Hollingsworth International Financial Services Ltd

Weekly Market Summary

2011-11-14T02:13:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets with investors still nervous despite the formation of a new Greek unity government intent on avoiding imminent debt default. European markets fell as concerns shifted to Italy and whether Rome can avoid being dragged further into the euro zone debt crisis as Italian bond yields spiked to a record. Wall Street rose as European finance officials agreed to release the next slice of bailout money to Greece as long as leaders of the parties agree in writing to carry out austerity measures required by international lenders.

On Tuesday, Asian markets wiped earlier gains and fell, weighed by concerns that surging bond yields could stifle debt-ridden Italy's fund raising ability and throw the euro zone deeper into financial turmoil, while Greece struggled to pick a new leader. European stockmarkets and Wall Street rose on Italian reform hopes as Italian Prime Minister Silvio Berlusconi's resignation gave hope for a clearer path to solving the euro zone debt crisis.

On Wednesday, Asian stockmarkets rose bolstered by easing inflation in China and the euro steadied after Italian Prime Minister Silvio Berlusconi said he would resign after parliament approves a budget law that includes reforms demanded by Europe, raising hopes the debt-ridden country would proceed with reforms to contain the euro zone's sovereign debt crisis from spreading. China's annual inflation rate eased to 5.5 percent in October from 6.1 percent in September for a third straight month of decline from July's three-year peak and Premier Wen Jiabao said prices had fallen further since then. Chinese producer prices rose 5 percent in the year through October, down from a 6.5 percent rise in the year to September. European markets slumped on worries that Italy is too big to bail-out as italian bond yields surged to over 7 percent which is considered to be unsustainable. US indices fell sharply as the Eurozone debt crisis escalated.

On Thursday, Asian markets fell after soaring Italian borrowing costs stoked fears that the euro zone's third biggest economy will be forced to seek a bailout, overwhelming the bloc's finances and raising the risk of a break-up of the currency area. Most European stockmarkets fell although there was a pullback in Italian bond yields below 7 percent to 6.9 percent. Strategists said further European Central Bank buying of Italian bonds helped push down yields. Wall street rose on Italy's successful bond auction and the appointment of a new leader in Greece. Lucas Papademos, a respected former vice-president of the European Central Bank, was appointed as the new Greek interim prime minister.

On Friday, Asian stockmarkets rebounded modestly after brighter corporate news lifted U.S. stocks and debt-ladened Italy was able to fund itself at a bond auction and the naming of a new leader in Greece. European indices and US markets rose following news that the Italian parliament may well vote this same weekend on an austerity bill and that a new government may even be announced as early as this next Sunday. In fact, the country's Senate has just approved that piece of legislation and tomorrow will come the turn of the lower house.

This morning, Asian stockmarkets and the euro rose on Monday on hopes that new leaders in Italy and Greece will take decisive action to save their indebted nations from bankruptcy and fend off a wider financial meltdown in the euro zone.

Last week, global equities and commodities fell throughout the week but recovered on Friday. The markets were very volatile as the Italian and Greek governments fell and havre now been replaced with temporary coalition governments who are expected to pass the austerity measures demanded by the EU for aid to continue. In fact, Italian 10-year bond yields soared above 7 percent last week to levels seen as unsustainable. Borrowing costs of more than 7 percent have previously driven Greece, Ireland and Portugal to seek bailouts.

Investors expect the leading European benchmark indexes to rise today, extending the previous session's rally as investors bet new leaders in Italy and Greece will speed up reforms to tackle the two countries' debt problems.

Following Italian Prime Minister Silvio Berlusconi's resignation, the country's president Giorgio Napolitano asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence, and Monday's bond auction will be seen as an initial judgment on his leadership. Italy is issuing a Euro 3 Billion five year bond today which will probably be fully taken up but at rates which are expected to be above six percent.
In Greece, the new Prime Minister Lucas Papademos -- a former central banker who oversaw his country's entry to the euro zone in 2002 -- will have to win Wednesday's confidence vote in his cabinet before meeting euro zone finance ministers in Brussels on Thursday, state television reported.

The markets should continue to be volatile this week as we wait the outcome of Italian and Greek actions

Weekly Market Summary

2011-11-08T05:31:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally. European and US markets also fell after the Japanese government intervened overnight to cap a rising yen and as doubts grew about a deal to tackle the European debt crisis.
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On Tuesday, Asian markets fell on renewed worries about a slow progress in resolving the euro zone's debt crisis and a firmer dollar dampened investor appetite for risk. Also, China's official purchasing managers' index (PMI) fell to 50.4 in October from 51.2 in September, countering expectations for a rise. The National Bureau of Statistics blamed the drop on weak European and U.S. economies. European and US stockmarkets fell heavily on worries that a planned Greek referendum could scuttle a plan to resolve Europe's debt crisis.

On Thursday, Asian shares, the euro, commodities and the Australian dollar all fell as fears that Europe's debt crisis could unleash financial chaos prompted investors to shed riskier assets in favour of the relative safety of the dollar. European and US stockmarkets rose as Greece's government backed away from a proposed referendum on staying in the euro and a rate cut from the European Central Bank raised hopes for an easing of the region's debt crisis. The ECB cut the base rate by 0.25% to 1.25%.

On Friday, Asian stockmarkets rose and the euro steadied on hopes that Greece will abandon a proposed referendum over a euro-zone bailout but investors remained cautious over a confidence vote later in the day in the Greek parliament. European and US markets fell as richer nations appeared to back away from a European Union plan to broaden funding for a euro zone bailout fund. Also, Italian bond yields spiked higher hitting record highs of around 6.4 percent, expanding the spread of Italian 10-year yields over Bunds to a new lifetime high.

This morning, Asian stockmarkets with investors still nervous despite the formation of a new Greek unity government intent on avoiding imminent debt default.
Last week, global equities and commodities fell except for gold and oil which appreciated slightly as concerns grew over the details of a coalition deal by Greece and Italy's rising borrowing costs. The market is still filled with too many uncertainties for prices to stabilise. The rollercoaster movement of base metal prices is a sign of directionless trading. Investors are waiting to see what happens next with the euro zone crisis and China's credit situation.

Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed on a new coalition government to approve the bailout plan, which requires painful fiscal reform, before elections. People are waiting for the situation to play out in Europe. Right now they are unwilling to put too many bets in either equities or commodities as investors remain unsure whether Greece will be able to work itself out of a debt crisis despite a weekend deal by the country's leaders aimed at implementing a controversial austerity program.

Also, a critical Italian parliament vote on Tuesday to debate austerity cuts has become a test of Prime Minister Berlusconi's government, with the opposition also preparing a motion of no confidence in the leader. The uncertainty in Rome eclipsed a political cross-party deal in Greece to approve the terms of its international bailout, although it was still short on detail.

The Greek debt crisis and the political uncertainty in Italy will continue to drive markets this week.

Weekly Market Summary

2011-10-31T03:56:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth. European and US markets rose after European leaders achieved some progress in talks to fix the region's finances and as strong earnings from Caterpillar boosted investor sentiment.

On Tuesday, Asian stockmarkets mostly rose following Wall Street's performance last night. European markets fell after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe's debt crisis. US markets fell after data showed consumer confidence tumbled to its lowest level since March 2009.

On Wednesday, Asian markets rose modestly as markets waited for news of whether a concrete plan to tackle the eurozone's debt crisis will emerge at an EU summit later today. European markets closed modestly lower as investors waited for the outcome of the EU summit. US stockmarkets rallied as Eurozone leaders sealed a three-part deal, which they hoped would convince markets that they have an effective response to the growing economic crisis.
Officials in Brussels said an accord had been reached with banks on a 50% write-off of 100bn euro of Greek debt and that banks would seek 106 Billion Euro to recapitalise their balance sheets. It was also agreed on Wednesday to increase the 440bn euro bailout fund, perhaps to over 1trn euro. This would help protect larger economies such as Italy and Spain from the market turmoil that has already pushed three countries to need bailouts.

On Thursday, Asian stockmarkets rose following the EU rescue plan. European markets exploded higher on the Eurozone debt agreement. Wall Street rose on strong volume followed the EU debt resolution programme.

On Friday, Asian markets rose having one of their best weeks in nearly three years after a long-awaited plan to resolve the European debt crisis sparked a huge relief rally in riskier assets. European and US stockmarkets closed flat after a strong rally on a long-awaited euro zone rescue deal, but a weak sale of Italian bonds showed investor confidence in the agreement was shaky.

This morning, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally.

Last week, global equities and commodities surged as investors cheered an EU rescue plan to resolve the Eurozone's debt crisis. This three part rescue plan consists of private banks agreeing to accept a write-off of 50% on Greek bonds, seek 106 Billion Euro to recapitalise their balance sheets and that the the European Financial and Stability Fund would be boosted to 1 Trillion Euro from 440 Billion Euro. A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing.

This week, traders will be cautious ahead of the Group of 20 leaders' meeting later on Thursday that will focus largely on the European debt crisis. Also, the markets are waiting for further details on the EU rescue plan and its implementation.

Also, this week, investors will shift their focus to U.S. economic data, which might temper their exuberance. Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve's policy meeting and Fed Chairman Ben Bernanke's quarterly news conference

Weekly Market Summary

2011-10-24T02:25:00.001-07:00

by Raymond Chatlani

This morning, Asian markets rose amid hopes that a crucial week for the euro zone crisis will see policymakers finally come up with a plan to resolve the region's debt woes and recapitalize its banks. European stockmarkets and Wall Street stocks fell as Germany's finance minister Wolfgang Schaeuble said a forthcoming summit would not yield a definitive solution to Europe's debt crisis.

On Tuesday, Asian stockmarkets fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns. China’s statistics bureau said the economy grew at 9.1 percent in the third quarter, less than predicted. European markets fell on Moody's warning that it may review France's credit rating and as growth in China slowed. Wall Street rose on strong bank earnings.

On Wednesday, Asian stockmarkets rose but gains were capped after Moody's Investors Service cut Spain's sovereign ratings by two notches, adding to uncertainty over the euro zone's debt crisis and economic growth. European markets rose on optimism policymakers will take major steps at a summit this weekend to solve the festering debt crisis and offsetting the impact from a cut to Spain's sovereign credit rating. U.S. stocks fell and the euro edged lower after optimism faded that European leaders will make substantial progress on resolving the euro zone debt crisis at their summit meeting this weekend.

On Thursday, Asian and European stockmarkets slumped with investors growing wary about taking risks ahead of a key European leaders' summit on Sunday. US markets rose as jobless claims fell last week and after France and Germany said they would press ahead to solve the euro zone debt crisis, despite setbacks that meant the details might not be settled at a weekend European Union summit.
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On Friday, Asian markets closed mixed and the euro clung to overnight gains as markets largely stayed within range, and as investors awaited a weekend meeting of European leaders for signs of progress in resolving the region's debt crisis. European stockmarkets rose as members of Germany's Merkel's government repeatedly stressed Europe's two biggest economies were in agreement on the broad outlines of a deal. US indices rose after a round of solid corporate earnings reports as industrial giant General Electric Co. said that its third-quarter net income rose 18 percent.

This morning, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth.

Last week, global equities and commodities rose in volatile conditions as investors bet that European leaders in crucial meetings over the next few days will move forward in resolving the euro zone's two-year-old debt crisis. European leaders are to meet Wednesday to hammer out a concrete resolution to the region's debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.
Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome. At the end of the day, the market is nervous, waiting to see anything substantial coming out of the summit. We are getting to a point that there have been so many false promises that they really need to deliver something big. We can expect this volatility to continue over the next two days until details emerge of the outcome from the summit next Wednesday.

Weekly Market Summary

2011-10-10T08:02:00.000-07:00

by Raymond Chatlani

On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.

On Tuesday, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession. European markets fell on increased worries about a major banking crisis in Europe and expectations that Greece would default soon. A late rally in U.S. stocks pulled Wall Street out of bear market territory on Tuesday, and the euro rose versus the dollar after Federal Reserve Chairman Ben Bernanke promised more economic stimulus if needed.

On Wednesday, Asian markets trimmed earlier gains as traders wait to see if Bernanke will definitely provide economic stimulus. U.S. and European stock markets traded higher amid reports monetary officials in Europe are working to shore up the weak European banking sector, in case Greece should actually default on its debt obligations in the near term.

On Thursday, Asian stockmarkets followed global stocks higher, buoyed by a recovery across a broad range of assets on optimism over Europe's efforts to aid the region's financial sector and U.S. data suggesting the economy could avoid recession. European and US markets rose as Europe moved closer to pumping aid to the region's troubled banks and U.S. jobless benefit claims rose less than expected last week. The European Central Bank (ECB) announced aggressive liquidity measures on Thursday, throwing a lifeline to lenders who have seen wholesale funding drying up as market confidence ebbed. The European Central Bank said it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.

On Friday, Asian markets rose for a third day following the ECB's agressive moves to provide liquidity to financial institutions. European stockmarkets rose on good US jobs data. Wall street fell after a ratings downgrades of Spain and Italy buffeted markets.

This morning, Asian stockmarkets closed mostly higher except for China and Hong Kong as on Sunday, French President Sarkozy and German Chancellor Merkel agreed a package of measures to help stabilise the eurozone by the end of the month.

Last week global markets and commodities rose modestly supported by assurances from the Federal Reserve that more economic stimulus would be provided if needed, promises by EU officials that European banks would be recapitalized to help deal with a potential debt default by Greece and yesterday's agreement between France and Germany to allow additional measures to stabilise the Eurozone by the end of the month.

As in previous weeks, we are still only seeing rhetoric by global officials without concrete action being taken. While short term action by the ECB to provide liquidity will ease the anxiety of the market for now, this present volatility is expected to continue until additional monetary policy measures are actually implemented later on this month.

Weekly Markey Summary

2011-10-04T02:54:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets tumbled on rumours that European leaders would accept some form of Greek default. European shares rose on reports that European leaders were mulling additional ways to stem contagion from the Greek debt crisis. Their plan envisages an increase in the size of the bailout fund to 2 trillion euros and is expected to involve a 50% write-down of Greek government debt. Banks with large exposures to Greek debt would be strengthened to ensure stability should Greece partially default. US stockmarkets rose on hopes that European officials would stabilise the Eurozone debt problem.

On Tuesday, Asian shares rebounded on bargain hunting on hopes that euro zone officials will act to corral Greece's debt woes and prevent another full-blown banking crisis. European stockmarkets expleded higher amid hope that plans are being crafted to help restore the region's fiscal and financial conditions. Wall Street ended 1.5 percent higher but gave up half its gains at the close after initially opening up 3 percent.

On Wednesday, Asian markets closed mixed, after a second day of rallies on Wall Street and in Europe, on cautious hope that eurozone leaders are plotting a solution to the region's debt crisis. But the gains, the second in a row, quickly faded due to the lack of concrete evidence of a plan, while traders looked ahead to a key vote Thursday in Germany, where MPs will decide on expanding a rescue fund for debt-mired European countries. European and US stockmarkets fell due to the high degree of uncertainty about the European situation and its effects on economic growth. There is a split between EU members over the terms of Greece’s second €109bn bail-out with members including Germany and the Netherlands calling for more losses to be imposed on the private sector, something France and the ECB oppose for fears of another rout of European banking stocks.

On Thursday, Asian shares and commodities fell on growing worries that Europe's intractable debt problems will plunge the world economy into a second global financial crisis. European stockmarkets rose following the passing through the German Bundestag of plans to expand the European Financial Stability Fund (EFSF). US markets rose as traders were relieved that Germany passed a measure to expand the powers of a regional bailout fund. That eased worries that U.S. banks could be buffeted by another bout of turmoil in Europe's financial system.

On Friday, Asian stockmarkets fell as China, the world's biggest metals consumer, saw its manufacturing sector contracting for a third consecutive month in September, suggesting the world's second-largest economy was not immune to global headwinds, while factory inflation quickened. European markets fell as retail sales in Germany, Europe's largest economy, came in below expectations, dropping 2.9% in July. The reading marked the biggest drop in more than four years and underscored a possible slowdown in the global economy. Wall Street fell heavily as investors fled to the safety of US treasuries.

On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.

This morning, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession.

Last week global stocks posted their worst quarter in nearly three years in July-September, due to persistent fears about the world economy and the lack of a convincing solution to Europe's debt problems. All commodities fell heavily except for gold which recovered later on last week and yesterday as investors sought safe havens on growing expectations of a Greek default that has increased fears of a global recession. A bid for safety also increased demand for US treasuries.

In a couple of weeks Greece will declare bankruptcy as funds will run out. Unless the EU, IMF and the ECB provide funds soon, we can expect world markets and commodities to continue their falls this week as investors are fed up with rhetoric and have completely lost their faith and trust in Governments.

Weekly Market Summary

2011-09-26T02:20:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target. European and US stockmarkets tanked on prospects of a Greek default and increasing fears that the single currency may be forced to break up unless greater fiscal integration is brought in.

On Tuesday, Asian stockmarkets and the euro fell after ratings agency S&P downgraded Italy a notch amid fears of a Greek default, as investors worried that the euro zone's debt woes will pitch the global financial system into a full-blown banking crisis. European markets rose despite a credit rating downgrade for Italy that heightened tensions surrounding the eurozone debt crisis with Greece struggling to avert a default as investors waited in anticipation the start today of a Federal Reserve monetary policy meeting. Wall Street rose as investors hoped the Federal Reserve's policy panel would add more monetary stimulus to kick-start economic recovery.

On Wednesday, Asian stockmarkets rose as investors waited to see if at the end of its two day meeting, the FEDS would announce further monetary policies to aid the global economy. European markets fell on fresh concerns over banks' exposure to indebted Greece. US equities fell after the U.S. Federal Reserve's widely expected plan to buy $400 billion in long-term debt failed to convince investors that "operation twist" would be enough to revive growth. The Feds intend to sell $400 billion of short-term Treasury bonds to buy longer-dated debt aimed at stimulating the economy by forcing down long-term borrowing costs.

On Thursday, Asian stockmarkets fell following a slide on Wall Street, as investors took fright at a warning from the Federal Reserve that the United States faced a grim economic outlook with "significant downside risks". HSBC China Flash PMI survey showed factory output fell for a third consecutive month in September, pointing to a slowdown in the world's second largest economy which further accelerated falls in Asia. European stocks slumped echoing falls elsewhere, after the US Federal Reserve disappointed investors with its stimulus plans and warned of serious downside risks amid the stubborn eurozone debt crisis. Wall Street plunged after the Federal Reserve indicated that the U.S. economic slump could last for years.

On Friday, Asian stockmarkets fell on prospects of a global recession as investors shed risky assets from portfolios and scurried to safer havens. European and US markets recovered from initial losses and closed in positive territory on talk that the European Central Bank might add liquidity to shore up the region's vulnerable banking system but persisting worries about a global recession kept markets volatile.

This morning, Asian markets tumbled on rumours that European leaders would accept some form of Greek default.

Last week, global equities and commodities tumbled as investors sought safe havens by buying the US Dollar and US treasuries on alarm at the U.S. Federal Reserve's dire outlook for the world's biggest economy at its two-day policy meeting last Thursday. The twin fears of U.S. recession and a banking crisis brought on by Europe sovereign debt woes have haunted equity markets in recent months and fuelled a sharp sell-off in early August and renewed weakness this month.
Commodities were decimated with oil, copper, gold and silver all falling over ten percent on fears that governments have done too little to head off a global recession. Financial markets are sick and tired of the authorities in Europe and in the U.S. twiddling their thumbs and not doing substantive things to solve this crisis of the global economy,

This weekend Finance ministers from the G20 nations gathered at a meeting of the International Monetary Fund (IMF) in Washington. It is expected that a plan to rescue the European single currency could be revealed within days. It is believed to involve beefing up the European Financial Stability Facility and an injection of funds into a number of continental banks.

The plans would lead to an orderly default by Greece but allow the country to remain within the eurozone in a bid to relieve some of the economic pressure on Spain and Italy.

Unless world leaders especially EU Governments act soon, we can only expect more of the same.

Weekly Market Summary

2011-09-26T02:19:00.000-07:00

By Raymond Chatlani

This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis. European markets continued their falls on concerns that Greece could default. US stockmarkets initially fell but recovered towards the close after a report that Italy may get financial support from China lifted Wall Street.

On Tuesday, Asian stockmarkets rose after the Financial Times reported on its website on Monday that Italy had asked China to make "significant" purchases of Italian debt. European indices fell on concerns that the Greek debt crisis is still unresolved but rallied strongly into positive territory on rumours that emerging countries would purchase European debt. US markets initially fell but closed strongly positive by headlines that suggested BRIC countries are in talks to purchase eurozone debt.

On Wednesday, Asian stocks fell after Moody's Investors Service downgraded credit ratings on Credit Agricole and Societe Generale by one notch, as expected, citing their exposure to the Greek economy. European and US stockmarkets rose as optimism over tentative steps to resolve Europe's debt crisis overcame still widespread fears that Greece will ultimately default on its debt.

On Thursday, Asian markets mostly rose on optimism that Europe will be able to get a handle on its sovereign debt crisis after reassuring words from European leaders aimed at soothing jittery financial markets. In a teleconference Wednesday night, German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to help Greece avoid a debt default and Greek Prime Minister Papandreou renewed his commitment to debt-reduction targets. European stockmarkets rose for a second day after the ECB said that it had decided to launch three-month loans in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. Wall Street rose after central banks in Europe and the U.S. announced a joint move to support European banks.

On Friday, a decision by European central banks to support the region's financial system helped calm Asian markets, setting off a rally across the region. European and US stockmarkets rose on improved sentiment as traders chased gains following the previous day's joint announcement by various Central Banks that unlimited three month US Dollar loans would be provided to banks until the end of the year.

This morning, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target.

Last week global equities rose on expectations that Italian bonds would be purchased by China, that the BRIC countries would purchase Eurozone bonds and that a number of Central banks launched a joint operation to pump liquidity to European banks to withstand the Eurozone debt crisis.

At the moment markets are in limbo with a lot of cash waiting in the sidelines as investors are torn between a possible recession in the US and Europe or whether these regions will be able to limp along with anemic growth. Also, weak leadership in the European Union where different countries have diverse views as to how to resolve the Greek default problem is keeping investment flowing to the EU. The most recent event is Merkel's objection to the introduction of Euro bonds while most European leaders are in favour of utilising this tool as needed.

This week the main event that will influence markets is the outcome of the two day FEDS meeting which will end on Wednesday where investors are eagerly waiting to see what monetary policies will be launched by US Federal Reserve Chairman Ben Bernanke. These policies may sway markets either way where confidence will be restored or see the present poor sentiment deteriorate.

Weekly Market Summary

2011-09-12T01:21:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets fell on Friday's disappointing US jobs data. European stockmarkets plunged as risk aversion and ongoing concerns about the eurozone debt crisis weighted on market sentiment. Wall Street was closed for the Labour day holiday.

On Tuesday, Asian stockmarkets fell amid fears that Europe's sovereign debt troubles are worsening and could trigger a second full-blown banking crisis after European stocks tumbled 4 percent on Monday, with financial shares falling to their lowest in more than 2 years. European markets continued to fall amid doubts about the will in Italy and Greece to push through austerity measures demanded by their partners, and hardening opposition to further aid in the bloc's paymaster Germany. US markets fell as they caught up with the markets after being closed yesterday due to a holiday in the USA.

On Wednesday, Asian stockmarkets rose on bargain hunting as value driven investors bought equities. European markets rose after a German court ruled against blocking bailout packages. Germany's Constitutional Court rejected a series of lawsuits aimed at blocking Germany's participation in bailout packages for Greece and other euro zone countries, but said parliament must have a bigger say in future rescues. Wall Street rose on relief that the bailout could continue in Europe.

On Thursday, Asian markets closed mixed as investors waited for statements from the ECB and US FEDS chairman Bernanke on anticipation that some form of quantitive easing would be announced. European stockmarkets rose as the ECB held rates at 1.5 percent. US indexes fell as investors were disappointed that while Bernanke did state that the FEDS would do everything to aid economic growth and employment, there was no indication as to what monetary tools would be used to support economic growth. Gold recovered after falling 3 percent the previous day as President Obama announced a $447 billion jobs plan to spur job growth, a mix of tax cuts and new spending. This is bullish for gold as more money is expected to be printed to support this plan.

