Wall Street gains on retailers’ holiday data
EW YORK (Reuters) – Wall Street edged higher on Monday as retailers’ shares rose on data pointing to an improved performance for the key holiday shopping season while rising commodity prices boosted the natural resource sector.
Sales at U.S. retailers rose 3.6 percent for the period from November 1 to Christmas Eve, data from MasterCard Advisors unit SpendingPulse showed. Macy’s Inc (NYSE:M – News) climbed 2.5 percent to $18.00 and the S&P Retail index (Chicago Options:^RLX – News) added 0.6 percent.
Amazon.com Inc (Nasdaq:AMZN – News) rose 1.9 percent to $141.05 after it said customers bought more e-books than physical books for the first time ever on Christmas Day.
“This game of chicken that went on between retailers and shoppers, it looks like the retailers won,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. “They held out, there weren’t deep discounts prior to Christmas, and people actually came in and bought the merchandise, so that bodes well.”
The Dow Jones industrial average (DJI:^DJI – News) advanced 17.08 points, or 0.16 percent, to 10,537.18. The Standard & Poor’s 500 Index (^SPX – News) gained 1.27 points, or 0.11 percent, to 1,127.75. The Nasdaq Composite Index (Nasdaq:^IXIC – News) gained 6.31 points, or 0.28 percent, to 2,292.00.
Volume was expected to be light in another holiday-shortened week. The S&P 500 is up nearly 25 percent for the year, and investors are carefully placing bets to make sure they don’t erode profits.
U.S. oil futures rose 1.2 percent, or 95 cents, to $79.00 a barrel, after hitting its highest intraday level since Nov 23, and boosted energy shares. The PHLX Oil Service index (Philadelphia:^OSX – News) rose 0.8 percent.
Airline stocks fell as the United States tightened airline security after a Nigerian man smuggled explosives aboard a transatlantic flight and attempted to blow up the plane.
AMR Corp (NYSE:AMR – News), the parent of American Airlines, lost 3.6 percent to $7.85, while Delta Air Lines Inc (NYSE:DAL – News) dropped 3.6 percent to $11.35. The NYSE Arca Airline index (AMEX:^XAL – News) shed 1.1 percent.
Emerging-Market Stocks Climb; China’s Index Jumps Most in World
Dec. 24 (Bloomberg) — Emerging-market stocks rose for a third day, with China’s benchmark index posting the biggest rally worldwide, as commodity and computer-chip prices climbed on speculation government stimulus is reviving economic growth.
The MSCI Emerging Markets Index advanced 0.9 percent to 972.59 at 8:45 a.m. in London, heading for the highest closing level in a week. China’s Shanghai Composite Index jumped 2.6 percent. The extra yield investors demand to own emerging-market debt over U.S. Treasuries dropped 4 basis points to 2.86 percentage points, the lowest level since August 2008, according to JPMorgan Chase & Co.’s EMBI+ Index.
Chinese shares advanced the most this month after the 21st Century Business Herald said the government may cut taxes for small and medium-sized businesses and technology companies. South Korea’s Hynix Semiconductor Inc. led gains in chipmakers after prices for dynamic-random-access-memory chips jumped 4.2 percent yesterday to the highest level since Nov. 25. OAO GMK Norilsk Nickel climbed in Moscow as nickel and copper prices rose more than 1 percent.
“All this stimulus funding has gone into the economy and pushed the equity market higher,” Manoj Ladwa, an equity strategist at ETX Capital in London, said in an interview on Bloomberg Television. “We’re going to see a continuation in the first quarter of 2010.”
Orders for U.S. durable goods probably rose in November as improving sales prompted companies to boost stockpiles and invest, economists said before a report today. Bookings for goods meant to last several years increased 0.5 percent after declining 0.6 percent in October, according to the median estimate of 72 economists surveyed by Bloomberg News. Another report may show fewer Americans applied for jobless benefits last week.
U.K. Economy Shrinks Less Than Previously Estimated
Dec. 22 (Bloomberg) — The U.K. economy shrank less than previously estimated in the third quarter as a jump in construction and fixed investment brought the longest recession on record closer to ending.
Gross domestic product fell 0.2 percent from the second quarter, compared with a previous measurement of a 0.3 percent drop, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 24 economists was for a 0.1 percent contraction. The recession has now shaved 6 percent off GDP, the statistics office said.
The Confederation of British Industry yesterday raised its 2010 economic growth forecast and said the Bank of England may pause its bond-purchase plan in February. Policy makers have pledged to print 200 billion pounds of new money to stoke spending and shake off Britain’s longest recession on record.
“We’ll have growth returning in the fourth quarter, absolutely,” said George Buckley, chief U.K. economist at Deutsche Bank AG in London. “The bank will start taking back its policy accommodation next year. There won’t be any more bond purchases, and the first rate increase will be in August.”
