Stocks Rallied On Revised GDP
All major indexes ended positive on Friday, excluding Hong Kong’s Hang Seng Index which ended at 0.07% lower at 20,597.30. Nikkei gained 84.58 points to end at 8,991.06, while Shanghai Composite Index added 7.26 points to end at 2,610.74. In Europe, DAX and FTSE 100 indexes turned higher as each gained 0.65% and 0.89%, respectively. American shares also rallied with the DJIA index jumped 164.84 points or 1.65% to end at 10,150.70, recovering from the sub-10,000 area. S&P 500 Index advanced 1.66% along with Nasdaq which ended 1.65% higher.
Yen Remained A Major Issue
Japanese shares rebounded on tough talk by the Prime Minister Naoto Kan who vowed to take decisive action whenever necessary if the yen continues to strengthen. USDJPY and EURJPY rallied on the comment and later in late New York trading session the pairs went even higher as Ben Bernanke indicated that the Federal Reserve will do whatever necessary to maintain economic recovery. USDJPY traded at 85.26 yen while EURJPY traded at 108.57 yen in late New York hours.
As the yen weakened, Japanese exporters gained. Nissan Motor ended 3.17% higher, Nikon Corp. gained 2.86%, while Daikin Industries ended at 2,955 with a 2.82% gains.
Nippon Ste
el was reported to rapidly building production bases and sales network overseas to fill overseas demand, dodging a takeover from European firm ArcelorMittal and to avoid rules on greenhouse gas emissions in Japan. Brazil, India, Thailand and African countries are the targets of expansion for Nippon Steel.
Toyota announced that it would recall another 1.3 million cars on Thursday, adding to a long line of recalls it had conducted this year. It was said that there were three accidents involving defects to engine control modules or ECMs. Toyota gained 0.44% however, at the end of the day.
Hang Seng Down as Investors Stayed Cautious
Hong Kong’s Hang Seng index became the only index falling on Friday as investors stay
ed on the sideline ahead of GDP revision release and the speech from Ben Bernanke during the New York hours. The constituents were actually had mixed performances with BOC HK gained 2.99%, Esprit Holdings up 1.81%, and Yue Yuen Industrial went up 1.58%. Among losers were Hang Lung Properties with 2.57% decline, China Resources dipped 2.38%, while China Life resumed its fall to 1.79%.
China Shenhua reported its 2Q net profit which hit a record 10.03 billion yuan, up from 8.98 billion in previous year. Consensus forecast 10.2 billion yuan net profit before the release. Coal production was up 3.2% during the first half from prior year to 109.2 million tonnes, while sales were up 11.6% to 137.4 million tonnes. The coal company warned however, that demand in second half could slow as the government’s economic policy could put a brake on electricity consumption.
On ratings updates, Cosco Pacific’s target raised to HK$13.20 against prior HK$12.10 by Nomura, while its rating was raised to BUY from NEUTRAL. China Resources’ target was raised to HK$32 from HK$29 by JP Morgan, while Henderson Land was downgraded to NEUTRAL from OUTPERFORM by Macquarie while its target cut to HK$50.70.
Europe Up on US GDP
European stocks were boosted by US data as Vodafone gained 2.78%, BT Group rose 2.76%, and Prudential settled 2.26% higher. DAX top gainers include Deutsche Telekom which rose 2.31% Volkswagen and Siemens with 1.64% and 1.25% gains, respectively. At the bottom were Commerzbank (-2.0%), BP (-1.54%), Rolls-Royce (-0.63%) and ThyssenKrupp (-0.18%).
Commerzbank slumped 2% as it was reportedly planning to sell new shares as soon as autumn this year. Around 5 billion euros are said to be sold, according to a Handelsblatt’s report. Another losing side was BP who fell 1.54% to 379.65 pence. The oil giant’s executives told investigators dealing with rig explosion at the Gulf of Mexico that they did not know who was in charge of the rig just before the explosion occurred.
Marks & Spencer announced its move to enter the Egyptian market as a part of its efforts to enhance glo
bal sales. Two stores were planned over the next two years in Cairo as the company saw opportunities in the clothing sector and shopping center businesses. At the end of the trading day, Marks and Spencer settled at 346.50 pence, gaining 1.73%.
Vodafone was reportedly going to sell its assets in Poland, China and France. The move was not intended to improve cashflow, but rather as a move to discipline its international expansion. As a result, the Vodafone Essar, an Indian mobile phone firm said that it would delay its IPO plan until next year. Vodafone ended at 153.60 pence or up 2.78%.
