Reports

World stock markets news summary (US, UK, Europe, Asia) (March 11, 2010)

By Paddy Power Trader

 

If interest rates rise, our prospects plummet, according to Anatole Kaletsky. Given that tax increases and cuts in public spending are inevitable in the next Parliament, whoever wins, a strong recovery will only be possible on one condition. Interest rates will have to remain low – if not quite at their present rock-bottom level of 0.5%, then certainly no higher than 1%-2% range – not just for the rest of this year, but until 2014 or 2015.

 

UK News

 

Commercial property may cause new crisis, says FSA. (Independent)

 

Tougher stress tests call on banks to show they can handle 8% GDP fall.

 

My demands for a post-election deal, by Nick Clegg. (Independent) Nick Clegg will this weekend announce the four “tests” he would set for Labour and the Conservatives in return for the support of the Liberal Democrats if neither main party wins an overall majority at the general election. In an interview with The Independent, the Liberal Democrat leader also revealed that his party would try to calm jitters in the financial markets about a hung parliament by calling for a GBP 10bln “repayment” to cut Britain’s public deficit. It would be found from GBP 15bln of spending cuts to be outlined this month.

 

US News

 

Treasuries were on a downward trend on Wednesday as equities opened higher and on short setting ahead of the USD 21bln 10-year note auction. However, prices bounced after the auction was well received, although the uptick was not as firm as some had expected. At the pit close t-notes finished down 6 ticks at 116.28. At 0620 GMT UST’s were trading near unchanged down half a tick to 116.27+ having digested a raft of Asian economic data overnight which showed stronger inflation in China and weaker than expected growth in Japan.

 

US Treasury’s Geithner says economy still faces ’substantial challenges’, but financial rescue effort ‘has been effective’ (BBG) Geithner says US economy is on ‘verge’ of creating jobs again and credit is ‘much more’ available to businesses. Says US is seeing ‘very substantial returns’ on TARP.

 

US Monthly Budget Statement (USD) (Feb) M/M -220.9bln vs. Exp. -222.0bln (Prev. -193.9bln) (BBG)

 

USD 21bln (Act) 10y Note Auction drew yield of 3.735% vs. Exp. 3.751%, b/c 3.45 vs. Avg. 2.94 (Prev. 3.00) and Indirects 35.1% vs. Avg. 42.01% (Prev. 28.85%). 70.94% of total issuance allotted at high. (BBG)

 

European News

 

ECB’s Trichet says no opinion on European Monetary Fund at the moment, says ECB not completely rejecting the idea. (RTRS/BBG)

 

Trichet also said the ECB thinks Greek measures are ‘convincing’.

 

Greek PM Papandreou says EU would intervene in markets if Greek borrowing costs don’t fall in the free market and says EU has devised ways to lower Greek borrowing costs. (RTRS) Angry public and private sector unions are expected to bring Greece to a standstill today in a second nationwide strike in as many weeks against tough government austerity plans.

 

Dubai World will present its first concrete proposals to local banks today on restructuring USD 22bln in debt, according to unnamed sources. (The National newspaper)

 

 

Asian News

 

JGB’s were trading down 23 ticks to 139.15 at 0623 GMT reversing two days of gains as the Nikkei rose 1%. In other news, Japan government to upgrade economic view first time in 8 months (Nikkei) In terms of economic data, Japan GDP Annualised (Q4 F) Y/Y 3.8% vs. Exp. 4.0% (Prev. 4.6%) (BBG)

 

China Producer Price Index (Feb) Y/Y 5.4% vs. Exp. 5.1% (Prev. 4.3%)

 

China Consumer Price Index (Feb) Y/Y 2.7% vs. Exp. 2.5% (Prev. 1.5%), 16-month high

 

China Retail Sales (Feb) Y/Y 22.1% vs. Exp. 18.1%

 

China Industrial Production (Feb) Y/Y 12.8% vs. Exp. 19.0%

 

China New CNY Loans (Feb) Y/Y 700.1bln vs. Exp. 600.0bln (Prev. 1390.0bln) (BBG)

 

China is not witnessing inflationary pressure yet, deputy central bank governor Su Ning said. (RTRS)

 

 

Forex

 

RBNZ Official Cash Rate M/M (Mar) 2.50% vs. Exp. 2.50% (Prev. 2.50%) (BBG/RTRS) New Zealand’s central bank said that the peak of its interest rate cycle would be lower than in the past, forcing investors to scale back bets on rate rises by more than a percentage point.

 

USD will retain reserve role if markets stay sound, S&P said. (BBG)

 

ECB’s Trichet says people have confidence in the EUR internationally. (BBG)

 

Goldman lowers forecasts for the EUR on growth, and the GBP on elections. (BBG) The bank now expects smaller gains in the GBP to GBP 0.87 per EUR, compared to a previous call for it to trade at GBP 0.84 in three months.

