., Mexico's main trading partner.
The Vector brokerage set a target of 45,700 points for the IPC in 2011. "Given persistent high liquidity, low interest rates, and continued world economic recovery, the Mexican stock market again offers some interesting investment opportunities in 2011," Vector said in a report.
The peso, which gained 5.8% against the dollar in 2010, was stronger Monday, quoted in Mexico City at 12.2610, according to Infosel. The peso ended Friday at 12.3650, according to the central bank's closing reference price.
ARGENTINA:
THURSDAY:
Argentina Stocks Ended Mixed Thursday
Argentine stocks and bonds closed mixed on Thursday with the Merval Index of leading shares closing virtually unchanged as selective profit-taking was offset by big gains in companies linked to agricultural commodities. The Merval Index closed just 0.03% lower at 3,603.44 points amid moderate volume of ARS114 million ($28 million).
Major sugar producer Ledesma S.A. (LEDE.BA) added to the big gains posted this week, climbing another 2.8% to ARS10.10. Ledesma shares are trading at a historic high, fueled by sky-rocketing international sugar prices, financial advisors Research For Traders said in a market note.
Grain exporter and food processor Molinos Rio de La Plata S.A. (MOLI.BA) also continued to climb due to high international commodity prices, rising 5.7% to ARS33.60.
Bonds posted mixed results as investors keep an eye on Argentina's efforts to reach a deal with the Paris Club of lending nations over the roughly $7.5 billion in defaulted debt owed stemming from Argentina's 2001 sovereign default.
The peso-denominated 2033 discount bond eased 0.7% in price terms to ARS191, to yield 7.1%. The dollar-denominated Global 2017, rose 0.1% in price terms to ARS417.10, with the yield at 8.1%.
Argentine stocks and bonds closed mixed on Thursday with the Merval Index of leading shares closing virtually unchanged as selective profit-taking was offset by big gains in companies linked to agricultural commodities. The Merval Index closed just 0.03% lower at 3,603.44 points amid moderate volume of ARS114 million ($28 million).
Major sugar producer Ledesma S.A. (LEDE.BA) added to the big gains posted this week, climbing another 2.8% to ARS10.10. Ledesma shares are trading at a historic high, fueled by sky-rocketing international sugar prices, financial advisors Research For Traders said in a market note.
Grain exporter and food processor Molinos Rio de La Plata S.A. (MOLI.BA) also continued to climb due to high international commodity prices, rising 5.7% to ARS33.60.
Bonds posted mixed results as investors keep an eye on Argentina's efforts to reach a deal with the Paris Club of lending nations over the roughly $7.5 billion in defaulted debt owed stemming from Argentina's 2001 sovereign default.
The peso-denominated 2033 discount bond eased 0.7% in price terms to ARS191, to yield 7.1%. The dollar-denominated Global 2017, rose 0.1% in price terms to ARS417.10, with the yield at 8.1%.
WEDNESDAY:
Argentina Auto Manufacturing Record In 2010
Argentina's car makers had a blockbuster year in 2010, with output setting a new record on the back of soaring domestic demand and exports to neighboring Brazil.
Vehicle production last year reached 724,023, up a whopping 41.2% on the year, the automobile manufacturer association Adefa reported Wednesday.
MONDAY:
Argentina Markets Start 2011 Higher Monday
Argentina began the year with heavy buying on Monday. The benchmark Merval stock index jumping 3% to close at 3,628.48 points. Volume was heavy at 105 million pesos ($26 million).
Banks fronted the gains on the Merval, with banking group Grupo Financiero Galicia (GGAL, GGAL.BA) rising 6.3% to ARS6.44, Banco Patagonia (BPATL, BPAT.BA) up 6.3% to ARS5.9%, and BBVA Banco Frances (BFR, FRAN.BA) closing 6.5% higher at ARS16.35. Banks are major holders of government bonds, which also rallied on Monday.
Pampa Energia (PAM, PAMP.BA), a holding company that owns electricity distribution and transmission assets, rose 0.7% to ARS2.78. Meanwhile, the country's biggest oil and gas company YPF (YPF, YPFD) rose 1.6% to ARS203.75, while phone company Telecom Argentina (TEO, TECO2) rose 1.8% to ARS20.35.
Bonds also posted big gains amid the global market rally. The peso-denominated 2033 discount bond jumped 2.7% in price terms to ARS192.50, to yield 7.1%.
The dollar-denominated Boden 2015, rose 0.7% in price terms to ARS391, with the yield at 8.1%. Tthe peso strengthened against the dollar, trading at ARS3.9750 compared to ARS 3.9775.
Pampa Energia (PAM, PAMP.BA), a holding company that owns electricity distribution and transmission assets, rose 0.7% to ARS2.78. Meanwhile, the country's biggest oil and gas company YPF (YPF, YPFD) rose 1.6% to ARS203.75, while phone company Telecom Argentina (TEO, TECO2) rose 1.8% to ARS20.35.
Bonds also posted big gains amid the global market rally. The peso-denominated 2033 discount bond jumped 2.7% in price terms to ARS192.50, to yield 7.1%.
The dollar-denominated Boden 2015, rose 0.7% in price terms to ARS391, with the yield at 8.1%. Tthe peso strengthened against the dollar, trading at ARS3.9750 compared to ARS 3.9775.
COLUMBIA:
MONDAY:
Colombia's Stocks Declined Monday
Colombian stocks declined Monday despite a rise in shares of oil firm Pacific Rubiales Energy Corp. (PEGFF, PRE.T), which as of Monday became the heaviest-weighted company in the Colombian Stock Exchange's main IGBC index.
The IGBC index of blue-chip stocks ended down 0.83% at 15,368 points. Trading extended to 4 p.m. local time for the first time Monday as part of an effort by the exchange to adhere to international standards and coincide with New York trading hours. Colombian stock trading used to close at 1 p.m. local time.
Pacific Rubiales, a Toronto-based energy producer whose main assets are in Colombia, saw its local shares gain 1.1% to COP63,900.
The company has been expanding rapidly in Colombia, developing oil fields in partnership with Colombia's state-run energy firm Ecopetrol SA (EC, ECOPETROL.BO), whose shares dropped 2.4% Monday to COP4,000.
The Colombian peso strengthened against the dollar for a third straight session, ending at COP1,893 for $1 from COP1,920 Thursday. The peso weakened sharply early last week, climbing above COP2,000 against the dollar for the first time in seven months.
Colombian 2010 Tax Income Beats Target
Colombia's tax authority DIAN said it collected 65.2 trillion Colombian pesos ($33.96 billion) in taxes last year, adding that more revenue from taxes on imports helped it exceed its target.
DIAN said the 2010 figure is a 2.2% increase from last year's haul and that the total also beat the 2010 target collection of COP64.24 trillion.
According to preliminary data, DIAN said it took in COP51.3 trillion in taxes domestically, while COP13.9 trillion were foreign, mostly in the form of tariffs and value-added taxes on imports. The foreign contribution was a 12.6% jump from 2009's collection of COP12.3 trillion, DIAN said.
Last week, the office of President Juan Manuel Santos announced plans to increase the number of people required to pay taxes on personal assets as a way to help pay for recovery efforts from the worst rainy seasons in years, which caused massive flooding and killed about 300 people.