The Fed Is Not Out of Options
US shares shot up as the GDP revision was higher than expected at 1.6% in 2Q. Consensus estimate was at 1.4% after previously the GDP was reported growing at 2.4%. Meanwhile, the decline in consumer sentiment from 69.6 in July to 68.9 in August was not able to deter stocks from rising. The figure was slightly lower than the consensus of 69.0.
Ben Bernanke’s speech in Jackson Hole, Wyoming sent a message to the markets that the Federal Reserve would be able to prevent another recession from happening. Growth was seen to be picking up in 2011 as households rebuild savings, banks expand lending and employment outlook improves. If necessary, the Fed would provide further monetary accommodation, but two criteria must be met: an increasing risk of deflation and, excluding whether deflation to happen or not, the Fed will safeguard the continuation of economic recovery. The Fed chairman indicated that three options are available: more purchases of securities, a change in the Fed’s policy statement and the reduction of interest rate that the Fed has been paying on banks’ excess reserves. Bernanke’s speech cheered the market as the Fed was initially thought of running out of options to prevent the second coming of the recession.
The bidding war over 3Par continued as Hewlett-Packard offered a counteroffer of $30 a share (or $2 billion) to acquire to compete with Dell’s offer of $27 a share. HP ended at $38, declining 0.58%, while Dell edged up 1.17% to $11.89.
Elsewhere, Bank of America was said to have to deal with a lawsuit regarding concealment of bonuses and losses at Merrill Lynch & Co. after it bought the brokerage firm. The news did not seem to hinder Bank of America’s advance to $12.64 as it settled 1.36% higher on Friday.
Intel cut its sales forecast on Friday as it saw weakened consumer PC market. Sales expectations were revised from between $11.2 billion and $12 billion to $11.00 billion plus or minus $200 million. Intel gained 1.05% to end at $18.37 instead of falling as slowdown in the PC markets had been expected long ago by investors.
Citigroup planned to open a China desk based in Singapore in order to encourage Chinese firms to set up business in Singapore. Products will cover cash management, trade services and finance, securities and fund services for Chinese clients. Citigroup ended the New York session at $3.76 or up 2.73%.
Sharing the same fate with Toyota, Ford also said that it would recall more than 575,000 units of Windstars from Canada and US due to problems with the rear axle corrosion. Ford was up 3.49% on late Friday, however.
IBM acquired Sterling Commerce as a move to improve its ability to help clients accelerate their interactions with customers, partners and suppliers through dynamic business networks. In turn, the effort would be able to enhance efficiency and profitability. The join-up of the two companies would help integrating key business processes across channels and among trading partners, which covers marketing and selling and up to order management and fulfillment.
Leaders in the North American market were Halliburton with 4.02% jump, AMD with 3.58% rally, and Ford that raced to end at $11.56 at the end of Friday’s session. At the bottom, Goldman Sachs slumped 1.45% below Thursday’s close, while HP suffered from its bidding war with Dell as it shed 0.58% to end at $38.
Week Ahead
Looking ahead, key US data to be announced next week would be personal income and consumer spending on Monday, each with the same expected growth of 0.3% in July, up from unchanged position in June. Chicago PMI will due on Tuesday, with August figure expected at 57 against 62.3 on July. Conference Board’s consumer confidence data is seen down from 50.4 to 50.0 in August. ADP employment will be the first major data to observe this week as it acts as a lead to the Friday’s Nonfarm Payrolls. ADP is expected to report on Wednesday. ISM will be announced on the same day, with expected August figure at 53.5, down from 55.5 in July. Construction spending is seen to have declined in July by 0.6%, compared to the 0.1% increase in June. Jobless claims will be delivered on Thursday and expect a further drop in claims from 473,000 last week to 470,000. Productivity is seen to have worsened to -2.0% in 2Q after in the prior quarter it fell 1%. Factory orders are seen to have improved in July, gaining 0.4% after a 1.2% fall in June. Another housing data will be out next week as pending home sales for the period of July is expected to have declined 1.3% after it fell 2.6% in June. Nonfarm payrolls on Friday will be the key data for next week. The markets expected a decline of 105,000 after July’s fall of 131,000. Private payrolls are seen to have shrunk to just 30,000 from 71,000, while unemployment rate is seen to have inched up to 9.6% from 9.5%. Average hourly earnings are seen at 0.1% growth in August, slowing from 0.2% in July. ISM for the service sector will end the next week’s calendar with an expected fall to 53.2 in August from 54.3 in July.