On Friday, Asian stockmarkets closed mixed as traders weighed news China's inflation moderated slightly against disappointment that Fed chief Ben Bernanke offered no immediate support for the ailing U.S. economy. European and US markets fell as a jobs proposal by President Barack Obama did little to reassure investors concerned about weak economic growth. German Stark, a top ECB board member resigned with both Europe and the US falling further at the close.

This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis.

Last week, global equities and commodities were decimated as investors worry that the US is falling into recession and on concerns that Europe's sovereign debt crisis is deepening. The only assets that finished in positive territory were gold and the US Dollar as safe havens were sought.
Although Italy's centre-right government promised on Tuesday to hike value-added tax as it bowed to market pressure for more action on its swollen debt and ignored mass street protests and strikes against its austerity measures and Greece's finance minister pledged to speed up delayed privatisations and structural reforms, while his Irish counterpart said Dublin was considering making a deeper fiscal adjustment than planned next year to boost market confidence, investors fled from equities, sold the Euro and purchased the US Dollar and treasuries. Greece's one year bond hit yields of over 80 percent last week, which is signalling that the markets believe that a default is inevitable.

Unless world leaders come up with clear fiscal policy solutions, we can expect global markets to continue to be volatile with a bias towards lower values.

Weekly Market Summary

2011-09-07T03:05:00.000-07:00

by Raymond Chatlani

On Monday, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment. European shares gained tracking a late rally in Wall Street on Friday, after U.S. Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the troubled economy at the U.S. central bank's September meeting. US stockmarkets rose supported by European and Asian equities that rallied partly on a possible merger between two big banks in Greece. Wall Street traders were also relieved that Hurricane Irene caused less damage than feared in New York City over the weekend.

On Tuesday, Asian stockmarkets rose after better-than-expected U.S. consumer spending data and a bank merger in Greece offered investors some rare good news about the outlook for indebted developed world economies. European indices initially fell except for London (which played catch up as it was a bank holiday on Monday in the UK) as consumer and business confidence in the eurozone economy slumped in August, falling for the sixth consecutive month, an EU survey showed amid rising fears of an economic slowdown. European markets recovered towards the end of the day and closed mixed. Wall Street closed positive in choppy trade as a recovery in risk appetite among some investors was countered by bearish economic news. U.S. consumer confidence hit a two-year low in August and prices of single-family homes dipped in June from May as the U.S. housing market continued to crawl along at depressed levels, data showed.

On Wednesday, Asian stockmarkets rose as investors put aside concerns over flagging consumer and business confidence in developed economies to hunt for bargains after gains on Wall Street. European shares rocketed on hopes the U.S. Federal Reserve would support the fragile recovery with fresh stimulus measures. US markets rose as hopes for more help from the U.S. Federal Reserve drove buying in equities, oil and metals.

On Thursday, Asian markets rose as China's official purchasing managers' index rose to 50.9 in August from a 28-month low of 50.7 in July, official data showed, while upbeat sentiment across financial markets lifted Asian stocks on hopes the U.S. Federal Reserve would intervene to support the economy. European shares slid on dismal eurozone manufacturing figures, making a downbeat start to September after an extremely volatile August which was haunted by shadows of global recession but recovered towards the close with investors encouraged by data showing U.S. factory activity cooling in August but still expanding. The eurozone manufacturing purchasing managers' index (PMI), compiled by Markit, logged 49.0 points in August, down from 50.4 in July. Any score below 50 indicates contraction, while anything above suggests expansion. US stockmarkets fell as data spurred fears of recession as investors wait for tomorrow's U.S. jobs data for August.

On Friday, Asian stockmarkets fell on weak global data and fears of recession. European markets plunged on renewed concern over the Greek debt crisis. US indices fell on very weak employment figures where the private sector created 17,000 jobs only in August which was offset by the US Government where employment went down by about 17,000 jobs. This last occurred sixty years ago.

This morning, Asian markets fell on Friday's disappointing US jobs data.

Last week, global equities and commodities fell on fears that the global economy is entering recession. Consumer and business confidence slunped in the Eurozone and US during August. In the US, prices of single family homes dipped in June which shows that the US housing market has not yet reached bottom. On Friday, The zero net growth in US jobs in August reinforced concerns that the US economy has stalled. Gold and silver were the only beneficiaries.

While two weeks ago, mounting speculation that the Fed is preparing a new round of monetary expansion helped the market regain its footing, last week both businesses and consumers were very worried by the slowdown in domestic economic activity, heightened financial market turmoil, ongoing serious concerns over the eurozone sovereign debt situation and increased fears over the health of the global economy. Investors fear that without further stimulus, the global economy will fall into recession.
Short term, the markets will have to jump the hurdle of this Wednesday's German Federal Constitutional court ruling on suits claiming Berlin is breaking German law and European treaties by contributing to multi-billion euro bailouts of Greece, Ireland and Portugal. Longer term, the result of the FEDS two day meeting on 20-21 September will greatly affect markets as the Federal Reserve are under pressure to provide more stimulus to aid the frail recovery.

Volatility is expected to continue until we know the outcome of these two important events.

Weekly Market Summary

2011-08-29T06:41:00.000-07:00

by Raymond Chatlani

On Monday, Asian stocks gave up early gains and fell as fears that the U.S. is slipping back into recession caused investors to dump riskier assets. Gold hit a new all time high of over $1,890 an ounce. Bank shares crashed despite a widespread rally across Europe's major stock markets as questions were raised about their ability to fund themselves. US markets rose modestly on expectations of the Feds introducing another quantitive easing program.

On Tuesday, Asian markets extended gains after the Chinese flash PMI from HSBC, designed to preview China's factory output before official data, showed the index edging up to 49.8 in August from July's final reading of 49.3. That left the index just below the 50-point mark which separates expansion from contraction, but HSBC itself believes a reading as low as 48.0 in China would still point to an annual growth of 12-13 percent in industrial output and 9 percent in GDP. For the fourth straight session, gold hit another new all time high at 1,911 an ounce at one point as investors continued to fret about the health of the global economy. European stocks rose as manufacturing activity in Germany was better than expected, rising to 52 in August, compared with estimates for a reading of 50.8. US stockmarkets rose amid better-than-expected global manufacturing data and expectations that the Federal Reserve Chairman Ben Bernanke will discuss additional support for the U.S. economy during a conference on Friday.

On Wednesday, Asian shares fell despite a sharp rally on Wall Street the previous night as Moody's downgraded Japan's credit rating to Aa3 from Aa2, citing weak growth prospects for the world's No. 3 economy, massive government debt and constant political uncertainty. European stockmarkets rocketed as the European Central Bank's weekly dollar funding operation was not used on Wednesday, calming fears that euro zone banks are being increasingly blacklisted by U.S. money market funds because of their exposure to the region's debt crisis. US markets turned higher as a larger-than-anticipated rise in orders for durable goods bolstered the view that, while sluggish, the economy is not headed into recession.

On Thursday, Asian shares rose cheered by gains on Wall Street and gold continued to struggle after running into a wall of profit-taking. European stockmarkets ended lower after another volatile trading session, as talk of an imminent ban on short-selling in Germany, later denied, swept through equity markets. . US markets fell on weakness in industrial and technology shares as Apple Inc fell 2 percent to $368.75 a day after co-founder Steve Jobs resigned as chief executive, keeping the Nasdaq negative. Adding to tech woes, Applied Materials Inc fell 3.6 percent to $10.94 after warning Wednesday that fourth-quarter revenue could fall as much as 30 percent on plummeting demand.

On Friday, Asian stockmarkets fell marginally on jittery trading as investors waited to see if Bernanke offered more support for the U.S. economy when he delivers a highly anticipated speech at a conference later today in Jackson Hole, Wyoming. European markets fell on concerns about the debt crisis. Wall Street rose sharply after Federal Reserve Chairman Ben Bernanke said the U.S. was headed for long-term economic growth.

This morning, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment.

Last week, global markets rose modestly with commodities rising sharply except for oil. European shares were mixed as some markets fell due to the ongoing Eurozone crisis. The bigger picture here is that US Federal Reserve chairman Bernanke appears to have enough confidence that the economy is not going to worsen and so he thinks there is no need for a QE3 at this time. Federal Reserve Chairman Ben Bernanke also left the door open to new stimulus to help the U.S. economy and reduce unemployment.

We expect this volatility and lack of direction in the markets to continue during September as traders and fund managers will still be on holiday. If Bernanke does launch QE3 as expected this Autumn, then markets should recover their present summer losses.

Weekly Market Summary

2011-08-12T08:21:00.001-07:00

by Raymond Chatlani

On Monday, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt. European and US markets extended last week's rout with the Dow Jones industrial average ending 5.55 percent lower following Friday's historic downgrade of the U.S. AAA credit grade by ratings firm Standard & Poor's.

On Tuesday, Asian stockmarkets nosedived and the Swiss franc held near a record high, as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States while gold hit a new high of $1,778 an ounce. The news that Chinese consumer prices in July rose 6.5 percent from a year earlier contributed to these falls, but Asian markets later staged a sharp rebound from early lows. European and US markets recovered after initially falling in a highly volatile session and closed into positive territory after the U.S. Federal Reserve promised to extend near-zero interest rates for two more years and said it would consider further steps to help growth..

On Wednesday, Asian stocks rebounded, following a jump in U.S. shares, after the Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout for the time being. European markets got hammered on worries that the debt crisis in Europe is spilling in to France amid a weaker economic outlook in the United States. A storm of market questions on the financial solidity of a major French bank and talk of an impending downgrade of France's credit rating, all denied by authorities, rattled financial markets. Safe-haven buying lifted gold above $1,800 per ounce for the first time and oil rebounded from six month lows on Wedesday as confidence in the U.S. and euro zone economies eroded fast. U.S. stockmarkets also fell on fears about the French banking sector's exposure to shaky European debt and its possible spillover onto U.S. banks.

On Thursday, Asian stocks fell 1-2 percent as the fallout from Wall Street's 4 percent drop overnight was limited by a rise in U.S. stock futures, while gold climbed above $1,800 an ounce to a new record, reflecting fears over Europe's worsening financial crisis. European markets initially fell as French bank's shares prices and the cost of insuring Italian government bonds against default hit a record high and the country's stock market fell again as politicians raised doubts about Prime Minister Silvio Berlusconi's new austerity plan. However, European and US stockmarkets rose strongly as a strong U.S. jobs report trumped early concerns about French banks and fears that Europe's debt crisis will spread.

On Friday, Asian stocks edged up, as investors hunted for value after an intense week of volatility, though the festering European financial crisis may mean that havens like gold and the Swiss franc may still draw buyers. European markets rose as regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators.Wall Street rose gently at the time of writing as traders dissected mixed reports on consumer sentiment, retail sales and business inventories. The government says that consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. But a survey on consumer sentiment fell to its lowest level in more than 30 years. And a separate report showed that businesses increased their stockpiles in July by the smallest amount since May 2010.

Another volatile week in the markets where investors continued to sell equities and commodities and seek safe havens such as gold, the Swiss Franc and US treasuries. This week gold breeched $1,800 an ounce temporarily. Besides last week's fears of a US slowdown and spikes of over 6 percent in Spanish and Italian bonds which were unsustainable, this week investors sold on rumours of a downgrade in France's credit rating and fears that Societe Generale may become insolvent and has to be bailed out by the French Government. French authorities denied this and markets bounced back today on the back of a ban on short selling of financial shares in many European markets, especially Spain, Italy and France.

Such volatility is expected to continue for a few weeks until it is clear whether the US economy will fall into recession again and if the Eurozone countries can muddle through the debt crisis.

Weekly Market Summary

2011-08-08T01:27:00.000-07:00

By Raymond Chatlani

This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer. Both Euope and Wall Street fell as manufacturing activity barely grew in July, falling to the weakest level since just after the recession ended. The Institute for Supply Management, a trade group of purchasing executives, says its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. That's the lowest reading since July 2009, one month after the recession officially ended.

On Tuesday, Asian shares fell on concerns about the health of the global economy after sluggish U.S. manufacturing data. European markets hit their lowest close in 11 months as weak global growth replaced the U.S. debt ceiling row as investors' main concern and banks fell on worries about the euro zone peripheral debt crisis. Europe's sovereign debt crisis contributed to the gloom as Italian bond yields hit their highest in the euro's 11-year lifetime today .US stockmarkets fell as investors fretted about a possible credit downgrade amid concerns that economic growth could remain subdued. Many investors fear that even if the US debt ceiling is raised, the measures would not be enough to avoid a credit downgrade which will raise borrowing costs. Also, in the latest economic data, U.S. consumer spending fell unexpectedly in June to post the first decline in nearly two years as incomes barely rose, the government reported.

On Wednesday, Asian stockmarkets fell for a second successive day and safe haven assets such as gold and the Swiss franc shone as renewed fears about the health of the global economy rattled financial markets. Confirmation of a last-gasp deal to avoid a default by the United States failed to bring any relief, as investors focused instead on worries that major economies could slip back into recession amid weak data and Europe's festering debt crisis. Gold hit anew all time high of $1,662 an ounce. European markets fell on the back that the last three days in the USA, a weak manufacturing report has been delivered, fresh signs the US consumer is ailing and, yesterday, evidence the country’s services sector is slowing. For investors it opens a new front of worry besides Europe, where Italy and Spain are in the eye of the debt storm. Wall Street fell initially as U.S. service firms, which employ nearly 90 percent of the country's work force, experienced their weakest growth in 17 months in July, but finished in positive territory as investors saw value and scupped up beaten down shares. The report confirms other data that show the economy is struggling two years after the recession ended.

On Thursday, Asian stockmarkets mostly fell as worries about slowing global growth sapped investor enthusiasm. Markets are also awaiting results of a Spanish bond auction after yields on Spanish and Italian bonds jumped in recent sessions on fears those economies would be engulfed by debt problems. Gold hit another record new high of $1,678 an ounce. European and US markets fell and commodities tumbled, trampled by a global stampede away from riskier assets as investors panicked over mounting signs of a sluggish U.S. economy as the US Labor Department reported that weekly claims for unemployment benefits remained at a high 400,000 last week.

On Friday, Asian stocks dropped 3 to 4 percent after panic triggered the worst sell-off on Wall Street since the global financial crisis, sending investors slashing positions and scrambling for cash and government bonds. Initially, European stocks fell heavily as the selling continued although nonfarm payrolls increased 117,000, the US Labor Department said, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force. Wall Street rallied at the open but closed mixed as S & P lowered the USA's credit rating to AA+ from AAA.

This morning, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt..

The worst week for global markets since 2008 as investors fear that the US may enter into recession and that Eurozone countries will be unable to rollover their debts at reasonable interest rates. Last week we saw a flight to safety as equities tanked and investors sought safe havens such as the Swiss Franc, US treasuries and gold.

In the US, in the past two weeks, we have seen consumer spending and private sector employment fall, a weak manufacturing report and lower durable goods orders and the US debt ceiling was raised as the US Government pledged to cut the US deficit which means that there will be no spending on economic stimulus. Also, the Federal Reserve is reluctant to do anything more. Without much to invigorate growth, the US economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade, so Wall Street is spooked.

Italian and Spanish bond rates rose above 6 percent which is unsustainable as investors panicked and started to dump them. Clearly, the second Greek bailout two weeks ago did nothing to calm the markets. The S & P downgrade of the US credit rating to AA+ on Friday affected Asian markets this morning and US futures are well down.

Markets may continue to fall for a number of weeks until investors are reassured that Government authorities will ensure that there is ample liquidity in the markets. Many analysts believe that there will be great opportunities in certain sectors of the markets when this correction is eventually over. Across the world company fundamentals are in much better shape than three years ago. Firms have cut costs, borrowings are a lot lower and growth seems to be returning across a number of sectors.

Weekly Market Summary

2011-08-01T00:06:00.000-07:00

by Raymond Chatlani

On Monday, gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled. Financials led european stockmarkets down on US debt concerns. US markets fell as political brinkmanship in Washington over the debt ceiling sparked fears of a U.S. rating downgrade. Gold surged to another record high, while oil and other commodities fell as the countdown for the United States to reach a debt deal or face a disastrous default drove investors into safer assets.

On Tuesday, Asian shares edged higher, bouncing back from a slide the previous day, after U.S. stocks posted only modest losses in reaction to the worsening deadlock in Washington over raising the debt limit and avoiding a technical bond default. Commodities rose broadly on Tuesday, with copper and corn outperforming the pack, as fear of a U.S. credit default sank the dollar and investors sought assets that could preserve value. European and US stockmarkets fell on a stalemate in US debt talks.

On Wednesday, Asian stocks rebounded and the U.S. dollar fell while gold hit a record high at more than $1,624 an ounce, as a drip feed of news out of Washington indicated politicians were making little progress on a plan to lift the U.S. debt ceiling. European markets fell for a third day as Italian banks tumbled in Milan as the Eurozone debt crisis resurfaced as Spain and Italy's borrowing costs marched back towards euro-era highs. Analysts said that this is due to Merkel's failure to confirm the bail-out plans until "after the parliamentary summer break". US stockmarkets fell amid continued gridlock for lawmakers debating how to avoid a debt default and a weak report on orders for manufactured goods. The government said that orders for durable goods fell 2.1 percent in June because of a drop in orders for commercial aircraft, automobiles and heavy machinery.

On Thursday, Asian markets tumbled following big losses on Wall Street, as the deadline approaches for US lawmakers to strike a deal to avoid a disastrous default. The White House and Democrats and their Republican rivals continue to bicker over a deficit-slashing plan that would allow a hike in the US debt ceiling, despite the government running out of money to pay its bills within a week. European shares fell for a fourth straight session to hit a one-week low as disappointing earnings and cautious comments from major European companies raised concerns about corporate profits. US stockmarkets fell as a stalemate continued over the U.S. debt limit even though there was a strong jobs report. The number of Americans claiming new unemployment benefits last week dropped below the 400,000 level for the first time since early April, a hopeful sign for the economy which has struggled to regain momentum.

On Friday, Asian stockmarkets fell as U.S. lawmakers squabbled over a compromise to avoid an unprecedented debt default, while growing worries about Europe's debt crisis weighed on the euro, adding to investor wariness. European markets fell after Moody's threatend to downgrade Spanish, adding to concerns that a Greek rescue package has done little to halt the spread of the eurozone debt crisis. Wall Street fell to post its worst weekly losses in nearly a year after data showed meager growth in the economy and debt deal deadlock kept investors nervous. The economy expanded at meager 1.3 percent annual rate in the spring after scarcely growing at all in the first three months of the year, the Commerce Department said Friday. Gold hit a new high of $1,632 an ounce.

This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer.

Last week, global markets fell significantly on fears of US lawmakers failing to lift the country's $14.3 trillion borrowing ceiling and risking a default and possible downgrade of its prized AAA credit rating as investors lost appetite for risky assets. Also, throughout last week's increasingly intense showdown in Washington over the U.S. debt ceiling, the spreads of Italian and Spanish bond yields over Germany widened sharply, signifying persistent unease that Greece's problem may spread to other European countries. Investors flocked to gold as a safe haven which hit a new record high of $1,632 an ounce on Friday.

This morning's news that the US debt ceiling will be raised should be positive for markets this week but will depend on whatever fiscal accord have been agreed. Details of this agreement will be revealed later today and tomorrow. European and US futures are already up and gold fell one percent this morning as investors are seeking riskier assets in anticipation of this new accord passing both the Senate and the House.

Weekly Market Summary

2011-07-26T06:04:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S. European stockmarkets continued to fall on sovereign debt woes and last Friday's stress tests with banks' share prices falling heavily. Mounting fears that politicians will fail to resolve the eurorozone's debt crisis sent markets sliding and Spain and Italy's borrowing costs nearing the "point of no return". The yields, or returns, on Spanish and Italian 10-year government debt hit euro-era highs over 6pc as investors demanded greater reward to shoulder the risk. Investors are unconvinced that the euro-sharing nations will manage to reach agreement on a second bail-out for Greece before Thursday's crunch summit in Brussels. US markets fell over Europe's banking troubles and an impasse over lifting the U.S. government's borrowing limit with gold breeching a new all time high above $1,600 an ounce and silver over $40 an ounce on safe haven demand.

On Tuesday, Asian stockmarkets continued to fall on sovereign debt fears. European markets bounced back led by banks but caution remained ahead of a crucial summit on Thursday where eurozone leaders will try to agree on a second rescue package for debt-stricken Greece. US markets rose as a strong quarterly report from IBM and Coca-Cola and a surge in housing starts sparked investor optimism a day after a selloff. Housing starts topped forecasts in June to touch a six-month high, and permits for future construction unexpectedly increased, the government reported. Also, President Barack Obama backed a proposal by six senators that would cut debt by $3.7 trillion over the next decade and raise the country's $14.3 trillion debt ceiling.

On Wednesday, Asian shares rose as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple Inc and International Business Machines Corp helped Asia's beaten-down tech sector gain for a second day. European markets rose boosted by gains in Asia and overnight on Wall Street, as investors assessed global debt concerns. US stockmarkets closed nearly unchanged as the oncoming debt ceiling deadline overshadowed strong earnings from Apple Inc. Apple hit another all-time high one day after the maker of the iPhone and iPad reported quarterly revenues that far exceeded expectationsinvestors sat on their hands amid the unresolved debt ceiling crisis in Washington as the White House and Congress were negotiating a deal to raise the U.S. debt ceiling before a looming default on Aug. 2.

On Thursday, Asian stockmarkets mostly fell as poor manufacturing data on top copper consumer China countered optimism about progress in resolving debt woes in Europe and the United States as it suggests that the Chinese economy is slowing down. European and US markets surged as EU leaders agreed on a package to rescue Greece. The Greek economy will get an injection of 109bn euros (£95.9bn) with more from the private sector in the coming decades.

On Friday, Asian stockmarkets rose after European leaders agreed on a package to rescue debt-stricken Greece and gains will be sustained if U.S. policymakers also manage to cobble together a last minute deal. European markets rose on the Greek bailout package. US indices closed mixed as Caterpillar's profit missed estimates, offsetting a strong report from GE and an agreement on a Greece rescue package.

This morning, Gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.

Last week, global markets fell early in the week on Greek default concerns and fears that the US debt ceiling would not be raised. This all turned around on Thursday when EU leaders agreed to inject 109bn euros (£95.9bn) into the Greek economy with more from the private sector in the coming decades. Investors also became optimistic that US policymakers would reach an agreement to raise the US debt ceiling in time.
Commodities gained last week as precious metals such as gold and silver were purchased as safe havens. Oil also hit a three week high on optimism that Europe was tackling its huge debt problem while agricultural markets rallied on worries about the impact of excessive summer heat on crops.

This week, US corporate earnings should continue to be positive but markets may still fall if no comprise is reached to raise the US debt ceiling.

Weekly Market Summary

2011-07-18T01:29:00.000-07:00

By Raymond Chatlani

This morning, Asian stockmarkets tumbled on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. European shares dropped as mounting signs the region's debt crisis was spreading to Italy hammered euro zone peripheral stocks, taking a key stockmarket index to a two-week low and below an important support level. Shares of financial institutions were among the worst hit. Wall Street dived as renewed jitters about Europe's debt crisis and the global economy overshadowed the start of earnings season.

On Tuesday, Asian stockmarkets fell again on Europe's spreading debt crisis as Italian Government bond prices continued to fall. European indices fell for a third day as moves by officials to stem the European debt crisis failed to allay concerns that the risk was spreading to Italy and Spain. US markets fell as the U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high and as Ireland's beleaguered economy suffered another blow as Moody's cut its credit rating to junk status on fears that it will need further bail-outs.The country joins Portugal and Greece to become the third euro-area nation to be reduced to non-investment grade.

On Wednesday, Asian markets rebounded higher as China's rapid economic growth slowed in the latest quarter to a still robust 9.5pc, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation. Economic growth slowed slightly from 9.7pc in the January-March quarter following repeated interest rate rises and other controls, data showed on Wednesday. Factory output rebounded and retail sales grew by double digits. European stockmarkets were lifted by upbeat Chinese growth data. Wall Street closed higher after Fed Chairman Ben Bernanke suggested the Fed would consider additional measures to support the economy if the outlook gets worse, but the market is likely to get hit in the coming session after Moody's said it could cut the United States' prized triple-A credit rating. Gold hit record highs on safe-haven buying linked to the European debt crisis and a dollar weakened by hints of more economic stimulus from the Federal Reserve, while supply concerns drove most other commodities higher.