CHILE:
WEDNESDAY:
Chile Stocks End At Record High Wednesday
Chile's blue-chip Ipsa index ended at a record high Wednesday as monthly economic activity data came in well above expectations, and as growth in the construction sector jumped.
The Ipsa ended 0.3% higher at 5040.97, while volume slipped to 142.5 billion Chilean pesos ($288.0 million) from CLP203.6 billion the prior session.
As the Andean nation continues to recover from a 2009 recession and February's devastating earthquake, economic activity surged by a higher-than-expected 6.2% in November, the highest reading for 11th month of the year since 2004.
Additionally, as Chile rebuilds from the earthquake and tsunami it spawned, growth in the construction sector gained 6.6% in November.
Chile's largest construction company, SalfaCorp (SALFACORP.SN), which aims to more than double its sales to some $2.4 billion by 2013, from $1.1 billion in 2009, and to increase its international exposure in Peru and Colombia, rose 1.6% to CLP1,780.40. For its part, real-estate developer Socovesa (SOCOVESA.SN) gained 1.3% to CLP387.95.
Banks, whose bottom lines are expected to benefit from rapid economic growth and strong consumer confidence, also posted gains.
Within the sector, the nation's largest bank in terms of loans, Banco Santander Chile (SAN, BSANTANDE.SN), gained 1.7% to CLP43.65, and the second-largest bank, Banco de Chile (BCH, CHILE.SN) increased 1.5% to CLP72.95.
After gaining 37.6% last year, the Ipsa is still expected to continue to rise in 2011 but at a more moderate pace.
"Last year was exceptional. The Ipsa will definitely continue to rise, but not like it did last year. I seriously doubt that will happen. Strong economic growth and robust profits are already incorporated into many share prices," said Rodrigo Arriagada, trader with local brokerage Molina y Swett.
Analysts see the Ipsa rising 10% to 12% by the end of the year to 5,500 to 5,600 points.
The peso ended 1.4% weaker against the dollar as the central bank began its previously announced $12 billion currency market intervention program. The peso ended at CLP494.80 to the dollar compared with Tuesday's close of CLP487.80, while trading in a range of CLP490.50 to CLP495.30.
Chile Approves Strengthened
Power Transmission Grid
Chilean authorities approved a record investment of $859 million to expand and revamp
the transmission network of the nation's largest power grid, the SIC.
Following a devastating earthquake in late February, which assailed central-southern Chile, the SIC grid suffered power outages, including two massive blackouts: one in the immediate aftermath of the quake and the other several days later.
"There's a clear sign about the importance of developing the transmission network to improve security to the energy supply in this country and also to move forward in the connection of the power grids, with competitive prices," Energy Minister
The government aims to have the nation's two largest power grids, the SING and SIC, interconnected by 2017.
TUESDAY:
Chile Stocks End Higher Tuesday
Chile's blue-chip Ipsa index ended 1.3% higher Tuesday, as exporters got a boost from the central bank's planned purchase of $12 billion aimed at stemming the peso's appreciation.
After settlement, the Ipsa was 1.2% higher on the day at 5024.66, just shy of a record high. Meanwhile, volume slipped to 203.6 billion Chilean pesos ($417.4 million) from CLP498.8 billion the prior session.
The central bank's move to increase foreign currency reserves by $12 billion this year will help exporters, who have been sent reeling as the peso's appreciation in recent months cut into the competitiveness of their products abroad.
Wine exporter and producer Vina Concha Y Toro (VCO, CONCHATOR.SN) jumped 1.8% to CLP1,150.00, while Coca-Cola bottler and beverage company Embotelladora Andina (AKOB, ANDINA-B.SN) gained 3.3% to CLP1,961.70.
"A company like Concha y Toro sees sales in dollars and costs in pesos, so a move like this obviously benefits the company," said Ximena Garcia, deputy director of studies at local brokerage EuroAmerica.
Commodities-related companies, which export the majority of their products, also posted gains.
Fertilizer and specialty chemical producer SQM's (SQM) more liquid B-series (SQM-B.SN) advanced 1.0% to CLP27,963.00; integrated steel and iron-ore producer Cap (CAP.SN) gained 1.2% to CLP25,962.00; pulp and paper producer CMPC (CMPC.SN) rose 2.1% to CLP25,300.00; and fuel and forestry conglomerate Copec (COPEC.SN), the most heavily weighted share on the Ipsa, jumped 1.9% to CLP9,299.20.
"A cheaper peso, helps exporters boost their bottom lines," said Rodrigo Mujica, analyst with local brokerage BCI Corridor de Bolsa.
Construction and real-estate companies again posted strong gains on expectations that a ramping up of post-earthquake reconstruction activity this year will boost profits.
Construction company Besalco (BESALCO.SN), which was incorporated into the Ipsa index on Monday, leaped 5.8% to CLP1,085.70, and real-estate developer Socovesa (SOCOVESA.SN) gained 2.8% to CLP383.06.
The peso ended 4.8% weaker versus the dollar as the market digested the central bank's plans to intervene in the local currency market.
The peso ended at CLP487.80 to the dollar, versus Monday's close of CLP465.40, which was a 32-month high. The local currency traded in a range of CLP482.70 to CLP490.50
The central bank's long-awaited intervention pulled the peso sharply lower. The intervention is "exceptional" and carries credibility, the central bank President Jose De Gregorio told reporters.
In the bond market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended sharply higher after the central bank detailed plans to use $2 billion in short-term instruments and facilities and $10 billion in both peso-denominated and inflation-indexed bonds to "sterilize" its dollar purchases.
The yield on five-year BCU bonds ended at 2.80%, up from 2.67% on Monday, while the yield on 10-year BCUs closed at 3.11%, up from 2.95% the previous session.
CHILE UNVEILS $12 BILLION PESO INTERVENTION
Chile's $12 billion local currency-market intervention won't pressure inflation upward as most local prices weren't adjusted to the strength the peso was showing against the dollar, Finance Minister Felipe Larrain said.
Chile Stocks Close Higher Monday
After rising 37.6% during 2010, Chile's blue-chip Ipsa index ended 0.8% higher Monday, in unusually heavy trading volume, as commodities-related and construction-sector companies surged.
The Ipsa rose to 4967.51, while volume leapt to 498.8 billion Chilean pesos ($1.07 billion), compared with CLP373.1 billion the prior session.
At the start of the year, just as in the last days of 2010, volume and share prices rose as investors shuffled their portfolios and bought stocks for accounting and tax purposes, traders said.
Among commodities-related companies, fertilizer and specialty chemical producer SQM's (SQM) more liquid B-series (SQM-B.SN) jumped 4.4% to CLP27,700.00 after local investment bank BCI said the fertilizer producer's shares are one of its favorites for 2011.
"The strong fundamentals of the global fertilizer market have been a catalyst for the [company's] shares. We believe [this] should continue as these fundamentals translate into higher prices for potassium-based fertilizers," BCI said in a note to clients.
Also within the sector, integrated steel and iron ore producer Cap (CAP.SN) gained 2.9% to CLP25,660.00.
Additionally, construction and real-estate companies posted strong gains on expectations that a ramping up of postearthquake reconstruction activity this year will boost profits.