The pound was little changed at $1.6046 as of 9:53 a.m. in London. The yield on the two-year government bond was up 1 basis point today at 1.185 percent.
Recession Damage
The economy contracted 5.1 percent from a year earlier, more than the 4.9 percent median forecast in a Bloomberg News survey of 21 economists.
The U.S. economy probably grew an annualized 2.8 percent in the third quarter, according to the median forecast of 62 economists. The Commerce Department will publish that data at 8:30 a.m. in Washington.
Construction jumped 1.9 percent, compared with a previous estimate of a 1.1 percent drop, the statistics office said. That offset bigger contractions in services and industrial production.
Travis Perkins Plc, the U.K. building-materials supplier that owns the Wickes home-improvement chain, said Dec. 17 it expects earnings for 2009 to be “at the upper end” of analyst estimates as spending on do-it-yourself projects aided sales.
Fixed investment increased 2.2 percent, instead of the 0.3 percent drop previously measured. Government spending rose 0.3 percent and consumer spending increased 0.1 percent, the statistics office said.
Election Looming
Prime Minister Gordon Brown is trying to revive the economy and rebuild support in time for an election which he must call by June. In an Ipsos-Mori poll published in the Observer on Dec. 20, the opposition Conservatives had support of 43 percent of voters, a 17 percentage point lead over Brown’s ruling Labour Party.
The economy may already be expanding again. Bank of England policy maker Kate Barker said in an interview last week that economic growth probably resumed in the fourth quarter. Unemployment unexpectedly fell in November for the first time since February 2008.
The Royal Institution of Chartered Surveyors today forecast house prices will rise as much as 2 percent in 2010. The CBI yesterday raised its 2010 growth forecast to 1.2 percent from a previous prediction of 0.9 percent. The group said the central bank will start raising the key interest rate from a record low of 0.5 percent in the second quarter.
Barker, speaking on Dec. 15, said that the economic pickup may still lapse in 2010.
‘Bumpy’ Recovery
“I’ve always been one of the people who thought that the path of this recovery was likely to be quite bumpy and uneven,” she said. “I wouldn’t rule out the possibility that we’d see another quarter of negative growth.”
The household savings ratio, which measures the proportion of income hoarded by consumers, rose to 8.6 percent in the third quarter, the most since the first quarter of 1998, the statistics office said.
The current account gap widened to 4.7 billion pounds in the third quarter, or 1.3 percent of GDP, from 4.4 billion pounds in the previous three months, the statistics office said in a separate report today.
Stocks Rise, Bonds Drop on Economic Recovery; Carbon Declines
Dec. 21 (Bloomberg) — Stocks rallied and bonds fell, sending the difference between 2- and 10-year Treasury note yields to a record, on signs the economic rebound is gaining steam. Oil rose after attacks on facilities in Nigeria and Iraq.
The Standard & Poor’s 500 Index added 1.2 percent to 1,115.44 at 11:20 a.m. in New York. Europe’s Dow Jones Stoxx 600 Index gained 1.4 percent. The Treasury yield curve touched 281 basis points on speculation the economic rebound will fuel inflation, while the cost to protect U.S. corporate bonds from default fell to the lowest since May 2008. Carbon-permit prices tumbled as leaders agreed not to set binding emissions targets at the Copenhagen climate summit.
Optimism about the global economic recovery was bolstered as analysts advised buying shares of Alcoa Inc. and Intel Corp. on signs that demand for aluminum and computer chips is improving. The Confederation of British Industry raised its forecast for next year’s U.K. growth to 1.2 percent from 0.9 percent. U.S. consumers probably earned and spent more in November, economists said before reports later this week.
“The economy is improving and shoppers are out there, which signals confidence in that improvement,” said Stefanie Yeager, a fund manager at State College, Pennsylvania-based Vantage Investment Advisors LLC, which oversees $450 million. “People are really seeing that things are turning around. Christmas isn’t turning out to be the black mark that people thought it might be earlier in the year.”
Chipmakers Lead Gains
All 24 industries in the S&P 500 advanced, with Intel leading computer-chip stocks up 2.6 percent for the top gain. Retailers climbed 1.5 percent as a group after the National Retail Federation said last-minute shopping in the days leading up to Christmas may make up for lost weekend sales on the U.S. East Coast after record snowfalls shut stores early and kept shoppers at home.
Health insurers, led by Cigna Corp. and Aetna Inc., rose two days after the Senate announced a compromise health-care bill that dropped proposals for a government-run plan to compete with the private sector and delayed taxes on the insurance industry. Cigna and Aetna climbed at least 6 percent, while the 13-member Standard & Poor’s insurance index was up 4.4 percent.
