Reports

World stock markets news summary (US, UK, Europe, Asia) (September 02, 2010)

Contributed by Paddy Power Trader

By Paddy Power Trader

Nationwide House Prices SA (Aug) M/M -0.9% vs. Exp. -0.3% (Prev. -0.5%); NSA (Aug) Y/Y 3.9% vs. Exp. 4.9% (Prev. 6.6%) (RTRS) UK house prices fell the most in six months in August as increased supply of property gave buyers more bargaining power, according to Nationwide Building Society.

UK News

Britain’s deficit is constraining public finances, says IMF report. (Independent) Britain’s public finances remain “constrained” and among the most precarious of the major advanced economies, the International Monetary Fund (IMF) warned yesterday. Ranking nations by their “fiscal space” – the insulation that they have against further unforeseen shocks to their economic systems – the IMF said the UK was only one notch above those countries most commonly thought of as being bust.

US News

T-notes fell on Wednesday for the first time in 3 days following better than expected economic data in form of ISM manufacturing. In addition to that, touted asset reallocation by hedge funds and pension funds into equities from Treasuries added to the sell-off. Treasuries pared some of the losses in the latter half of the session before settling into range bound trade to settle down 24+ ticks at 124.250. At 0636 BST UST’s were trading up 3+ ticks at 124.29.

Fed’s Fisher says US economy is restrained by high household debt, uncertainty and lack of confidence. (RTRS) Fisher says Fed must take into account the impact of fiscal and regulatory policy on impact of Fed action. Furthermore, says Fed alone cannot boost growth and says US needs to dispel “uncertainty about what’s coming” and says “there is fear of growing debt of United States”. In addition, says Fed’s recent decision to buy treasuries was a bid to ‘avoid passive tightening’ .

Fed’s Plosser says Fed should not ease more in attempt to solve unemployment problem. (RTRS) Plosser says would entertain idea of more quantitative easing if real deflation risks arise and says does not see near-term inflation or deflation risks. Says US economy has hit soft-patch, not a double-dip and says basis for moderate economic recovery is still ‘more or less in place’. In addition, sees 2010 US economic growth of 3% and 2011 growth of 3-3.5%. Elsewhere, says Aug. 10 move to reinvest MBS proceeds may not have ‘measurable impact’ on economy.

Fed’s Kohn said the central bank’s decision to reinvest proceeds from maturing mortgage-backed securities won’t necessarily lead to additional stimulus. (Sources) Kohn added that shift on managing balance sheet reflected view that letting policy tighten in any way was not appropriate when economic outlook is deteriorating.

Fed’s Evans said that while the US economy and housing market have shown signs of stability, more improvement is needed. (Sources)

White House Adviser Romer says odds of US double dip recession are very small. (RTRS) Romer says US GDP by most estimates is still about 6% below trend, with the main cause being high unemployment. Says the US must take action, and do it quickly, to boost demand and bring down unemployment and says best way to boost US demand in short run is for government to spend more and tax less.

The Monster US employment index rose 12% in August from a year ago, however on a M/M basis it dropped 1% in August. The Index was at 136 in August from 138 in July. (RTRS)

US Total Vehicle Sales Y/Y (Aug) 11.46mln vs. Exp. 11.60mln (Prev. 11.85mln, Rev. to 11.56mln); US Domestic Vehicle Sales Y/Y (Aug) 8.66mln vs. Exp. 8.85mln (Prev. 9.11mln) (RTRS/Sources)

European News

France may have to increase taxes in 2013 to fund its social security system, according to the budget minister Baroin. (Le Figaro)

Greek finance minister Papaconstantinou said the country’s GDP will shrink about 4% this year. (La Tribune) He added that he expects to raise the EUR 800mln which is needed to reach the country’s target of a deficit of 8.1% of GDP in 2010.

Slovenia has scrapped plans to sell more benchmark bonds this year as the export-dependent economy’s return to growth reduces the need to raise money on international markets, according to the finance minister. (Sources)

French ILO Unemployment Rate (Q2) Q/Q 9.7% vs. Exp. 10.0% (Prev. 9.9%) (Sources)

Asian News

JGBs fell overnight and the yield curve continued to steepen after better-than-expected US and Chinese data assuaged some of the pessimism towards the global economy. JGBs were trading at 142.31 (-0.20) at 0618 BST. (RTRS)

The BOJ will maintain its monetary stance at a policy meeting to be held on September 6th and 7th, according to sources. (Asahi)

Forex

Australian Trade Balance (Jul) M/M 1888mln vs. Exp. 3100mln (Prev. 3539mln, Rev. to 3438mln) (RTRS) Australia’s trade surplus almost halved in July as exports of coal and iron ore came off the boil while imports were lifted by defence spending, suggesting trade will be less of boost to economic growth this quarter.

