A wave of disappointing economic data from recent weeks derail the faith of investors in the sustainability of U.S. economic recovery. And because the labor market is one of the best reference on the state of the economy and consumer spending, the eyes of all investors on Wall Street this week will be focused on Friday’s employment data in non-agricultural sectors of the U.S. economy and unemployment rate in February. In addition to expectations for the recovery of world economy, the strong rally in stock markets worldwide over the past 11 months and contributed to unprecedented measures governments and central banks to promote economic activity and increasing the money supply. Deterioration of consumer confidence data, sales of homes and applications for unemployment benefits, however, hint at the danger of repeated contraction of the economy this year. Along with this deepening fiscal crisis in Greece increased volatility in the securities markets worldwide. The U.S. economy grew by 5.9 percent in the last quarter of 2009, but now come to the fore the question of whether this growth will continue, after the government and central bank begin to pull back their economic incentives. For this purpose, we need state of the labor market has improved, and analysts expect that unemployment in the United States increased from 9.7% to 9.8% in February, after another 40 thousand jobs have been closed within the last month.
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The U.S. banking system will lose by 30 per cent more than expected, as the main role, there will be a contraction of loan portfolios. This will put pressure on the performance of financial institutions, says banking analyst Meredith Whitney. Although government regulations to increase strongly in the banking sector, this is not the main threat to the performance of individual banks, says Whitney. The problems come because of the contraction of loan portfolios of up to 20 per cent, which will greatly outweigh the balance sheets, says Whitney. “Good does not want borrowers to take loans and the banks themselves will want to eliminate the bad borrowers. Also led to contraction of loan portfolios by 4 to 20 per cent, and our expectations are that large banks will fall by another 10-15 percent this year, “Whitney said in an interview on CNBC. Her comments come against a background of very good results from banks, as well as several other large companies traded on the U.S.. But this year may be different from last year, because banks will have to look for a new model to achieve similar results. “Major banks made their profits from trading fixed income instruments, as well as raw materials. This year things are different, “Whitney is confident.
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Greece in the next few days getting ready to place bonds with maturity of 10 years for 5 billion euros. From the financial success of this operation will depend on the views of investors about the ability of Greece and other countries of Southern Europe to deal with debt and budget problems, predicted Wall Street Journal, quoted by BGNES. Planned step not only aims to help the Greek government to solve the problem by reducing the budget deficit, but will finally clarify the relationship with investors. Furthermore, as expected, the result of this transaction will force the leadership of the European Union to designate the particular measures that are ready to take to save in the case of Greece deficit. At the end of January, the Greek Government has completed the issuance of operation euro-bonds for a period of 5 years worth 8 billion euros, receiving orders for it at 25 billion euros. The date for the new deal has not yet been determined. The longer the delay after the issue, the more favorable conditions will be Athens.
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Today’s session has been particularly strong growth of exchanges in the Asian and Pacific region in November 2009, and local currencies rose strongly after the financial results of several large companies in the region peaceful investors rejoiced. The news that the prospects of the Australian economy has improved significantly, also contributed to a strong optimism stock today. The regional index MSCI Asia Pacific, which monitors stock markets in ten Asian countries, Australia and New Zealand, jumped 1.9 percent to 118.62 points. This contributed to most financial and mining companies in its composition, writes Bloomberg. Securities markets in China and Taiwan were closed for the third consecutive day this week for celebrating the lunar New Year. The financial sector did well thanks to the news that the fourth largest banking group in the world – Britain’s Barclays, has realized a profit of 11.6 billion pounds in 2009 to 6.1 billion liras in 2008 to gain shares of the extractive and oil companies rose after oil prices and commodity prices increased strongly during yesterday’s session. Shares of one of the largest lenders in the Pacific – Australia & New Zealand Banking Group, rose by 4.6 percent, while those of the largest bank in China – Industrial & Commercial Bank of China, increased its price by 2,3 % by the end of trading sessions in Hong Kong. The index of blue chips in Japan, the Nikkei 225 advanced 2.7 percent to 10 306.8 points and was the most profitable in the region today. Australian S & P / ASX 200 added 2.2 percent after the index of leading indicators of bank Westpac, showed that the Australian economy is about to take account of strong growth. Exchange of Hong Kong’s main Hang Seng index rose by 1.3 percent to 20 534 points.
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Last year Japan remained the second-highest in the world economy. Leader continues to be the United States. Despite the recession, which plunged the country, it is slightly ahead of China, according to statistics released today by the government, which relies agency Reuters. Gross domestic product (GDP) of Japan in 2009 amounted to 474 924 billion yen in par value or $ 5075 billion. The Japanese economy recorded Gross domestic product growth of three consecutive quarters, the growth in September – December 2009 due to increase by 5% export growth of 0.7 percent of consumption and 1% increase in investment in equipment. According to data published in January, China’s GDP for 2009 was 33 500 billion yuan, or $ 4 900 billion so Japan 40 years has managed to hold China to push it ahead.
