Reports

World stock markets news summary (US, UK, Europe, Asia) (March 10, 2010)

By Paddy Power Trader

 

Bank of England officials are counting on their ?200bln bond purchase program to have succeeded in restoring the economy to growth, policy maker Adam Poser said (RTRS) We believe growth will pick up from here, Posen said in an interview on Sky news yesterday. “It’s not going to go gangbusters. We had to go down from what we said before, but it’s still going to be strong. And in that case, there’s no need for more quantitative easing.

 

 

UK News

 

British finance minister Alistair Darling will announce the date of the budget for the 2010-11 financial year later on Wednesday at 0930 GMT. (RTRS) Darling, the Chancellor of the Exchequer is widely expected to make his budget statement on March 24, increasing expectations that Prime Minister Gordon Brown will call a general election for early May.

 

British Prime Minister Gordon Brown sees risks to the economic recovery and says it is not the moment to change course as he prepares for an election by June. (RTRS)

 

Britain is facing a second credit crunch as banks shrink their loan books to avoid a funding crisis, a leading analyst has warned. (Telegraph) Jonathan Pierce, from Credit Suisse, believes UK banks will have to reduce the size of their balance sheets by as much as GBP 530bln over the next three to four years to meet new regulations.

 

US News

 

T-notes pared gains at the CBOT open ahead of the USD 40bln 3 year auction and amid rate lock selling. The auction result was solid although the market reaction was tame given further upcoming supply, with many focusing their sights on the 10yr note. However, in the final hour of pit trade t-notes did regain some upside momentum as corporate deal pricings were cleared and as equities dipped. At the pit close t-notes finished up 4+ ticks at 117.02. At 0605 GMT UST’s were trading up 1+ ticks to 117.03+ as the Nikkei fluctuated around the unchanged mark overnight.

 

Fed’s extended period rate pledge criticised by some on FOMC. (BBG) Kansas City Fed President Thomas Hoenig voting against repeating the statement on January 27 because he wanted to keep “the broadest options possible”. Since then, Dallas Fed President Richard Fisher, James Bullard of St. Louis and the Philadelphia Fed’s Charles Plosser have also expressed reservations.

 

US economists raised their forecast for economic growth in 2010 in March, the third straight monthly rise, while trimming their growth forecast for 2011, according to a survey in the Blue Chip Economic Indicators newsletter. (RTRS) Economy is expected to grow by 3.0% in 2011, which is 0.1% lower than estimates made a month ago, according to the survey. But economists raised their 2010 growth forecast for the third consecutive month to 3.1%, up 0.1% from February.

 

USD 149bln Jobs bill clears procedural hurdle in the US Senate. The bill reinstates USD 25bln in expired tax breaks. (RTRS)

 

In other news, two US Senate Democrats, Jeff Merkley and Carl Levin, said they will propose on Wednesday placing new limits on proprietary trading by banks and nonbank financial firms, widening the Volcker Rule backed by the White House.

 

USD 40bln (Act) 3y Note Auction drew yield of 1.437% vs. Exp. 1.449%, b/c 3.13 vs. Avg. 2.98 (Prev. 2.83) and Indirects 51.8% vs. Avg. 53.53% (Prev. 51.26%). 15.66% of total issuance allotted at high. (BBG)

 

US ABC Consumer Confidence (Mar 7) W/W -49 vs. Exp. -48 (Prev. -49) (BBG)

 

European News

 

ECB’s Gonzalez-Paramo said measures taken by Greece convince ECB, IMF and European Commission, adding that responsibility for Greece’s future lies with Eurozone countries. (RTRS)

 

The Greek government plans to raise more money through bond offerings seeking to raise EUR 10bln through one or two bond issues in March, and between USD 5bln and USD 10bln through a separate offering targeted at investors in the US and Asia, officials familiar with the matter said. (WSJ)

 

 

Asian News

 

At 0607 GMT JGB’s were trading at 140.31 (+0.05) as the Nikkei fluctuated around the unchanged mark overnight and the latest January machine orders came in at -3.7% slightly worse than the expected -3.5%.

 

Japanese finance minister Kan said he saw no immediate need to have a more formal policy pact with the Bank of Japan as the government and the central bank already share the common goal of beating deflation. (RTRS)

 

PBOC’s assistant governor Guo said implementing a moderately loose monetary policy this year will face more difficulties than in 2009. (Financial News/RTRS) In other news, China is very unlikely to experience serious inflation this year, according to China’s top banking regulator.

 

China had about CNY 700bln of new loans last month, according to an unidentified person familiar with the situation. (China Securities Journal)

 

Forex

 

BOE’s Posen said in an interview with Sky News that he hopes the bank is done with the QE programme. (Sky)

 

New Zealand finance minister English says government’s wholesale funding guarantee to end on April 30 and says New Zealand banks are successfully raising funds without guarantee. (RTRS)

 

 

Commodities

 

Oil reversed earlier losses to gain a few cents towards USD 82 on Wednesday after China said imports jumped in February, boosting evidence that emerging Asian economies will lead global demand back into growth this year. WTI crude futures were trading at USD 81.52, up USD 0.03, at 0619 GMT. (RTRS)

 