Construction company Besalco (BESALCO.SN), which was incorporated into the Ipsa index on Monday, increased 3.0% to CLP1,030.00, while rival SalfaCorp (SALFACORP.SN) grew 3.3% to CLP1,745.00, and real-estate developer Socovesa (SOCOVESA.SN) gained 1.4% to CLP372.00.
The Ipsa is expected increase to between 5,400 and 5,500 points this year, as Chile's gross domestic product is forecast to expand between 5.5% and 6.5% on the year on the back of robust domestic demand, strong investments and reconstruction efforts.
"Expectations for strong economic growth this year will continue to fuel the Ipsa's rise," said Hernan Guerrero, head of research with local brokerage BBVA Corredores de Bolsa.
The peso ended at a 32-month high against the dollar as international copper prices hit a new record, bringing the local currency closer to levels expected to prompt central bank intervention.
The peso finished stronger at CLP465.40 to the dollar compared with Thursday's close of CLP467.30, while trading in a range of CLP465.10 to CLP467.00. With the peso's 7.8% appreciation last year, exporters have demanded currency-market intervention as the strength of the local currency hurts their competitiveness abroad.
The central bank recently said it doesn't rule out increasing its foreign-currency reserves as a way to limit the peso's recent strength. Traders see an increased risk of intervention if the peso appreciates to CLP450-CLP460.
In the bond market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended higher in light over-the-counter trading. The yield on five-year BCU bonds ended at 2.67%, from 2.65% on Thursday, while the yield on 10-year BCUs closed at 2.95%, from 2.89%.
After rising 37.6% during 2010, Chile's blue-chip Ipsa index ended 0.8% higher Monday, in unusually heavy trading volume, as commodities-related and construction-sector companies surged.
The Ipsa rose to 4967.51, while volume leapt to 498.8 billion Chilean pesos ($1.07 billion), compared with CLP373.1 billion the prior session.
At the start of the year, just as in the last days of 2010, volume and share prices rose as investors shuffled their portfolios and bought stocks for accounting and tax purposes, traders said.
Among commodities-related companies, fertilizer and specialty chemical producer SQM's (SQM) more liquid B-series (SQM-B.SN) jumped 4.4% to CLP27,700.00 after local investment bank BCI said the fertilizer producer's shares are one of its favorites for 2011.
"The strong fundamentals of the global fertilizer market have been a catalyst for the [company's] shares. We believe [this] should continue as these fundamentals translate into higher prices for potassium-based fertilizers," BCI said in a note to clients.
Also within the sector, integrated steel and iron ore producer Cap (CAP.SN) gained 2.9% to CLP25,660.00.
Additionally, construction and real-estate companies posted strong gains on expectations that a ramping up of postearthquake reconstruction activity this year will boost profits.
Construction company Besalco (BESALCO.SN), which was incorporated into the Ipsa index on Monday, increased 3.0% to CLP1,030.00, while rival SalfaCorp (SALFACORP.SN) grew 3.3% to CLP1,745.00, and real-estate developer Socovesa (SOCOVESA.SN) gained 1.4% to CLP372.00.
The Ipsa is expected increase to between 5,400 and 5,500 points this year, as Chile's gross domestic product is forecast to expand between 5.5% and 6.5% on the year on the back of robust domestic demand, strong investments and reconstruction efforts.
"Expectations for strong economic growth this year will continue to fuel the Ipsa's rise," said Hernan Guerrero, head of research with local brokerage BBVA Corredores de Bolsa.
The peso ended at a 32-month high against the dollar as international copper prices hit a new record, bringing the local currency closer to levels expected to prompt central bank intervention.
The peso finished stronger at CLP465.40 to the dollar compared with Thursday's close of CLP467.30, while trading in a range of CLP465.10 to CLP467.00. With the peso's 7.8% appreciation last year, exporters have demanded currency-market intervention as the strength of the local currency hurts their competitiveness abroad.
The central bank recently said it doesn't rule out increasing its foreign-currency reserves as a way to limit the peso's recent strength. Traders see an increased risk of intervention if the peso appreciates to CLP450-CLP460.
In the bond market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended higher in light over-the-counter trading. The yield on five-year BCU bonds ended at 2.67%, from 2.65% on Thursday, while the yield on 10-year BCUs closed at 2.95%, from 2.89%.
Markets and banks in Chile were closed Friday for the New Year's Eve holiday.
PERU:
FRIDAY:
Peru's Main Stock Indexes End Sharply Lower
Peru's main stock market ended sharply lower Friday, as weaker mineral prices continued to drag down mining company shares.
The Lima Stock Exchange's broad General index closed lower by 1.61%, at 22,928.86.
The Selective blue-chip index ended weaker by 1.93% at 31,298.59.
Base metals miner Southern Copper Corp. (SCCO) decreased 1.85% to end at $46.72, as the price of copper weakened. Copper miner Sociedad Minera Cerro Verde SAA (CVERDEC1.VL) lost 8.33% at end at $49.50. Silver and lead miner Volcan Compania Minera SAA (VOLCABC1.VL) fell 0.78% to end at 3.80 soles, ($1.36) in heavy volumes. Financial holding Credicorp Ltd. (BAP) declined 4.37% to end at $113.32. It owns Banco de Credito, Peru's largest bank. The sol ended slightly stronger at PEN2.804 per dollar. The sol ended the previous session at PEN2.805 per dollar.
THURSDAY:
Peru's Main Stock Indexes End Lower
Peru's main stock market ended lower Thursday, as a number of key mining companies fell due to weaker mineral prices. The Lima Stock Exchange's broad general index closed lower by 0.81%, at 23,305.04.
The blue-chip index ended weaker by 0.99% at 31,914.21.
Precious metals miner Compania de Minas Buenaventura SAA (BVN, BUENAVC1.Vl) lost 2.58% to end at $45.30 as the price of gold eased.
Silver and lead miner Volcan Compania Minera SAA (VOLCABC1.VL) fell 1.03% to end at 3.83 soles, ($1.37) in heavy volumes.
Base metals miner Southern Copper Corp. (SCCO) decreased 2.06% to end at $47.60, as the price of copper weakened. Copper miner Sociedad Minera Cerro Verde SAA(CVERDEC1.VL) lost 3.04% at end at $45.30. The sol ended slightly weaker at PEN2.805 per dollar. The sol ended the previous session at PEN2.803 per dollar.
Peru's Central Bank Increases
Interest Rate To 3.25%
The central bank aims to keep inflation within a target range of 1.0% to 3.0%.
The Central Reserve Bank of Peru on Thursday increased its reference interest rate by 25 basis points to 3.25%. In a statement, the central bank's board of directors said the policy rate increase was "preventive."
They said the increase took place due to dynamic domestic demand, "in a scenario of increases in the international prices for food and energy." "This measure seeks to avoid that inflationary expectations are influenced by supply factors," the central bank added.
The central bank said that future movements in its reference rate will be tied to new information about inflation and its determinants. Inflation remains subdued in Peru, with the national statistics agency reporting that Peru's benchmark consumer price index rose 0.18% in December from the previous month, bringing the annual increase in inflation in 2010 to 2.08%.
