OT -- global economy post
Every economy center--The US, the EU, the BRICs individually, Japan, Asia--has its issues that each central bank has been trying to deal with in its own way. If we can get the EU on even a moderate growth path, it will help everyone enormously.
“We’re seeing better economic data out of Europe and China, with several positive surprises,” Thomas Haerter, who helps oversee about $54 billion as chief strategist at Swisscanto Asset Management AG in Zurich, said in a telephone interview today. “Getting better-than-forecast numbers out of the Europe is even more positive for stocks than better-than-forecast data out of the U.S., as the growth problem is mainly in Europe.”
My bolding below.
European Stocks, Metals Climb on PMI Data as Bonds Drop
By Pratish Narayanan & Stephen Kirkland - Aug 22, 2013 6:22 AM ET
bloomberg.com
European stocks rose for the first time in four days and metals gained after better-than-estimated manufacturing data from Germany and China. Bonds slid while the dollar appreciated after Federal Reserve minutes fueled speculation the U.S. will scale back stimulus next month.
The Stoxx Europe 600 Index climbed 0.9 percent to 303.25 at 6:20 a.m. in New York and Standard & Poor’s 500 Index (SPX) futures rose 0.4 percent. Copper jumped 1.9 percent and lead advanced 1.3 percent. Corporate bond risk fell from a five-week high. The yield on 10-year German bunds increased six basis points to 1.93 percent. The Bloomberg U.S. Dollar Index added 0.4 percent after a 0.6 percent advance yesterday. India’s rupee and the Turkish lira slumped to all-time lows.
Germany led growth in manufacturing and services in the euro area, while a gauge for China’s factory output unexpectedly showed expansion. Fed officials were “comfortable” with Chairman Ben S. Bernanke’s plans to start reducing bond buying this year should the U.S. economy improve, July meeting minutes showed. “We’re seeing better economic data out of Europe and China, with several positive surprises,” Thomas Haerter, who helps oversee about $54 billion as chief strategist at Swisscanto Asset Management AG in Zurich, said in a telephone interview today. “Getting better-than-forecast numbers out of the Europe is even more positive for stocks than better-than-forecast data out of the U.S., as the growth problem is mainly in Europe.”
Ahold Beats
More than 10 shares advanced for each one that declined in the Stoxx 600, which rebounded from a three-week low. Royal Ahold NV rallied 5 percent after the Dutch owner of the Stop & Shop supermarket chain reported second-quarter earnings that beat analysts’ estimates.
Euro-area services expanded in August for the first time in 19 months, led by Germany, and manufacturing gained for a second month, London-based Markit Economics said today.
“We are probably either at or just past the mid-point of the economic cycle,” Ashish Misra, who helps oversee $17 billion as head of investment policy and research for Lloyds TSB Private Banking in London, said in a phone interview. “The negative influence of rising interest rates will be, or is being, offset by the positive influence of the reasons behind the rise in interest rates.”
Hewlett-Packard
The gain in S&P 500 futures indicated the U.S. gauge will climb from a six-week low. Hewlett-Packard Co. (HPQ) dropped 7.7 percent in German trading as the world’s second-biggest maker of personal computers issued a forecast for fiscal fourth-quarter profit that missed some estimates.
A report at 8:30 a.m. in Washington may show initial claims for U.S. jobless benefits increased to 330,000 last week from 320,000 the previous period, according to a Bloomberg survey of 48 economists.
The MSCI Emerging Markets Index fell 0.7 percent, extending its six-day slump to 5.2 percent. The Philippine Stock Exchange Index tumbled 6.3 percent, the most in two months, as trading resumed after a three-day closure. The Jakarta Composite Index dropped 1.7 percent, declining more than 20 percent from a record-high three months ago. Benchmark gauges in Turkey, Malaysia and South Korea declined at least 1 percent. India’s Sensex rose 1.1 percent after a four-day 7.6 percent slump sent the gauge to an 11-month low.
China Manufacturing
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 1.1 percent while the Shanghai Composite Index slipped 0.3 percent. A purchasing managers’ index of preliminary China manufacturing data unexpectedly rose to 50.1 for August, from 47.7 in July, according to HSBC Holdings Plc and Markit Economics. That compares with a 48.2 median estimate by 16 analysts surveyed by Bloomberg. A reading above 50 indicates an expansion.
India’s rupee dropped 1.4 percent to 64.9263 against the dollar, after reaching 65.56, and the lira slipped as much as 0.5 percent to 1.9894. Thailand’s baht and the Malaysian ringgit dropped to three-year lows and the Indonesian rupiah sank to the lowest since April 2009.
South Africa’s rand gained 0.7 percent, rebounding from a 4 1/2-year low, and Australia’s dollar jumped 0.5 percent after the Chinese manufacturing report boosted trade prospects.
Norway’s krone weakened for an eighth consecutive day against its Swedish counterpart, sliding as much as 0.9 percent to 1.0708 kronor, the weakest level since March 2004. Sweden’s currency gained against all 16 of its main counterparts after a report showed unemployment unexpectedly fell last month.
The euro dropped 0.4 percent to $1.3306 while the yen weakened 1 percent to 98.70 per dollar.
Bonds Drop
German bonds fell for a second day. Treasury 10-year note yields rose two basis points to 2.91 percent today after climbing eight basis points yesterday. The yield on 10-year U.K. gilts rose four basis points to 2.75 percent.
Copper rose to $7,380.25 a metric ton. China is the biggest buyer of the metal, followed by the U.S. and Germany. West Texas Intermediate oil advanced 0.4 percent to $104.22 a barrel.
The cost of insuring against losses on corporate bonds fell from the highest in five weeks. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies decreased 1.1 basis points to 105.2 basis points.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Pratish Narayanan in Singapore at pnarayanan9@bloomberg.net; |
