Reports

World stock markets news summary (US, UK, Europe, Asia) (September 03, 2010)

Contributed by Paddy Power Trader

By Paddy Power Trader

ECB’s Nowotny says sees no danger of double-dip for Europe. (Sources)

UK News

QE concern rises as investors fear “dead cat bounce”. (FT) Investors gave warning yesterday that the Bank of England might be forced to pump more money into the economy as fears grew of a double-dip recession. A string of weaker-than-expected figures, including Nationwide’s data on house prices yesterday and a survey of construction activity, has increased and possibility of a re-launch of quantitative easing.

UK private pension liability poses ‘unprecedented’ risk. (Telegraph) Aon, a leading consultancy that published the research, warned that the liability levels were “unprecedented” and posed a “significant financial risk”. The advisers said that failing yields on Government bonds was the key factor behind the soaring liabilities.

US News

T-notes finished the session lower after a combination of stronger than expected economic data, as well as the latest issuance sale announced by the US Treasury weighed on prices throughout the session. At the pit close T-notes finished down 8+ ticks at 124.170. At 0636BST UST’s were trading up 2 ticks at 124.19+.

The White House stressed that no second economic stimulus package is being considered as part of new measures under review by President Obama’s team. (RTRS)

USD 10bln 10y TIPS auction received a b/c 2.80 vs. Avg. 2.77 (Prev. 2.88) and Indirects were 46.6% vs. Avg. 46.25% (Prev. 51.26%).The auction drew a yield of 1.019% with a total of 24.86% of issuance was allotted at the high. (RTRS)

European News

ECB’s Wellink said the transition to higher capital and liquidity standards for global banks is likely to have a modest impact on economic growth. He also said that higher bank capital standards will enhance long-term economic stability and that the system does not have the capacity for another round of bail outs for financial companies. (Sources)

Asian News

JGB’s traded lower for the majority of the session on the back of minor strength in Nikkei and as the market looks ahead to key US jobs data later in the day. JGBs were trading at 141.97 (-0.24) at 0621 BST. (RANsquawk)

The Bank of Japan is expected to hold off on easing monetary policy next week but is gearing up for further action in October as the strong JPY threatens to derail its forecast of a moderate economic recovery, according to sources. (RTRS)

Japanese companies cut capital spending in April-June by a less than expected 1.7% from the same period last year, pointing to an upward revision of an anaemic preliminary reading for second-quarter GDP growth. (RTRS)

China’s state owned banks reported an increase in “special-mention” loans in the second quarter, raising concerns over asset quality despite declining bad loan ratios. (China Securities Journal/Sources) Special-mention loans, referring to debt that could potentially turn sour, rose by CNY 54bln in total during the April-June period at China’s top five state lenders, and account for 3.91% of their total loan assets. However, PBOC’s vice governor, Yi Gang, said that China’s banking system is health in terms of lenders’ liquidity adequacy ratios.

Forex

China offered a rare glimpse into its foreign exchange reserve, confirming that they are overwhelmingly allocated in USD, while a central banker said the mountain of cash could face depreciation risks. (China Securities Journal) The Chinese government’s currency reserves, the world’s largest such stockpile at USD 2.45trl, are held roughly in line with what was described as the global average: 65% in USD, 26% in EUR, 5% in GBP and 3% in JPY.

Japan views probable US opposition to intervention in the foreign-exchange market to address the appreciating JPY as an obstacle to taking unilateral action, according to three Japanese government officials. (Sources)

One of three independent MPs, Bob Katter, needed by Australia’s PM Julia Gillard to form a minority government hinted on Friday he could negotiate on Labour’s mining profits tax he had previously opposed. (RTRS)

Commodities

US crude fell overnight for the first day in three as traders awaited monthly US employment data, while Hurricane Earl approached the country’s east coast, fuelling concerns of disruptions to refineries and demand during the Labour Day long weekend. WTI crude futures were trading at USD 74.68, down USD 0.34, at 0621 BST. (RTRS)

Hurricane Earl raked North Carolina’s barrier islands with gusting winds, pounding surf and rain on Thursday as it took a swipe at the US East Coast on an offshore path towards New England and Canada. (RTRS)