In September last year, the central bank increased its reference interest rate by 50 basis points to 3.0%, the fifth consecutive monthly increase. The key policy rate had hit a historic low of 1.25%.
WEDNESDAY:
Peru's Main Indexes End Higher Wednesday
Peru's main stock market ended slightly higher Wednesday as some blue-chip mining companies gained ground. The Lima Stock Exchange's broad General index closed higher by 0.02%, at 23495.61. The Selective blue-chip index ended stronger by 0.38% at 32233.26.
Precious metals miner Compania de Minas Buenaventura SAA (BVN, BUENAVC1.Vl) gained 0.22% to end at $46.50.
Silver and lead miner compania Minera Volcan SAA (VOLCABC1.VL) gained 1.04% to end at 3.87 soles, ($1.38) in heavy volume. Going the other way was base metals miner Southern Copper Corp. (SCCO, SCCO.VL), which decreased 0.25% to end at $48.60, as the price of copper weakened.
The sol ended unchanged at PEN2.803 per dollar. The Central Reserve Bank of Peru noted in a statement Wednesday that the sol had its 20th anniversary on Jan. 3.
MONDAY:
Peru's Main Stocks Close Higher Monday
The Lima stock market continued where it left off last year, when its broad General Index gained 65%. On Monday, rising mining companies, boosted by climbing mineral prices, continued to lift the overall indexes. The Lima Stock Exchange's broad General index closed higher by 0.95% at 23,595.62. That is just off of its record high of 23,789.75, reached in July 2007
On Monday, the Selective blue-chip index ended stronger by 1.29% at 32,464.52.
Base metals miner Southern Copper Corp.(SCCO) increased 1.36% to end at $49.80, while copper miner Sociedad Minera Cerro Verde SAA (CVERDEC1.VL) rose 3.51% at end at $56 as copper prices improved.
Silver and lead miner Compania Minera Volcan SAA (VOLCABC1.VL) gained 1.30% to end at 3.89 soles ($1.39) in heavy trade.
Financial holding company Credicorp Ltd. (BAP) rose 2.24% to end at $121.15. It owns Peru's largest bank, Banco de Credito.
The sol ended slightly stronger at PEN2.802 per dollar. In the previous session it closed at PEN2.807 per dollar.
VENEZUELA:
WEDNESDAY:
Venezuela Takes Over Banvalor
Venezuelan officials said Wednesday they took over Banvalor, a small bank in financial troubles, amid growing efforts to increase state control in the sector. The state banking regulator known as Sudeban cited "fragilities" in Banvalor that justified the takeover.
The Venezuelan state already owns about 25% of the banking system due in part to a series of government takeovers of financially troubled banks. Venezuela's legislature approved a law last month increasing state control over the banking system in what the opposition warned was a prelude to nationalization.
The law strengthens the power of the superintendence of banks "to control and apply sanctions against the institutions and persons that form part of the (financial) sector." It declares the banking system a public utility, places limits on the formation of financial groups and bars banks from having an interest in brokerage firms or insurance companies.
____________________________________________________________
European Markets:
FRIDAY:
THURSDAY: EURO STOXX 50 2,834.48 +0.74 (0.03%)
The euro zone's private sector grew at a steady pace in December, with growth in Germany and France offsetting weakness in debt-laden Spain and Ireland. Meanwhile, factory orders and factory-gate prices in the euro zone rose.
CENTRAL EUROPE FACES PRICE PRESSURES
Poland's central-bank governor hinted that interest rates could start climbing here soon, while Romania held rates steady as central bankers across the region weigh the contrasting risks posed to their countries' fragile economies by hot money and mounting inflation.
Poland's central-bank governor hinted that interest rates could start climbing here soon, while Romania held rates steady as central bankers across the region weigh the contrasting risks posed to their countries' fragile economies by hot money and mounting inflation.
Greece will have no problems repaying private holders of its bonds, thanks to its vigorous debt-reduction efforts, structural reforms and the financial support provided by the EU and the IMF, the country's prime minister said.
WEDNESDAY: EURO STOXX 50 2,819.55 -24.62 (-0.87%)
European stock markets dropped Wednesday, giving back some of the gains they made in the previous two sessions, with Germany's DAX index falling 0.9% and the broad Stoxx Europe 600 index shedding 0.3% in intraday action.
TUESDAY: EURO STOXX 50 2,861.54 +22.11 (0.78%)
EURO-ZONE INFLATION THREATENS ECONOMY
Annual euro-zone inflation rose to 2.2% in December from 1.9% in November, Eurostat data showed Tuesday. That was above the ECB's target of below, but close to 2% for the first time since late 2008. The euro zone's first batch of economic data in 2011 had more negatives than positives, providing a sharp reminder of the delicate balance between supporting growth and keeping inflation in check, Geoffrey Smith writes. Though most economists still predict that the ECB won't raise rates before 2012, rising inflation across the euro zone, if continued, could prompt them to hike interest rates earlier than currently expected, Nina Koeppen writes.
MONDAY:
Euro edges up vs. dollar in a thin market and on solid U.S. manufacturing data.
EURO ZONE'S MANUFACTURING EXPANSION GATHERS PACE
Activity in the euro zone's manufacturing sector increases more rapidly than first estimated in December, with factories in Spain and Ireland starting to catch up with those in Germany and France.
UK - United Kingdom:
FRIDAY: FTSE 100 5984.33 -35.18 -0.58% FTSE 100 5984.33 -35.18 -0.58%
FTSE 250 11674.35 -42.52 -0.36%
DJ UK Smaller Companies 986.81 -0.52 -0.05%
London Stocks End Lower Friday
FTSE 100 finishes down, 0.6% lower at 5984.33. However, it should be noted that overall, the FTSE 100 has a positive week, ending +1.4%. There are no economic data for the UK on Monday. Investors will be looking forward to the Bank of England rate announcement on Thursday.
New-Car Registrations Climb In 2010
U.K. new-car registrations in 2010 rose 1.8% from 2009, but are expected to shrink 5% this year as tough market conditions persist.
UK PM Cameron To Meet Executives
To Boost Job Creation Monday
U.K. Prime Minister David Cameron will hold talks with business leaders Monday in an effort to boost job creation as he looks to kick-start a private sector-led economic recovery, a Downing Street spokesman said Friday.
THURSDAY: FTSE 100 6,014.61 -29.25 (-0.48%)
FTSE Closes Lower Thursday
FTSE 100 6019.51 -24.35 -0.40%
FTSE 250 11716.87 -24.70 -0.21%
DJ UK Smaller Companies 987.32 -4.32 -0.44%
Much of the session's focus is on ARM Holdings and BP. ARM soars, ending the session +2.3% after Microsoft confirms it will use ARM chips in the next Windows operating system.
BP finishes 0.5% lower. Traders still feel any gross negligence in the Macondo incident cannot be proved but at this stage, they think it looks a bit pricey.
U.K. Chancellor of the Exchequer George Osborne Thursday said he remains confident in the U.K. economy despite data showing a surprise contraction in the services sector in December.
UK Mortgage Demand "Fell Markedly" In 4Q
U.K. mortgage demand fell "markedly" in the three months to December and is likely to drop further in the current quarter, a Bank of England survey released Thursday found.