Australia’s opposition came under pressure to explain a USD 9.6bln hole in its election manifesto costings, putting at risk its talks with independent MPs whose backing it needs to form a government. (RTRS)

French finance minister Lagarde says China needs to participate in currency talks. (Sources)

Swiss GDP (Q2) Q/Q 0.9% vs. Exp. 0.8% (Prev. 0.4%, Rev. to 1.0%); Y/Y 3.4% vs. Exp. 2.6% (Prev. 2.2%, Rev. to 2.3%) (Sources)

Commodities

Oil, overnight, held onto most of its previous session gains of 2.8% after manufacturing in top consumers the US and China picked up in August, raising hopes record petroleum stockpiles will fall and reviving confidence across markets. WTI crude futures were trading at USD 73.83, down USD 0.08, at 0615 BST. (RTRS)

Hurricane Earl strengthened on Wednesday, churning up dangerous swells, forcing evacuation of some of North Carolina’s barrier islands and prompting storm alerts along much of the US East Coast. (RTRS)

China plans to spend CNY 250bln – CNY 300bln under its new five year development plan to boost offshore oil production, according to a report in China Securities Journal. (China Securities Journal)

Total CEO says the oil price is at the right level, the price of gas is low. (RTRS)

Company News

BP – Co. expects to remove a failed blowout preventer atop its ruptured Gulf of Mexico oil well by Saturday or Sunday and later plug the leak for good, the top US official overseeing the spill response said. (RTRS)

UK

Energy Companies – Ofgem has received information suggesting that Npower, Scottish Power, Scottish and Southern Energy, and EDF Energy may have been broken new rules on soliciting customers. (BBC)

BHP Billiton – China is stepping up attempts to hamper co.’s USD 39bln hostile offer for Potash, amid worries about future supplies of fertiliser it needs to rapidly boost food production. China’s state-run Sinochem has hired HSBC to advise it on its options regards Potash. (RTRS)

Rio Tinto – Co. said contract prices for the steelmaking commodity will probably fall 13%, the first decline in three quarters as Chinese demand weakens. (Sources)

AstraZeneca – Co. received European Commission’s positive decision on Seroquel XR as an add-on treatment of major depressive disorder. Co. says will now forward in obtaining local approvals. (RTRS)

Anglo American – Co. said a group of mining companies in Australia plans to lodge a formal bid for Queensland State’s coal freight network next week after making a revised initial AUD 5.1bln proposal last month. (Sources)

BAE Systems – Co. receives USD 629mln contract from the US Mine Resistant Ambush Protected (MRAP) Joint Programme Office to upgrade 1700 Caiman MRAP vehicles. (RTRS)

Tesco – Co. is among more than ten bidders for Carrefour’s assets in Thailand, Malaysia, and Singapore. (FT)

Cables & Wireless Worldwide – AT&T not planning to move on co., citing sources close to AT&T. (FT)

Tullow Oil – Co. acquires a 50% interest of the East African rift basin. (Sources)

Tui Travel – Co. took off, up GBP 0.15 to GBP 2.16, amid reheated rumours that TUI AG, its German majority shareholder, is weighing up a possible bid for the 45% of the equity that it does not already own. (The Times)

Autonomy – Co. was yesterday the subject of renewed bid speculation. Oracle and Microsoft were again mentioned as potential bidders. (FT)

Fresnillo – Co. was yesterday the subject of renewed speculation of a bid from Carlos Slim. (Independent)

US

On the first day of the month equities have staged a broad based rally after consensus beating ISM boosted investor appetite for riskier assets. In addition to that, supporting the upside trend was touted asset reallocation by pension funds and hedge funds into equities out of Treasuries. All 10 sectors in the S&P 500 finished in positive territory, while Apple (+2.97%) topped the leaders board in the NASDAQ 100 after announcing redesigned iPods. Finally, at the closing bell DJIA closed up 2.54% at 10269.47, S&P 500 closed up 2.95% at 1080.25 and NASDAQ 100 closed up 2.98% at 1820.05.

Apple – Co. unveiled an aggressive move into the internet-television market on Wednesday, with its new Apple TV, while also rolling into out an overhauled line-up of its iPod devices and new operating systems for its iPhone and iPad. (RTRS)

Ford – August adjusted US sales down 10.7% vs. Exp. down 5.2%, says August sales down 5% from last month. (Sources)

Chrysler – August adjusted US sales up 7% vs. Exp. up 3%. (RTRS)

General Motors – August adjusted US sales down 21.9% vs. Exp. down 19%. (Sources) In other news, co. plans to begin courting investors for its initial public offering immediately after the November 2 US midterm congressional elections, two sources familiar with the plans said. (RTRS)

Europe

Total – Co.’s CEO says interested in some BP assets, says won’t elaborate. In addition said, co. has received offers for its UK Lindsey refinery and hopes to sell it by the end of the year, according to Chief Executive Offer. (Sources/RTRS)

Pernod Ricard – Co.’s full year net EUR 951mln vs. Exp. EUR 987mln, and co. are to pay dividend of EUR 1.34 a share. They will give 2010-11 targets at November 10 shareholder meeting. (Sources)

Capgemini – Co.’s CEO says does not see further major acquisitions this year. (RTRS)

Companies paying Dividend: France Telecom (EUR 0.6000) RWE – Co. plans to pool its German sales operations and power grind in a new company, citing unidentified people close to the utility. (Handelsblatt)

Volkswagen – August adjusted US sales down 7.9%. (Sources)

Daimler – Mercedes Benz August adjusted US sales up 15%. (Sources)

BMW – August adjusted US sales down 1.6% to 23,965, says does not see H2 as strong as H1. (Sources)

Porsche – August adjusted US sales up 33%. (Sources)

Unicredit – Consob, Italy’s securities regulator, is to carry out an investigation into stakes held in co. by Libyan financial institutions. (Il Sole 24 Ore) Swisscom – Co. says has not decided whether to purchase remaining 18% shares in Fastweb. (RTRS)

Swatch – Co. is accusing UBS for losses suffered through products it invested in and is pressing charges to recover some of the money lost. (Tages-Anzeiger)