On Thursday, Asian stockmarkets fell modestly on fears that America ratings would be cut from AAA. Spot gold hit a record high $1,594 an ounce, buoyed by a sharp drop in the dollar after Moody's warned the U.S. may lose its top credit rating, the possibility of more Federal Reserve stimulus and Europe's deepening debt crisis. Both European and US markets fell on fears of the spreading Eurozone debt crisis and possible cut to the US credit rating although U.S. retail sales unexpectedly rose in June while weekly jobless claims dropped by a surprisingly large 22,000 to 405,000..

On Friday, Asian stockmarkets closed mixed although ratings agency Standard & Poor's has warned there is a one-in-two chance it could cut the United States' prized triple-A rating if a deal on raising the government's debt ceiling is not agreed soon. This is the second ratings agency that may cut the US credit rating. European markets closed lower as eight of 90 European banks failed the stress test. Wall Street advanced on strong corporate results from Citigroup and Google which offset a rash of weak U.S. economic data. Most major commodities rose on Friday, reversing the previous session's losses, as forecasts for hot weather drove up energy and agriculture prices and mounting fears about debt defaults lured investors into gold.

This morning, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S.

Last week, global markets fell as the ongoing debt crises in the U.S. and the euro zone kept investors from adding to their risky assets. The results of stress tests on European banks that were released after the close of trading Friday overshadowed the start of this week's trading in Asia. The results did little to reassure investor confidence in the continent's shaky financial sector, revealing that eight of 90 European banks flunked tests aimed at revealing how they would fare in another recession. Another 16 barely passed.
Investors are also unsettled by the inability of U.S. politicians to work out a deal to avoid a debt default before a deadline that is just two weeks away.

With policymakers on both sides of the Atlantic offering no clear solutions to the markets on their respective debt problems, risk-averse investors are expected to continue piling up perceived safe-haven instruments like gold which hit a record high of $ 1,598 an ounce this morning and bonds.

In the coming days there is likely to be volatility as the market grapples with these major issues. Earnings reports from US companies this week, even if positive may not lift the markets as investors focus on sovereign debt issues while commodities may continue to gain.

Weekly Market Summary

2011-07-11T00:17:00.000-07:00

by Raymond Chatlani

On Monday, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September. European markets mostly rose as worries about Greece receded further. Volume was low, at 56.6 percent of the index's 90-day average, with no direction provided by Wall Street, closed for the Independence Day holiday.

On Tuesday, Asian stockmarkets mostly fell modestly after rating agency Moody's said China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses. European markets rose modestly on low volume. US stocks were little changed as concerns about further monetary tightening in China and soft euro-zone economic data made investors cautious.

On Wednesday, Asian stockmarkets fell after Moody's slashed Portugal's credit rating to junk status, reigniting fears that it may need a second rescue package. European markets fell on the Portugese downgrade and China's interest rate rise sparked jitters about global growth prospects. China's central bank increased interest rates for the third time this year today, making clear that taming inflation is a top priority as its economy gently slows. Although Portugal's credit downgrade pressured global stocks and China's rate hike weighed on commodities, Wall Street paid little heed and pushed shares higher.

On Thursday, Asian stockmarkets rose as investors judged that the People's Bank of China is getting closer to taking a break from its multiple increases in policy rates and bank reserve requirements as the economy shows signs of losing steam. European indexes rose after the ECB raised interest by a quarter percent to 1.5 percent as expected by investors and on improved US labour data. US markets rose after data showed an improvement in the labor market ahead of Friday's key U.S. government monthly payrolls report and as retail sales came in stronger than expected, raising hopes that economic recovery was gaining traction. A report by payrolls processor ADP showed U.S. private hiring increased by 157,000 in June, well above the expected 68,000, bouncing back from a surprise slump the month before. A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000 last week. The decline was more than economists's expectations for a fall to 420,000.

On Friday, Asian markets rose following good labour and retail sales data in the US the previous evening. Both European markets and Wall Street fell after the government said businesses added the fewest jobs in more than a year in June and the unemployment rate rose to 9.2 percent and on fears that the eurozone's debt crisis will engulf Italy. The US economy generated a net 18,000 new jobs in June, and the number of jobs added in May was revised down to 25,000, the Labor Department said. Italy's benchmark index, the FTSE Mib, closed 3.5pc down amid worries that political jostling in Rome threatens the country's fiscal stability. The flight from Italian government debt saw the yield, or return, on its 10-year bonds touch 5.3pc, a euro-era high.

This morning, Asian stockmarkets fell on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. Australia tumbled the most as it was unveiled on Sunday that the 500 worst polluters are to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit, with the government promising to compensate households hit with higher power bills under a plan to reduce greenhouse gas emissions.

Last week, global markets rose for a third consecutive week with commodities continuing their appreciation in price. The resolution of the Greek debt crisis and investors perception that China would bring inflation under control by the last quarter of 2011 were the main catalysts for these rises.

However, markets fell on Friday on the low number of jobs created in the US during June and fears that after Greece and Ireland that Italy will be the next country that will have a fiscal crisis.

Investors are worried that Giulio Tremonti, Italy's finance minister, is threatened by corruption accusations against a former aide and seems to have lost the support of his prime minister Silvio Berlusconi. The fear is that if Mr Tremonti is forced out of government it could derail the austerity measures he has pushed through to bring down Italy's huge debt, which amounts to around 120pc of its GDP. That would leave Italy in greater danger of being sucked into the turmoil which overtook Greece and Portugal, as doubts about their finances saw them shut out of the international debt markets.

This week markets will be focusing on this morning's emergency ECB meeting over how to stop contaign spreading to Italy and US second quarter corporate earnings.

2011-07-04T00:25:00.000-07:00

By Raymond Chatlani

On Monday, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth. European and US stocks recovered some of last week's losses in early trading after encouraging signs about Europe's debt crisis overshadowed weak data about spending by American consumers. Markets rose as French banks agreed to accept slower repayment of Greece's debt although US consumer spending was unchanged in May, the Commerce Department said which was the worst result since September 2009. And when adjusted for inflation, spending actually dropped 0.1 percent.

On Tuesday, Asian stocks rose and the euro held its gains on Tuesday as investors cheered an agreement by French banks to roll over Greek debt, a move that could lessen the chance of a disorderly default by the nation at the heart of Europe's debt crisis. European and US stockmarkets rose as the Greek budget passed along with enough votes for the austerity measures to be accepted so that Greece will receive the first tranche of further financial aid.

On Wednesday, global markets all rose when Greece passed an austerity plan to avoid a sovereign debt default. Commodities also rallied for a second day, as the dollar fell after Greece cleared a critical hurdle to its debt bailout although protesters are still causing chaos in Athens.

On Thursday, Asian markets all rose for a third day on Greece's austerity measures. European shares rose for a fourth day as Greece edged closer to securing funds needed to avoid default. US stockmarkets rose on data showing that factory activity in the U.S. Midwest accelerated in June.

On Friday, Asian equities edged higher, getting a lift as fears of an imminent default by Greece receded and on encouraging data from the U.S. overnight. The markets appear to have taken weaker-than-expected China data in their stride. China's factory sector grew at its slowest pace in 28 months in June as new orders expanded less quickly, with weaker global demand and tight monetary policy at home pinching production.The official purchasing managers' index (PMI), designed to provide a snapshot of conditions in China's vast manufacturing sector, fell to 50.9 in June, below expectations for a reading of 51.3 and down from 52 in May, the China Federation of Logistics and Purchasing said on Friday. Europeanand US markets rose following a report that manufacturing rebounded in June. The Institute for Supply Management's manufacturing index rose to 55.3 from 53.5 in May.

This morning, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September.

Last week global markets rose significantly on the back of the Greek government's victory on Wednesday in the critical vote on a new set of austerity packages which marks at the very least a lull in a crisis that has seen investors turn to the safety of government bonds in recent weeks. Investors were calmed after fears of an immediate Greek bankruptcy and had a higher appetite for risk. Commodities also rose except for gold and silver which fell slightly.
There is hope that for final six months of 2011 will be very positive for stockmarkets and commodities. Investors enthusiasm also got a lift on Friday from an unexpected expansion in American manufacturing.

Weekly Market Summary

2011-06-27T00:14:00.000-07:00

by Raymond Chatlani

This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers. European stockmarkets fell as the postponement of a final decision on extending £10.6billion (€12bn) in emergency loans to Greece spooked investors across the world. Wall Street rose as the latest development to reduce Greece's debt helped draw buyers and the S&P 500 touched a key support level, but anemic volume signalled the recent weakness may not be over.

On Tuesday, Asian stockmarkets all rose except for China as Chinese banks faltered on fears of further tightening by the Chinese Central Bank. European indices rose at their fastest pace in two months, bouncing from three-month closing lows on optimism that Greece will get the financial support to avoid defaulting next month. US markets for a fourth day straight on hopes that a vote of confidence in the Greek government will help the country avoid a default.

On Wednesday, Asian stockmarkets jumped after Greece's embattled prime minister won a confidence vote, taking him one step closer to pushing through austerity measures and avoiding a default, although in Shanghai, concerns over a widely expected interest rate hike tempered gains, with the bourse adding just 0.03 percent. European markets were down modestly as Greek Prime Minister George Papandreou attempted to introduce further cuts to the budget in order for the country to receive its latest 12 billion euro bailout. US indices dropped after the Federal Reserve acknowledged the sluggish pace of the U.S. economic recovery without hinting at further plans for stimulus.

On Thursday, Asian stockmarkets fell with investors reluctant to buy riskier assets ahead of a European leaders meeting which could be dominated by talk of Greece's debt crisis, and after the Federal Reserve cut its growth forecasts for this year and next. European shares fell to a fresh three-month closing low, as higher-than-expected weekly U.S. jobless claims intensified doubts about the strength of the recovery in the world's biggest economy. Greece's debt crisis also hurt sentiment. U.S. stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove the S&P 500 lower, keeping a downward trend in place. Greece won the consent of a team of European Union and International Monetary Fund inspectors for its new five-year austerity plan after committing to an additional round of tax increases and spending cuts

On Friday, Asian stockmarkets rocketed higher as Greece's deal with international lenders for a new austerity plan offered investors a rare piece of good news in a week filled with gloomy economic data.

The Greek government survived the confidence vote allowing the markets a brief bounce but a clear resolution has yet to materialise. European indices rose on Greek hopes but gave up all gains at the close as trading was halted in two italian banks.
Italian banks UniCredit and Intesa Sanpaolo fell 5.5 and 4.3 percent respectively, as worries circulated about their capital positions and the deepening euro zone crisis. UniCredit hit a two-year low. Both stocks were suspended for part of the session, due to the sharp movements, but their volumes were still above their respective 30-day averages. US markets fell after a brief suspension in the trading of some big Italian banks raised new concerns about the European debt crisis, though better-than-expected durable goods orders kept losses limited.

This morning, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth.

Last week the US Dollar rose and commodities and global markets fell. Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. With the daily volatility and downbeat sentiment coming from all angles investors are running scared.

To summarise, all these events reported last week are weighing on the markets:-

On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the U.S. economy may last longer than previously thought. He also warned that the economy is weaker than previously forecast, and lowered this year's gross domestic product growth estimate to 2.9 percent from 3.3 percent.

On Thursday, Greece's new finance minister sought to explain gaps in his austerity plan to EU and IMF officials, with European leaders insisting on deep spending cuts and tax hikes if Athens wants to secure funds and avoid potential default.

The euro tumbled on Thursday, and the dollar's gain, partly on a "flight to safety" was one factor pulling down metals and crude prices.

Meanwhile, in the US the continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.

Finally, fears that the Chinese will raise interest rates in the face of a slowing economy and worries about the weak capital positions of Italian banks continues to bother investors.

This week markets will be mainly driven by the following two events.

Athens will vote on Wednesday the framework austerity package on tax increases and spending cuts, and then on its implementation on Thursday. It is critical for the country to pass the package to secure funding from international lenders to avert a sovereign default.

The U.S. Institute for Supply Management is expected to release on Friday data showing a slower rate of growth for factory activity in June after it grew at its slowest pace in May since September 2009.

Weekly Market Summary

2011-06-20T00:52:00.000-07:00

by Raymond Chatlani

On Monday, Asian stocks weakened on renewed worries over the global economy and concern that protracted wrangling in the euro zone could delay a solution to Greece's debt crisis. European markets rebounded modestly as investors sought out bargains and reacted to takeover and jobs speculation after sharp losses before the weekend. US stockmarkets closed flat on corporate deals and the latest downgrade on Greek debt. The Greek government's efforts to pull its economy out of crisis have been dealt a massive blow as its debt rating has been slashed to CCC now only two notches away from Standard & Poor's (S&P) benchmark default rating.

On Tuesday, Asian stockmarkets all rose as Chinese inflation figures and industrial output provided some relief that the world's second biggest economy would not have to aggressively increase monetary tightening, boosting appetite for risky assets. European and US markets rose, boosted by positive Chinese data. Also US May producer prices rose as anticipated and retail sales showed a milder-than-expected decline.

On Wednesday, Asian stockmarkets initially rose as positive data from the world's two largest economies encouraged investors to buy back into growth-sensitive assets, but closed mixed on concern about the global outlook and the Greek debt crisis after EU ministers failed to seal a deal on Greece, prompting a move away from riskier assets which helped gold extend gains. European indexes fell on renewed concerns over Greece's debt crisis and contagion fears. US markets fell on worries the Greece debt crisis may escalate and after a negative reading on New York State manufacturing underscoring the headwinds facing the economy. The New York Federal Reserve's Empire State manufacturing index, an early indicator of U.S. factory conditions, unexpectedly contracted in June, falling below zero for the first time since November.

On Thursday, Asian stockmarkets got hammered as Greek debt troubles deepened as Euro zone officials said a new three-year financing program for Greece may be delayed until next month due to differences over how to involve private investors and also on fears of a US slowdown on poor economic data. European indices fell sharply as worries about Greek's debt troubles worsened and investors feared contagion, reflected in Spain's debt auction. Us markets rose as fewer Americans applied for unemployment benefits last week, though applications remained above levels consistent with a healthy economy and housing starts and permits for future construction rose in May, signs that offered some hope the economy could soon pull out of its soft patch.

On Friday, Asian stockmarkets fell despite positive economic data out of the U.S., as a political shake-up in Greece added to worries that the country might be forced to default on its debt. European markets slipped with markets still largely unconvinced that Greece can dodge a default without political stability in Athens, keeping equity and commodity prices in a near-term downtrend but reversed and closed in positive territory when investors were reassured by a Franco-German summit on the Greek debt crisis. US indices rose after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors over a possible credit dry-up.

This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers.

World stocks fell for a seventh straight week over concerns over slowdowns in the United States and China and the euro zone debt problems. In the USA, retail sales are down, jobless claims are up, and housing has flatlined. In China, inflation is still higher than the Chinese Central Bank's target of 4 percent per annum and investors fear that interest rates will have to continue to increase although Chinese May 2011 inflation figures and industrial output provided some relief that the world's second biggest economy may not have to aggressively increase monetary tightening. The Greek debt crisis could spread to other EU nations such as Ireland, Portugal, Spain and Italy.
A slew of data showing the United States is on the verge of a slowdown has already done its damage to the market. After the heavy selling of the past several weeks, it seems investors are taking a wait-and-see approach -- for now. On Wednesday, Bernanke is to give his views on the economy and any hint that bond repurchase programme will continue may help markets to rebound

Weekly Market Summary

2011-06-06T01:09:00.000-07:00

By Raymond Chatlani

On Monday, Asian markets closed mixed on thin trade as the UK and US markets would be closed. European stockmarkets fell in thin trade with fears of a Greek restructuring weighing on investors.

On Tuesday, Asian stockmarkets rose on news that industrial and manufacturing activity was showing signs of rebounding after a devastating earthquake in Japan in March. European stocks rose as the euro hit a three-week high versus the dollar on a report that Germany could make concessions on efforts to put together a bailout for Greece. The European Union raced to draft a fresh bailout package for indebted Greece to release vital loans next month and avert the risk of the euro zone country defaulting. US markets rallied attributed to news of Germany leading a second bailout for Greece.

On Wednesday, Asian stocks were little changed as traders awaited manufacturing data from China. China’s manufacturing expanded at the slowest pace in nine months in May as the government extended a campaign to cool inflation and the property market. European markets fell on concerns of a slowdown in China's manufacturing growth which was further compounded by poor economic data out of the USA. US stockmarkets extended losses after a survey showed a sharp slowdown in U.S. manufacturing activity in May, adding to fears the economic recovery was faltering.

On Thursday, Asian stockmarkets fell heavily on poor US economic data on fears of slowing US growth. European markets fell on poor US economic data and worries about Greece. US stocks closed flat as as investors absorbed the latest economic data ahead of Friday's May jobs report.

On Friday, Asian stocks closed mixed before a key U.S. jobs report later in the day. European stockmarkets registered moderate gains while Greek stocks soared on positive comments from the Finance Ministry. US markets fell as employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.

Last week Wall Street closed out a fifth week of losses with more selling on Friday after an anemic jobs report strengthened the case that the economy was slowing, though analysts said indexes may stabilize in the near-term. Earlier last week, we saw reports that US and Chinese manufacturing slowed in May. There is evidence that the U.S. economy is slowing, hampered by high gas prices and natural disasters in Japan that have hurt U.S. manufacturers. Also, the Chinese margin hikes in the banking system seems to be finally moderating economic growth which may bring down inflation in the second half of the year.

It looks like the the Chinese interest rate increases and increase of margins for their banking sector is working. In the US, economic growth is slowing and we shall probably see another stimulus package. With both unemployment and housing deteriorating in the USA, the economy cannot move forward unless the Feds continue to stimulate the economy.

Weekly Market Summary

2011-05-30T23:45:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets were sharply lower amid signs of U.S. economic sluggishness and escalating worries about Europe's debt crisis after Italy and Greece were slapped with credit downgrades. In Europe, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative Saturday, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing. But with its rating still A+, Italy remains in far better shape than Greece. European mining and airline shares fell on renewed worries over the Eurozone debt crisis and as an eruption by Iceland's most active volcano was set to keep the island's main airport shut on Monday, while other European nations watched for any disruption to their air routes from a towering plume of smoke and ash. US markets joined the global sell-off on european debt worries.

On Tuesday, Asian stockmarkets closed mixed and flat amid eurozone worries. European markets rose on strong German business sentiment which was above expectations. US stocks ended the day with modest losses with weakness on tech stocks while oil stocks gained.

On Wednesday, Asian stockmarkets fell with Asian investors spooked by concerns over valuations and the outlook for commodities. European markets fell at the start of trading but closed the day higher on a turnaround in Wall Street. US indexes rose as commodities gained.

On Thursday, Asian stocks rose led by commodity and consumer related sectors, with steadier commodity markets and the euro's rally above $1.41 bringing some investors back into the markets in search of bargains. The risks surrounding the euro have not eased much, with Greece fighting to avoid a debt restructuring that could have a big ripple effect across other high risk-European countries struggling with gaping fiscal deficits. European stockmarkets fell as a result of disappointing economic news from the US and the ongoing troubles in Greece. US markets rose on upbeat corporate earnings although two disappointing economic reports revealed a weak U.S. jobs market and sluggish overall economic growth. US GDP grew at a sluggish 1.8 percent in the January-March quarter and more people applied for unemployment benefits last week. The number of people seeking benefits rose by 10,000 to 424,000, more than analysts were expecting.

On Friday, Asian stockmarkets rose for a second day after leaders of the Group of Eight said the global economy is gaining strength and South Korea’s current-account surplus widened. European markets rose across the board, with banks leading the advance after Citigroup turned bullish on the sector. Wall street rose as bullish comments about Greece caused the dollar to fall against the Euro, resulting in strength in commodity prices.

Last week, global equities and commodities recovered slightly, though Europe fell after Italy and Greece were slapped with credit downgrades. The U.S. dollar fell broadly on Friday after weaker-than-expected U.S. consumer spending and housing data stoked worries the recovery is losing momentum, while commodities posted a third straight week of gains. Friday's data showed high gasoline prices crimped U.S. consumer spending and bad weather pushed pending home sales to a seven-month low in April.

Today, trading is expected to be thin due to holidays in the U.S. and the UK. Although markets had a positive week, signs of a less than robust recovery in the US economy together with worries that Greece may not be able to avoid a default may hold this market within a range throughout the summer

Weekly Market Summary

2011-05-23T00:30:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell before an important European meeting today on resolving Greek's debt crisis upon news that the head of the International Monetary Fund, Dominique Strauss-Kahn would not be present for the talks as he was arrested in New York for an alleged sexual attack on a hotel maid. Europe's stock market indices closed uniformly lower on the Greek sovereign debt crisis with european banks bearing the brunt of the sell-off. US markets had a gradual decline while the Nasdaq suffered a sharper slide that left it with a loss that was more than double that of the S&P 500 and about four times that of the Dow.

On Tuesday, Asian stockmarkets were steady and closed slightly higher. European markets fell on speculation of Greece's debt restructuring. US indices fell, pressured by a negative outlook from Hewlett-Packard Co, the world's largest technology company, and weak U.S. housing data. Groundbreaking for new housing dropped 10.6 percent to an annual rate of 523,000 units as a glut of homes on the market discouraged new projects, a Commerce Department report showed

On Wednesday, Asian stockmarkets all rose except for India, led by consumer stocks. European indexes seemed to celebrate the European Central Bank's decision to reject a Greek restructuring, as major benchmark indices across the continent finished higher. US markets rose on widespread gains in commodity prices which lifted energy and materials companies.

On Thursday, Asian stockmarkets rose on expectations that commodities have resumed an uptrend. European markets rose in a broad market rally but ended off their highs after mixed U.S. economic data, and some strategists said equities might be stuck in a range until the macro picture improves. US indices rose as the number of Americans filing new claims for jobless benefits fell last week, but other data on home sales and regional factory activity suggested the economy remained on a moderate growth path.

On Friday, Asian markets fell slightly on tepid US economic data showing that the US economy may not be as robust as previously thought. European stockmarkets were lifted by social networking site LinkedIn whose IPO price closed more than double but markets tanked at the close as Fitch ratings agency downgraded Greece's long-term credit rating further into junk status, in yet another blow to the debt-ridden country. US markets fell as market sentiment remained fragile due to the debate about possible solutions to Greece's debt problems, with the main market worry that any restructuring could have contagion effects beyond Greece's borders.

Last week global markets and commodities fell on signs of a slowing economy in the U.S. and concerns that Greece will default on its debt. On Friday, Fitch downgraded Greece’s credit rating to B+ from BB+, four notches below investment grade. On Saturday, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing.
Markets are going through "a global correction" because of slowing growth in China, the contraction of Japan's economy and Europe's debt problems. Also, the relatively weak U.S. economic data and the tightening of money markets mean people are getting nervous and reluctant to take long positions in the market.

This correction may continue for a number of weeks especially if Greek contaign spreads.

Weekly Market Summary

2011-05-16T05:17:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets were lifted by better than expected growth in U.S. jobs and a bounce back in commodity prices. European shares fell as Eurozone debt worries weighed as Standard & Poors cut its rating on Greece by two notches to B from BB-, citing the Mediterranean country's rising default risk. US indexes rose as investors weighed uncertainty about Greece's hefty debt load against a spate of deals news.

On Tuesday, Asian stocks gained after China reported record exports. As a result China's politically-sensitive trade surplus ballooned to $11.4 billion in April and exports hit a record monthly high, as Washington pressured Beijing for a stronger currency. European stockmarkets rose as sentiment towards Greece's debt predicament improved and on a buoyant start to Wall Street. U.S. stocks rose after strong Chinese trade data eased concerns over a slowdown in the world's second-largest economy and pointed to healthy global demand.