U.K. Adverse Weather Claims
More Retail Victims
Severe U.K. snowfall in the run-up to Christmas claimed two more retailers as victims Thursday, as both Clinton Cards PLC (CC.LN) and Mothercare PLC (MTC.LN) said they will miss full-year earnings expectations because of sluggish festive sales.
British Airways Estimates Cost Of Disruption
U.K. flag carrier British Airways PLC (BAY.LN) Thursday said heavy snowfall that forced the cancellation of some flights last month will cost the airline about GBP50 million.Rolls-Royce And Airbus
Win Orders In Wake Of Blowout
In a sign of confidence following the high-profile engine blowout on a super jumbo jet late last year, plane manufacturer Airbus and engine maker Roll-Royce Group PLC (RR.LN) Thursday announced new orders for A380 aircraft and Trent 900 engines potentially worth about $7 billion.
WEDNESDAY: FTSE 100 6043.86 +29.99 +0.50%
FTSE Ends Higher WednesdayLondon's FTSE 100 ends +0.5% at 6043.86, managing a positive finish despite spending most of the session in negative territory. The better-than-expected US ADP employment survey helps the index off lows .
FTSE 100 6043.86 +29.99 +0.50%
FTSE 250 11741.57 +19.01 +0.16%
DJ UK Smaller Companies 991.63 -0.47 -0.05%
Wednesday Economic Reports: UK CIPS construction PMI is at 0930 GMT.
The ADP employment survey at 1315 GMT will be of interest to investors.
UK Business Confidence Hit
By Domestic Demand
Fears-Survey U.K. businesses are less confident about the outlook for the next six months than they were in mid-2010 due to renewed fears about domestic demand, but the economy should avoid slipping back into recession, Lloyds TSB Commercial said Wednesday.
UK Company Administrations Decline,
But Many More At Risk
The number of U.K. companies going into administration declined 35% in 2010 compared with the previous year, but continued economic weakness means many more are still at risk,
professional services firm Deloitte LLP said Wednesday.
LME Lists Malay Warehouse;
Receives Request For Aluminum Brand
The London Metal Exchange Wednesday said it has listed a new warehouse in Malaysia, and has also received an application from a Malaysian producer to list a new aluminum brand.
ARM Holdings Rises On Takeover Talk
ARM Holdings (ARM.LN) shares up 1.9% at 446p, bucking the overall downward trend amid reports the company may be the subject of a takeover bid, with Intel Corp (INTC) mooted as the potential purchaser. At the same time, a trader notes talk that Microsoft (MSFT) will reveal a new version of Windows Thursday at the Consumer Electronics Show in Las Vegas, that uses ARM Holdings' microprocessors rather than Intel's.
Waitrose To Double Rate of
Store Expansion In 2011
Upmarket Waitrose plans to open 39 new stores this year as U.K. grocers continue their push into the convenience store space.
Tuesday Reports: U.K. Chancellor of the Exchequer George Osborne defended the rise in the sales tax rate that takes effect Tuesday and said the government had no hidden plans to introduce further tax increases to fix public finances.
The Bank of England's preferred measure of broad money supply picked up in November although the pace of growth remained weak, underscoring the likelihood that the central bank will keep policy on hold for some time.
UK Year-Ahead CPI Expectations High
U.K. public inflation expectations for the year ahead rose to a two-year high in the last month of 2010, as price growth remained at elevated levels, a survey by Citi and pollsters YouGov showed Tuesday.
UK Manufacturing PMI Hits 16-Year High
The U.K.'s manufacturing sector expanded at the fastest rate for more than 16 years in December, which bodes well for a continuation of the manufacturing-led economic recovery, data showed Tuesday.
UK Mortgage Approvals Rise
The number of mortgages approved for house purchases in the U.K. rose unexpectedly in November, but consumer credit was weaker than expected, data from the Bank of England showed Tuesday.
M&A News:
Oberthur, a maker of banknotes and smart-card technologies, Tuesday sought reassurances from acquisition target De La Rue PLC (DLAR.LN) about the impact on its business and reputation of embarrassing paper-production irregularities that hurt its operations last year.
In spite of its concerns, Oberthur signaled it remained interested in buying the world's largest printer of banknote paper.
Oberthur said in a statement to the London Stock Exchange that it believed De La Rue's commercial relationship with a principal international customer had been "materially impaired" as a result of the production problems, and that the customer hadn't invited the company to participate in a recent tender. Oberthur said it believed the customer to be India's central bank, the Reserve Bank of India.
The privately held French company said it believed that it was important for De La Rue to "provide a full update to its shareholders as to its realistic prospects of obtaining new business from this very important customer."
It added that it believed De La Rue's reputation had been damaged by the production issues and that its ability to win new contracts and retain existing customers had been undermined.
GERMANY:
FRIDAY:
German Chancellor signing $8.7 billion in deals with China
China's Vice Premier pledges to improve business conditions for foreign firms during a bilateral meeting with the German Chancellor and begins signing $8.7 billion in deals with German companies.
THURSDAY: Germany's DAX gained 0.6 percent
German carmaker Daimler (DAIGn.DE) rose 1.9 percent after government sources said the automaker and Volkswagen (VOWG_p.DE) would sign deals totaling $5 billion at a meeting with Chinese Vice Premier Li Keqiang on Friday.
WEDNESDAY: The German DAX 30 index fell 0.5% to close at 6,939.82
Shares of Heidelberg Cement AG losing 3.4% and auto group Volkswagen AG declining 2.6%. Retailer Metro AG fell 4.1% in a sector that was particularly weak across Europe.
MONDAY:
German Chancellor signing $8.7 billion in deals with China
China's Vice Premier pledges to improve business conditions for foreign firms during a bilateral meeting with the German Chancellor and begins signing $8.7 billion in deals with German companies.
THURSDAY: Germany's DAX gained 0.6 percent
German carmaker Daimler (DAIGn.DE) rose 1.9 percent after government sources said the automaker and Volkswagen (VOWG_p.DE) would sign deals totaling $5 billion at a meeting with Chinese Vice Premier Li Keqiang on Friday.
Germany Closes More Than
4,700 Farms After Dioxin Scare
Germany's agriculture ministry Thursday said it had ordered the closure of 4,709 farms across the country following a scare over dioxin contamination. WEDNESDAY: The German DAX 30 index fell 0.5% to close at 6,939.82
Shares of Heidelberg Cement AG losing 3.4% and auto group Volkswagen AG declining 2.6%. Retailer Metro AG fell 4.1% in a sector that was particularly weak across Europe.
MONDAY:
Fresenius Medical Care AG & Co. KGaA (FMC) said Tuesday it will purchase Euromedic International's dialysis service operations for EUR485 million.
MUNICH RE PUTS GLOBAL CATASTROPHE COSTS AT $130B
Reinsurance firm estimates that major global catastrophes in 2010 resulted in overall losses of about $130 billion, putting 2010 among the six most loss-intensive years for the insurance industry since 1980, by the company's estimate.
FRANCE:
THURSDAY: France's CAC 40 3,900.83 -3.78 (-0.10%)
The French anti-trust watchdog's advisory council is to meet Thursday to study a plan by the majority-shareholding family of Hermes International SCA (RMS.FR) that would prevent a hostile takeover of the luxury group, according to a source familiar with the matter.