Company News

BP – Co. says cost of oil spill response so far is USD 8bln, and no new oil flowed into Gulf since 15 July (Sources)

UK

Royal Dutch Shell – Co. may sell Swedish Gas stations to Finland’s ST1. (SVT)

HSBC – Co. may move its headquarters from Britain if the Government’s new Banking Commission calls for a break up of lenders. (The Times)

BAE Systems – Airgas and co. sign a five year supply pact. (Sources)

United Utilities – Co. was yesterday the subject of bid rumours, according to an analyst at Nomura Securities. (FT)

US

Decent macro-economic data lifted equity markets for the second day in a row. However, despite the optimistic economic data, investors remained cautious and likely have sidelined them levels from further commitment until they are able to digest the NFP report tomorrow. Home builders have shown decent gains post stronger housing data, while consumer services sector benefited from better than expected retail sales data. Worth noting that oil & gas sector came under pressure today following an explosion on one of its rig in the Gulf of Mexico. The latter half of the session saw equities settle into a range-bound trade and at the closing bell DJIA closed up 0.49% at 10320.10, S&P 500 closed up 0.91% at 1090.10 and NASDAQ 100 closed up 1.13% at 1840.58.

Apple – Samsung is challenging co. in the emerging market for tablet computers with a handheld device called Galaxy Tab that is smaller and lighter than the iPad. (The Times)

Google – Co. is in talks with music labels on plans for a download store and a digital song locker that would allow its mobile users to play songs wherever they are as it steps up its rivalry with Apple. (RTRS)

Europe

France Telecom – Co.’s CEO expects to conclude deal to combine TV Orange, TPS Star in coming weeks, says co. to hold up to 50% share. In addition, co’s CEO says Meditel stake talks are going well, sees deal in several weeks and says will seek to persuade government to abandon triple-play VAT plans. (RTRS)

Air France – Co. considers setting up a no-frills carrier in France to compete with other low-cost airlines in the country. Co. says the new unit will be called Air France Express and should be operating from airports in Marseilles, Nice and Toulouse starting next year if an agreement can be reached with unions. (Sources)

Dexia – Co. aims to cut an additional 700-800 jobs in France, Belgium and Luxembourg, according to De Standaard. The paper says this is part of a cost cutting plan which aims to free up EUR 200-300mln until the end of next year. (De Standaard)

French Companies

Theolia – Co.’s H1 net loss EUR 24.2mln vs. Prev. loss EUR 14.1mln. (Sources) German Utilities – German Chancellor Angela Merkel’s government plans to levy a tax of EUR 220 per gram on uranium or plutonium in nuclear reactors. (Sueddeutsche Zeitung)

Deutsche Bank – Co. may move ahead with a takeover of listed rival Postbank in the coming week. (Sueddeutsche Zeitung)

Bayer – A US judge has rejected co.’s request to extend a stay that prevents Watson Pharmaceuticals from pursuing regulatory approval of a generic version of the co.’s birth control pill Yasmin. (Sources)

RWE – Co. is of interest to Deutsche Bank’s infrastructure fund and to the Australian investment bank, Macquarie. (Handelsblatt)

Merck – Co. shareholder BlackRock has reduced its stake in the listed German drug company, co. also dropped below the reporting threshold of 10% holding 8.86% of BlackRock. (Sueddeutsche Zeitung)

Lenders shunned on stress tests doubts. (FT) Leading UK and continental European companies are increasingly shunning banks from Spain, Italy and even Germany because they do not believe the Europe-wide stress testing of banks gave a true picture of their financial health. Corporate treasurers from groups with revenues of more than USD 240bln told the Financial Times they were conducting their own tests to gauge for themselves banks’ robustness.

ENI – Co. says presents plan to boost gas storage by 4bln cubic metres to industry ministry – Ministry. (RTRS)

Aegon – Co. gets mandate for GBP 2bln pension scheme for asset allocation for Leicestershire county. (Sources)

Roche – Co. confirms its full year outlook for 2010, they have also said over months ahead to review all parts of business structures. Co. has a new initiative to be implemented in 2011 and 2012. (RTRS)