In midweek U.S. indexes registered a decrease after a second day of economic data disappointed market players. Orders for durable goods in June recorded a decrease of 1% which was far from analysts’ forecasts for growth of 0.9 per cent. Without transportation orders fell by the indicator account for 0.6 percent growth expectation to 0.6%. Enterprise-level Boeing Bears lead among blue chips, fell by 1.89 percent to 67.32 dollars per share. Aviation company reported better than expected second-quarter profit, but also registered a decline in revenue and maintained its forecast below expectations on Wall Street. In the financial sector, Citigroup fell 2.04 percent to 4.07 dollars, and Bank of America fell 1.34 percent to 14 dollars for security. Among tech companies with Google retreated 1.68 percent to 484.35 dollars, while Apple fell 1.18 percent to 260.96 dollars per share. Among the indices S & P 500 fell 0.69 percent to 1106.
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Chinese economy slowed its pace of dynamic growth in the second quarter, rising by 10.3 percent compared with same period of 2009. During the first three months of this year gross domestic product (GDP) of the country increased by 11.9 per cent yoy. The government in Beijing, however, taken several steps to cool bank lending and slow the pace of growth in the real estate sector over the past few months. This, together with the effects of fiscal crisis in Europe may have contributed to slower GDP growth in the second quarter. He was less than expected and analysts of growth of 10.5 percent. China’s economy should grow at least 8% a year, so that employs numerous workers in the country. Series data for China today also showed that annual inflation slowed to 2.9 percent in June compared with 3.1 percent in May. Producer price level in turn increased by 6.4 percent over the past 12 months to June, which is less than the production of the 7.1 percent inflation in May. This will reduce pressure on the Chinese central bank to tighten monetary policy. Industrial production in China on the other hand has grown by 13.7% yoy, which was its weakest growth rate in the last nine months. For comparison, it surged by 16.5 percent in May and 17.8 percent in April compared with the corresponding months of 2009, market analysts expect it to grow more with 15.2 percent on an annual basis. These data highlight the risk of overheating Chinese economy is diminishing and this is likely to weaken the pressure on the government of Prime Minister Wen Jiabao to impose restrictions on bank lending and investment properties. In 2009 China’s banks granted record amount in home loan comparison and businesses, and housing price inflation in the 70 largest cities in the country at record pace this year. Worries about excessive appreciation of the shares of stock companies in China, in turn, decreased by 25% the main stock measure in the country Shanghai Composite.
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The Employment in the U.S. fell in June for the first time this year after the private sector hired fewer people than expected, and 225 thousand temporary jobs created in conjunction with the census, were closed. Employed in the agricultural sectors of the U.S. economy fell by 125 thousand in the last month – the biggest decline since October last year. The private sector has created 83 thousand jobs in June on expectations about 112 thousand, transmits Reuters. However, the unemployment rate fell to 9.5 percent from 9.7 percent in May – the lowest since July 2009, thanks to the release of many of the labor market. Analysts interviewed by Reuters had expected a decline in employment of 110 thousand and increases in unemployment to 9.8 percent. The government revised data for April and May during which they were created by 25 thousand more jobs than initially reported.
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The European indexes suffered a decline for the third straight session Thursday after the U.S. Federal Reserve presented a less optimistic forecast for growth of U.S. economy and debt problems in the eurozone, writes MarketWatch. Stoxx Europe 600 lost 1.83 percent to 250 points, after having suffered a decline of 1.5 percent over the last two session. “Bad data from the real estate market in the U.S. and fears about debt problems and budget deficits are fixed, the mood of investors,” said an analyst at RBC Capital Markets. The Federal Reserve announced Wednesday that the problems around The debt crisis in Europe reflect negatively on the economic recovery in the U.S. and interest rates remain historically low levels, predicts that interest rates will remain unchanged for some time. In a statement made after two days-long meeting of government experts, the Fed lowered its forecast for U.S. economy, declaring that the recovery continues “instead that” strengthens “, as noted in April. European banks are major creditors of European governments, suffered losses. Among the losers were the French BNP Paribas and Spain’s Santander. Focus around the Debt Crisis in Europe adversely affect Greece, the Greek insurance on debt has made new record highs on Thursday.