RENAULT VEHICLE SPYING
THREATENS STRATEGIC ASSETS
A case of corporate espionage in electric vehicles at Renault , which has led to the suspension of three managers, was serious enough to "threaten strategic assets," the car maker says.
PEUGEOT-CITROEN POSTS SALES RECORD; OPEN TO ALLIANCES
Peugeot-Citroen sells a record 3.6 million vehicles in 2010, helped by a boost through government incentives, and Chief Executive Philippe Varin says France's largest car maker remains open to equity alliances with other automakers.
NETHERLANDS:
FRIDAY:
Tata Steel Europe, a unit of India's Tata Steel Ltd (500470.BY), declared force majeure on a series of strip products made at the company's Netherlands-based IJmuiden steel plant, a person familiar with the matter said Friday.
The force majeure was declared in response to a fire that broke out on the smallest of IJmuiden's three pickling lines on Dec 27.
He confirmed that the force majeure would apply to products such as cold reduced coil, pickled and oiled, and hot-dip galvanized coil but noted that deliveries to customers aren't expected to be materially disrupted.
Tata Steel Europe has other pickling lines at IJmuiden and within Europe from which it can source additional products to meet customer orders.
BELGIUM:
FRIDAY:
Belgium Budget Deficit Lower Than Expected
Belgium's caretaker government will announce a final 2010 budget deficit that is below its current target, a government official said Friday.
"The numbers will be better than expected by a significant margin," the official said. "On a federal level, the reduction is better than planned."
Local news agency Belga reported, without citing sources, that the federal budget deficit for 2010 would be 3.5% of gross domestic product, compared with the 3.8% target in Belgium's stability plan.
The larger-than-expected reduction in the deficit could reassure holders of Belgian sovereign debt, who are increasingly concerned about the country's debt-to-GDP ratio, the third highest in the euro zone.
Johan Vande Lanotte resigned Thursday as mediator of talks between Belgium's two main language groups, prolonging the deadlock in coalition negotiations that has left the country without a government since elections in June.
The spread between 10-year government debt for Belgium and Germany was at 127 basis points late Friday, 12 basis points wider than Thursday, according to Tradeweb. This is still below highs of over 150 in November during the worst days of the European debt crisis.
While the political situation is very complex, all the parties involved in the talks are "well aware" that they "can't get it wrong in terms of market pressure," to form a government and propose a budget, the official said, adding that the country's debt levels would only increase slightly and by less than European peers.
IRELAND:
FRIDAY: Dublin Stocks: ISEQ Ends Flat At 2,871
THURSDAY: Dublin Stocks: ISEQ Ending Flat at 2,868
SPAIN:
WEDNESDAY:
Spanish stocks were under the most pressure on Wednesday. A Markit Spain Services PMI survey reported business activity decreased at its fastest pace in 12 months during December, with new business down for a sixth month.
"The macro is still driving the markets and so they will for a period of time," said one trader in Madrid who asked not to be named.
Shares of BBVA SA fell 1.3%, with the banking heavyweight dragging the Spanish IBEX 35 index down 0.9%.
SPAIN SELLS ASSETS TO CHINA
Financially troubled Spain signed more than a dozen business accords Wednesday with China, a welcome boost for its recession-battered economy.
The deals involving the banking, energy, transport and telecommunications companies were signed after Prime Minister Jose Luis Rodriguez Zapatero met with China's Vice Premier Li Keqiang on Wednesday. Other deals involved the wine, cured ham and olive oil sectors.
State-owned Spanish National Radio and other media outlets said the deals were valued at some euro5.6 billion (US$7.5 billion).
Spain's connections with China have been growing since the countries signed a strategic association during a visit by President Hu Jintao in 2005.
Earlier this week, Li wrote in Spanish daily El Pais that China was confident Spain would emerge from the economic crisis and added that it would continue to buy the country's public debt as a show of support.
The visit was important for Spain, which is emerging from nearly two years of recession with a eurozone high unemployment rate of 20 per cent and a massive deficit.
Li later met with King Juan Carlos and Foreign Minister Trinidad Jimenez. The vice-premier started of the day with a breakfast with some 100 business leaders from both countries.
On Tuesday, he met with Finance Minister Elena Salgado and Industry Minister Miguel Sebastian. A finance ministry statement said the two had discussed bilateral relations and the economic situation on in Spain, the European Union and China.
TUESDAY:
On Tuesday, BBVA sold EUR1.5 billion in covered bonds at a much higher yield than its European rivals. Construction company Actividades de Construccion y Servicios SA (ACS.MC) Tuesday said it has secured 30.34% of the voting rights in Hochtief AG (HOT.XE), allowing it to buy additional shares of the German builder on the stock market at its discretion.
SPAIN'S 2010 BUDGET DEFICIT BELOW TARGET
Spain succeeds in lowering its budget deficit for 2010 to just under the government's 9.3% target, Prime Minister Jose Luis Rodriguez Zapatero says, adding Spain will meet its 2011 target for a budget deficit of 6% of gross domestic product.
____________________________________________________________
Asian Pacific Markets:
Asian stocks slid on Wednesday following a broad commodities sell-off but the U.S. dollar edged higher after stronger-than expected U.S. factory data offered further evidence of an economic recovery.
Oil fell for a second day as investors took profits from a sharp year-end rally. Gold inched up, though, after sinking more than 2 percent in the previous session.
The fall in commodities to their lowest level in seven weeks weighed on shares of resource companies in early Asia trade, although market analysts said it was likely to have a limited impact.
CHINA:
THURSDAY:Shanghai 2,824.20 -14.40 (-0.51%)
Hang Seng Index 23,786.30 +28.48 (0.12%)
WEDNESDAY: Shanghai 2,842.87 -9.77 (-0.34%)
Hang Seng Index 23,615.39 -53.09 (-0.22%)
TUESDAY:Shanghai 2,852.65 +44.57 (1.59%)
Hang Seng Index 23,668.48 +232.43 (0.99%)
MONDAY:Shanghai 2,808.08 +48.50 (1.76%)
Hang Seng Index 23,436.05 +400.60 (1.74%)
THURSDAY MARKET NEWS:
CHINA WILL GIVE HIGHER
PRIORITY TO CURBING INFLATION
China's central bank will give a higher priority to curbing inflation in 2011, the People's Bank of China says, boosting expectations that it will adopt more tightening measures, such as raising interest rates.
CHINA TAKES LARGER EU POSITION
China has been increasing its holdings of EU countries' debt, including Spanish government debt, since the outbreak of the European sovereign debt crisis, China's vice commerce minister said.
WEDNESDAY MARKET NEWS:
Hong Kong-listed China Eastern Airlines Corp. said Tuesday it expects its 2010 net profit to be around 10 times that of a year earlier, partly due to a rapid recovery in global air traffic demand.
TUESDAY MARKET NEWS:
China's economic planning agency unveiled rules to prevent price collusion and monopolistic pricing practices, giving the government more tools to rein in inflation pressures.
MONDAY MARKET NEWS :
Chinese PMI Falls in December
Manufacturing growth slowed in December because of a tighter monetary policy and the closure of energy-wasting and highly polluting factories.