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The European Commission President Jose Manuel Barroso has spent over 730 thousand euros for travel and entertainment expenses, says the Spanish newspaper La Vos de Galicia. “According to inside information Barroso spends 200 days a year outside Brussels but not their own aircraft. The Commission also stressed that last year there was more international than usual meetings, including that of the G20, Pittsburgh, USA. Earlier, AFP reported that the commissioners spent nearly 4 million in 2009, but have limited representation expenses between 5000 and 16 000 euro, with the exception of President Jose Manuel Barroso, which for this purpose has spent 32 457 euros. The most expensive European taxpayers, according to AFP was worth the cost of Barroso. For its work was spent in total 730 230 euro. Commission representative told AFP justified the high costs of Barroso with his frequent trips. In 2009 Barroso, who is Portuguese, was of 66 missions – 56 EU and 10 abroad – a total of 697 000 euros. Commissioner for External Relations and European Neighborhood Policy Benita Ferrero-Waldner (Austria), in turn, has spent 429 000 euro for 60 trips, including 21 from outside the EU. Representative of its costs are € 5000.
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The first session on Wall Street this week began positively, after rising global stock markets. Positive trade in Europe affect the outcome of Barclays Plc, which reported net profit for 2009 nearly doubled over the results of the previous period. Second largest bank in the UK recorded a profit of 11.6 billion pounds for the year to 6.1 billion pounds in 2008. In the United States benefited from the survey data of manufacturing New York Empire, which in February rose to 24.91 points, far above the estimated 17 percentage points and recorded a month earlier 15.92. Depreciation of the dollar lent support to the energy and extractive companies, after commodity prices rose. Oil futures with delivery in March rose by 4.4 percent to a level of 77.25 dollars per barrel. On the corporate level Merck reported profit for last quarter of 2009 from 79 cents a share, which was in line with analysts’ forecasts for 78 cents a share. The pharmaceutical giant ended the session with a growth rate of 2% per level of 37.66 dollars per share. Simon Property Group, which is the largest owner of shopping malls in the United States made an offer to purchase the second in the ranking General Growth for more than 10 billion dollars. Shares of Simon Property rose by 3.9 percent to 74.82 dollars, while those of General Growth rallied by 27.8 percent to 12.02 dollars. Appreciation is ranked among the shares of Chevron, after Sanford C. Bernstein increase the company’s rating from “market perform” to “outperform”. Chevron ended the day with a growth of 2.8 percent to $ 73 for stock.
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Finance ministers of 16 countries of the euro area’s economic growth expected area of the single European currency in 2010 to be “fragile” but positive, about 1%. In 2009, the eurozone has experienced the worst recession in its history, as the gross domestic product (GDP) fell by 4 per cent. In the fourth quarter of last year growth was only 0.1 percent, reports agency Reuters. Expectations of ministers who had the extraordinary meeting is to inflation in the eurozone rose by an average of around 1.3 percent this year. What will hamper the development is the labor market situation, unemployment will continue to rise until 2011, warn experts. Many companies that have low utilization, you will be able to maintain jobs. One of the most important reasons for the refund will be renewed confidence in financial markets, which currently is still quite fragile. Most major central banks kept interest rates at around zero, and this increased demand and purchase of assets with higher interest. Eurozone inflation rose to an average of around 1.3 percent in 2010.
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In the second half of 2009 75% of SMEs in the EU have received the full amount or part of those seeking bank loans. However, institutions have refused credit to 18 percent of the companies. Reported that the European Central Bank (ECB) in a study published today for access to European business and finances. The study was carried out in the period between 19 November-December 18, 2009, and there are 5 320 companies participated in the euro area. Nearly half of these firms stated that their needs in bank lending does not change the past six months. However, about 25 percent said they had a greater need for loans, but for only 10% of the companies needs bank loans were lower. While 42% of businessmen believe that the ability to take a bank loan in the second half of 2009 have deteriorated. For comparison, in the first half 43 percent of businesses gave a bad evaluation of access to funds from banking institutions. Only 10% see improvement of the system. Their number remains unchanged from the first half. 75% of the businessmen said that they received the loan for which they applied. In the first half of 2009 a total of 77 percent of companies participating in the quiz, said they have received funds or demand of them. 18% of the companies, however, is denied a loan. In the first half of last year’s loan from a banking institution was denied to 12% of the companies.
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People worldwide are beginning to feel more confident in its future following the global financial crisis, but the majority of them still are worried. This study shows the international agency Reuters and independent international institute for market research Ipsos. According to the survey, which covers 24 000 people from 23 countries, 44% were confident in their future, while 56 percent continue to be worried. At the end of 2008, 42 percent expressed confidence in its future. This optimism is greater among the citizens of India, China, Australia, Canada and the Netherlands, which expressed the strongest confidence in its future, as between 61 and 79 percent of respondents foresee brighter times. In Japan, only 14 percent of people are confident in its future, as this indicator is 21 per cent in France, 25 percent – in the CR and 28% – in Russia. John Wright, vice president of Ipsos, stated that according to the study in 17 people from 23 countries assessed the economic situation in his country as “good”, while respondents in only eight countries have expressed similar optimism in the previous study made in April / May.
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