On Wednesday, Asian stockmarkets firmed on rising commodity prices which boosted energy and resource stocks, as investors largely shrugged off slightly stronger-than-expected inflation data from China. China's inflation eased in April to 5.3 percent and other data, including for industrial output and loans, suggested the world's second-biggest economy may be cooling and there was less need for further aggressive monetary tightening. European markets fell on a sharper rise in German inflation than expected and as the price of commodities dived. US stockmarkets fell as commodities slid.

On Thursday, Asian share markets tumbled after a second big sell-off in commodities in less than a week curbed investor appetite for riskier investments and boosted the U.S. dollar. European stockmarkets fell, joining a global sell-off after heavy losses in Asia and on Wall Street, as sliding commodity prices dented the resources sector. Sentiment was further rattled after China announced it would raise its bank reserve requirement ratio, stoking concerns about slower economic growth in the Asian powerhouse. U.S. stocks advanced in a volatile session, erasing early losses as a rebound in commodity prices kept the market churning higher.

On Friday, Asian stockmarkets rose as bargain hunting investors bought. European markets fell although data showed that Germany, Europe's largest economy, grew by a startling 1.5 percent in the first three months of the year, with France only paling a little in comparison, growing by 1.0 percent. US indices fell as investors continued to reduce investment in risky assets.

Last week, global markets and commodities continued to fall on Greek's resurfacing debt crisis, fears of high inflation in developing markets and concerns of slowing economic growth in the USA. As investors continued to flee into the US Dollar, commodities continued to sell off. Investors are divided as to the future direction of the markets.

Bullish investors see inflation as being strong and point out that first quarter earnings have been strong with almost three quarters of reporting companies beating Wall Street's estimates and that revenue strong has been sturdy. The bears point out that the Federal Reserve's $600 billion program to buy Treasury debt has helped investors divert funds to commodities and equities, creating a bubble in those assets, which is now starting to burst.

With the summer months ahead which is usually a slow time for the markets, we may now be entering a period where investors are paring their positions to take profits and re-enter the markets in the fall. Our view is that as long as interest rates remain below inflation, then we shall continue to see global equiities and commodities rise though there may be weakness over the summer months.

Weekly Market Summary

2011-05-09T00:20:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets tracked Wall Street higher although stock trading in Asia was thin amid a slew of holidays this week in the region. Hong Kong's Hang Seng index and mainland China's Shanghai Composite Index were closed for holidays as were stock markets in Taiwan, Malaysia and Singapore. Commodity shares retreated with silver falling 10 percent to $45 an ounce as the US Dollar strengthened on news that Osama Bin Laden was killed in Pakistan in a U.S.-led operation. European stocks edged up on merger activity and Bin Laden's death. US stocks rose following Bin Laden's death but ended lower at the end of the session as energy shares fell.

On Tuesday, Asian stockmarkets dipped as a bounce following the killing of Osama bin Laden by U.S. forces quickly faded and investors refocused their attention on the fragile global economy. European indexes fell after European producer prices in March grew a bit faster than expected. Factory gate prices in the euro zone were 6.7% higher in March than a year earlier, after registering a 6.6% annual increase in February. US markets fell after several companies reported weak earnings.

On Wednesday, Asian stockmarkets fell with soft commodity prices making investors nervous that a broader pullback in risk taking may be unfolding. European markets fell as investors dropped commodity-related shares and The European Union's statistics office Eurostat said retail sales in the 17 countries using the euro fell 1.0 percent month-on-month in March for a 1.7 percent year-on-year drop. U.S. stocks added to losses after the Institute for Supply Management's non-manufacturing index came in weaker than expected.

On Thursday, Asian stockmarkets closed mixed as commodity shares fell offset by rising technology and consumer shares. European stock markets slid following a clutch of disappointing earnings updates from the region's banks and ahead of interest rate decisions in Britain. Britain's state-rescued Lloyds Banking Group reported on Thursday a net loss of £2.4 billion after setting aside a vast sum to compensate clients who were mis-sold payment insurance. In Paris, Societe Generale slumped 4.10 percent to 43.68 euros after the lender announced first-quarter net profits of 916 million euros ($1.36 billion), a 13.8 percent drop on the same period last year. US markets fell as new jobless claims fell to a 8 month high. Initial claims for state unemployment benefits rose 43,000 to a seasonally adjusted 474,000, the highest since mid-August, the Labor Department said on Thursday.

On Friday, Asian stocks declined, dragging the region’s benchmark index to its steepest weekly drop in seven, following the biggest slump in commodities since 2009 and before a report today forecast to show slowing U.S. jobs growth. European and US stockmarkets rocketed and commodities recovered as the Labor Department reported that the economy added 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted.

Last week stocks and commodities fell as investors took profits on weak corporate profits and as the US Dollar strenghtened on the news of Bin Laden's death. Investors weighed trades cautiously as analysts warned that inflation remained a major drag on the region despite various actions by central banks in China, India, South Korea and elsewhere to cool rising prices by raising interest rates and taking other steps to reduce the amount of money sloshing around their economies. In commodities, silver dominated the news with a fall of around 30 percent to $35 an ounce.

On Tuesday, China's central bank said its top priorities were stabilizing consumer prices and managing inflation expectations. The same day, India's central bank raised its key interest rate, its ninth hike in just over a year, and warned that persistent inflation is threatening growth in Asia's third-largest economy.

On Friday, markets and commodities recovered on the strong jobs report in the USA where investors felt that the selloff last week was overdone.

Weekly Market Summary

2011-05-03T00:16:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.

On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.

On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.

On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.

On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.

Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.

The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.

Weekly Market Summary

2011-05-02T01:44:00.000-07:00

By Raymond Chatlani

On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.

On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.

On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.

On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.

On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.

Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.

The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.

Kind regards,

Raymond Chatlani

Investment Analyst

Hollingsworth International Financial Services Ltd

Office 22

Regent House

Bisazza Street

Sliema SLM1641

Malta

Tel : +356 21316298

Fax : +356 21316299

Mob: +356 79619448

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Weekly Market Summary

2011-04-26T01:02:00.000-07:00

by Raymond Chatlani

On Monday, Asian stocks mostly fell as China on Sunday raised banks' reserve requirements for the fourth time this year while the euro weakened on a broad wave of profit-taking. The move was not a surprise as market players had predicted more tightening after last week's data showed an acceleration in inflation. European stockmarkets fell on talk about Greek restructuring of its debt, including a Greek newspaper report on Monday that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring. A Greek finance ministry source said the report was not true. On bond markets, Portuguese, Spanish and other lower-rated euro zone government debt came under pressure. Moody's cut the long-term bank deposit ratings of Ireland's government-guaranteed banks by two notches to Baa1 following a sovereign downgrade last week, meaning that all the lenders are now classified as junk. European and US markets plummeted after S & P downgraded its credit outlook to negative for the United States, citing a "material risk" that policymakers may not reach agreement on a plan to trim its large budget deficit and mounting concerns over Greece. Gold temporarily hit a new high of $1,497 an ounce before retreating to $1,490 an ounce.

On Tuesday, Asian markets fell after rating agency Standard & Poor's lowered its U.S. credit outlook to negative, prompting a global flight to other assets. European stockmarkets rebounded on bargain hunting after a slump triggered by Standard & Poor's first ever downgrade of its US sovereign debt outlook. U.S. stocks rose as results from Johnson & Johnson and Goldman Sachs Group Inc. helped lift sentiment after the prior day’s rout and as new home construction rose 7.2 percent from February to 549,000 units.

Asian stocks rose on Wednesday, following a rebound on Wall Street and in Europe on upbeat corporate results, and commodity-linked currencies such as the Australian dollar also gained as momentum returned to metals markets. Gold pierced record highs above $1,500 an ounce and silver notched the biggest rise of the young second quarter exceeding $45 an ounce as investors banked on safe-haven bets on worries over inflation and the economy. European and US markets rose sharply on on strong earnings reports by Intel Corp. and other companies.

On Thursday, Asian stockmarkets rose as the U.S. dollar slid to a 2-1/2-year low against a basket of major currencies and as investors scrambled to get in front of upward momentum in higher-yielding assets, particularly in emerging markets. European and US markets were buoyed by upbeat US earnings as Intel Corp beat expectations, Apple's iphone sales helped earnings almost double and General Electric posted an 80 percent surge in first quarter earnings.

Markets were closed for Good Friday.

Last week, global markets rose on good corporate first quarter earnings ignoring worries on Greek, Irish and Portugese debt problems and the problems in the Middle East including the escalating violence in Libya.
The US dollar tanked and commodity prices rose with gold hitting new all time highs and silver hitting new 32 year highs. It seems that investors are selling the US dollar and bonds and are buying stocks and hard assets as replacements to protect themselves from high inflation. While it is hard to predict the short term, we should continue to see this strategy over the medium term as long as the US deficits remain and interest rates continue to be lower than the rate of inflation.

Weekly Market Summary

2011-04-18T02:01:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell as Japan's core machinery orders fell 2.3 percent from a month earlier in February, with the bigger-than-expected fall during pre-quake conditions raising concerns about the severity of the March 11 quake's impact in the months to come, as investors continued to worry about soaring oil prices although investors ignored news that China said it had posted its first quarterly trade deficit in seven years, despite a narrow surplus in March, as rising commodity prices pushed manufacturers' costs higher. European and US markets mostly fell on investor concerns over the impact higher raw material costs as well the effects of Japan's earthquake on the earnings season. Adding to the worries in the United States was news after the bell that Alcoa Inc revenue missed forecasts, sending its shares down 3.6 percent in post-market trade.

On Tuesday, Asian markets fell after Japan raised the severity of its nuclear crisis, putting it on par with the 1986 Chernobyl disaster. Japan's Nikkei tumbled 2.1 percent on worries about the impact of the March 11 earthquake and tsunami on company results. European and US stockmarkets fell on worries about Japan and first quarter earnings. Commodities ended sharply lower on Tuesday, posting their steepest daily fall in a month after more bearish comments on oil from Goldman Sachs triggered a second day of widespread selling. Oil closed down $3 a barrel in both London and New York after Goldman, a long-time commodities bull, said prices had gotten ahead of fundamentals. Warnings from the International Energy Agency (IEA) and OPEC that high prices would erode global demand also weighed on the market.

On Wednesday, Asian stockmarkets rose with investors looking for fresh opportunities to bet on risky assets after a sharp drop in oil the previous day caused an unwinding of positions. European bourses recovered from Tuesday's sell off on spectular results from JP Morgan. US markets ended a choppy session little changed.

On Thursday, Asian markets fell amid concerns that rising food and fuel costs could undermine consumer demand, hurting economic growth and company profits, although Singapore's gross domestic product grew 23.5 percent quarter-on-quarter on an seasonally-adjusted annualised basis, blowing past even the most bullish forecast in a Reuters poll. European stockmarkets fell as traders reacted to a raft of company news and the lingering eurozone debt crisis. US indices were flat as jobless claims rose by 27,000 to 412,000 in the week to 9 April, a bigger rise than had been expected. Producer prices also rose more than expected. They were up by 0.3% in March, the biggest year-on year increase since August 2009.

On Friday, Asian stockmarkets fell as concern over Chinese inflation rattled the markets. China's economy grew a more-than-estimated 9.7 percent in the first quarter and inflation accelerated in March to the fastest pace since 2008. China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. Gold briefly jumped to another record high of $1,479 an ounce after the dollar fell to its lowest since late 2009 against a basket of major currencies, taking silver to a 31-year high of over $42 an ounce, while inflation pressures in China also helped lift bullion's appeal.
China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. European markets and the Dow and S&P rose as encouraging economic indicators offset some disappointing corporate results, though weakness in Google pressured the Nasdaq. A government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected.

Last week, equity markets mostly fell with commodity prices flat. The only exceptions were gold and silver which hit new highs as inflation concerns stoked demand. In fact, this morning Gold hit a new high of $1,485 an ounce with silver breeching $43 an ounce.

Although equity markets fell, economic data from the US was positive as a government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected as the preliminary index of consumer sentiment advanced to 69.6 from 67.5 the prior month and U.S. industrial production at factories rose 0.8 percent in March, the fifth straight gain. Last week's fall in stockmarkets can be attributed to inflation concerns with European debt problems again in focus as Moody's cut Ireland's sovereign rating by two notches to Baa3 and left the outlook negative. Moody's cited an expected decline of the Irish government's financial strength and the country's weaker economic growth outlook as reasons for the downgrade.

This morning, a Greek newspaper report that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring of its debt will not help the markets this week. A Greek finance ministry source said the report was not true. We are in earnings season and this could act as a catalyst to lift the markets should earnings surprise.

Weekly Market Summary

2011-04-11T01:45:00.001-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets rose after strong jobs growth in the United States was seen as lifting the prospects for the global economy. European indices closed mixed and flat as major cross-border takeover activity provided support, notably Vivendi's purchase of Vodafone's stake in French mobile phone operator SFR for 7.75 billion euros although banks fell. US markets closed flat among an absence of catalysts.

On Tuesday, Asian stockmarkets fell modestly as Japan began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to give it room to store more highly contaminated water although markets in China, Hong Kong and Taiwan were closed for a holiday. European and US markets closed slightly lower in subdued trading as Moody's issued its second downgrade on Portugal in less than a month and as traders await this week's European Central Bank interest rate decision. Although China again took advantage of a national holiday to make a surprise 25-bp hike, the fourth in 12-months, silver set a new 31-year peak above $39/oz while gold surpassed the $1450 mark, touching $1456 in after-market trade.

On Wednesday, Asian stockmarkets edged higher calmed by signs of progress in Japan's battle to contain a nuclear crisis as its central bank meets to determine what measures are needed to help the country through its worst disaster since World War II. European shares rose as banks recovered from earlier session falls on the back of a successful Portuguese debt auction and brokers said there was long-term upside for key indexes in Europe. US markets rose modestly as bank shares gained. Later in the evening, Portugal followed Greece and Ireland in requesting an emergency bailout after the country's debts spiralled out of control. Gold temporarily hit a new high of $1,461 an ounce before retreating to $1,454 an ounce.

On Thursday, Asian stockmarkets closed flat on the news of Portugal's bailout and expectations of an ECB interest rate hike of 0.25% later today. European and US markets rose as fewer people applied for unemployment benefits last week in the USA and retailers reported stronger March sales than expected. However, all markets fell into the red at the close as Japan was hit by a massive 7.1 earthquake. Gold hit a new high of $1,466 an ounce with silver breeching $40 an ounce as the dollar weakened against the Euro as the ECB raised the base rate by a quarter percent to 1.25 percent and signalled it was ready to tighten policy further if needed to check rising prices.

On Friday, Asian stockmarkets inched higher as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage. European markets rose on reassuring reports out of Japan as investors minds were put at ease following yesterday's late sell-off caused by Thursday's magnitude 7.1 aftershock. US indices fell as a spike in oil prices revived worries that inflation would derail the recovery, jolting a market that had been treading water ahead of corporate earnings. Gold hit another new high of over $1,470 an ounce with Silver breeching the $41 an ounce due to the weakening US Dollar.
World markets and commodities rose last week with gold hitting new highs and silver hitting 32 year highs as the US Dollar continued to fall against most cueencies especiaaly the Euro. U.S. crude hit its highest this year, driven largely by unrest in the Middle East. The Euro gained significantly last week as the ECB hiked interest rates by a quarter percent with more expected later this year.
Global indices rose because the US economy recovery keeps improving. In recent weeks we have seen strong and perhaps accelerating economic growth, good profit growth, fair valuations, momentum and high merger and acquisitions activity. But uncertainty arising from world trouble spots shows scant sign of abating and may contain stock prices. Also Ratings agencies warned of trouble ahead for debt-laden Ireland and Japan looked set for a long-haul in containing its nuclear crisis.

Weekly Market Summary

2011-04-04T00:30:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets slipped on persistent anxiety over the tension in the Middle East and in Japan after the destructive quake and tsunami two weeks ago. European markets closed slightly up on low volume. US indices fell slightly as developments in Japan, Libya and the Middle East kept traders wary.

On Tuesday, Asian markets closed mixed with Japan, China, Indonesia and Singapore falling slightly with the rest of Asia gaining. European stockmarkets closed slightly down as capital concerns hit the banks on S & P's downgrades on Portugese and Greek debt. US stocks gained on tech strength and energy shares though volume was light.

On Wednesday, Asian stocks rose as investors were drawn back to riskier assets by attractive valuations, while Japanese exporters were helped by the yen's weakness on expectations of interest rate rises in Europe. European stockmarkets rose on miners. US markets rose as data showed private employers added jobs in a sign of economic improvement and acquisition activity lifted sentiment. Private employers created 201,000 jobs in March, according to ADP Employer Services, a rise that was in line with expectations.

On Thursday, Asian indices rose except for China. European markets fell after Ireland put a 70 Billion Euro price to prevent their banks from going under should conditions deteriorate. US stockmarkets closed mixed and flat although a report showed U.S. jobless claims fell last week and data pointed to improving employment in the Midwest. The U.S. economy probably recorded a second straight month of solid job growth in March, when non-farm payrolls rose by 190,000 according to a Reuters poll, proof the labour market has turned the corner after lagging the broader economic recovery.

Asian shares rose on Friday as markets digested news that China's official purchasing managers' index rose in March from a six-month low, but was still a touch under the Reuters median forecast. European shares rocketed sharply higher and US markets rose as the US unemployment rate fell to a two year low of 8.8%.

Last week was another good week for global equities which have risen two weeks in a row with oil hitting a two and a half year high this morning and gold and silver close to their recent highs. The improvement in the US unemployment rate has been the main catalyst for these gains as investors feel that the US is in the early stages of a sustainable recovery in employment. More jobs means more income and more consumer spending which will encourage corporate companies to expand their businesses

Weekly Market Summary

2011-03-29T03:35:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets rose as Japan's nuclear crisis eased as two of the six reactor units were safely cooled down, though pressure unexpectedly rose in a third unit's reactor, meaning plant operators may need to deliberately release radioactive steam. The Japanese market was closed for a public holiday. European and US stockmarkets gained after investor confidence rose on signs the situation at Japan's nuclear plant was improving, with telecoms lifted by Deutsche Telekom's sale of T-Mobile USA to AT&T.

On Tuesday, Asian shares posted modest gains, after bouncing on Monday when Tokyo markets were closed for a holiday. Support came from U.S. stocks, which were buoyed on Monday by AT&T's move to buy Deutsche Telecom. Japanese stocks jumped nearly 4 percent amid reports of progress in stabilising an earthquake-damaged nuclear plant. European markets slipped as investors worried about the outlook for higher interest rates in the euro zone and as tensions in the Middle East intensified. US stockmarkets closed modestly lower on low volume.

On Wednesday, Asian markets fell with Tokyo's Nikkei shedding nearly 2 percent, and oil ticked up as investors fretted about the possible repercussions of a nuclear crisis in Japan, violence in Libya and unrest in the Middle East. European stockmarkets fell after draft conclusions prepared for the euro zone summit showed member states will only take a decision on how to increase the effective capacity of their bailout fund by the end of June and not at this week's summit but finished in positive territory on strong miners. US Indices rose on strong buying interest, although new-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes to the fewest on records dating back nearly half a century.

On Thursday, Asian stockmarkets eked out small gains as higher commodities prices lifted materials shares. European markets rose although Portugese Prime Minister Jose Socrates resigned yesterday following parliament's rejection of his austerity plans which was seen as increasing the likelihood that Portugal will join Greece and Ireland in requiring a bailout from the European Union. US shares rose as data showed the improvement in the labor market was becoming sustained, with new claims for jobless benefits falling last week and the four-week moving average dropping to it lowest level in more than 2-1/2 years. Gold temporarily hit a new price of $1,447 an ounce with silver hitting a new 31 year high crossing $38 an ounce before both retreated but held near their highs.

Asian stocks rose on Friday amid optimism about upcoming company earnings, and the euro held steady as investors bet European leaders would be able to prevent a political crisis in Portugal worsening the region's sovereign debt crisis. European stockmarkets rose slightly with all major benchmark indices struggling to find direction, as bail-out concerns in Portugal continued to worry nervous investors. American markets rose as technology shares led Wall Street higher after Oracle's upbeat outlook.

A good week for equities and commodities notwithstanding the same tensions still present in Japan, the Middle East especially Libya and Portugal's potential debt problems. The markets have already discounted this news and could continue to go higher especially next month if company earnings continue to exceed expectations.

Weekly Market Summary

2011-03-21T01:39:00.001-07:00

by Raymond Chatlani

On Monday, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities. The Japanese quake hit European shares with insurers getting hammered. Us stockmarkets fell following world global markets.

On Tuesday, Japanese shares tumbled for a second day as the nuclear crisis created panic as dangerous levels of radiation leaking from a crippled nuclear plant forced Japan to order 140,000 people to seal themselves indoors after an explosion and a fire dramatically escalated the 4-day-old crisis spawned by a deadly tsunami. The Nikkei fell 17% over two days only. Other Asian markets dived also. European and US markets followed Japan's plunge.

Asian financial markets rallied on Wednesday, led by a nearly 6 percent surge in Japanese stocks, after a horrendous two-day sell-off on last week's killer earthquake and an unfolding nuclear crisis.
Other Asian stock markets also closed higher. European and US fell sharply following disappointing U.S. economic news and more worries about the nuclear crisis in Japan. The Commerce Department reported that new home construction fell to the second-lowest level on record in February, reflecting weak demand. Wholesale prices, meanwhile, rose last month by the most in nearly two years due to higher energy and food costs.

On Thursday, Asian stockmarkets fell after U.S. officials said the risk of a catastrophic radiation leak from an earthquake-crippled Japanese nuclear plant was rising. European and US markets rose as US factory output rose for the sixth straight month and US initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 385,000. The four-week moving average of unemployment claims -- a better measure of underlying trends - dropped 7,000 to 386,250, the lowest since mid-July 2008 and staying below the 400,000 level for a third straight week.

On Friday, Asian stockmarkets rose as the Yen tumbled after the Group of Seven agreed on rare joint intervention to curb the soaring currency and calm markets jittery over Japan's nuclear power plant crisis. European shares, led by industrials rose after the Group of Seven nations helped calm market nerves over the Japanese earthquake-tsunami disaster by intervening to restrain a soaring yen. US markets rose sharply as Wall Street welcomed reports of a cease-fire in Libya which reduced tensions in the region and a coordinated effort by industrialized nations to bring the Japanese yen down from historic highs.

Over the weekend, a coalition force backed by a United Nations mandate imposed a no fly zone over Libya and attacked Gadhafi's air defences. US, British and French military warplanes, warships and submarines fired cruise missiles to destroy Gadhafi's airplanes and communications equipment. The U.S. military said the bombardment so far — a rain of Tomahawk cruise missiles and precision bombs from American and European aircraft, including long-range stealth B-2 bombers — had succeeded in heavily degrading Gadhafi's air defenses. As of Sunday, members of the coalition included the U.S., Great Britain, France, Canada, Italy, Belgium and Qatar.

In Japan, while the operator of the overheated nuclear plant said two of the six reactor units were safely cooled down, pressure unexpectedly rose in a third unit's reactor, meaning plant operators may need to deliberately release radioactive steam.

Last week, markets got hammered with Japan falling 10% and other global markets falling around 3%. This will probably be temporary as economic data out of the US continues to improve.

In America, factories are producing more cars, computers and household appliances, and applications for unemployment benefits over the past four weeks are at the lowest point since summer 2008. Economic data released last Thursday suggest that March will be the second straight month of strong job growth. Still, rising prices for household necessities and trouble overseas could slow the U.S. economy in the coming months.
Also, manufacturing output has grown in all but four months since the recession ended in June 2009. And manufacturers have created 190,000 jobs over the past year, the highest 12-month total for that group since 1998. Last month alone factories added 33,000 net new jobs. Rising factory output supports more high-paying jobs.

Private companies added 222,000 jobs in February, the most in almost a year, and unemployment fell to 8.9 percent. The unemployment rate has fallen by nearly a full percentage point since December -- the steepest three-month decline since 1983.

Most economists don't expect the Federal reserve to take any steps to combat inflation, such as raising short-term interest rates, until next year. Overall, the Fed this week offered its most optimistic assessment of the economy since the recession ended, largely because of stronger job growth.

Though investors are entering next week’s markets after five volatile days of trading and they could encounter another bruising ride driven by fast-moving events in Japan, Libya and parts of the Middle East, we remain cautiously optimistic that this turmoil will prove to be temporary.

