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The European indexes ended the session mixed Monday despite upbeat U.S. economic data and expectations of robust earnings of Chinese companies. The Stoxx Europe 600 lost 0.12 percent to 289 points after trading in today’s weak fluctuated between gains and losses. The markets are likely to remain in this range in the coming days as investors await catalysts that either make them take up new positions or leave the market, said John Ventry, Director of Multi-Manager and Chief Investment Officer of Skandia Investment Group.
Last year, markets were expecting a series of bad news, but in early January see correction to more normal levels. Many risks subside – some problems were solved in USA, while extreme “tail-risk” around Europe and China disappeared Ventry said. “From here on, there is no particular reason to have even steer setup. At the same time there is nothing that would make us sell. On the horizon is not particularly apparent risks in the short term”, he said.
Earlier today the indexes in China reported strong growth amid optimistic forecasts for earnings of Chinese companies in December and reported 17.3% growth in profit overall. News from USA also contributed to some optimism. Orders for durable goods in December increased by 4.6 percent – a result pleasantly surprised analysts who had expected twice as weak growth. Wall Street started the session of the green area.
The New York Stock Exchange closed session on Tuesday ambiguous. American traders behave soberly before the highly anticipated speech of Fed Chairman Ben Bernanke. On Tuesday observed economic data traders fail to make any definitive conclusions about whether and how the Fed will support the U.S. economy again, writes Reuters. On one hand, the mood of American consumers deteriorated in August to its lowest level in nine months. On the other hand, the index S & P Case / Shiller indicates increasing prices for the fifth consecutive month. As is clear from the index, home prices in the U.S. rose in June 2012 compared to the previous month. So prices have improved in the month in the top 20 cities with 2.3 percent the previous month, and once in the previous month was reported revised price increase of 2.3%. Compared with the same month last year, a growth in house prices of 0.5%, the report said. In August, consumer confidence even in the U.S. has deteriorated significantly. Consumer confidence deteriorated from 65.4 adjusted (initially 65.9 points) in the previous month to 60.6 points, as announced by a private organization Conference Board in Washington. This is the lowest level since October 2011. Market expectations were clearly missed. Bankers expect to important economic index increased slightly to 66.0 points.
The USA indexes ended in red territory in trading Thursday, which ended three days of continued increases before the address by Federal Reserve Chairman Ben Bernanke, the next morning.
“It will give the best of ourselves to stop fears and convince investors that it has additional tools, but the likelihood of actually starting something new is extremely low, I would say less than 5%,” said Robert Pavlik, chief market strategist at Banyan Partners LLC. Some investors appeared and concerns about the situation in Europe amid rumors that credit agencies could downgrade Europe’s largest economy – Germany. Standard and Poor’s, Fitch Ratings and Moody’s Investors Services announced that they do not provide an update on the AAA rating in Germany. Dow Jones Industrial Average fell 1.5% to 11 149.82 points.
Standard & Poor’s 500 lost 1.6 percent to 1 159.27 points.
Nasdaq Composite fell 2% and ended the session at 2 419.63 points.
The leading U.S. markets closed today’s session of the green for the first time four days ago, encouraged by data on Chinese economic growth and comment on Federal Reserve Chairman Ben Beranke. In his remarks Mr Bernanke noted that the U.S. economy grew slower than expectations, and if this continues, the central bank is ready to implement additional support measures. The initial enthusiasm of investors, however, began to evaporate with increasing trade. Dow Jones rose 0.36 percent to 12.491 points. The broader index S & P 500 grew by 0.3% to 1,317.72 points and the Nasdaq Composite rose 0.5% to 2.796.
“The investors have their reasons to trade cautiously. They still do not take big rally like that in the last days of June”, said Ken Tower, chief analyst based in Jersey Quantitative Analysis Service. Yesterday, after the trade of electronic games manufacturer Electronic Arts announced a new acquisition. The company will purchase PopCap Games, a deal worth $ 1.3 billion. Were confirmed and annual financial expectations of the concern. With a turnover of 3.75 to 3.95 billion dollars the company expects net loss between 70 and 90 cents per share. Kinetic Concepts also located to the billionth transaction. Healthcare company is likely to be acquired by investor consortium, which includes Apax Partners and other companies of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board for a total of 6.3 billion dollars. During the transaction the shareholders of Kinetic Concepts will receive 68.50 dollars per share. Shares of the company reported a decline of 5.7%.
Supported by the good performance on Wall Street yesterday, today Asian markets started trading with good positions. Tokyo shares were highly sought by the manufacturer of cameras and camcorders Canon, which rose by 7%, despite weak financial results, announced yesterday. The investors have already calculated the bad news due to earthquake and nuclear disaster, say brokers. That is why the message of the credit rating agency Standard & Poor’s, that will worsen its assessment of the risk profile of Japan, not to cause the Exchange. The shares of Sony registered a decline of 2%, after the Group recognized a successful hacker attack. Unknown persons have gained access to personal data such as name, address, email and date of birth, wrote today in the Sony company’s blogs worldwide. Subsequently, attention in Japan shifted from the financial results of companies to the two-day meeting of Fed Reuters. The remaining shares of major Japanese companies grew – Honda’s shares rose 1.5 percent, while those of Advantest – 1,7%. The index Nikkei, which covers 225 companies closed with an increase of 1.4% of 9691 points. The broader Topix index added 0.8 percent and reached 839 points. Stock exchanges in Singapore, Taiwan and Hong Kong also switched to green. Exchanges in Korea and Shanghai does almost not change its index.