All major indexes ended positive on Friday, excluding Hong Kong’s Hang Seng Index which ended at 0.07% lower at 20,597.30. Nikkei gained 84.58 points to end at 8,991.06, while Shanghai Composite Index added 7.26 points to end at 2,610.74. In Europe, DAX and FTSE 100 indexes turned higher as each gained 0.65% and 0.89%, respectively. American shares also rallied with the DJIA index jumped 164.84 points or 1.65% to end at 10,150.70, recovering from the sub-10,000 area. S&P 500 Index advanced 1.66% along with Nasdaq which ended 1.65% higher.
Yen Remained A Major Issue
Japanese shares rebounded on tough talk by the Prime Minister Naoto Kan who vowed to take decisive action whenever necessary if the yen continues to strengthen. USDJPY and EURJPY rallied on the comment and later in late New York trading session the pairs went even higher as Ben Bernanke indicated that the Federal Reserve will do whatever necessary to maintain economic recovery. USDJPY traded at 85.26 yen while EURJPY traded at 108.57 yen in late New York hours.
As the yen weakened, Japanese exporters gained. Nissan Motor ended 3.17% higher, Nikon Corp. gained 2.86%, while Daikin Industries ended at 2,955 with a 2.82% gains.
Nippon Ste
el was reported to rapidly building production bases and sales network overseas to fill overseas demand, dodging a takeover from European firm ArcelorMittal and to avoid rules on greenhouse gas emissions in Japan. Brazil, India, Thailand and African countries are the targets of expansion for Nippon Steel.Toyota announced that it would recall another 1.3 million cars on Thursday, adding to a long line of recalls it had conducted this year. It was said that there were three accidents involving defects to engine control modules or ECMs. Toyota gained 0.44% however, at the end of the day.
Hang Seng Down as Investors Stayed Cautious
Hong Kong’s Hang Seng index became the only index falling on Friday as investors stay
ed on the sideline ahead of GDP revision release and the speech from Ben Bernanke during the New York hours. The constituents were actually had mixed performances with BOC HK gained 2.99%, Esprit Holdings up 1.81%, and Yue Yuen Industrial went up 1.58%. Among losers were Hang Lung Properties with 2.57% decline, China Resources dipped 2.38%, while China Life resumed its fall to 1.79%.China Shenhua reported its 2Q net profit which hit a record 10.03 billion yuan, up from 8.98 billion in previous year. Consensus forecast 10.2 billion yuan net profit before the release. Coal production was up 3.2% during the first half from prior year to 109.2 million tonnes, while sales were up 11.6% to 137.4 million tonnes. The coal company warned however, that demand in second half could slow as the government’s economic policy could put a brake on electricity consumption.
On ratings updates, Cosco Pacific’s target raised to HK$13.20 against prior HK$12.10 by Nomura, while its rating was raised to BUY from NEUTRAL. China Resources’ target was raised to HK$32 from HK$29 by JP Morgan, while Henderson Land was downgraded to NEUTRAL from OUTPERFORM by Macquarie while its target cut to HK$50.70.
Europe Up on US GDP
European stocks were boosted by US data as Vodafone gained 2.78%, BT Group rose 2.76%, and Prudential settled 2.26% higher. DAX top gainers include Deutsche Telekom which rose 2.31% Volkswagen and Siemens with 1.64% and 1.25% gains, respectively. At the bottom were Commerzbank (-2.0%), BP (-1.54%), Rolls-Royce (-0.63%) and ThyssenKrupp (-0.18%).
Commerzbank slumped 2% as it was reportedly planning to sell new shares as soon as autumn this year. Around 5 billion euros are said to be sold, according to a Handelsblatt’s report. Another losing side was BP who fell 1.54% to 379.65 pence. The oil giant’s executives told investigators dealing with rig explosion at the Gulf of Mexico that they did not know who was in charge of the rig just before the explosion occurred.
Marks & Spencer announced its move to enter the Egyptian market as a part of its efforts to enhance glo
bal sales. Two stores were planned over the next two years in Cairo as the company saw opportunities in the clothing sector and shopping center businesses. At the end of the trading day, Marks and Spencer settled at 346.50 pence, gaining 1.73%.Vodafone was reportedly going to sell its assets in Poland, China and France. The move was not intended to improve cashflow, but rather as a move to discipline its international expansion. As a result, the Vodafone Essar, an Indian mobile phone firm said that it would delay its IPO plan until next year. Vodafone ended at 153.60 pence or up 2.78%.