Weekly Summary

2011-03-14T02:34:00.000-07:00

On Monday, Asian stocks slipped as concerns about the Middle East and higher energy prices weighed on equities. As a consequence, Gold hit a new all time high of $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce. Moody's slashed Greece's credit rating by three notches to B1 from Ba1 with a negative outlook, citing significant risks to the country's fiscal consolidation plan and risks of a debt restructuring. European equities fell on strong oil prices on mounting unrest in the Arab world. US stockmarkets fell as US Crude oil hit a two year high of $107 a barrel on Libyan instensified fighting.

On Tuesday, Asian stockmarkets rose although gains were capped by Middle East tensions. Most commodities retreated on a report that Gadhafi would give up power if he was offered safe passage. European and US markets rose as financial shares pushed stock indexes higher on signs that banks may soon raise their dividends.

On Wednesday, Asian stockmarkets rose as oil prices fell for a second day although investors remained on edge because of the turmoil in the Middle East. European and US markets fell as the fighting in Libya and worries that turmoil could erupt in other Arab countries continued to cast a shadow. Investors were also worried about the euro zone's sovereign debt problem after Portugal saw its cost for issuing two-year debt soar to its highest level since it joined the euro in 1999, rekindling fears Lisbon will need a bailout.

On Thursday, Asian shares edged lower, weighed down by worries that a surge in oil prices could exacerbate inflation pressures in the region and cripple economic growth and after surprisingly weak Chinese trade data hit markets. Latest data showed China swung to a surprise trade deficit in February of $7.3 billion (4.5 billion pounds), its largest in seven years, as the Lunar New Year holiday dealt a sharper blow to export activity than had been expected. European stockmarkets fell as Moody's cut Spain's sovereign debt rating one notch, warning of potential further cuts because it fears bank restructuring will likely cost more than twice what the government expects. US markets fell as investors absorbed a larger-than-expected increase in initial jobless claims, a surprise trade deficit in China and a downgrade to Spain's credit rating.

On Friday, Asian stockmarkets fell about 1 percent, extending their drop by more than 3 percent for the week as fresh outbreaks of violence in the Middle East kept markets on edge and on a major earthquake of magnitude 8.9 in Japan. European shares fell in sympathy with global markets. US stockmarkets rose on bargain hunting.

This morning, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities.

With the civil war in Libya, the slashing of Greece's and Spain's credit ratings and the huge earthquake and tsunami in Japan, it is surprising that markets did not go down significantly last week. This is probably because we are seeing the US pulling out of recession.

This week we should see further weakness as there was a second nuclear explosion this morning in Japan and it is estimated that the damage caused by both the earthquake and tsunami will cost tens of billions in dollars to restore the infrastructure. This weakness may continue for a few weeks until next month where companies report earnings for the first quarter of this year.

Weekly Market Summary

2011-03-07T01:18:00.000-08:00

by Raymond Chatlani

On Monday, Asian markets edged higher although the worsening situation in Libya stirred renewed concern about disruptions to oil production. European and US stockmarkets rose after oil prices stabilized and corporations announced another round of deals.

On Tuesday, Asian stocks rose, tracking U.S. shares which gained on optimistic remarks from influential investor Warren Buffett, while Chinese manufacturing growth slowed to a six-month low. Slowing economic growth in China is considered good for cooling inflation. European stockmarkets rose as manufacturing growth accelerated in the Eurozone to the fastest pace in more than ten years but fell into negative territory in the afternoon on Middle East tensions. US markets fell on fears of a prolonged civil war in Libya and as gold and oil both appreciated.

On Wednesday, Asian stockmarkets fell as oil prices rose above $116 a barrel on fears that anti-government protests in the Middle East could spread as tensions grow in Libya. European shares fell on mounting worries political unrest in the Middle East could result in persistently high energy prices and derail economic recovery. US markets rose as the private sector added 217,000 jobs in February beating analyst's expectations who had expected a rise of 175,000 jobs only.

On Thursday, Asian stock markets rose on upbeat US economic news and bargain hunting, but optimism was tempered by turmoil in the Middle East and North Africa, which kept oil around two-year highs. European markets rebounded on US data and a fall in the price of oil. US shares rocketed as unemployment benefits requests fell to a 3 year low.

On Friday, Asian shares surged, helped by retreating oil prices and a firmer Wall Street close while the euro perked up after the central bank signalled a rate rise as early as next month. European and US stockmarkets fell as worries about another jump in oil prices overshadowed a solid report on the U.S. job market. The Labor Department reported that employers added 192,000 jobs in February, in the range of what economists expected.

The good news last week was that the US unemployment rate dipped to 8.9 percent from 9 percent the previous month. The rate has dropped for three months in a row and is now at its lowest level since April 2009. Over the past few months, economic data has shown that the US is coming out of recession and this should continue to drive stockmarkets higher. Also, taking into consideration the civil war in Libya and the escalating price of oil, emerging markets have been quite resilient and have not fallen a lot.

On the other hand, the civil war in Libya and fears that tensions will spread throughout the rest of the Middle East could derail this recovery, especially if the price of crude oil reaches unsustainable heights. As a rresult, this morning US Crude Oil rose above $106 to the highest in 30 months as escalating violence in Libya renewed concern that supply disruptions may spread through the Middle East. As a consequence, Gold hit $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce.

Weekly Market Summary

2011-02-28T00:41:00.000-08:00

by Ryamond Chatlani

On Monday, Asian stockmarkets slipped on increasing tensions in Libya. European shares fell on Libyan worries. US markets were shut for President's Day, a public holiday.

On Tuesday, oil prices rose and Asia stock prices fell sharply as markets watched the growing crisis in Libya, with investors turning to safe haven gold which in turn pushed up silver to its highest level in 31 years. European and US stockmarkets fell as protests in Libya intensified although US consumer confidence hit a 3 year high.

On Wednesday, Asian stockmarkets extended losses on Libya's turmoil. European markets fell further as Qadhafi vowed to stay in power. US indices fell on a spike in the oil price.

On Thursday, Asian stockmarkets fell again as Brent oil topped $113 on Libyan unrest. European shares were hit by growth worries as crude continued to rally. American markets were mixed as applications for unemployment benefits dropped by 22,000 last week to a seasonally adjusted 391,000 which was the lowest level in more than two and a half years and as investors feared that climbing oil prices could derail the economic recovery.

This morning, Asian markets rebounded for the first time this week as crude prices slipped on rumours that Gadhafi has been killed. European and US stocks rebounded strongly as consumer sentiment rose to its highest level in 3 years and as Saudi Arabia raised oil output by 8 percent to 9 million barrels of oil a day to compensate for Libya.

After dictatorships fell in Tunisia and Egypt, it is now Libya's turn. Libya is a different case and will continue to affect the markets as it exports 1.1 million barrels of oil a day and a civil war has broken out. That is why global stockmarkets have been decimated this week.

American data this week is showing that the US economy is recovering where we saw that claims for unemployment benefits dropped to their lowest level in the last two and a half years and that consumer sentiment has recovered. If the Libyan problem gets resolved, markets should bounce back. Although Saudi Arabia have turned on the taps to compensate for the loss of Libyan production, this will only be useful for a short while. Markets should continue to fall should the civil war in Libya be prolonged.

Weekly Market Summary

2011-02-21T00:14:00.000-08:00

by Raymond Chatlani

On Monday, Asian stocks rose as investors greeted news of Egyptian President Hosni Mubarak's resignation with relief. After a firm start due to the resignation of Mubarak, European stockmarkets closed mixed. US markets were mixed as Obama revealed a $3.73 trillion budget.

On Tuesday, Asian stockmarkets closed mixed as China's inflation rate fell in January which cheered the market although traders remained wary about protesters destabilising other regions in the Middle East. European indices rose on good corporate results. US markets fell on surprisingly weak retail sales numbers.

On Wednesday, Asian stockmarkets were mostly higher although South Korea lost over one percent. European stock markets rose as investor sentiment was boosted by solid earnings news from US computer giant Dell and Dutch brewer Heineken. US stocks rose after estimate-beating results from technology bellwether Dell and a deal for Sanofi-Aventis to buy Genzyme for $20.1 billion in cash.

On Thursday, Asian stock markets rose, buoyed by strong corporate earnings and as the Federal Reserve expressed cautious optimism about the strength of the U.S. economic recovery. European markets opened flat but fell on US employment figures. US stocks fell after the government said first-time applications for unemployment benefits jumped more than expected last week.

This morning, Asian stockmarkets rose buoyed by gains on Wall Street though China and Indiia both fell. European shares fell on miners as China has raised bank reserve requirements by half a percentage point to a record level of 19.50%. US markets were flat at the time of writing.

This week global equities rose as the Egyptian problem was resolved as Mubarak resigned. Good corporate earnings and merger news also contributed to the rise. While commodities were volatile and remained almost the same, gold and silver appreciated as unrest in the Middle East spread this week to Bahrain and Libya.

While there are political risks in the Middle East and inflation fears in emerging markets, global equities are appreciating due to the high liquidity that has been pumped into the world's economic systems by Governments.

Weekly Market Summary

2011-02-14T04:06:00.000-08:00

by Raymond Chatlani

On Monday, Asian stocks rose led by South Korea and Japan as the U.S. job market showed further signs of recovery, highlighting a brighter outlook for its economy. European stockmarkets rose as miners and energy shares gained as copper hit a new record high. US markets rose on good earnings reports and takeover deals.

On Tuesday, Asian stockmarkets closed mixed where Japan, Australia, Hong Kong and Malaysia rose while the rest fell as China hiked interest rates by a quarter percent. European markets rose modestly on carmakers profits as both BMW and Audi both reported a double-digit increase in sales. US stocks rose as investors ignored the Chinese interest rate hike.

On Wednesday, Asian stockmarkets fell on China's interest rate hike. European indices fell as many european blue chips traded ex-dividend. US markets fell as commodity and material stocks were sold.

On Thursday, Asian markets fell although China rose higher. European and US stockmarkets fell as companies reported corporate profits below expectations although US jobless claims fell to a 31 month low.

On Friday, Asian stockmarkets fell as investors shunned risk on concerns about the pace of policy tightening within the region and escalating tensions in Egypt. European markets were slightly positive. US stocks were flat after embattled President Hosni Mubarak refused to step down, raising concerns that protests could intensify, and then it was reported that Mubarak left Cairo.

Markets rose early in the week but are giving up those gains on President Mubarak refusal to step down. Investors are concerned that the intensifying protests in Egypt may spread to other regions within the Middle East. This should continue to affect the markets next week.

Weekly Market Summary

2011-02-07T00:51:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell broadly except for China and Taiwan following Friday's sharp drop on Wall Street as anti-government rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil. European markets slid on Egyptian unrest. US stocks gained on good earnings and merger activity and as fear on Egypt eased.

On Tuesday, Asian markets rose modestly led by shares in resource companies as strong US factory data offset fears that unrest in Egypt could spread elsewhere in the Middle East. European shares were boosted by upbeat euro zone manufacturing data while strong earnings from ARM and Infineon lifted technology firms. US stockmarkets rose on solid manufacturing data in Europe and the USA as the index of manufacturing activity in America rose to 60.8 which is the highest reading since 2004..

On Wednesday, Asian markets ended higher on solid Wall Street gains buoyed by encouraging earnings and manufacturing data. South Korea, China, Taiwan and Vietnam were closed for the Lunar New Year holidays. European stockmarkets were mixed after a very strong overnight performance on Wall Street, as investors shrugged off an S&P downgrade for Ireland and stubborn concerns over Egypt. US indices ended flat on good corporate earnings and escalation on the Egyptian situation where violent street clashes were reported.

On Thursday, Asian markets were mostly closed for the lunar holidays. While the Nikkei fell, Australia and India closed positive. European stockmarkets fell on weak earnings and intensified violence in Egypt. US stocks fell as investor worries about violent protests in Egypt outweighed relatively positive news on retail sales, but closed positive at the end of the session after Bernanke said that the Fed expects the economy to improve this year and inflation to remain low despite the jump in commodity prices.

This morning, Asian markets rose except for India. European stock markets closed modestly up on good corporate earnings. US stocks are flat as investors weigh that the US jobless rate fell to 9 percent from 9.4 percent against protests in Egypt.

Global stocks inched higher this week as data from the US is showing signs of a pick up in the economy although gains have been muted due to the Egyptian crisis and fears that this may spread to other countries in the Middle East.

Weekly Market Summary

2011-01-31T00:19:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets mostly rose as growth hopes made their presence felt but China and Hong kong fell on inflation fears of further Chinese tightening. European bourses rose on data which showed eurozone growth accelerating . US stocks rose on news of takeovers.

On Tuesday, Asian stocks rose on optimism that companies will report strong earnings. European markets fell as confidence in Britain was shaken by an unexpected drop in fourth-quarter UK growth figures and with Spanish banks down on concerns new capital requirement rules may not be tough enough. US stockmarkets ended flat overcoming most of the session's losses as bargain hunters bought equities late in the day.

On Wednesday, Asian stockmarkets rose buoyed by strong corporate earnings. European indices rose buoyed by expectations of a firm start on Wall Street. US markets rose as investors shrugged off weak corporate earnings and focused on President Barack Obama's call to lower taxes on businesses. The market also got a boost after U.S. Federal Reserve policymakers, at the end of a two-day meeting, said they would press on with a plan to buy $600 billion in government debt to further stimulate the economy.

On Thursday, Asian shares extended their upbeat run for the fourth day after the Feds statement last night. European markets rose modestly on corporate earnings. US stockmarkets rose as orders for core capital equipment goods rose 1.4% in December though orders for US durable goods declined by 2.5% and US jobless claims rose more than expected.

This morning, Asian stockmarkets were lower for the first time this week with commodity shares pulled down by a drop in oil and gold prices. The Japanese market was especially hurt by S & P's downgrade of Japan's credit rating and disappointing US economic data. European stocks were mixed on US GDP figures. US markets fell although the US economy grew 3.2% on an annualised rate in the fourth quarter due to a big gain in consumer spending and strong exports. This economic growth is considered too slow to ease high unemployment.

This week world markets rose on strong corporate earnings and an improving US economy. Inflation worries still persists in emerging markets, so commodities have been mixed this week. Precious metals and oil fell, base metals were neutral and grains gained slightly.

Weekly Market Summary

2011-01-24T07:00:00.001-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell after China’s central bank raised banks' reserve requirements ratio by 0.5 percentage points on Friday. China's Shanghai Composite Index lost 3 percent as property shares were hit on speculation that a property tax would be imposed. European markets fell as hopes of swift action from policymakers to boost the euro zone's rescue fund faded ahead of a meeting of finance ministers.

US markets were closed for Martin Luther King public holiday.

On Tuesday. Asian markets closed mixed but technology plays outperformed despite news the Apple Chief Executive Steve Jobs would take medical leave for the third time since 2004. European stocks rose as euro zone finance ministers inched towards improving a rescue fund and investor confidence grew in Germany. US indices rose on strong corporate earnings especially in the tech sector as both Apple and IBM reported improved earnings.

On Wednesday, Asian stockmarkets rose led by sectors most sensitive to the economic growth cycle ahead of U.S. earnings. European markets fell as mining and banks stocks were sold, though market players still see the upcoming European earnings season as a positive catalyst that should propel the market higher. US stocks fell on poor US housing data and as Goldman Sachs quarterly report showed that earnings fell 53 percent.

On Thursday, Asian markets retreated due to disappointing US corporate earnings and on profit taking and on news that Chinese GDP rose to 9.8 percent in the fourth quarter of 2010, defying expectations for a slowdown to 9.2 percent which indicates that Beijing still needs to work at combating price pressures, with inflation remaining stubbornly high. European and US stockmarkets fell although existing US home sales soared 12.3 percent year on year as global markets worried about high Chinese inflation.

This morning, Asian stockmarkets fell on fears of further Chinese tightening. European markets rose on good corporate results. US stocks rose as Google and General Electric reported strong quarterly results.

This week global equities and commodity prices fell after robust Chinese economic growth prompted fears the world's second-largest economy would try to choke off excessive demand that is fueling inflation, although European and US corporate earnings have been strong. We are probably going to enter a period of consolidation where markets may continue to fall for a while until inflation fears go away. We still expect both commodity and equity markets to perform this year due to the large amounts of liquidity that is being pumped into the global economy by various governments.

International Living Magazine Article

2011-01-21T03:28:00.000-08:00

Two countries have tied for first place with the best climate on earth in this year’s Quality of Life Index, published last week in International Living magazine.

Climate is one of nine categories that go in to calculating the countries with the best quality of life in the annual International Living index. Sharing top scores for climate in the 2011 index are Malta and Zimbabwe.

Of the two, Malta is our favorite, says International Living magazine Editor Eoin Bassett. “But with 5.2 hours of sunshine a day, a stable government and economy, Malta is a very strong draw for expats. And it’s English-speaking.”

Anchored almost in the center of the Mediterranean Sea, 60 miles from the Italian island of Sicily, frost and snow are mostly unknown in Malta, and the temperature nudges 70 degrees Fahrenheit even in November.

The five islands that make up Malta aren’t on everyone’s radar, and are mostly unheard of by Americans. About 500,000 Maltese live on the largest, more sophisticated main island, and most have a lively urban lifestyle. Homes and apartments here attract an international set as do the historic harbors and five-star hotels.

Crime hardly exists, the locals are hospitable and the health care is excellent. There aren’t any property taxes, and the U.S. expats who benefit most from living here are those who retain earnings from elsewhere that they then elect to get taxed in Malta, at 15%.

At roughly twice the size of Washington D.C., it’s easy to socialize with other expats.

There’s regular 90-minute ferry service to Sicily and a modern airport at Luqa with flights to numerous other European countries, including Rome, just one hour away by plane.

Along with its top climate ranking, Malta’s many other virtues combined to earn it third place overall in the 2011 Quality of Life index, beaten only by New Zealand and the U.S.

Weekly Market Review

2011-01-10T06:38:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets rose broadly on optimism that 2011 will deliver a blockbuster stock market performance on expectations of solid domestic economic growth and abundant liquidity, but volume was thin as many major markets like Japan, China and Australia were closed for public holidays. European and US stocks rose on stronger global manufacturing data

On Tuesday, Japanese stocks led Asian equities higher, climbing to their highest since May with investors betting the improving U.S. recovery may be reflected in jobs data later in the week. European stocks rose on reflections of improved sentiment on the prospects for the global economy. US indices ended mixed and flat as financials rose and commodities fell.

On Wednesday, Asian markets fell after commodities sold off on profit taking. European shares fell hit by a retreat in commodity shares ahead of the release of U.S. private sector employment expected to highlight the pace of recovery in the jobs market. US markets rose as private companies added 297,000 jobs last month. That was far above the 100,000 economists expected.

On Thursday, the Nikkei rallied as investors snapped up shares of Japanese exporters after the dollar hit two-week highs against the yen, but markets elsewhere in Asia were more subdued ahead of the influential U.S. non-farm payrolls report which is due on Friday. Other Asian markets closed mixed after alternating between positive and negative territory. European markets rose on growing confidence the economic recovery was on a stronger footing after U.S. employment figures pointed to a pick-up in the labour market. US eased on softer retail sales data before a U.S. employment report expected to give direction to markets. US stockmarkets were flat after unemployment claims rose slightly over the previous month.

On Friday, Asian markets were lower as traders waited for the US employment report later in the day. European and US stocks fell on disappointing US payrolls added which were below expectations although there was a significant decline in the unemployment rate from 9.7% to 9.4%.

Last week, emerging markets were flat and commodities fell on profit taking. US indices rose on improved economic metrics like ramped-up consumer spending, improved factory orders from businesses, better consumer confidence although employment data disappointed on Friday as investors expected more jobs to be created. This week, companies start reporting and these results will largely move the markets in the weeks to come.

Weekly Market Summary

2011-01-04T02:14:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets fell as investors' nerves were rattled by possible escalating tensions in North Korea as South Korea launched live firing drills in a disputed area this morning despite threats of war from Pyongyang after an emergency U.N. Security Council meeting failed to agree on how to defuse the crisis. European markets rose on optimism for the economy. US stocks closed mixed and flat as the dollar strenghtened.

On Tuesday, Asian markets rose broadly as investors picked up end-of-year bargains and as North Korea backed off threats to strike back at South Korean military drills on a frontline island and reportedly offered concessions on its nuclear program. European stocks rallied as tensions on the Korean Peninsula eased and China took concrete action to help Europe limit its sovereign-debt crisis. US stockmarkets rose on merger activity.

On Wednesday, Asian markets were modestly up except for Japan, China and Indonesia on speculation that the US economic recovery is gathering pace. European indices rose modestly on optimism for the economy and as China's decision not to raise interest rates boosted miners. US stockmarkets rose modestly as sales of previously owned homes edged up in November, the third increase in four months after a dismal summer for home-buying.

This morning, Asian stocks mostly fell on thin trade. European stocks are mixed on US economic data. Although US new home sales rose 5.5% in November and consumer sentiment is at its highest level since June, US markets are falling with the DOW flat. This is probably becuase of a bigger than expected drop in durable orders.

A good week for commodities and global markets. This is because there is confidence that the US economy is recovering, though volumes have been low this week due to the Xmas holidays.

Weekly Market Summary

2010-12-20T05:19:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets rose as China did not raise interest rates as expected. Analysts believe that the next interest rate raise will commence in 2011. European stocks rose as upbeat U.S. and Chinese data boosted investors' risk appetite, and on hopes that Beijing may not raise interest rates anytime soon. Us stocks started off on a positive note after China refrained from raising its benchmark interest rate but gave up gains in the last hour with the indices ending mixed.

On Tuesday, Asian markets rose supported by optimism that China would shun aggressive measures to curb inflation that could inhibit its strong economic growth or blunt its voracious demand for raw materials. European indices rose on good US retail sales. US stocks rose after the Commerce Department reported that retail sales rose for the fifth straight month in November.

On Wednesday, Asian stocks fell on the Federal Reserve's decision not to increase its quantitive easing program on Tuesday which strengthened the US Dollar and drove riskier assets such as miners and oil to fall back. Sentiment in Asia was further dampaned by the Bank of Japan's Tankan survey for December showing that confidence among big manufacturers fell for the first time in seven quarters. Spanish shares led Europe lower on debt fears as Moody's warned that it may downgrade Spain's debt. US markets fell due to inflationary concerns reflected in the bond market as yields keep rising.

On Thursday, Asian markets fell except for Australia and India on low volume. This is a sign that investors are cutting back on exposure to equities in the region for the rest of the year. European stockmarkets closed flat and mixed although Spanish bond yields were forced higher during an auction of sovereign debt. US stocks rose as it was reported that jobless claims fell slightly and housing starts rose in November. Also, European leaders agreed to change the EU treaty to create a permanent financial safety net which further boosted sentiment.

This morning Asian markets rose after two days of declines although on declining volumes. European stocks fell modestly on another Irish debt downgrade. US stockmarkets fell although the U.S. Congress passed an $858 billion bill extending for two years all Bush-era tax cuts.

Sentiment has been bullish this week on strong economic data in the USA as it was reported that jobless claims fell slightly and housing starts rose in November and on some positive policy announcements in the United States in the past weeks especially the plan announced by the U.S. administration this month to extend all Bush-era tax cuts for two years. December's reduced trading volumes and holidays typically cause whippy price action and make big bets difficult to hold for long, so we may see volatility over the last two weeks of this year.

Emereging markets and commodities have hardly moved this week probably due to low volumes. Let's hope that we have a January rally based on the improving economic news that we have been seeing this month.

Weekly Market Review

2010-12-16T05:27:00.000-08:00

by Raymond Chatlani

On Monday, Asian stocks rose amid investor hopes for more Federal Reserve action to boost the U.S. economy, although the Nikkei fell modestly due to pressure on Japanese shares from a stronger yen. European stockmarkets closed mixed with banks falling and oil shares rising. US markets fell modestly with investors taking profits and looking for further action from European officials to prevent a debt crisis from spreading. Gold temporarily hit a record high of $1,429.40 an ounce with silver reaching a thirty year high.

On Tuesday, Asian stockmarkets all rose except for Japan due to a strengthening Yen and India. European and US stocks rose due to the agreement by President Obama and Republicans to extend the Bush-era tax cuts for two years, along with an extension of unemployment benefits and a 2% cut in payroll taxes.