The price of gold set a new record today, quotations remained more sustained than 1500 dollars per ounce. The reason for this was a significant retreat of the dollar, which drew investors to demand higher security. Platform Globex electronic trading today gold for June delivery is moving up from 0.65 percent to 505.80 dollars an ounce, a new record in the history of trade in precious metals. The foreign exchange market the euro is progressing strongly, the rise of 1.4 per cent to $ 1,4522 EUR / USD. The single currency has advanced greatly, regardless of the problems that have troubled countries in the periphery of the eurozone. The US Dollar Index does move with a decline of 0.9 percent to 74.37 points. The appetite growing for gold in recent days because of reduced prospects for the credit rating of U.S. debt problem and crisis in Europe and the overall desire of investors to risk aversion. In today’s trading silver reached a new 31-year high, while moving with a growth of 1.5 percent to 44.56 dollars per ounce. Copper rising by 1.7 per cent, while platinum and palladium prices increased by 1.3 and 3.25 per cent.
The U.S. indexes ended Friday’s session on green and reached new record for the past 30 months as investors turned their attention to shares of energy companies and manufacturers of consumer goods, ignoring the new increase in mandatory bank reserves in China. Dow Jones Industrial Average rose 0.59 percent to 12,391 points. Standard & Poor’s 500 rose 0.19 percent to 1343 points while the Nasdaq Composite won 0.08 percent to 2834 points The Chinese central bank announced it would increase the requirement for mandatory bank reserves by half a percentage point – the second increase for the year to withdraw excess liquidity from the economy and reduce inflation. The market did not react to the news from China since the measure was expected due to inflation of consumer goods in January.
In addition, movement of the market was weak due to the expected long weekend. The U.S. markets are closed Monday.
“We expected a long weekend,” said Brian Dzhendrau, market strategist at Financial Network. “Actually I expected a weak market downturn as investors closed their positions before the holidays.”
The U.S. shares ended the session in positive territory by Standard & Poor’s 500 reported a profit first week of the month. Better than expected data on job creation increased optimism that the economy will avoid recession new. S & P 500 rose 1.3 percent to 1105 points. This is the fourth day of growth for the index and its longest winning streak from July Dow Jones Industrial Average rose 1.24 percent to 10,448 points and Nasadaq Composite – by 1.53 percent to 2234 points. Before the start of the session were published data on employment in the private sector in the U.S. showed that in August were up 67 thousand new jobs. The data for July were revised upward to 107 thousand jobs created, which reduced fears that unemployment will prevent of economy recovery. In early trading the shares traded in positive territory but then lost earnings due to higher than expected decline in the services sector in the country in August. But then came the main indexes of profit. Among the winners today were the financial sector and technology companies. Association study of U.S. individual investors showed that optimism about U.S. shares rebounded from a 17-month bottom thanks to the good economic data.
American and European investors are trying to get back 170 million dollars from China Milk Products Group Ltd, another large number of Chinese companies that ceased to pay its debts after the beginning of 2009, writes Wall Street Journal. Among the companies whose shares went down headlong in the last 16 months, have ever hit among investors Celestial NutriFoods, China Sun Bio-Chem Technology, Delong Holdings, Fu Ji Foods & Catering Services, Sino-Environment Technology and Sunshine Holdings. In recent years, investors eagerly bought Chinese stocks, often paying a high price just to find a niche in a significant increase marked the Chinese economy. Now, many Western investors are facing problems with debt collection, especially from companies that sold shares and bonds during the boom years of 2006-2007. According to data from the Wall Street Journal investors currently have a problem with collecting a total of 1.3 billion dollars debt by Chinese companies. Although China Milk operates in China, it is registered in the Cayman Islands. Trade in company shares that are traded on the stock exchange in Singapore, was arrested in February but investors fall into a vicious circle. Regulatory authorities for securities in China say that China Milk is not a Chinese company and they are not legally entitled to dispose of its shares and bonds. “Our obligation is solely to protect local investors,” said a spokesman of the Chinese Securities Commission.
Investors should be set to lower than normal returns of both stocks and bonds on over the years, says Bill Gross of Pimco to CNBC. In the context of new definition of his company to “normal” returns in a low growth, he predicted that profitability would be half the usual around 8%, to which investors are accustomed. “We expect lower demand and slower growth in household income compared to previous years,” said one of the leaders of Pimco, the largest fund for investment in bonds in the world. According to the current yield on 10-year U.S. government bonds of around 4% growth shows what we can expect. He warned people who hope to send their children to college or to retire, thanks to investments that will be easy. “Lower your expectations for return on risky assets.” Jack god, founder of Vanguard Funds is less pessimistic about the market return. “The expected return on shares should be around 8% and that of bonds – about 4 percent,” he said.