“The bill seems fairly benign for the industry,” said Les Funtleyder, a Miller Tabak & Co. analyst in New York, in a note to clients. “A mid-2010 start date seems like it will give the companies enough time to deal with the new rules.”
Default Swaps Drop
Credit-default swaps on the Markit CDX North America Investment-Grade Index, used to speculate on the creditworthiness of 125 companies in the U.S. and Canada or to protect against losses on their debt, declined 1.5 basis points to 87 basis points, according to broker Phoenix Partners Group. The index fell to its lowest since May 2, 2008, according to CMA DataVision.
The MSCI World Index of 23 developed nations’ stocks advanced 1 percent. Safran SA climbed 3.8 percent in Paris after winning a $5 billion contract to supply engines for China’s first narrowbody aircraft. Natixis SA added 3.6 percent after the French bank said it will be profitable in the fourth quarter.
The MSCI Asia Pacific Index fell 0.3 percent, as Hong Kong- listed property developers and insurers declined on concern China will do more to curb real-estate speculation. Soho China Ltd., the biggest developer in Beijing’s central business district, dropped 4.5 percent and Poly (Hong Kong) Investment Ltd. lost 6.1 percent.
Carbon Permits Tumble
European Union carbon permits fell the most since February on the European Climate Exchange. Carbon-dioxide allowances for delivery in December 2010 fell as much as 8.7 percent to 12.40 euros a metric ton.
The U.S., China, India and other nations attending the two- week Copenhagen summit that ended at the weekend agreed to voluntary, rather than binding, targets to reduce emissions. The accord isn’t enough to boost demand for permits, said Trevor Sikorski, an emissions analyst at Barclays Capital in London.
The dollar traded near a three-month high against major counterparts. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against currencies including the euro, yen, pound and franc, has increased 3.8 percent this month to 77.687, within 1 percent of its three-month high of 78.141 reached on Dec. 18.
The dollar traded at $1.4318 per euro, compared with $1.4338 on Dec. 18, when it appreciated to $1.4262, the strongest level since Sept. 4. The yen depreciated 0.4 percent to 130.20 per euro, from 129.75.
Oil Rallies
Crude oil rallied as much as 1.3 percent to $74.32 a barrel in New York. Nigeria’s main militant group claimed its first assault on oil infrastructure in the country in five months, while Iraq shut its northern export pipeline to Turkey after an explosion damaged the link. OPEC, meeting in Angola tomorrow, said it expects to hold production targets.
Nickel rallied 4.8 percent to $17,925 a metric ton on the London Metal Exchange as Russia’s government decided to reimpose a 5 percent tax on nickel exports that was suspended in January. Russia is home to OAO GMK Norilsk Nickel, the world’s largest producer of the stainless-steel ingredient.
Copper for three- month delivery added 1.7 percent to $6,960 a ton, the first gain in three days.
The yield on the German 10-year bund, Europe’s benchmark government security, climbed five basis points to 3.18 percent. Greece’s bonds fell for a third day, pushing the 10-year yield 16 basis points higher to 5.94 percent to its highest level since March.
Yen Favored for Carry Trades as Japan Faces Deflation
Dec. 14 (Bloomberg) — The yen is poised to replace the dollar as the top funding currency for investments in cities from Sydney to Sao Paulo after borrowing from Japan became almost as cheap as U.S. loans for the first time in four months.
Rates on 90-day yen loans between banks have fallen the most in 13 years amid record deflation that prompted the Bank of Japan to start a $113 billion lending program last week. By easing demand for private-sector loans, the move helped shrink the gap between U.S. and Japanese London interbank offered rates by two-thirds over the past three months to 0.024 percentage point, the least since Aug. 26, data compiled by Bloomberg show.
Investors are betting Libor rates in the U.S. will be higher by June as it recovers from the recession quicker than Japan, according to Bloomberg data. The U.S. will expand 2.6 percent in 2010, twice as fast as Japan, median forecasts in Bloomberg surveys of as many as 82 economists show. That may entice traders to shift to yen from dollars to buy assets in higher-interest countries like Australia and Brazil, weakening Japan’s currency and shoring up the dollar, as advocated in public statements by both governments.
“The dollar’s role as a funding currency is fleeting at best,” said Samarjit Shankar, a foreign-exchange group managing director in Boston at BNY Mellon, the world’s largest custodial bank at more than $20 trillion in assets. “When central banks start raising rates, the yen will be left behind as the primary funding currency.”
Binary Options Game Plan-USD/CHF Breakout 09/12/09
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Binary Options Game Plan for USD/CAD 12/08/09
We have a nice bullish momentum of the USD/CAD with a run from 1.0493 to 1.06670 in just 11 hours of trading. After the ascending triangle breakout at the 1.06460 level was followed by an immediate retreat,
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Binary Options Game Plan for the USD/CHF 08/12/09
We are witnessing a short-term strength in the USD/CHF trading activity, With a recent breakout of the 1.02260.