On Wednesday, Asian markets mostly fell amid expectations of Chinese interest rate hikes. European stockmarkets closed mixed. US stocks rose as much of the focus remained on President Obama's decision to help middle class Americans with the two-year tax cut extension.

On Thursday, Asian equities were higher across much of the region with Sydney hitting a four-week high on strong employment data while a weaker yen overnight continued to boost Japanese shares. European markets rose boosted by technology and bank shares. US Stocks closed mixed as traders waited to see whether a tax compromise brokered by the White House and Republicans would pass the Democratic-controlled House.

This morning, Asian indices were mostly down on profit taking. European stocks rose modestly on easing sovereign concerns. US markets are modestly down at the time of writing.

This week European and US markets rose as debt concerns eased and on improving US economic data. Commodities and emerging markets lost some ground this week on fears that China will raise interest rates this weekend.

Perhaps the most important event this week is that bond yields are appreciating which is decimating the price of bonds. As investors flee, where will this money go? Cash has almost no return, so stocks could benefit over the next few months. Also, volatility has been tame this week compared to the last few months. This is generally a good sign for markets to appreciate.

The versatile portfolio manager

2010-12-15T02:24:00.000-08:00

A myth often observed by investors is that in order to spread your risk into more sophisticated investments and alternative strategies requires substantial capital. The reality is that you can gain exposure to hedge funds, managed futures and structured notes etc at very low entry levels so long as you have a portfolio manager who is able to pool investors' capital.

A diversified portfolio

Having your capital protected is very popular, especially to the new investor. Some High Street Banks offer these as retail products and clients can participate in this 'plain vanilla approach'. But what if the investor wants to invest in gold or oil or the Brazilian stockmarket as opposed to the traditional standard FTSE or Eurostoxx offerings ? Can his advisor do this for him and protect his capital also ? Typically the response is negative as minimum levels for such structures are often in the region of €1 million. If on the other hand, your advisor or portfolio manager can gain access to international banks then the door is opened to a world full of choice. Whereas the minimum trade may be €1 million, the manager can pool individual trades, often from as little as €10,000 then place the one aggregate trade of €1 million.

The same principle applies to many hedge funds or alternative investments. Often perceived only for the rich and famous, investors can now trade from low levels if their manager has a good relationship with the fund managers. Having a sizable asset base allows the manager to bring in new investors who piggy back onto the fund without having to commit large amounts.

Exchange Traded Funds

If you do elect to invest internationally, a mistake often made by investors is to only consider investment funds from recognised banks and financial institutions. There is however a much cheaper, easily accessible way of investing into almost any global stockmarket, commodity or currency in the world. Exchange Traded Funds (ETFs) and IShares are used by many portfolio managers to allow them to trade intra day without surrender penalties or lock in periods like many investment funds. Imagine therefore the following hypothetical portfolio :

Commodities	Equity Indices	Alternatives
Gold Bullion ETF	IShares Brazil	FTSE100 Autocall 11%
Short Silver ETF	IShares Eastern Europe	Blue Chip Income Note 8.1%
Leveraged Crude Oil ETF	IShares Australia	3 Year Phoenix Note 18%
Grains ETF
Global Nuclear Energy ETF

The above contains a truly global exposure to commodities, equities and income notes, the latter being in the form of structured income notes that pay a fixed income with inbuilt capital protection. To the average investor, the use of ETFs and IShares will be unheard of but they are a fabulous way of investing cheaply and effectively into almost any market you choose. You avoid initial fees that you incur with fund managers and they also carry a much lower annual management fee.

A portfolio manager's job is not only about performance but controlling costs also. If he can give the investor a truly international portfolio that includes alternative investments, capital protection and the use of low cost trading tools then the investor is really getting a portfolio that may be perceived to require a very high capital investment. In reality the manager could offer his services and give a diversified approach for in the region of €50,000 upwards - therefore appealing to a lot wider clientele and not just the super rich.

Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd

Tel: +357 99066840, +356 21316298

e-mail: info@hollingsworth-int.com

Website: www.hollingsworth.eu.com

Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457

Weeket Market Summary

2010-12-06T01:15:00.000-08:00

by Raymond Chatlani

EU finance ministers on Sunday endorsed a bailout package of 85 billion euro to help Dublin cover bad bank debts and bridge a huge budget deficit, and outlined a permanent system to resolve the euro zone debt crisis in which investors could share the cost of any future default.

On Monday, Asian mostly rose on the Irish bailout news. European and US stocks fell sharply as concerns about the European debt crisis took the edge off a strong weekend of holiday sales in the USA. US shares recovered late in the session and closed modestly down.

On Tuesday, Asian markets fell as Chinese shares slid on fears of an interest rate hike and the European Union's bailout of Ireland failed to convince investors the continent's debt crisis has been contained. European indices fell as the spread between Spanish 10-year bond yields over those of Germany widened by 20 basis points to 297 basis points, while Italian 10-year spreads rose for a fourth day to 210 basis points. US stocks slid as continuing European debt woes and an 0.7% decline in the Standard & Poor's/Case-Shiller 20-city home price index offset a five month high in consumer confidence.

On Wednesday, gold rocketed to just below $1,400 an ounce with silver exceeding $28 an ounce. Asia markets rose broadly as sentiment was boosted by data showing China's factories revved up production in November with the official Chinese purchasing managers' index (PMI) rising to a seven-month high of 55.2. European indices rose calmed by indications that the European Central Bank could subtantianlly increase purchases of eurozone bonds and on stronger Chinese data. US stocks were sharply higher as upbeat U.S. and Chinese data lifted investor confidence about a global economic recovery. USA data showed an improvement in construction spending while manufacturing activity expanded for the 16th consecutive month.

On Thursday, Asian stock markets rose sharply after improved economic indicators powered big gains on Wall Street and worries eased about Europe's debt problems. European stocks rose on expectations that the ECB would signal action to fight a eurozone debt crisis. US stocks extended gains after data showed pending sales of existing homes unexpectedly surged in October.

This morning, Asian markets closed mixed on good US data and fears that China would raise interest rates. European and US indices were mixed as the US unemployment rate climbed to 9.8 percent in November from 9.6 percent, a seven-month high, as hiring slowed.

At the beginning of the week, markets continued to fall after last week's losses. In the past few days, markets and commodities recovered on improving US data, ECB intervention in the form of purchasing bonds and a statement that unlimited liquidity would be provided to Eurozone banks till the end of March 2011. Chinese data this week also reversed sentiment to a positive stance. Commodities, especially gold, silver and oil appreciated significantly.

It looks like the Korean and EU debt crisis are diminishing in investor's minds and they are focusing on improving US economic data.

Hollingsworth Daily Post

2010-12-02T07:00:00.000-08:00

Qantas has begun legal action against the engine supplier Rolls-Royce following the explosion of an engine on one of the airline's Airbus A380s.It said the legal action was back-up in case a settlement could not be reached.Earlier, Australian air safety authorities said they had identified a serious manufacturing fault with some of Rolls-Royce's Trent 900 engines.Rolls-Royce said the Australian findings were "consistent with what we have said before".Qantas has resumed flying some of its A380 planes after grounding the fleet for safety checks following the incident on 4 November.
The euro has risen in value after the European Central Bank (ECB) confirmed it would continue to purchase European government bonds.The confirmation was given by ECB president Jean-Claude Trichet, although he declined to give any further details.He also confirmed that the ECB would continue its support of struggling banks within the eurozone.The euro was up to $1.3145 from its earlier low of $1.3059.The main share indexes were also higher, with Germany's Dax adding 0.4%, France's Cac up 0.5%, and the UK's FTSE 100 advancing 1.3%.
Soft drinks maker PepsiCo has said it is buying a 66% stake in Russian dairy and fruit juice maker Wimm-Bill-Dann for $3.8bn (£2.4bn).PepsiCo said it would also seek to buy the remaining shares in Wimm-Bill-Dann when the initial deal is completed.The deal is the biggest foreign investment in Russia outside the energy sector."Wimm-Bill-Dann is a terrific business with significant opportunities," said Zein Abdalla of PepsiCo Europe.
Brazil's Congress has modified laws relating to the country's oil sector which could increase development of its offshore oil fields.The bill ensures that the state-run oil company Petrobras will have a 30% stake in any new joint exploration ventures in Brazil's offshore fields.Exploitation of the reserves could turn Brazil into a global energy exporter.President-elect Dilma Rousseff helped to draft the proposals while chief of staff in the current government.
A presidential panel set up to help trim the US budget deficit has called for steep spending cuts and tax rises.The proposal would cut defence, social security and other spending, slashing a total of $4.1tn (£2.62tn) from the budget deficit by 2020.But analysts say the panel is unlikely to ratify the plan with a vote, calling into question whether the US Congress will act on its recommendations."The solution will be painful," the plan reads. "There is no easy way out."The US had a budget deficit of $1.3tn in the year to September, and critics have said the government should do more to narrow the gap

BBC Business News 2nd December 2010

Weekly Market Summary

2010-11-30T05:55:00.000-08:00

by Raymond Chatlani

On Monday, Asian stockmarkets closed mostly positive after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. This bailout is expected to be between 80 to 90 Billion Euros which is less than the Greek bailout earlier in May this year. European shares rose in the morning but fell into negative territory in the afternoon as investors waited to see the terms of Ireland's bailout. US indices closed mixed as a bailout for debt-soaked Ireland failed to allay fears of a wider euro zone crisis, prompting investors to seek safety in the U.S. dollar and Treasuries.

On Tuesday, Asian stockmarkets fell, following declines on Wall Street the previous day and after North Korean artillery fired dozens of shells onto a South Korean island near their disputed sea border, wounding several people, setting fire to buildings and prompting a return of fire by the South, Seoul's military and media reported. EU and US stocks, especially miners got hammered on Irish and Korean tensions.

Asian shares initially fell on Wednesday and the euro hovered near a two-month low to the dollar as regional stocks caught up with a sharp sell-off after North Korea's deadly shelling of a South Korean island and investors sought safety in the U.S. currency. However, Asian markets recovered at the close and were mostly in positive territory. European and US stocks gained on economic data as the US Government released a batch of reports on the economy. The government said first-time claims for unemployment fell 34,000 to 407,000 in the week ending Nov. 20 and that personal incomes rose 0.5 percent in October, slightly better than expected.

On Thursday, Asian markets were mostly higher in light trading as investors took heart from data showing an improving economic picture in the U.S. and signs that tensions had cooled at least temporarily on the Korean peninsula. European stocks rose in thin trade on last night's US data. US markets were closed for Thanksgiving.

This morning, Asian stockmarkets fell on worries about China tightening monetary policy to contain inflation, fresh artillery shots fired by North Korea on the disputed island amid warnings of war and fears that European contagion will spread to Portugal and Spain. Banks lead European markets down on the eurozone crisis with miners also losing ground on a strenghtening US dollar. US stocks fell on thin trade due to the long holiday Thanksgiving weekend.

A bad week for equities and commodities. Clearly, the Irish problem and fears that contagion will spread to Portugal and Spain, the uncertainty of when China will probably raise interest rates to control inflation and that North Korea has fired shells on a disputed South Korean island have all contributed to a strenghtening US Dollar against a weakening Euro this week and a flight to US treasuries. Also, trading has also been more volatile in the second half of this week due to US markets being closed on Thursday for the Thanksgiving holiday.

A bright spot this week was that first-time claims for unemployment fell significantly last week, incomes rose last month and consumer spending climbed for a fifth month in the USA. This raises hopes that shoppers will hit the malls in droves the day after Thanksgiving, the start of the holiday shopping season. These are fundamental signs that the US economy may be improving.

Will improving US data drive the markets forward or shall we continue to see this volatility due to the European debt crisis? Short term it is difficult to predict, but the USA is determined to devalue the US Dollar and we should see emerging markets and commodities eventually recover from this recent selloff.

Weekly Market Summary

2010-11-22T03:32:00.000-08:00

by Raymond Chatlani

On Monday, Asian markets closed mixed shrugging off stronger-than-expected growth in Japan amid fears China will take new steps to cool its economy. The Japanese government said the economy expanded an annualized 3.9 percent in the July-September quarter. European markets fell in the early morning but turned into positive territory in the afternoon on news that Ireland was in talks with its European neighbours over how to deal with its financial troubles and on positive eurozone trade data. US stocks closed mixed following a jump in October retail sales and on fears that Ireland may seek a bailout.

On Tuesday, Asian stockmarkets fell as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation. Also, persistent concerns about the euro zone debt crisis kept investors cautious. Major European indexes fell on Irish debt woes with fears that this could spread to Portugal. US stocks slid following new worries about rising inflation in Asia and the possibility Ireland might need a bailout.

On Wednesday, Asian stock markets retreated Wednesday, extending a global sell-off triggered by Europe's simmering debt crisis and expectations China will raise interest rates again to tame inflation. European markets rose on optimism that Ireland's crisis may be resolved. US stocks were flat although core inflation, which excludes food and energy costs, climbed 0.6% from October 2009, the smallest rise on record.

On Thursday, Asian indices rose on soft US inflation and news that China would introduce price controls on food rather than an interest rate hike to control inflation. European stockmarkets rocketed on expectations that Ireland would become the second euro zone country after Greece to receive a bailout to cope with high debts and deficits. US stocks surged on expectations that Ireland will get a giant loan to ease its debt crisis and as US weekly jobless claims data were better than expected.

This morning, Asian markets closed mixed on good US weekly jobless claims data, fears of EU debt problems and news that the Chinese Government told banks they must hold more reserves. EU stocks fell on continued uncertainty as to the Irish debt problem as EU sources said that a financial aid plan to help Ireland cope with its battered banks will be unveiled next week. Wall street fell on China's raising of Bank's reserve ratios and worries that a financial rescue package for Ireland is proving more difficult to agree than expected.

This week markets and commodities fell on the Irish banks debt problems and Chinese inflation problems.

With the Irish problem still unresolved, investors have taken profit after two good months in the markets largely on fears that contaign will spread to Portugal and Spain. China ordered its banks to raise their reserve ratios to control inflation today. The move is aimed at cutting down on lending to avoid speculative bubbles and curb inflation. Inflation in China shot up to a more than two-year high last month. There is also growing expectation China will raise key interest rates soon as part of the inflation fight.

These events have given investors an excuse to take profits. The Irish problem should be resolved next week. The Chinese Government's policies should also help the economy from overheating. Short term we may well see markets continue to go down but over the medium term, we should see the US Dollar continue to slide and emerging markets including commodities appreciate.

The main threat that still remains is if the Irish debt problem remains unresolved as contaign will spread throughout the EU and the Euro could be at risk.

Hollingsworth Daily Post

2010-11-19T06:01:00.000-08:00

The Irish government has insisted it will not raise the country's low corporation tax rate in return for a European Union-led bail-out.Deputy Prime Minister Mary Coughlan said the 12.5% rate - much lower than the EU average - was "non-negotiable".Her comments come as speculation grows that France and Germany want Dublin to raise the tax in return for aid.The Irish government is in bail-out talks with officials from the EU, the European Central Bank and the IMF.An aid package is expected to emerge next week, according to an unnamed source quoted by the Reuters news agency.
US Federal Reserve chairman Ben Bernanke has criticised countries like China that run large trade surpluses."Currency undervaluation by surplus countries is inhibiting needed international adjustment," he said in a speech to the European Central Bank.He said that by buying dollars, these countries were hurting the US recovery and the global economy with it.He also defended the Fed's policy of "quantitative easing", which has been criticised by China and Germany.Defending QE.China, Germany and others have attacked the Federal Reserve in recent weeks for its decision to purchase another $600bn of US government debt in a bid to stimulate the US economy.They say that the policy will unfairly devalue the dollar in currency markets, and that this could lead to inflation and asset bubbles elsewhere in the world.
China's central bank has raised the amount of money that lenders must keep in reserve, as it moves again to try to control the country's high inflation.The People's Bank of China said the reserve ratio would go up by a further 0.5 percentage points on 29 November.It is the fifth time this year that the central bank has made such a move, and the second announcement this month.It comes after Chinese inflation hit a two-year high of 4.4% last week on the back of the fast-growing economy.The central bank hopes that increasing the level of funds Chinese banks have to keep in reserve will help to dampen inflation, as it will limit the amount of money the banks can lend.
China's exports to Japan of rare earths could resume next week, the Japanese trade minister has said.Shipments of the minerals, vital for making a number of hi-tech products, have been halted by Beijing for almost two months.This came after the Japan's navy arrested a Chinese fishing boat captain near disputed East China Sea islands.Japan's Trade Minister Akihiro Ohata said he hoped shipments would now return to normal.He added: "I think the Chinese understand that stalled exports of rare earths to Japan would in turn have a big impact on China's production of computers.
Further details have been released of the difficulties faced by the pilots of the Qantas A380 superjumbo that saw one of its engines explode.Airbus, the plane's manufacturer, has said that flying debris from the Rolls-Royce engine severed cables in the aircraft's wing.A separate report by the AP new agency said the explosion caused a series of system failures in the plane.The pilots made a successful emergency landing in Singapore on 4 November.Airbus made its comments in its latest report to airlines.

BBC Business News 19th November 2010

Hollingsworth Daily Post

2010-11-18T07:31:00.000-08:00

Irish Central Bank governor Patrick Honohan has said he expects the Irish Republic to accept a "very substantial loan" as part of an EU-backed bail-out. Mr Honohan told RTE radio he expected the loan to amount to "tens of billions" of euros.The final decision will be up to the Irish government, which has yet to comment.Mr Honohan's comments come as a team of international officials meet in Dublin for further talks on the debt crisis.Representatives from the International Monetary Fund, the European Central Bank and the EU will meet the Irish government, which has denied that it has asked for aid.
Shares in General Motors (GM) have risen 7% on the first day of trading following the carmaker's record public share offering.Shares rose to $35.53 in the first few minutes of trade in New York, having been priced at $33 by the company.GM raised $20.1bn (£12.6bn) through its offering, making it the largest share sale in the US to date.President Obama called the sale a "major milestone" for both the company and the US car industry.
The Greek government has unveiled an austerity budget that aims to cut its 2011 public deficit to 7.4% of the nation's annual economic output or GDP.If achieved, this would mean a 5bn-euro ($6.8bn; £4.3bn) reduction on Greece's projected 9.4% deficit for 2010.Under the budget plans, the government will cut health and defence spending, and increase the sales tax on most retail items from 11% to 14%.Greece had to accept a 110bn-euro ($150bn; £93bn) rescue deal in May.
Brewer SABMiller has reported a 13% increase in half-year profits, as sales growth in emerging markets offset a decline in Europe and North America.The owner of beer brands as Grolsch and Peroni made a pre-tax profit of $1.7bn (£1bn) in the six months to 30 September, up from $1.5bn a year ago.Revenues at SAB, whose headquarters is in London, rose 7% to $14.2bn.Its sales volumes were down 5% in Europe, but increased by 11% in Africa and by 10% in Asia.Sales in the US and Canada were 5% lower.
The Paris Club of creditor nations has cancelled $7.35bn (£4.6bn) of debt owed by the Democratic Republic of Congo.The deal was agreed following a meeting between representatives of Paris Club members and senior figures from the DR Congo government.In a statement, the Paris Club said the figure represented more than half of DR Congo's foreign debt.It added that the DR Congo government had pledged more work to reduce poverty.
An industry taskforce has called on the government to act to protect the UK economy against a new threat of rising oil prices.A consortium of British business, including retailers Kingfisher and transport group, Stagecoach, say the UK must prepare for the next oil shock.It says not to do so would present energy security problems.A barrel of oil is currently around $80 a barrel, well below the last peak of $145 two-and-a-half years ago.

BBC Business News 18th November 2010

Weekly Market Summary

2010-11-15T03:34:00.000-08:00

by Raymond Chatlani

Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.

On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.

On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.

On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.

This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.

Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.

Weekly Market Summary

2010-11-10T07:48:00.000-08:00

Hollingsworth Daily Post

2010-11-03T05:53:00.000-07:00

The Federal Reserve will announce later its plans to stimulate the US economy, with expectations high that they will feature the reintroduction of so-called quantitative easing (QE).Many analysts expect the Fed to start pumping around $500bn (£310bn) into the economy to boost the fragile recovery.The economy grew by an annual rate of 2% between July and September - not enough to reduce high unemployment.Some analysts see QE as the last chance to get the US economy back on track.Interest rates are already close to zero, which means the Fed cannot reduce rates any further in order to boost demand - the more traditional policy used by central banks to stimulate growth.Instead, it is likely to announce a fresh round of QE, in which it would pump hundreds of billions of dollars into the economy by creating money to buy government bonds.The programme has been dubbed QE2, after the Fed pumped $1.75tn into the economy during the downturn in its first round of QE.
Lloyds Banking Group says its new chief executive will be Santander UK's current boss, Antonio Horta-Osorio.He will replace the current chief executive of Lloyds, Eric Daniels, who is retiring, on 1 March.Lloyds, which is 41%-owned by the UK government, is Europe's fourth-largest bank by market value.The Portuguese banker's replacement at Santander UK will be Ana Patricia Botin, according to BBC business editor Robert Peston.
Lloyds' share price rose more than 3% on the news, to nearly 70p, following the announcement by the UK bank, while in Madrid, Santander's shares fell 1.4% before recovering slightly.Ms Botin is the daughter of Santander's chairman, Emilio Botin. She has worked for the bank since 1988, having previously worked at investment bank JP Morgan in the US.

BBC Business News 3rd November 2010

Investor Protection

2010-11-03T05:52:00.001-07:00

By Mark Hollingsworth in Money Magazine

There is no doubt that the internet has opened the floodgates for potential investment scams. So called boiler room cold calling is common place and unlicensed financial consultants recommend investment products that offer no protection of capital. Sadly, many individuals, often those that can not take financial risks are taken in by these practices with serious financial consequences.
Before making any investment decisions, certain steps should be taken to quantify the advice and recommendations being received. Certain questions should be asked and backed up in writing before parting with your life savings. A legitimate investment recommendation must be supported by facts and you must be aware of the complaints procedure in the event that things unfortunately go wrong. You must be fully armed and prepared for all eventualities. The following list is aimed at helping you make the right investment decisions and from the right source :
Licensed and regulated advisors : If a firm claims to be offering you investment advice but is not authorised to do so then this should be an obvious reason not to proceed. A list of license holders can be found on the MFSA's website, www.mfsa.com.mt. There are approximately 75 license holders whose services include banking, insurance and investments. The category of the license holder is also very important as this can determine amongst other things whether the firm can handle client's money or can act with a delegated authority.
Investor protection : Are you aware of your rights if the advice that you have received turns out to be inappropriate or deemed bad advice ? Can you make a claim against the firm and do they have adequate Professional indemnity insurance to settle any potential claims ? We are very fortunate to have a specialist complaints unit within the MFSA whose role is to handle any consumer complaints. The unit also provides an education platform to assist both existing and potential investors. During 2009, the unit received 324 written complaints, 90 of which related to investments. In addition there were 39 verbal complaints and 147 consumer queries relating to investments. The role of the MFSA as arbitrator cannot be underestimated with a freephone helpline and dedicated consumer website www.mymoneybox.mfsa.com.mt as examples of the regulators commitment to helping investors.
Bank Protection scheme : Bank account holders in Malta are protected in the event that their bank fails up to €100,000. The need to spread your cash deposits across more than one bank is therefore advisable if your cash wealth exceeds this limit. The collapse of certain Icelandic banks in 2008 is still very fresh and severe lessons have been learned by savers who have deposited their savings with banks who offer headline grabbing rates of interest.
Experience of the individual providing advice : How long as the advisor been in the industry and what are his industry qualifications ? He should be able to provide you with their professional qualifications and adequate experience cannot be ignored. Unfortunately, salesman often from the US or Asia regularly contact potential investors to buy into stocks with great enthusiasm. Such unsolicited actions often result in individuals entering into contracts that are worthless, buying more and more shares as the share price supposedly rockets. When attempting to recover your gains, the salesman has disappeared along with your savings. If you wish to speculate on the stockmarket then obtain professional advice and support and never act on the basis of a hot tip from a stranger.
In summary, you invest with the expectation of making a profit over time. By seeking professional advice from licensed institutions, you are taking the right first steps. If things go wrong then you have the peace of mind that Malta has a very strong regulatory framework which is committed to supporting aggrieved investors. All license holders are required to have Professional Indemnity Insurance to cover any claims and investors can be reassured that investing through a Maltese firm offers strong levels of protection.

Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd
Tel: +356 21316298
e-mail: info@hollingsworth-int.com
Website: www.hollingsworth.eu.com
Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457

Weekly Market Summary

2010-10-29T08:01:00.000-07:00

by Raymond Chatlani

On Monday, Asian stockmarkets rose as investors reacted positively to the G20 statement that they would avoid competitive devaluations between their nations. European markets especially commodity stocks rose as the US Dollar fell on the back of the G20 statement. US stocks rose modestly as US existing home sales soared 10% in September.

On Tuesday, Asian markets were mixed making only small gains or losses. European stocks fell as European corporate earnings mostly left investors disappointed ahead of more releases from the U.S. and Asia. Disappointing earnings and a slightly stronger US Dollar sent US stocks lower but these recovered at the close and closed slightly positive.

On Wednesday, Asian indices fell as investors pared positions and took some profits on quantitive easing uncertainty as they wait for the outcome of the Federal Open market Committee meeting next week on 2-3 November and as South Korea's GDP slowed sharply to 0.7% in the third quarter from 1.4% in the second quarter of 2010. European stocks fell on lower commodity prices as doubts grew over the size of the next economic stimulus. US markets fell as investors questioned whether the Federal Reserve's expected plan to buy Treasury bonds might be as big as anticipated.

On Thursday, Asian stocks mostly rose modestly ahead of earnings from the region's major companies and amid uncertainty over the size of the U.S. Federal Reserve's bond-buying program aimed at stimulating the economy. European markets rose on strong corporate earnings and a weaker US Dollar. US stocks closed flat as investors dug through a raft of earnings reports that painted a mixed picture about the economy.

This morning, Asian markets sank amid weak Japanese factory production figures as investors trimmed bets ahead of a U.S. economic reports on gross domestic product, consumer sentiment and manufacturing and likely Federal Reserve stimulus measures. Japan's industrial production fell for the fourth straight month in September, underscoring the country's fragile recovery as factory output tumbled 1.9 percent from the previous month as makers of cars and electronic devices cut production, much worse than a 0.6 percent fall forecast by analysts. European markets were modestly up on a weaker US Dollar. US stocks were flat on reports that GDP grew 2% in the third quarter which is considered too low to create employment.

For the second week in a row, markets and commodities have fluctuated without any sense of direction although corporate earnings in the US, UK and EU have exceeded earning expectations. Investors are largely ignoring fundamentals of improving economies to drive stocks higher. Rather, investors are waiting for the FEDS announcement after their meeting on 2-3 November 2010 as to how large their programme of quantitive easing will be. If the amount of quantitive easing will not be up to expectations then this rally will probably be over as traders will book profits.

Hollingsworth Daily Post

2010-10-26T02:41:00.000-07:00

The Swiss banking giant, UBS, has reported a net profit of 1.66bn Swiss francs ($1.65bn, £1.1bn) for the three months to the end of September.The number was boosted by a major one-off tax credit of 825m francs.It compares with a loss of 564m for the same three months last year.The bank - Switzerland's biggest - said it had suffered difficult market conditions, marked by low levels of client activity, and had also been hit by a rise in the franc.The Swiss currency has strengthened against both the dollar and the euro.UBS made a net profit of 2bn Swiss francs in the April-to-June quarter.
The UK's economy grew at 0.8% between July and September, official figures show, suggesting the economy is recovering faster than expected.It follows 1.2% growth in the second quarter of the year, and is double the 0.4% expected by analysts.The gross domestic product (GDP) figures released by the Office for National Statistics (ONS) is only a first estimate, and may be revised.
Bank of England Governor Mervyn King has attacked the 'absurd' level of risk taken on by banks in a speech.He called the banks' reliance on short-term debt to meet funding needs in 2008 an "accident waiting to happen".He said that, in future, banks must be forced to rely much more on equity to finance their risky activities.His comments raise the prospect that big UK banks will be required to hold significantly more equity than new international rules require.
ArcelorMittal, the world's biggest steel company, has said profits jumped 48% in the three months to the end of September compared with the same period a year earlier.Third-quarter net profit was $1.35bn (£858bn), up from $910m a year earlier.Sales increased by 30% against a year ago, to $21.04bn.But compared with the second quarter this year, earnings were down and the company warned of higher raw materials prices and slowing demand.ArcelorMittal's chairman, Lakshmi Mittal, said the business had not matched expectations and that he was uncertain about the final three months of the year.

BBC Business News 27 October 2010

Hollingsworth Daily Post

2010-10-25T01:59:00.000-07:00

The Singapore stock exchange (SGX) has unveiled a multi-billion dollar bid for the company that owns the Australian Stock Exchange (ASX) in Sydney.If approved, the $8.3bn takeover would mark the first stock exchange merger in the Asia Pacific region.The deal would enhance Singapore as a major financial hub in the region and benefit Australian investors by giving them greater access to Asian markets.A merged exchange would hope to compete more effectively with Hong Kong.ASX shares soared more than 20% to A$43.49 ($43.17) after the announcement, while SGX shares fell back 4.35% to S$9.13 ($7.05).
US Treasury Secretary Timothy Geithner has said he believes China is now "committed" to allowing the yuan to go up in value.Mr Geithner made the comment in a TV interview before he held talks with China's Vice-Premier, Wang Qishan.The US has long said China keeps the value of the yuan artificially low to make its exports more competitive, something Beijing denies.On Saturday, G20 finance ministers said they would refrain from such tactics.Finance ministers from the G20 leading economies have agreed reforms of the International Monetary Fund, giving major developing nations more of a say.At a meeting in South Korea, they agreed a shift of about 6% of the votes in the IMF towards some of the fast-growing developing countries.Those nations will also have more seats on the IMF's Board, while Western Europe will lose two seats.But the US will retain the veto it has over key decisions.Such decisions require an 85% vote - Washington holds 17% under the IMF's weighted voting system.The ministers also agreed to refrain from competitive devaluations of their currencies and move towards more market-determined currency systems.
The French Senate has passed a controversial pension reform bill, which has caused a series of strikes and protests around France.The senators approved President Nicolas Sarkozy's plan to raise the retirement age from 60 to 62, and it could become law as early as next week.Mr Sarkozy says the measure is necessary to reduce the deficit.
Indian tax authorities have given Vodafone 30 days to pay a 112bn rupee ($2.5bn, £1.6bn) tax bill, as part of an ongoing tax dispute.The formal demand relates to the mobile phone company's 2007 purchase of the Indian telephone assets of Hong Kong conglomerate Hutchison Whampoa.Vodafone will appeal against the tax at the Indian supreme court on Monday.The firm says the $11bn transaction was exempt from tax because it took place between two offshore entities.
The Cuban government has outlined the taxes that will have to be paid by the country's growing number of self-employed workers.It is the latest stage of President Raul Castro's reforms to move Cuba away from a solely state-run economy.Self-employed workers will have to pay 10% income tax, while those who take on staff will pay more.It comes after the government announced last month that it was laying off half a million state workers.Cuba's new tax code is detailed in the latest edition of the country's Communist Party newspaper - Granma.
Spanish airport operator Ferrovial has said it will sell a 10% stake in BAA, the operator of Heathrow airport.The partial sale would help the Spanish company establish a market value for its stake, said Ferrovial's chief executive, Inigo Meiras."Heathrow is one of the best infrastructure assets in the world," boasted Mr Meiras, who reaffirmed his company's long-term commitment to BAA.Proceeds will be used to fund other investments and to pay down debts.

BBC Business News 25 October 2010

Weekly Market Summary

2010-10-25T00:56:00.000-07:00

By Raymond Chatlani

On Monday, Asian indices fell except for New Zealand which was flat as the US Dollar strenghtened, rising moderately from recent lows. European markets were up on financials as Citigroup reported a profit for the third quarter in a row as losses from failed loans declined. US stocks rose on earnings reports.

On Tuesday, Asian markets all rose except for New Zealand and South Korea. European indices fell on miners and tech, though banks were firm. US stocks tanked as shares in U.S. banks fell on renewed concern over mortgage foreclosure and on news that China increased interest rates for the first time in 3 years and on mixed earnings from corporate heavyweights which disappointed investors.

On Wednesday, Asian stocks and commodity markets fell except for South Korea and Taiwan as the US Dollar strengthened after the Chinese rate hike reflecting concern that higher rates will slow chinese growth. European indices were mixed on the UK announcement of the largest cuts in public spending since world war 2 in a 5 year austerity plan but closed mostly modestly positive before the close on US earnings reports. US markets rose following strong earnings reports from manufacturing and airline companies.

On Thursday, Asian equities closed mixed on reports that China's GDP slowed down to 9.6% in the third quarter of this year from 10.3% over the second quarter. European markets rose as corporate results exceeded expectations. US stocks climbed for a second day after the Labor Department said first-time claims for unemployment benefits fell last week and on upbeat earnings as Caterpillar Inc., Travelers Cos. and McDonald's Corp. all beat expectations and AT&T Inc. matched forecasts, but only closed modestly higher as the US Dollar rebounded.

This morning, Asian stock markets were mostly higher after a slew of better-than-expected U.S. earnings but gains were tempered as currency tensions overshadowed a summit of major economies (G20) who are meeting today and tomorrow in South Korea to discuss reforms to the global economy. European markets fell modestly as traders took some profit before the G20 summit that is to be held this weekend. US indices are mixed and fluctuating in a tight range as investors pour through another batch of earnings looking for clues as to the health of the US economy.

This week both stockmarkets and commodities traded within tight ranges as on the one hand company earnings are beating expectations and on the other hand tensions are simmering between nations as they may start a currency war.

We still believe that this rally will continue and we may have entered a period of consolidation before the next leg up.

Hollingsworth Daily Post

2010-10-22T01:09:00.000-07:00

Finance ministers from the G20 leading economies are meeting in Gyeongju, South Korea, ahead of a summit by heads of state and government next month.Continuing tensions over exchange rates are likely to dominate proceedings.China is resisting pressure to allow the yuan to appreciate significantly, and many developing countries also fear a currency rise could hit exports.Low interest rates in wealthy countries have encouraged investors to seek better returns in emerging economies.
Saskatchewan province, home to Potash Corporation, has asked the Canadian government to block mining giant BHP Billiton's hostile bid for the fertiliser group.The province's governor said the takeover was not in the interests of Saskatchewan or of Canada.Last month, Potash asked a US court to block the bid.The Anglo-Australian mining group offered $39bn (£25bn) for the firm in August.
AIA, the Asian arm of US insurance giant AIG, has announced the price of a share offering that it hopes will raise about $18bn (£11.4bn).Shares will be priced at 19.68 Hong Kong dollars ($2.53; £1.61) when they begin trading next week.The money raised will be used to help AIG repay the US government, which bailed out the insurer during the financial crisis.AIG failed to sell AIA to UK insurer Prudential earlier this year.AIG is 80%-owned by the US government after it was bailed out for $182bn during the financial crisis.Last month, the company announced plans to begin repaying the US taxpayer.
Quarterly profits at Chinese internet search engine Baidu have more than doubled as it benefits from Google's troubles in the country.Net profit between July and September came in at 1.1bn yuan ($158m; £100m) compared with 492m yuan a year earlier.Revenue for the quarter was 2.3bn yuan, slightly above analysts' expectations.Baidu now commands more than 70% of China's search engine market, a figure that has risen following Google's spat with the Chinese authorities.Earlier this year, Google threatened to pull out of China in a row over censorship.
The online retailer, Amazon, has reported a 16% rise in third-quarter profit, as its Kindle e-book reader continues to bolster sales.Amazon made a net profit of $231m (£147m) in the three months to September, up from the $199m it made in the same period a year earlier.Revenues rose 39% to $7.56bn.But the firm also said that its total operating expenses rose more than 40% to $7.29bn, sending its shares down 5% in after-hours trading.
UK broadcaster BSkyB added 96,000 new customers in the three months to 30 September, leaving it just shy of 10 million in total.Analysts had predicted an increase of only about 69,000 subscribers.Total revenues were £1.53bn ($2.41bn), a 15% rise on a year ago, as customers took up a broader range of services."We have made a very good start to the year with... a record take-up of our additional subscription products," said chief executive Jeremy Darroch.

BBC Business News 22 October 2010

Hollingsworth Daily Post

2010-10-21T07:45:00.000-07:00

China says its economy has maintained robust growth in the third quarter of 2010, albeit at a slightly lower rate.Official figures show a drop from just over 10% growth to 9.6%, still far ahead of any other major economy.The Chinese government has been taking measures to cool a credit boom in order to achieve more sustainable growth levels.Meanwhile consumer prices rose at the fastest pace in nearly two years in September, official data showed.
Toyota has announced a recall of more than 1.5 million cars worldwide over brake and fuel pump defects.The carmaker said the decision affected certain Avalon, Highlander and Lexus cars, including 740,000 cars in the US, 600,000 in Japan and 17,000 in the UK.It wants to ensure that fluid does not leak from the brake master cylinder, causing the warning light to turn on.The fault could cause the brake pedal to feel spongy, and braking performance to "gradually decline".
Credit Suisse's profits fell 74% in the third quarter, thanks to choppy stock markets hitting its investment bank.The Swiss bank earned 609m Swiss francs ($630m, £400m) during the three months, down from 2.4bn francs a year ago.Investment banking revenues fell by 30%, mainly because of low client activity in the group's equity advisory and underwriting businesses.Stock markets took a battering over the summer because of fears over eurozone debt and a US double-dip recession.
Chancellor George Osborne has defended the "fairness" of his UK spending cuts after Labour claims they were reckless and would hit the poorest hardest.He told the BBC that, including Budget measures, the top 10% of earners would be hit hardest but everyone was making a contribution to cutting the deficit.He said "the path to economic ruin" lay ahead if the deficit was not tackled.
UK retail sales fell again September, the second month in succession they have declined, official data has shown.Sales last month were 0.2% lower than August, led by falls in clothing and car fuel sales, said the Office for National Statistics (ONS).The ONS also revised down August's decline, saying sales that month slipped by 0.7% compared with its original calculation of 0.5%.The data comes as a number of retailers have warned of weak trading conditions.
Apple is cashing in on the popularity of its iPhone and iPad to boost demand for its oldest product, the Macintosh.The company announced that its popular app store for the iPhone and the iPad would soon be coming to its laptops.It also launched a revamped MacBook Air at an event at its headquarters.The computer is seen as a marriage of what Apple has learned from desktop computing and mobile devices. Like the iPad, the Air will have no hard drive and rely on flash memory.

BBC Business News 21 October 2010

Hollingsworth Daily Post

2010-10-20T05:26:00.000-07:00

Chancellor George Osborne is setting out details of the biggest programme of public spending cuts attempted by a UK government since the Second World War.Unveiling his Spending Review in the Commons, Mr Osborne is expected to cut the budgets of Whitehall departments by an average of 25% - or £83bn in total.He vowed "fairness" would underpin the cuts, telling MPs "those with the most should pay the most".He also insisted economic growth and reform were at the heart of his plans.He began his statement by saying: "Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt."
Mining giant Rio Tinto has announced a $3.1bn (£2bn) expansion of its Australian iron ore operations in what it calls the "largest ever mining project" undertaken in the country.The move would increase production by almost 30%, from 220 million tonnes to 283 million tonnes, the company said.The announcement comes just two days after Rio and BHP Billiton dropped plans to combine their Australian iron ore operations.
Euro MPs have backed a controversial draft law to extend maternity leave to 20 weeks on full pay and make that mandatory in the EU.UK business leaders and Conservative MEPs lobbied against the proposal. The European Commission earlier recommended an extension to 18 weeks.One assessment said the 20-week proposal could cost UK businesses an extra £2.5bn (2.8bn euros) a year. Minimum maternity leave in the EU is currently 14 weeks.Even though MEPs have approved the 20-week plan it cannot become law unless EU governments back it too, and the UK's coalition government is among those lobbying against it.
The Bank of England's Monetary Policy Committee was split three ways during its October meeting, released minutes have revealed.Seven of its members voted for no change to interest rates and no additional stimulus spending, while one person wanted to see rates rise.The ninth member, Adam Posen, voted to see quantitative easing (QE) - the bank's main stimulus measure - restart.This is the means by which the Bank puts more money into the economy.The French government has used the security forces to lift blockades by strikers at three fuel depots serving the west of the country.President Nicolas Sarkozy has authorised police to break all remaining blockades at fuel depots.French workers are taking their rolling strike against planned pension reforms into its seventh day.Masked youths have been roaming the streets of the Paris suburb of Nanterre, skirmishing with police.In the centre of Paris, hundreds of students gathered outside the Senate, chanting, "Resistance".The Senate, the upper house of the French legislature, is due to vote on the proposed retirement age later this week.
British Airways cabin crews are to be balloted on a new deal that could end their long-running industrial dispute.The new offer was reached in talks between BA chief executive Willie Walsh and Unite joint leader Tony Woodley.The union has been pressing for the restoration of travel concessions removed from members who went on strike earlier in the year.It has also been trying to reverse disciplinary sanctions imposed on union members during the dispute.

BBC Business News 20th October 2010

Hollingsworth Daily Post

2010-10-18T02:46:00.000-07:00

by Raymond Chatlani

On Monday, Asian indices were all higher except for South Korea and Taiwan as investors plowed cash into stocks amid expectations the U.S. Federal Reserve will take action to prevent the American economy from slipping back into recession. European stocks followed Asia's momentum on hopes for US Feds action. US markets ended flat before the start of a busy earnings week.

On Tuesday, Asian markets fell except for China amid reports China had raised reserve requirements for banks to cool lending and as investors awaited earnings from U.S. companies. China told its top six banks to increase reserves in a new move to control lending as Beijing tries to cool inflation and housing prices without derailing its recovery from the global slump. European indices fell modestly on China's aim to curb lending. US stocks opened mixed but closed higher upon the release of the minutes from the FOMC's meeting on September 21. According to the minutes, members of the FOMC are prepared to provide additional accommodation, if needed, to support the economic recovery and to return inflation, over time, to levels consistent with the FOMC mandate. In other words, further quantitive easing.

On Wednesday, Asian stocks rose following an upbeat fourth-quarter forecast from computer chipmaker Intel last night and as Japan's machinery orders, a closely watched indicator of future business investment, rose 10.1% from the previous month which was far better than a 4.0 percent drop projected by economists, marking the third straight month of growth. European shares rocketed after the minutes of the FOMC suggested it was closer to introducing fresh stimulus measures to support the economy. US markets rose after solid earnings news and on hopes for further quantitative easing.

On Thursday, gold hit a new high of $1,379 an ounce with silver exceeding $24 an ounce. Asian stockmarkets rose except for India which was flat following better than expected earnings by US corporations. European markets were mostly lower except for Germany. US stocks edged lower after another disappointing report on jobs where weekly jobless claims rose by 462,000 , but losses were limited because traders expect the Federal Reserve will act soon to strengthen the economy.

This morning Asian indices were mostly lower as the US jobs market remains weak and on a strenghtening Japanese Yen with South Korea, Singapore and China rising; the latter rocketing 2.88%. European markets were mostly lower except for germany. US markets declined as consumer sentiment unexpectedly dipped in early October to its weakest level since July, with buying plans on the decline, a survey released Friday showed. The Nasdaq rose on Intel's and Google's strong earnings.

Hollingsworth Daily Post

2010-10-14T07:39:00.000-07:00

The US trade deficit was wider than expected in August, figures have shown, in the wake of record imports from China.US Commerce Department figures showed the gap between imported and exported goods grew by 8.8% to $46.4bn (£29bn).Imports from China grew 6.1% in August to a record $35.3bn. The US trade deficit with China also set a new record of $28.0bn.US exports to China remained essentially unchanged at $7.3bn.
The US dollar has reached another fresh 15-year low against the Japanese yen at the end of trading in Tokyo.The dollar was worth as little as 81.12 yen at one stage, just above the post World War II low of 79.75 yen.The dollar's continued fall reflects speculation that the US Federal Reserve will expand its quantitative easing programme.But Japan's central bankers have also repeatedly threatened further action to curb the recent rises in the yen. A strong yen is hurting Japanese export companies, which are relied upon to spearhead a recovery in Japan's struggling economy.
Mining company Rio Tinto says it has produced record quantities of iron ore in the past quarter, thanks to a surge in demand from China.47.6 million tonnes of the ore in the three months to September.China is continuing to import huge amounts of the ore for steel production.Rio Tinto's Australia-listed shares rose to a two-year high in response to the news.In London, its shares were up more than 1.5% in the first hour of trading.
South Korea's central bank has kept interest rates on hold at 2.25% following its latest policy meeting.The decision came as a surprise as most economists had expected an interest rate rise to 2.5%.The Bank of Korea (BoK) had left the rate at a record low 2% for 17 months in response to the economic downturn, before raising it to 2.25% in July.The bank said it was not the right time to be raising the cost of borrowing in what is Asia's fourth-largest economy.
More than one quarter of loans to Chinese local government are at risk of default, according to a report.About two trillion yuan ($300bn; £187bn), or 26% of the 7.66tn in loans to local authority financing vehicles, is at risk says state media.The figures, published in the official China Securities Journal (CSJ), were slightly higher than prior estimates which put 23% of these loans at risk.In 2009, banks lent heavily to regional financing vehicles for construction.
Stationery and books chain WH Smith has reported better-than-expected profits - helped by a strong performance at its stores in airports, train stations and motorway service stations.Pre-tax profits were £89m in the year to 31 August, up 9% from last year.The profits rise came despite a 4% fall in like-for-like sales.At WH Smith's 516 stores at travel locations, profits increased by 10% after the retailer improved profit margins.
All 50 US states have started a joint investigation into whether mortgage firms were wrong to repossess hundreds of thousands of homes.It follows allegations that the companies often mishandled documents when people behind on their mortgages had their houses taken from them.According to industry figures, more than 2.5 million US homes have been repossessed since December 2007.

BBC Business News 14 November 2010

Hollingsworth Daily Post

2010-10-13T06:05:00.000-07:00

The gap between China's imports and exports narrowed in September, official data has shown.But analysts say the decline is unlikely to ease the pressure on Beijing to strengthen its currency.The US has been among its strongest critics, claiming China deliberately undervalues the yuan, boosting China's exports by making them cheap.
JP Morgan has reported a 23% rise in profit in the third quarter, as the bank was able to set aside less money to cover loan losses.The company reported a net profit of $4.4bn (£2.8bn), compared with a profit of $3.6bn a year ago.The bank set aside $1.55bn for retail credit losses during the quarter, less than half the $3.99bn it set aside during the third quarter of 2009.
Standard Chartered has announced plans to bolster its balance sheet, issuing £3.3bn of shares in the banking group.The move follows global rules agreed last month on how much capital banks should hold in reserve.The new regulations, called Basel III, were designed to prevent another financial crisis.Standard said it saw many opportunities for growth across Asia, Africa and the Middle East but that these would be limited unless more money was raised.
The number of people unemployed in the UK fell by 20,000 to 2.45 million in the three months to August.This meant the overall UK unemployment rate fell to 7.7% from 7.8% the Office for National Statistics (ONS) said.However, the figures also showed the claimant count - those out of work and receiving unemployment benefit - rose by 5,300 in September to 1.47 million.
Tom Hicks and George Gillett have failed in their High Court attempt to wrest back control of Liverpool.The unpopular American co-owners had tried to oust the boardroom rivals that had sanctioned the sale of the club to New England Sports Ventures (NESV).But Mr Justice Floyd ruled they did not have the power to do so.The decision means the sale to NESV can proceed, although club chairman Martin Broughton hinted rival bids may now be considered at a meeting on Wednesday."I am absolutely elated, it's a very important day for our club," said Broughton as he left the Royal Courts of Justice in London."This will clear the way for the sale, we will have a board meeting this evening and proceed with the sale.
French strikers are disrupting services for a second day running, as they seek to build pressure on the government over its pension reform plans.Tuesday saw the biggest strikes and demonstrations so far in the campaign, and several unions say they will continue their stoppages indefinitely.Rail services are still restricted, causing congestion and delays.And strikers forced the closure of all six of the Total oil group's refineries in France, threatening fuel shortages.
Lloyds Banking Group is to cut about 4,500 jobs in its IT operations.It said 1,600 would be roles held by permanent staff with a further 1,150 working on temporary contracts. The other 1,750 jobs are held overseas.The bank said the cuts, to happen by 2012, were part of its integration of IT operations between Lloyds and HBOS.