WTI crude oil in 2010 to average USD 80.06, according to DOE, says oil consumption to average 85.51 MBPD in 2010. Separately, IEA Economist sees 2010 global oil demand up about 1.5mln BPD (BBG/Sources)

 

EIA sees US Natural Gas production down 2.7% in 2010 (Prev. down 2.6%), up 1.1% in 2011 (Prev. up 1.3%), sees US Natural Gas consumption of 0.7% in 2010 (Prev. up 0.4%), down 0.4% in 2011 (Prev. up 0.4%) and expects US LNG imports to rise 45% in 2010 to 1.80 BCFD (Prev. up 44%). (RTRS)

 

US API Crude Oil Inventories W/W (Mar 5) 6500K vs. Prev. 2665K

 

US API Gasoline Inventories W/W (Mar 5) -3181K vs. Prev. 909K

 

US API Distillate Inventory W/W (Mar 5) -2796K vs. Prev. -4074K

 

US API Cushing Crude OK Inventory W/W (Mar 5) 1138K (BBG)

 

Company News

 

Jonathan Pierce, from Credit Suisse, believes UK banks will have to reduce the size of their balance sheets by as much as ?530bln over the next three to four years to meet new regulations. (Telegraph)

 

UK

 

GlaxoSmithKline – Co. has strengthened its ties with Anglo-German biotech company Cellzome by signing a second drug discovery deal worth up to EUR 508 mln. (RTRS)

 

Barclays – Co. is interested in purchasing a US retail bank to obtain more deposits and expand Barclays Capital. Co. says it is not in discussions with any US cos. and no deal is imminent, according to people close to the matter. (WSJ)

 

Standard Life – Co.’s FY EEV operating pretax GBP 919mln vs. Exp. GBP 662mln, and full year dividend up 4.0% to GBP 0.1224. (BBG)

 

Tullow Oil – Co.’s 2009 profit falls 92% to GBP 18.5mln, and 2009 sales drop 16% to GBP 582mln. Co. says its final dividend is GBP 0.04, and expects to sign Ugandan agreement in coming weeks. (BBG)

 

Tullet Prebon – Co. was rumoured yesterday to be facing a takeover approach worth GBP 4 per share. (The Independent)

 

Companies going Ex-Dividend: Admiral (GBP 0.2980), British American Tobacco (GBP 0.7160), Schroders (GBP 0.2900), Serco (GBP 0.0440), Shire (GBP 0.0591), Standard Chartered (USD 0.4480), TUI Travel (GBP 0.0770)

 

US

 

Equities traded higher for the best part of Tuesday’s session despite a lack of any notable economic data. The NASDAQ 100 once again outperformed with Apple (+1.8%) shares leading the gainers in the index. Elsewhere the Telecommunication’s sector was the best performing in the S&P 500, with Sprint Nextel (+6.47%) finishing the day with good gains. In the closing stages, equities came under some selling pressure but still managed to finish with gains. At the close; the S&P 500 closed up 0.17% at 1140.45, the DJIA closed up 0.11% at 10564.38 and the NASDAQ 100 closed up 0.55% at 1901.38.

 

Chevron – Co. CEO says has no plans to quit oil refining business, and doesn’t need acquisitions to grow output. (BBG)

 

ConocoPhillips – Co.’s CEO says plans to grow the co. organically, not by acquisitions. (RTRS)

 

GE – Co. sees 2010 earnings unchanged from 2009 and sees 2011 and beyond solid earnings growth. (BBG)

 

Caterpillar – Co. CEO says sales expected to rise 10-25% this year. (Sources)

 

Goldman Sachs – Co., JP Morgan and other banks have received more than USD 1 bln in fees selling debt through the US Build America Bonds program. (WSJ)

 

Citigroup – Fox Business News reporter Charlie Gasparino reports a rumour that the U.S. government is in the process of discussing plans to sell its massive stake in co., sometime within the next three months. In other news, Apollo Management LP agreed to buy Co. real estate investment unit, according to a person with knowledge of the deal. (Fox Business/BBG)

 

Northrop Grumman – Co. confirms 2010 profit forecast of USD 5.70-5.95 vs. Exp. USD 5.83, affirms 2010 sales outlook of USD 34-34.6bln vs. Exp. USD 34.6bln. (BBG)

 

Europe

 

Pharmaceuticals / Insurers – German Health Minister Roessler plans new legislation by the end of this year to force pharmaceutical companies and health insurers into talks aimed at cutting drug prices (Bild Zeitung)

 

E.ON – Co.’s 2009 adjusted net income EUR 5.33bln vs. Exp. EUR 5.81bln, and 2009 revenue EUR 81.82bln vs. Exp. EUR 84.3bln. Co. says 2010 adjusted net to match year earlier level, and plans to stick to 50%-60% dividend payout ratio. (BBG)

 

Munich Re – Co. reiterates FY profit target of over EUR 2bln, and plans for EUR 5.75 per share dividend for 2009. Co. says it will carefully consider further share buybacks. (BBG)

 

Sanofi-Aventis – Co. is likely to have to sell some assets to satisfy regulators over its planned veterinary medicine combination with Merck & Co. (BBG)

 

ENI – Co. is not looking to make a transformational acquisition any time soon, according to its chief executive. (Sources)

 

Unicredit – Co. is likely to pay a cash dividend for 2009. (Il Sole 24 Ore)