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The Economic activity in developed economies worldwide has risen for the third consecutive quarter in the three months to end March, although at a slower rate compared to the previous period, said the Wall Street Journal. The data published today by the Organization for Economic Cooperation and Development (OECD) show that gross domestic product of 31-th States was by 0.7% higher compared to the three months to the end of December and 2.5 % higher than the first quarter of 2009. This is the first GDP growth on an annual basis from the third quarter of 2008 and another sign that the global economy recover. OECD members formed 61.3 percent of global GDP. However, growth is far from uniform, with the European Union lags behind the U.S. and Japan – the conditions of recovery which is expected to continue in the future. While the U.S. economy grew by 0.8 percent compared to fourth quarter, and Japan – with 1.2 percent, the economies of the eurozone and the EU have risen by only 0.2 percent.
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Today’s trading session in the U.S. began with cautious increases for two of the three main index after Citigroup announced impressive profit of 4.4 billion dollars for the first three months of this year. Were encouraging and the data for the index of leading indicators of the Conference Board, which predicts the direction of the U.S. economy over the next six months. It grew for the 12th consecutive month in March and it more than expected – by 1.4 percent on a monthly basis. Its value for April amounted to 109.6 points and was the highest since the economic barometer of the Conference Board began to be calculated in 2004 This is good news because it shows that the U.S. economy, which is the largest in the world will continue to recover this year. Most improved in March, the index components that monitor the market situation of labor and financial markets. Namely the improvement of employment in non-agricultural sectors of the U.S. economy is the most reliable benchmark for the improvement of the condition. Despite the good economic data and results of Citigroup investor concerns arising from made against the investment bank Goldman Sachs allegations of fraud by mortgage securities seized indexes on Wall Street near the neutral zone.
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The Russian economy, which ranks 11th largest site in the world, has contracted by 7.9 percent in 2009, cited by Bloomberg. This is the biggest drop in gross domestic product (GDP) of Russia within one year of the Soviet Union in 1991. In the last quarter of 2009, however, visible signs of mitigating the economic downturn of the country. Negative GDP growth for the fourth quarter amounted to 3.8% which is much smaller than the decline of his previous two quarters. That contributes to increased exports of raw materials and the price of oil, gas and metals. The price of Ural oil doubled at the end of last year compared with their levels of 32 dollars per barrel in December 2008 sales of oil and natural gas are the source of about 25% of GDP. Russia’s GDP shrank by 7.7 percent in the third quarter and a record 10.8 percent in the second. Increased demand for raw materials worldwide and the depletion of inventories, however, led many extractive companies in the country to increase production at the end of last year. Net exports of Russia, which represents the difference between the value of exports and imports increased by 61 percent in the fourth quarter after rising by 108% in the third. However, consumer spending remains weak point of the Russian economy, declined by 9.4 percent in the fourth quarter. Limited investment costs of Russian companies and high unemployment also threaten the economic recovery of the country.
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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 French central bank predicted that France’s economic growth will be 0.5 percent in the first quarter of 2010. According to estimates by the National Statistics Institute (Insee) reconstruction of the country’s economy will strengthen in early 2010 but will be difficult and the increase in gross domestic product will be in the range of 0.3 – 0,4 per cent per quarter to mid-year, BTA reported, citing information to Agency France-Press. Recently the government to revise its forecast for growth this year for economic growth of 0,75 to 1.4%. National Institute of Statistics will publish on Friday its initial data on the economic growth of France in the last quarter of 2009.
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After the strong decrease in the last two days last week the main stock measures of today’s Wall Street started a session of positive territory. In the absence of major economic announcements initial growth remained without any particular change to the end of the day. Slight pressure proved data on sales of existing homes in December, but drastic changes are not enough. Sales of existing homes last month of last year fell to 5.45 million, which was below forecasts for a decline to 5.98 million. Level of corporate shares of Intel rose 2% to 20.32 dollars following the positive outlook for the market of information technology. Royal Philips Electronics has increased by 7% to a level of 30 dollars per share. The biggest producer of consumer electronics for the third time reported quarterly results above analysts’ expectations. AK Steel Holding also rose by 5.35 percent to 21.27 dollars after a report of the last quarter the company exceeded analysts’ original forecasts. Financial sector Bank of America advanced by half a percent to $ 15 per share. Wells Fargo closed the session with a growth of 1,5 percent to 27.66 dollars on security.
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