A purchasing managers’ index fell to 53.9 from 55.2 in November, China’s logistics federation and the statistics bureau said Jan. 1. Manufacturers’ input costs rose at a slower pace, the report showed.
Premier Wen Jiabao is seeking to limit bank lending and inflows of capital that could fuel inflation after a record expansion in credit drove the nation’s recovery. The central bank raised interest rates on Christmas Day and, six days later, the currency regulator said it was expanding a program to let exporters keep revenue overseas
Growth slowed for the first time in five months and the reading was less than any of 13 analysts’ estimates in a Bloomberg News survey. Their median forecast was 55. In contrast, a non-manufacturing PMI rose in December from November’s level, a separate logistics federation report showed today.
Inflation Forecasts
December’s annual inflation rate probably fell from November’s 5.1 percent, a 28-month high, according to economists at Bank of America-Merrill Lynch and China International Capital Corp. CICC estimates consumer prices rose 4.5 percent last month from a year earlier, while Merrill’s forecast is 4.8 percent.
A higher base for comparison may have helped to pare December’s increase. Credit Suisse Group AG. cautioned today that inflation may surge back to exceed 6 percent by mid-year “after a brief pause over the next two to three months.”
.
CHINA EASES CAPITAL CONTROLS ON EXPORTERS
China eases capital controls on exporters' foreign-currency earnings, a move that over time could damp inflationary pressures and slow growth in its massive foreign-exchange reserves.
HONG KONG - Hutchison Whampoa Ltd. to buy
China Resources (Holding) Co. Assets
Hutchison Whampoa Ltd., a conglomerate forming part of billionaire Li Ka-shing's business empire, which surged 5.2 per cent after it announced the purchase of assets from China Resources (Holding) Co. in a deal worth 5.7 billion Hong Kong dollars ($733 million).
JAPAN:
 |
| NIKKEI 225 INDEX |
WEDNESDAY:Nikkei 225 10,380.77 -17.33 (-0.17%)
TUESDAY: Nikkei 225 10,398.10 +169.18 (1.65%)
JAPAN'S KAN URGES TALKS
ON RAISING TAX
Japanese Prime Minister Naoto Kan said he wants to begin talks with the country's opposition parties on raising the nation's consumption tax, in a move that could further erode public approval of the government.
SINGAPORE:
MONDAY:
Singapore's economy expanded at a record rate in 2010, driven by a surge in manufacturing activity.The economy grew by 14.7% last year, rebounding strongly from a 1.3% contraction the previous year.Singapore's growth surpasses the previous record of 13.8% set in 1970, although Prime Minister Lee Hsien Loong said the pace would slow in 2011.
The economy expanded by 12.5% in the fourth quarter, helped by a 28.2% growth in the manufacturing sector.According to figures from the International Monetary Fund, only Qatar had faster growth, at 16%.
Singapore's GDP, valued at 247.33bn Singapore dollars ($191bn; £123.7bn) in 2009, is very dependent on external trade and exposed to changes in the global economy.
Its GDP shrank 1.3% in 2009 because of the global downturn when demand from the United States and other developed economies collapsed.
The services sector, which accounts for 65% of Singapore's GDP, grew 8.8% in the fourth quarter of 2010.
SOUTH KOREA:
THURSDAY: South Korea's KOSPI Composite Index 2,077.61 +(16.74) WEDNESDAY: South Korea's KOSPI Composite Index 2,078.10 Down 7.04 (0.34%)
TUESDAY: South Korea's KOSPI Composite Index 2,085.14 Up 12.06
MONDAY: South Korea's KOSPI Composite Index 2,070.08 Up 19.08 (0.93%)
WEDNESDAY MARKET NEWS:
Samsung Group Announces Hiring Plans for 2011
Samsung Group has announced record investment and hiring plans for this year as it seeks to strengthen international dominance of its mainstream businesses and develop new ones.
South Korea's biggest business conglomerate said Wednesday in a statement that it will invest slightly over 43 trillion won ($38.3 billion) in 2011 for an increase of 18 per cent over last year.
Samsung also said that it will hire 25,000 people for a gain of 11 per cent over 2010.
The statement said both figures are all-time highs.
Samsung Electronics Co. is the group's flagship corporation. The conglomerate also consists of dozens of other businesses covering a broad array of sectors including shipbuilding, construction, leisure and finance.
MONDAY MARKET NEWS:
Hyundai Motor Co., South Korea's No. 1 car maker by sales, is targeting to produce and sell 6.33 million units in global markets in 2011, up 10% from a year earlier, the company's chairman said Monday.
NORTH KOREA:
N Korea Calls For 'Unconditional' Talks With South
SEOUL (AFP) -- North Korea proposed "unconditional and early" talks with the South Wednesday to mend battered cross-border ties, as a top U.S. envoy arrived in Beijing for meetings on the Korean peninsula crisis.
In an unusually conciliatory statement carried by its KCNA agency, Pyongyang said the communist nation "courteously propose having wide-ranging dialogue and negotiations" with South Korea.
"In order to mend the north-south relations now at the lowest ebb we will conduct positive dialogue and negotiations
.. be they authorities or civilians, ruling parties or opposition parties, progressives or conservatives," said the statement.
It said Pyongyang is "ready to meet anyone anytime anywhere" and called for "unconditional and early opening of talks" among officials with "real power and responsibility," it said.
The move from Pyongyang came two days after South Korean President Lee Myung-Bak reached out to the North, offering closer economic ties if it changes its course.
In his New Year policy address, delivered after Pyongyang called for improved relations in 2011, Lee said the door for talks was "still open" if North Korea shows sincerity to mend ties.
Relations between the two Koreas were stretched to breaking point after the North shelled a South Korean island on the disputed border in November, killing four people, including two civilians.
The South has since staged a series of military exercises, including a live-fire drill on Dec. 20 on the island, but the North didn't follow through with threats of a new and deadlier attack.
Earlier on Wednesday the chief U.S. envoy on North Korea arrived in Beijing to hold talks with Pyongyang's main ally China, after a visit to Seoul focused on reducing frictions on the peninsula.
Stephen Bosworth's three-nation tour comes six weeks after the North shelled the frontier island of Yeonpyeong, killing four South Koreans, including two civilians, and sending tensions in the region to their highest level in years.
The U.S. embassy in Beijing said Bosworth had arrived in Beijing Wednesday evening and would hold talks with officials before his expected departure on Thursday for Tokyo.
In Seoul, Bosworth met South Korea's chief nuclear negotiator, Wi Sung-lac, and Foreign Minister Kim Sung-Hwan, for talks centered on Pyongyang's nuclear program and easing strains that have emerged since November's attack.
Foreign ministry officials said Bosworth stressed that Pyongyang needed to show it was sincere about mending ties with Seoul if six-party international talks on its nuclear program are to resume.
Kim added that any resumption of the multi-party talks should be preceded by two-way talks between the Koreas.
The North has refused to discuss the nuclear issue directly with the South, saying it only wants to deal with Washington.
"The six-party talks are a useful framework for negotiation on the North's denuclearization but in order to achieve tangible progress through the talks, the right atmosphere -- including bilateral talks -- should be created," Kim said.
