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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (91756)	6/21/2012 1:24:06 PM
From: elmatador	Respond to of 219565

Weak economic data add to growth fears Some in the market are also expressing disappointment at the US Federal Reserve’s decision not to take aggressive stimulus steps – particularly gold bugs, who have reacted by selling the bullion down by $21 to $1,585 an ounce. By Jamie Chisholm, Global Markets Commentator Thursday 16.00 BST. Stocks and commodities are struggling for traction as weak manufacturing data from Germany and China add to global growth concerns. Some in the market are also expressing disappointment at the US Federal Reserve’s decision not to take aggressive stimulus steps – particularly gold bugs, who have reacted by selling the bullion down by $21 to $1,585 an ounce. However, judging by the way many equity indices at one point bounced sharply off session lows, other traders appear committed to the view that bad economic news can only hasten more support by the world’s monetary guardians. An easing of eurozone sovereign debt tensions – illustrated by falling Spanish bond yields – are bolstering those of a more bullish bent. The mood remains generally sour, however. The FTSE All-World equity index is down 0.6 per cent following a 0.7 per cent retreat in Asia and as the FTSE Eurofirst 300 trims early losses to sit up 0.1 per cent. Wall Street’s S&P 500 is down 0.4 per cent, held back by the latest weekly initial jobs claims report, which did little to dispel a sense that the US labour market lacks vigour, and a much softer than expected Philadelphia Fed factory activity survey covering June. Other risk gauges that usually benefit from broader market anxiety are performing to type, with the dollar index rising 0.7 per cent and 10-year Bund yields falling 7 basis points to 1.56 per cent. Industrial commodities are seeing sellers, pushing copper down 1.8 per cent to $3.33 a pound and forcing Brent crude to shed $1.11 to $91.58 a barrel. That leaves Brent near an 18-month low, a retreat that reflects concerns about waning demand as data out of China and Europe add to recent evidence of slowing global economic growth. China’s manufacturing sector contracted for an eighth consecutive month in June, according to the HSBC flash purchasing managers’ index, as export orders suffered their fastest contraction since March 2009. The news dragged down Chinese shares, with Hong Kong’s Hang Seng index losing 1.3 per cent and China’s Shanghai Composite index stumbling 1.4 per cent to a two-month low. Japan’s Nikkei 225 bucked the regional trend with a rise of 0.8 per cent as a falling yen boosted exporters. In addition, the euro is lower by 0.7 per cent to $1.2606 after a survey showed Germany’s private sector shrinking for a second consecutive month in June as manufacturing activity slid to its weakest in three years. The narrative of weakening global demand was fed further by comments on Wednesday from Procter & Gamble, after the world’s largest consumer goods producer by sales cut its revenue forecasts. Such news may add to the trend of analysts trimming corporate profits expectations ahead of the US second-quarter earnings season, which kicks into gear in the next few weeks – a move that is likely to apply more downward pressure on stocks. And it looks like traders hoping for succour from central banks will have to be patient. The Bank of England appears more likely to deliver additional quantitative easing this summer to supplement a planned bank lending boost, and hopes are building that the European Central Bank may trim rates in response to signs of sentiment cracking in Germany. But it seems that the Fed has left investors somewhat unimpressed by what some perceive as a meek response to recent soft US data and its own downgrade of growth estimates. Ben Bernanke, chairman, said the Fed would extend its Operation Twist programme of replacing short-term bonds with longer-term debt by $267bn until the end of this year. After some volatile trading in US markets following the announcement and subsequent press conference, most assets were not far from levels seen just before the statement. Now, many “risk” assets are pulling back again as the data from China are absorbed. Meanwhile, concerns about the eurozone linger, though the mood is less tense than that seen of late. The latest sentiment hurdle was an auction by Spain of €2.2bn of medium-term bonds. There was good demand at the sale but borrowing costs soared to a 15-year high of 6.01 per cent for the five-year portion of the offering. Still, Madrid’s 10-year benchmark yield is down 18bp at 6.56 per cent, well off the 7.3 per cent euro-era peak reached at the start of the week, an improvement partly secured by hopes that the eurozone bailout fund might buy sovereign debt. Additional reporting by Song Jung-a in Seoul