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Binary Options Game Plan for the AUD/USD- 07/12/09
We had an interesting pattern for the swingers among us in the AUD/USD, the AUD is showing short term strength, crossing a former support level at 0.9105 and is advancing towards the wall- a descending channel in the 0.9118 area.
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Yen, Dollar Rise on Rate Outlook; Stocks, Commodities Decline
Dec. 7 (Bloomberg) — The yen strengthened and the dollar rose to its highest level in a month against the euro, as investors weighed whether the world economy is recovering fast enough to warrant higher central bank interest rates. U.S. stock index futures and commodities fell.
The yen advanced against all 16 most-traded currencies tracked by Bloomberg as of 11:42 a.m. in London. The dollar gained versus 15. The MSCI Emerging Markets Index dropped the most in six days, losing 0.7 percent. Dubai’s equity index plunged 5.8 percent to a four-month low. The Dow Jones Stoxx 600 Index of European companies sank 0.6 percent. Futures on the Standard & Poor’s 500 Index slipped 0.3 percent, while gold fell for a third day.
Federal Reserve Chairman Ben Bernanke speaks today for the first time since the Dec. 4 U.S. employment report signaled a surprise drop in the jobless rate, stoking expectations the Fed may raise rates sooner than economists had anticipated. Investors are concerned banks may have to increase writedowns that have reached $1.7 trillion worldwide since the credit crunch began, as Dubai World seeks to delay payment on $26 billion of debt.
“On the U.S. dollar front we now have an early indication on the level of volatility that a shift in monetary policy can trigger,” Khurram Butt, in the Treasury sales division of Europe Arab Bank Plc in London, wrote in a client note. “Before the job report, the chances of a June Federal Reserve rate hike was implied at only 35 percent, but this jumped to above 50 percent after the unemployment number came out.”
Yen, Dollar Gain
The yen rose most against higher-yielding currencies, advancing 1.6 percent versus the New Zealand dollar. The U.S. dollar traded at its highest level since Nov. 4 versus the euro, extending gains made at the end of last week that followed the U.S. employment report.
The U.S. lost 11,000 jobs in November, less than the 125,000 median forecast of 82 economists in a Bloomberg survey, the Labor Department said Dec. 4. Fed-funds futures contracts on the Chicago Board of Trade showed today a 16 percent probability the central bank will increase its benchmark overnight rate to at least 0.5 percent by March, up from 8.3 percent a week ago.
The MSCI World Index of 23 developed nations’ stocks retreated 0.4 percent. The MSCI Asia Pacific Index rose 0.3 percent as the region’s exporters increased. Canon Inc., the world’s largest maker of cameras, added 3.3 percent in Tokyo. Billabong International Ltd., a clothing maker that generates more than half its sales in the Americas, added 4.9 percent in Sydney.
Futures Fall
Fresnillo Plc, the world’s largest primary silver producer, and Xstrata Plc led basic-resources producers lower in London, each sinking at least 2.1 percent. Siemens AG, Europe’s biggest engineering company, slipped 2.3 percent in Frankfurt after Morgan Stanley cut its recommendation on the shares.
The decline in U.S. stock-index futures indicated the S&P 500 may retreat from last week’s advance. The Fed on Nov. 4 pledged to keep its benchmark overnight lending rate near zero for an “extended period.” The jobs report showed the unemployment rate unexpectedly dropped to 10 percent from 10.2 percent in November.
The Dubai Financial Market General Index sank the most among benchmark equity indexes worldwide. The measure has tumbled 17 percent since Dubai announced on Nov. 25 that state- owned Dubai World would ask creditors for a “standstill” agreement on its debt, including property company Nakheel PJSC’s $3.5 billion bond due for repayment in a week.
Russian Stocks
Russia’s Micex Index dropped 2.1 percent as oil company OAO Rosneft sank on falling crude prices. South Africa’s FTSE/JSE Africa All Shares Index declined 1.7 percent, after gold producer AngloGold Ashanti Ltd. retreated 4.3 percent.
Gold for immediate delivery fell for a third day in London, slumping 1.6 percent to $1,142.97 an ounce. The metal reached a record $1,226.56 on Dec. 3. Copper for delivery in three months retreated 1.3 percent on the London Metal Exchange, leading a drop in industrial metals. Oil for January delivery fell as much as 1.2 percent to $74.56 a barrel in New York trading.
Treasuries rose, with the 10-year note yield dropping 5 basis points to 3.43 percent, even as the U.S. government prepared to sell $74 billion in notes and bonds this week, starting with an auction of $40 billion of three-year notes tomorrow. The yield on the German bund fell 4 basis points to 3.19 percent.