"The government will continue pursuing both tracks -- dialogue and sanctions -- to press the North to prove its willingness for denuclearization through actions," he said.
Upon arrival in Seoul Tuesday, Bosworth called for "serious negotiations" as a central strategy to deal with the communist state. Bosworth also held talks with Unification Minister Hyun In-taek before leaving for Beijing.
In Washington, State Department spokesman Philip Crowley said dialogue with the North should be constructive. "We don't just want to have talks for talks' sake," he said.
Crawley said the United States wanted to see a reduction of tension between the Koreas, an end to North Korean provocation, and a seriousness of purpose with respect to its obligations under a 2005 agreement on denuclearization.
The North also raised security fears that month by disclosing a uranium enrichment plant to visiting U.S. experts.
Bosworth and Wi agreed that the North's uranium program deserved a stern response from the international community, foreign ministry officials said.
The North has insisted the plant is designed solely to fuel a light-water reactor being built to produce energy. But U.S. officials and experts say this could easily be converted to produce weapons-grade uranium.
AUSTRALIA:
FRIDAY: S&P/ASX 200 4,705.00 -20.00 (-0.42%)
THURSDAY: S&P/ASX 200 4,725.00 +10.10 (0.21%)
WEDNESDAY: S&P/ASX 200 4,714.90 -27.60 (-0.58%)
TUESDAY: S&P/ASX 200 4,742.50 -2.70 (-0.06%)
MONDAY: S&P/ASX 200 4,745.20 -45.20 (-0.94%)
FRIDAY MARKET NEWS:
Rio Tinto Working To Reopen
Kestrel Mine After Floods
Mining giant Rio Tinto Plc (RIO) on Friday said it is working towards reopening its Kestrel coal mine in the flood-affected Australian state of Queensland but the declared force majeure will stay in place until full production is resumed.
Mining giant Rio Tinto Plc (RIO) on Friday said it is working towards reopening its Kestrel coal mine in the flood-affected Australian state of Queensland but the declared force majeure will stay in place until full production is resumed.
WEDNESDAY MARKET NEWS:
Australian stocks slipped 0.2 percent in mid-morning trade on Wednesday hurt by weak commodity stocks but top airline Qantas gained after a newspaper said it was set to resume A380 flights on the lucrative Los Angeles route.
BHP Billiton Ltd. (BHP.AU) said Wednesday its Kwinana nickel refinery in Western Australia state has resumed operations after production was hit in December due to a shortage of nitrogen gas.
Qantas climbed 1.2 percent to A$2.51. The airline grounded its super-jumbo fleet after a Rolls-Royce engine exploded in November, but it has resumed A380 flights on some other routes.
Top miners were down after copper eased from record highs as part of a broad-based sell off over-heated commodities. BHP Billiton was 0.6 percent lower, while Rio Tinto was 0.3 percent weaker.
Queensland-based insurer Suncorp Metway fell 0.6 percent extending Tuesday's 3 percent fall on fears of mounting claims due to record floods in the state.
Rare earths firm Lynas fell 5.6 percent to A$2.18 as investors viewed the sharp rise over the past four sessions, after dominant supplier of rare earths China cut export quotas of the minerals, as excessive. The stock had risen 42 percent in the past four days of trade.
Goody Fined - The Federal Court has found that an Adelaide company falsely advertised its plastic bags as biodegradable.
The Australian Competition and Consumer Commission claimed Goody Environment breached the Trade Practices Act in the making and distribution of the bags. The court heard the company engaged in misleading and deceptive conduct and made false claims about the bags. Goody Environment will pay $65,000 in court proceedings and publish corrective notices.
TUESDAY MARKET NEWS:
Australia December Performance Of
Manufacturing Index Declined
The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index fell 1.3 points in December from November to 46.3.
New orders remain low, suggesting there's little immediate relief in sight. This decline highlights the stark contrasts within Australia's economy as a once-in-a-century mining boom grabs headlines but with little solace for manufacturers and exporters outside of the mining sector. The areas most hard hit in the month were clothing and footwear, basic metals, food and beverages, and wood products and furniture.
The mining boom has notably driven the currency up for nearly six straight months, with the Australian dollar now trading at its highest levels since the currency was floated in 1983. In addition, the country's central bank has been forced to hike interest rates seven times in its last 14 meetings in an effort to stave off the risk of rising inflation.
NEW ZEALAND:
WEDNESDAY: New Zealand's benchmark NZX 50 index climbed 0.6 percent to 3,328.55.
____________________________________________________________
WORLD FOREX CURRENCIES SNAPSHOT:
(FRIDAY, JAN 7, 2011 4:00 PM EST)
EUR/USD 1.2932 -0.0067 (-0.52%)
USD/JPY 83.0300 -0.2500 (-0.30%)
GBP/USD 1.5548 +0.0094 (0.61%)
USD/CAD 0.9927 -0.0045 (-0.45%)
USD/HKD 7.7719 -0.0011 (-0.01%)
USD/CNY 6.6276 +0.0016 (0.02%)
AUD/USD 0.9954 +0.0022 (0.22%)
____________________________________________________________
WORLD MARKETS SNAPSHOT:
(FRIDAY, JAN. 7, 2011: 4:00 PM EST)
Shanghai 2,838.80 +14.60 (0.52%)
Nikkei 225 10,541.04 +11.28 (0.11%)
Hang Seng Index 23,686.63 -99.67 (-0.42%)
TSEC 8,782.72 -100.49 (-1.13%)
FTSE 100 5,984.33 -35.18 (-0.58%)
DJ EURO STOXX 50 2,808.25 -27.98 (-0.99%)
CAC 40 3,865.58 -38.84 (-0.99%)
S&P TSX 13,272.30 -39.37 (-0.30%)
S&P/ASX 200 4,705.00 -20.00 (-0.42%)
BSE Sensex 19,691.81 -492.93 (-2.44%)
.
____________________________________________________________
FRIDAY'S U.S. ECONOMIC CALENDAR:
8:30 a.m.
Dec Unemployment rate Non-Farm Payrolls (expected +150K), Unemployment Rate (expected 9.7%), Average Hourly Earnings (previous 22.75), Average Hourly Earnings Net Change (previous +0.01), Manufacturing Payrolls (previous -13K), Service Producing Payrolls (previous +54K), Government Payrolls (previous -11K), Federal Payrolls (previous +2K)
9:30 a.m.
Fed Chmn Bernanke testifies before U.S. Senate Budget panel on 'The U.S. Economic Outlook: Challenges for Monetary and Fiscal Policy' in Washington)
12:15 p.m.
Minneapolis Fed Pres Kocherlakota participates in Sovereign Credit Risk' discussion in Denver, Colo.
1:30 p.m.
Federal Reserve Governor Elizabeth Duke speech on the economic outlook
3:00 p.m.
Nov Consumer Credit Monthly Net Change (expected 0)
4:30 p.m.
Chicago Fed Pres Evans participates in 'The Future of Monetary Policy' panel in Denver, Colo.
4:30 p.m.
Boston Fed Pres Rosengren participates in 'Understanding the Effects of Unorthodox Monetary Policies' discussion in Denver, Colo.
N/A
Dec Halifax House Price Index Monthly (previous -0.1%), Yearly (previous -0.7%)
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