The Fed Is Not Out of Options
US shares shot up as the GDP revision was higher than expected at 1.6% in 2Q. Consensus estimate was at 1.4% after previously the GDP was reported growing at 2.4%. Meanwhile, the decline in consumer sentiment from 69.6 in July to 68.9 in August was not able to deter stocks from rising. The figure was slightly lower than the consensus of 69.0.
Ben Bernanke’s speech in Jackson Hole, Wyoming sent a message to the markets that the Federal Reserve would be able to prevent another recession from happening. Growth was seen to be picking up in 2011 as households rebuild savings, banks expand lending and employment outlook improves. If necessary, the Fed would provide further monetary accommodation, but two criteria must be met: an increasing risk of deflation and, excluding whether deflation to happen or not, the Fed will safeguard the continuation of economic recovery. The Fed chairman indicated that three options are available: more purchases of securities, a change in the Fed’s policy statement and the reduction of interest rate that the Fed has been paying on banks’ excess reserves. Bernanke’s speech cheered the market as the Fed was initially thought of running out of options to prevent the second coming of the recession.
The bidding war over 3Par continued as Hewlett-Packard offered a counteroffer of $30 a share (or $2 billion) to acquire to compete with Dell’s offer of $27 a share. HP ended at $38, declining 0.58%, while Dell edged up 1.17% to $11.89.
Elsewhere, Bank of America was said to have to deal with a lawsuit regarding concealment of bonuses and losses at Merrill Lynch & Co. after it bought the brokerage firm. The news did not seem to hinder Bank of America’s advance to $12.64 as it settled 1.36% higher on Friday.
Intel cut its sales forecast on Friday as it saw weakened consumer PC market. Sales expectations were revised from between $11.2 billion and $12 billion to $11.00 billion plus or minus $200 million. Intel gained 1.05% to end at $18.37 instead of falling as slowdown in the PC markets had been expected long ago by investors.
Citigroup planned to open a China desk based in Singapore in order to encourage Chinese firms to set up business in Singapore. Products will cover cash management, trade services and finance, securities and fund services for Chinese clients. Citigroup ended the New York session at $3.76 or up 2.73%.
Sharing the same fate with Toyota, Ford also said that it would recall more than 575,000 units of Windstars from Canada and US due to problems with the rear axle corrosion. Ford was up 3.49% on late Friday, however.
IBM acquired Sterling Commerce as a move to improve its ability to help clients accelerate their interactions with customers, partners and suppliers through dynamic business networks. In turn, the effort would be able to enhance efficiency and profitability. The join-up of the two companies would help integrating key business processes across channels and among trading partners, which covers marketing and selling and up to order management and fulfillment.
Leaders in the North American market were Halliburton with 4.02% jump, AMD with 3.58% rally, and Ford that raced to end at $11.56 at the end of Friday’s session. At the bottom, Goldman Sachs slumped 1.45% below Thursday’s close, while HP suffered from its bidding war with Dell as it shed 0.58% to end at $38.
Week Ahead
Looking ahead, key US data to be announced next week would be personal income and consumer spending on Monday, each with the same expected growth of 0.3% in July, up from unchanged position in June. Chicago PMI will due on Tuesday, with August figure expected at 57 against 62.3 on July. Conference Board’s consumer confidence data is seen down from 50.4 to 50.0 in August. ADP employment will be the first major data to observe this week as it acts as a lead to the Friday’s Nonfarm Payrolls. ADP is expected to report on Wednesday. ISM will be announced on the same day, with expected August figure at 53.5, down from 55.5 in July. Construction spending is seen to have declined in July by 0.6%, compared to the 0.1% increase in June. Jobless claims will be delivered on Thursday and expect a further drop in claims from 473,000 last week to 470,000. Productivity is seen to have worsened to -2.0% in 2Q after in the prior quarter it fell 1%. Factory orders are seen to have improved in July, gaining 0.4% after a 1.2% fall in June. Another housing data will be out next week as pending home sales for the period of July is expected to have declined 1.3% after it fell 2.6% in June. Nonfarm payrolls on Friday will be the key data for next week. The markets expected a decline of 105,000 after July’s fall of 131,000. Private payrolls are seen to have shrunk to just 30,000 from 71,000, while unemployment rate is seen to have inched up to 9.6% from 9.5%. Average hourly earnings are seen at 0.1% growth in August, slowing from 0.2% in July. ISM for the service sector will end the next week’s calendar with an expected fall to 53.2 in August from 54.3 in July.
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