 

Commodities

 

Oil fell to below USD 82 a barrel on expectations for OPEC to keep pumping above quotas in the second quarter, pulling prices down from eight-week highs reached a day earlier. WTI crude futures were trading at USD 81.62, down USD 0.47, at 0617 GMT. (RTRS)

 

China’s refinery crude throughput increased to a record high of 8.32 MBPD in February, data from the National Bureau of Statistics showed. (RTRS)

 

 

Company News

British Airways’s 12,000 flight attendants moved closer to a strike after talks with Europe’s third-largest airline over pay cuts broke down. (BBG)

 

UK

 

UK Stocks – Investec to join and Resolution to leave FTSE 100. (BBG)

 

BP – Co. will pay Devon Energy USD 7.0bln in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. (RTRS)

 

British Gas – Co. makes oil discovery near Snorre field in North Sea. (BBG)

 

AstraZeneca – Co. extends branded generics capability with Torrent agreement, and says Torrent will supply to co. a portfolio of generic medicines. (RTRS)

 

Rio Tinto – Co. is in talks with Chinalco, over potential JV opportunities. (Australian Financial Review)

 

Xstrata – Co. spokesman says production still halted at Rolleston coal mine and timing of return to mining yet to be determined. (BBG)

 

BAE Systems – US resumes processing co.’s export license applications. (FT)

 

Rolls Royce – United Airlines has signed a firm order for 25 A350-900 XWB aircraft, which will be powered by co.’s Trent XWB engines. (BBG)

 

Morrison – Co.’s FY net GBP 598mln vs. Exp. GBP 540mln, and FY pretax profit GBP 858mln vs. Exp. 759mln, and FY revenue up 6%. Co. sees further profitable growth. (BBG)

 

Old Mutual – Co.’s FY adjusted operating EPS GBP 0.121 vs. Prev. GBP 0.149. Co. says board recommending GBP 0.015 final dividend for 2009. Co. plans to sell its US Life business. (BBG)

 

Home Retail – Argos 8 weeks to February 27 like-for-like sales down 9.4% vs. Exp. down 7%. Homebase 8 weeks to February 27 like-for-like sales down 0.6% vs. Exp. down 2%. Co. says for the new financial year they continue to plan cautiously. (RTRS)

 

US

 

Equities finished higher on Wednesday following a seesaw session. The financial and technology sectors led the S&P 500 for much of the session, and oil related stocks also performed well following bullish weekly DOE inventory data and after OPEC raised its global demand forecast for this year. Financials outperformed by a wide margin on talk the industry could see a lot of M&A action and after ECB’s Weber said the proposed ‘Volcker Rule’ had ’significant’ shortcomings, thus increasing speculation it would be hard to implement the new rules in the US without EU backing. It is also worth noting in the closing minutes of cash trade, Devon Energy (+1.4%) shares took a decent bid after the WSJ reported thatBP was a leading contender to buy the co.’s USD 5bln-plus in oil assets. At the close; the S&P 500 closed up 0.45% at 1145.61, the DJIA closed up 0.03% at 10567.33 and the NASDAQ 100 closed up 0.84% at 1917.35.

 

Google – Co. expects to resolve China dispute in “weeks, not months”. (BBG)

 

Cisco – Co. preparing to launch new flip cameras. (Silicon Alley Insider)

 

Bank of America – Co.’s CEO says acquisitions are unlikely, but will hire in investment bank and internationally. (RTRS)

 

Citigroup – Co.’s CEO Vikram Pandit will today raise the prospect of the US bank earning as much as USD 20bln from its main unit within a few years, according to unidentified people close to the situation. (FT)

 

Devon Energy -BP will pay co. USD 7.0bln in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. (RTRS)

 

CSX – Co. says expects to deliver strong double digit EPS growth for 2010, says expectation supported by strong volume and revenue growth. (RTRS)

 

Europe

 

E.ON – Co. would not comment on rumours that its US business may be sold. (Boersen-Zeitung)

 

Bayer – Co. was accused in a Canadian lawsuit of ignoring health risks of the contraceptive Yaz and advertising the drug as safe to boost sales. (BBG)

 

Salzgitter – Co. considers takeover attempt unlikely. (Boersen-Zeitung)

 

Lufthansa – Co. says expects slight sales increase in 2010, and operating profit above 2009 level. It also says new acquisitions will not contribute to group profitability in 2010, and risks to outlook come from timing of economic recovery as well as oil prices. (RTRS)

 

K+S – Co.’s FY net EUR 96.4mln vs. Exp. EUR 92.8mln, and 2009 sales EUR 3.57bln vs. Exp. EUR 3.48bln. Co. sees good prospects for revenue, and earnings growth in 2011. (BBG)

 

Axa – Co. seeks acquisition opportunities in Spain. (Europa Press)

 

Air France – Co. will in coming weeks file a complaint with the European Commission over what it says is illegal state aid received by Ryanair Holdings. (BBG)

 

Lagardere – 2009 net group share EUR 137mln vs. Prev. EUR 593mln, 2009 EBIT EUR 448mln. Co. proposes to maintain dividend at EUR 1.30 per share. In other news co. CEO says has no plans to sell EADS stake in near future and says there are no talks yet on Canal Plus stake sale. Also says not against returning cash to shareholders as additional dividend or via share buybacks. (RTRS/BBG)

 

Santander – Co. is not interested in buying General Electric’s 20.85% stake in Turkiye Garanti Bankasi, according to unidentified co.’s spokesman. (BBG)