BBC Business News 13th October 2010

Hollingsworth Daily Post

2010-10-12T02:08:00.000-07:00

Iceland remains the country that has the greatest equality between men and women, according to an annual report by the World Economic Forum (WEF).It is the second year in succession that Iceland has topped the foundation's Global Gender Gap Report.Nordic nations dominate the top of the list of 134 countries, with Norway in second place and Finland third.The report measures equity in the areas of politics, education, employment and health.
The case to decide the future ownership of Liverpool Football Club will be heard in the High Court on Tuesday.The Royal Bank of Scotland (RBS), the club's major creditors, have submitted an application to the court against co-owners Tom Hicks and George Gillett.Hicks and Gillett, who bought the Reds in March 2007, owe RBS £240m but are blocking the £300m sale of the club to New England Sports Ventures (NESV).The American duo have opposed the sale as they say it undervalues the club.The case is one of a number to be heard by Mr Justice Floyd at 1030 BST and revolves around whether chairman Martin Broughton has the authority to sell Liverpool to NESV against the wishes of Hicks and Gillett.
US clothes retailer Gap has scrapped a new logo just one week after its introduction following an "outpouring of comments" online.The original logo, which has used been used for more than 20 years, has a blue box with "GAP" written in white inside.The new logo on the website had "Gap" written in black against a light background with a small blue square laid over the top of the letter "p".But critics attacked the rebranding on social networks and online forums.More than 2,000 comments were posted on the company's Facebook page on the issue, with many demanding the return of the traditional logo.
French unions are staging a national day of strikes and demonstrations in opposition to the government's pension reforms - the third in a month.Hundreds of thousands of people are expected to march in cities across France, with transport workers, civil servants and teachers stopping work.Ministers want to raise the minimum retirement age from 60 to 62, and the state pension age from 65 to 67.Meanwhile, key workers are set to vote on whether to begin open-ended strikes.
UK Consumer Prices Index (CPI) inflation remained unchanged in September at 3.1%, according to the Office for National Statistics (ONS).It means the rate has been above the Bank of England's 2% target for 10 months in a row.Inflation as measured by the Retail Prices Index (RPI) fell back from 4.7% in August to 4.6% in September.RPI - which factors in a greater chunk of the cost of housing - is important for wage negotiations.
Growth in the UK economy is slowing, with the service sector particularly affected, two surveys have suggested.A report from the British Chambers of Commerce (BCC) said economic growth in the third quarter was "considerably" slower than the previous quarter.The BCC warned businesses faced serious challenges in the coming months.The British Retail Consortium (BRC) said retail sales growth slowed last month, with like-for-like sales up 0.5% from a year ago.

BBC Business News 12 October 2010

Weekly Market Summary

2010-10-11T07:02:00.000-07:00

by Raymond Chatlani

On Monday, Asian markets all rose except for Japan although the Chinese stock exchange will be closed all this week for public holidays. EU and UK stocks fell as German new car sales tumbled 18% in September and fears that reports this afternoon may show slowing factory orders in the USA. US indices fell as factory orders fell 0.5% in August, slightly worse than expected. The U.S. dollar gained broadly on Monday on lingering concerns about euro-zone debt especially against the Euro.

On Tuesday, weak U.S. economic indicators sent most Asian markets lower with only Indonesia, Malaysia and Japan up. Japanese indices rose 1.5% as the Yen weakened on news that the Japanese Central Bank cut rates to virtually zero would use quantitive easing by allocating 35 trillion Yen to purchase a pool of equities and bonds and broaden its loan program. Gold hit a new record high of $1,331 an ounce. European stockmarkets rose strongly on Japan's surprise rate cut and proposed cash injection into the domestic economy. US shares rocketed on Japan's announcement of quantitive easing and reports that activity in the nation’s services sector expanded for a ninth straight month during September.

On Wednesday, gold hit a new high of $1,347 an ounce. Asian stockmarkets rallied Wednesday, buoyed by growing expectations that the Federal Reserve will take steps to bolster the U.S. economy following the Bank of Japan's surprise interest rate cut. European indices rose by following Asia's buoyant mood, but pared gains in the afternoon on US job market reports. US stocks closed mixed with the Dow Jones up and the Nasdaq down and S & P 500 flat after a disappointing report that private employers recruited less staff than expected renewed concern about the health of the economy.

On Thursday, gold hit a new record high of $1,3660 an ounce with silver hitting a new 30 year high of over $23 an ounce. Asian indices were modestly down except for Indonesia which fell over 1% as investors digested the yen's overnight climb to a new 15-year high against the dollar and a disappointing U.S. jobs report. European stocks rose on good US data except for the ETSE100 and Ireland as irish debt was downgraded. US shares initally rose on reports that applications for unemployment benefits fell last week for the fourth time in five weeks, a sign that layoffs are declining and that September sales results were better than expected, but closed flat as traders opted for caution ahead of Friday's employment report from the Labor Department, the most crucial piece of news on the economic calendar this week. Gold pulled back to S1,335 on profit taking.

Today, Asian indices were mostly lower except for China and Hong Kong as investors pared bets ahead of a key U.S. jobs report later in the day and the yen traded at a 15-year high against the dollar. Shares in China jumped as investors playing catch-up as financial markets reopened after the weeklong National Day holidays and after Moody’s Investors Service said it may raise the nation’s debt rating and retail sales surged during a five-day public holiday. European stocks were mostly down as traders pared back positions before the US jobs report later today. US stocks are flat although employers in America cut more jobs than forecast in September.

At the beginning of this week global stocks surged on Japan's surprise quantitive easing and on speculation that other Governments will take additional actions to reinvigorate the global economic recovery. On Thursday and Friday, global stocks were flat as investors seem divided as to whether the Feds will execute another round of quantitive easing due to poor employment in the American economy.

Important Further Update

Further to the summary below, on Friday US markets surged by the end of the session and the Dow Jones breached an important barrier by ending above 11,000. This is an excellent signal that this rally should continue.

This morning Asian stocks rose as investors plowed cash into stocks amid expectations the U.S. Federal Reserve will take action to prevent the American economy from slipping back into recession

Hollingsworth Daily Post

2010-10-08T06:31:00.000-07:00

European regulators have backed tougher than expected draft rules on bankers' pay despite pressure from the UK and France to water down the restrictions.If the draft rules are implemented, it would cap the amount of a bonus able to be taken in cash to a maximum of 30%.On Thursday, the measures were passed by the Committee of European Banking Supervisors, made up of financial watchdogs from the EU's 27 members.London argues that the new regime will make the European Union uncompetitive.
The Japanese cabinet has approved a plan to pump more than $60bn (£38bn) into the country's struggling economy.The aim of the plan - which still needs approval from parliament - is to boost growth, jobs and spending.The Japanese economy is suffering from deflation and a strong currency; prices keep falling, but consumers hold off spending in hope of lower prices.Analysts said the key problem is that the yen is at a 15-year high, making exports more expensive.
Migrant workers are suffering worst in the aftermath of the global recession, according to a special report commissioned by the BBC World Service.Foreign workers in developed nations are more likely to be jobless than their native-born counterparts, as the employment gap widens between the two.At the same time, immigration to developed countries has slowed sharply.
Hollywood film studio Metro Goldwyn Mayer has begun plans to file for bankruptcy protection in an effort to rid itself of $4bn (£2.5bn) of debts.The company behind the James Bond films wants more than 100 of its creditors to agree plans to enter chapter 11 bankruptcy while it restructures.Creditors will get a 95% stake in the company as part of the deal.Chapter 11 allows MGM to operate as normal, but money troubles have held up production of new 007 and Hobbit films.
Global currency wars pose "a real threat" to economic recovery, the head of the International Monetary Fund, Dominique Strauss-Kahn, has warned.In an interview with the BBC, he said currency disputes showed countries were not co-operating as well as they had during the financial crisis.In recent weeks both the US and Europe have led criticism of China over its undervalued yuan.Meanwhile, Japan has been forced to intervene to curb rises in the yen.
Shanghai authorities have imposed limits on home buying in an attempt to cool the city's property market.Families in Shanghai will temporarily be allowed to buy only one more home, and banks must restrict mortgages.It follows moves by the central government to curb property speculation on the back of big price rises.Earlier this week, authorities in Shenzhen announced that anyone owning two houses or more would be stopped from buying further properties.
Thomas Cook and the Co-operative Group are to merge their High Street travel businesses to create the largest such network in the UK.The move will bring together 1,204 stores, but both Thomas Cook and Co-operative Travel will retain their separate branding.They will create a new joint subsidiary company to be 70%-owned by Thomas Cook, with 30% held by the Co-operative.Thomas Cook admitted the deal may mean "hundreds" of job cuts.

BBC Business News 8th October 2010

Weekly Market Summary

2010-10-04T06:32:00.000-07:00

BY RAYMOND CHATLANI

On Monday, Asian stock markets kicked off a new week of trading in good spirits, encouraged by an improvement in U.S. indicators that provided respite from worries about the durability of the economic recovery. Last Friday's report of an increase in US corporate spending lifted Asian indices. European and US markets edged lower as investors pocketed profits.

On Tuesday, Asian equities were lower on lingering concerns about eurozone debt. European markets fell slightly as traders are again weary of the health of Europe's financial markets and how countries there will be able to cope with mounting debt. US markets rose on reports that house prices have risen for five straight months and merger and takeover activity although consumer confidence dropped to its lowest level since February.

On Wednesday, Asian markets mostly rose on speculation that the Fed and Bank of Japan look to pump more funds into markets via bond purchases and other measures to help their struggling economies. European shares fell on massive street protests against austerity measures renewed worries about the region's finances with banks leading the downfall. Gold hit a new high of $1,313 an ounce at one point. US indices were down modestly as concerns over Europe's debt problems dampened sentiment.

On Thursday, Asian markets were mostly down except for China which rocketed over 1.5 percent on speculation government measures to tame real- estate prices will end policy tightening earlier and prevent asset bubbles from hurting the economy. European markets fell on concerns over Ireland and Spain's debt problems as Ireland’s government is preparing to take majority control of Allied Irish Banks Plc and pump extra cash into Anglo Irish Bank Corp. to draw a line under its financial crisis and as Moody's lowered Spain's credit rating from Aaa to Aa1. European markets later recovered in the afternoon and went into positive territory after economic reports in the USA topped expectations but finally closed mixed. American stocks rose on news that second quarter GDP grew 1.7% which was higher than estimated a month ago and that jobless claims figures were lower than expected but closed in negative territory at the end as investors booked profits for the month.

Today, most Asian stock markets rose although Hong Kong and China were closed for public holidays on stronger growth in Chinese manufacturing in September which suggests the world's No. 2 economy isn't slowing as sharply as feared. European markets fell except for the Uk on fears of a possible debt crisis on austerity protests. Gold hit a new high today at 1,318 an ounce driven by the US Dollar's weakness against the Euro. US stocks were flat as American personal spending topped estimates and data showed the manufacturing sector grew at a slower pace in September.

Another good week for equities and commodities. Data from the USA and China are showing slow growth in the US economy and high growth in Asia. EU markets were the exception this week and fell on debt worries stoked by the problems in Ireland and the downgrade of Spanish debt.

Gold new highs this week signifies that the market is looking ahead and probably sees inflation coming. If the market's view is correct, then our portfolios will continue to perform as the US Dollar continues its fall and emerging market's assets continue to appreciate.

Hollingsworth Daily Post

2010-09-30T02:07:00.000-07:00

The Irish central bank has said bailing out Anglo Irish Bank will cost up to 34bn euros ($46bn; £29bn) under a worst-case scenario.It said bailing out Anglo Irish would cost 29.3bn euros under a "base" scenario, but it could cost another 5bn euros in a "stress scenario".Last month, the cost of the bail out was estimated at between 22-25bn euros.Anglo Irish was most dependent on property values, the sector worse affected by the credit crunch.
Shares in games company Nintendo have sunk following news that its new console will not go on sales during the crucial Christmas season.Nintendo admitted that its 3DS machine, which features 3D technology, will not be ready in time, and more than halved its profit forecast for the year.In Tokyo, shares in Nintendo closed down 9.3%.The 3DS will now go on sale in Japan in February, and reach shops in Europe and the US in March.
Spain has lost its last triple-A credit rating with the major rating agencies, following a downgrade from Moody's.The agency downgraded Spanish debt by one level to Aa1, following similar moves by Fitch and Standard & Poor's earlier this year.Moody's said the downgrade reflected the "considerable deterioration" in Spain's public finances.The slow growth in the Spanish economy would also present challenges, it said.
UK-based Lotus has revealed details about five new sportscars ahead of their unveiling in Paris on Thursday.The cars, which will hit the road over a five-year period, mark a new start for the carmaker, Lotus says."This is not just about the cars, it's about the complete remake of the brand," boss Dany Bahar told BBC News.
The US House of Representatives has backed legislation that would pave the way for trade sanctions on China.The Democrat-backed bill passed by 348 to 79, and targets countries that hold down the value of their currencies, as many accuse China of doing.To become law, the bill would also need to be passed by the Senate - unlikely before November mid-term elections - and then signed by President Obama.China said the bill contravened World Trade Organization rules.
Air France-KLM and sister cargo carrier Martinair are being sued by hundreds of European companies, led by Ericsson and Philips, the firms' lawyer says.The carriers face claims of up to 500m euros ($681m; £432m) in compensation for alleged air cargo price-fixing.They say they were overcharged by 10% on international air freight between 2000 and 2007 because of an illegal price-fixing deal between airlines.The case is being brought in Amsterdam with papers to be filed on Thursday.

BBC Business News 30th September 2010

Weekly Market Summary

2010-09-27T02:57:00.000-07:00

by Raymond Chatlani

With the Japanese stockmarket closed on Monday, Asian equities were mixed as investors wait for the FEDS statement on the US economy on Tuesday. European markets extended gains after US shares rose on a report showing that U.S. homebuilder sentiment unexpectedly held steady in September. US indices closed over 1% higher as investors expect the Feds on Tuesday to state that more quantitive easing may be forthcoming if necessary.

On Tuesday, Asian markets rose modestly following the US markets. EU indices closed mixed although Irish, Spanish and Greek Government bond issues were all successful. Consequently, the Euro climbed strongly against the US Dollar. US stockmarkets were flat although housing starts in August rose more than expected. The U.S. Federal Reserve announced that it was ready to provide more support for the economy and expressed stronger concerns about low inflation, while keeping interest rates on hold and not offering a timetable for when it might provide that support. Investors heard what they wanted but did not push US indices higher. It seems that they are waiting to see if further quantitive easing actually occurs. Gold hit a new high of $1,290 an ounce.

On Wednesday, Asian stocks were mixed in thin trade as markets were closed for holidays in South Korea, mainland China and Taiwan. The FTSE 100 fell on speculation over government plans to introduce a new bank windfall tax which hit financials. EU markets fell also. Gold hit a new record high of $1,295 an ounce as the US Dollar tanked against the Euro. US indices fell as some technology companies slumped and the Federal Reserve's downbeat assesment of the U.S. economy weighed on sentiment. Investors are realizing things will have to deteriorate first in the economy before the Fed is going to intervene.

On Thursday, Asian markets that were open fell modestly in thin trade as major markets in Japan, mainland China, Hong Kong and South Korea were closed for holidays. European and US indices fell as investors worried about growth prospects in the developed world as a surprise contraction in Ireland's GDP and news that US unemployment claims climbed and that sales of previously-owned homes in the US rose to a 4.13m annual pace in the month, second lowest only to July which was the worst in a decade's worth of figures from the National Association of Realtors.

This morning, Asian stockmarkets were mixed on the back of US unemployment figures providing evidence of a poor recovery in the world's biggest economy. Gold hit an all time high of $1,299.95 an ounce before pulling back slightly while silver rose to a thirty year high of $21.37 an ounce. European markets rose upon US macro data after opening flat during the day. US shares rallied almost 2 percent as demand for American capital equipment rebounded and German business confidence improved. Growth in orders for US durable goods excluding transportation equipment grew 2 percent while German business confidence unexpectedly rose to the highest level in more than three years.

This week economic data has again improved and the US Federal Reserve's implied action of quantitive easing has contributed to emerging markets gains. Today's improvement in US durable goods orders may be a significant event as it implies that US companies are now spending and investing to grow their business. While we are still seeing the western economies of the USA, EU, UK and Japan struggling to grow as unemployment and housing still remain weak, emerging markets and commodities are taking off. Our recent changes to be more aggressive and invest into emerging markets is working. As long as the developed economies do not go into another recession, then we should see further gains.

Weekly Market Summary

2010-09-17T08:13:00.000-07:00

by Raymond Chatlani

On Friday, industrial production data showed that factory output in July in India expanded 13.8% from a year earlier, nearly double analyst estimates and the fastest pace since April.

On Monday, Asian stockmarkets climbed as robust Chinese economic indicators boosted confidence in the economic recovery. China's industrial production growth accelerated to 13.9 percent year-on-year in August from July's 13.4 percent increase. Investment in factories and other fixed assets soared 24.8 percent while retail sales of consumer goods rose 18.4 percent due to better-than-expected auto sales. EU and US indices rose on China's robust data and relief that new global bank rules would not mean a rush to raise billions of dollars in extra capital. The new banking regulation Basel 3 gives institutions up to 2019 to adequately raise their capital/ liquidity ratios to conform with this new legislation.

On Tuesday, Asian markets were up except for Japan, Singapore and South Korea who are heavily dependant on exports. This can be attributed to their strenghtening currencies against the US Dollar with the Yen hitting a 15 year high against the American Dollar. European and US indices closed mixed as German consumer confidence fell sharply in September and industrial production unexpectedly stagnated during July in the countries that use the euro, while US retail sales grew more than forecast as sales rose in August to their highest gain in 5 months. Gold hit a new record high as the US Dollar fell against most global currencies.

On Wednesday, Japan led Asian stockmarkets higher soaring nearly 3 percent after the government announced its first currency intervention to weaken the yen since 2004. European stocks fell after a gauge of manufacturing in New York State unexpectedly fell to its lowest level in more than a year in September. US stocks rose when the Federal Reserve reported that industrial production in the USA rose modestly in August and the manufacturing sector grew for the 12th time in 14 months.

On Thursday, Asian markets dropped as the US dollar posted its largest gain against the Yen in the last two years as Japan began selling its currency on foreign exchange markets on Wednesday and on speculation that China's banking regulator was considering raising capital adequacy ratios at banks to constrain excesses in the property market. European stocks were lower on unemployment data in the USA. US indices were little changed although the Labor Department said first-time claims for unemployment benefits fell to a two-month low, but still remain at levels that indicate economic growth is sluggish. Claims dropped to 450,000 last week which is below the figure of 460,000 expected by economists.

On Friday, Asian indices all rose amid confidence that the region's growth will be sustained despite slow economic recoveries in the U.S. and Europe. Gold hit a new record high of $1,282 an ounce as the US dollar resumed its fall against most major currencies but pulled back to $1,276 at the time of writing. European markets were up on acquisition news and recediing fears of recession but fell into negative territory at the close after consumer confidence fell in the USA. In the USA consumer sentiment edged down in August and US indices were flat.
This week we have seen economic data improve again. In the USA, the third drop in jobless claims in four weeks and a mild uptick in wholesale prices in August add to evidence that a second recession is unlikely. Economists are less worried that the U.S. will experience another round of mass layoffs and its first bout of deflation since the 1930s. The US economy is still growing, but at a pace too slow to create many jobs.

Last week we started to invest a little bit into emerging markets for a few select clients and this week we have restructured most of our clients' portfolios from an allocation of 75% bonds / 25% cash into 75% bonds / 25% emerging market equities. If economic data continues to improve in the next few weeks, we shall continue to increase exposure to more risky assets.

Hollingsworth Daily Post

2010-09-17T01:10:00.000-07:00

Shares in Blackberry-maker Research in Motion (RIM) rose more than 4% in after-hours trade after the firm posted stronger-than-expected profits.Net profit for the three months to August rose to $796.7m (£507m) from $475.6m a year earlier.The company has recently been involved in a row over data security in India and the Middle East.This was partly to blame for the firm adding fewer subscribers than expected in the quarter, RIM said.
The UK's interim cap on immigration from outside the EU is damaging to British business, Lib Dem Business Secretary Vince Cable has said.Some companies were considering moving jobs abroad because they could not recruit the staff they needed, he said.He told the Financial Times he backs plans for a permanent cap from next April but wants it to be more flexible.The Home Office said the temporary cap, introduced in July, still allowed the brightest and best to enter the UK.
European plans to change maternity rights will cost UK firms £2.5bn a year, a business group has warned.Under proposals to be voted on next month, women leaving work to having a child would be entitled to 20 weeks' leave on full pay.The British Chambers of Commerce (BCC) argues this is unaffordable, especially in the current financial crisis.However, others insist that it is wrong to allow policy to be influenced by temporary economic downturns.
One in seven Americans was living in poverty in 2009 with the level of working-age poor the highest since the 1960s, the US Census Bureau says.The number of people in poverty increased by nearly 4m - to 43.6m - between 2008 and 2009, officials said.The bureau defines poverty as any family of four living on less than $21,954 a year.Meanwhile, new figures showed home foreclosures in August hit the highest level since the mortgage crisis began.
The US Treasury Secretary, Timothy Geithner, says China's currency is significantly undervalued.Mr Geithner told a key committee of Senators that he was examining what mix of tools would encourage China to let the yuan appreciate more quickly.Unlike most other major currencies, China does not allow its currency to fluctuate freely according to market demand.It intervenes to keep it low, but said in June it should be allowed to rise.Mr Geithner said the yuan had appreciated just 1.9% against the dollar since then.
Shareholders in the Italian carmaker Fiat have agreed to spin off its non-car assets and split the business.The move was approved by a large margin.John Elkann, Fiat's 34-year-old chairman and the grandson of the founder, Gianni Agnelli, called the vote an "historic" event that "gives birth to two Fiats".The split is designed to help Fiat integrate with Chrysler but also to form other alliances.Many major car makers have forged ventures with firms in the fast-growing markets of India and China.

BBC Business News 17th September 2010

Hollingsworth Daily Post

2010-09-15T07:54:00.000-07:00

Japan's leading shares rose as much as 3% after authorities intervened in the currency markets to weaken the value of the yen against the dollar.The central bank stepped in to sell yen and buy dollars, a day after the yen hit a 15-year high against the dollar.It is the first time in six years that the Bank of Japan has intervened, and further action has not been ruled out.A strong yen makes Japanese exports more expensive, and reduces profits when earnings are repatriated.The dollar was up 3.1% to 85.63 yen, on track for its biggest daily gain in nearly two years. The euro was also up 2.9% at 111.10 yen.
The European Commission has published draft rules on trading in complex financial products, saying it currently operates in a "Wild West territory".The body wants to create a watchdog to monitor the derivatives market - products used to make bets on assets without buying them.Officials also want to assess the extent of short-selling, when traders bet on asset prices falling.The practices have widely been blamed for causing economic instability.Derivatives and short-selling are viewed by some as contributing to the eurozone debt crisis, which led to major market instability.
Deutsche Telekom has said its chief executive, Rene Obermann, is being investigated by German prosecutors regarding bribery allegations.The investigation is part of an inquiry looking at allegations that some of the company's eastern European businesses paid bribes to influence regulators."The CEO [Rene Obermann] has rejected the criminal allegations made against him as false," Deutsche Telekom said.Eight people, including non-Telekom workers, are being investigated.
The World Trade Organisation (WTO) is set to make its latest ruling in a multi-billion dollar battle between planemaking giants Boeing and Airbus.It will give its initial decision over claims illegal subsidies were made by the US government to Boeing.The case was brought by the European Union which says Washington's support is anti-competitive.Earlier this year, the WTO ruled that the EU paid illegal subsidies to Airbus parent firm EADS.
The Bank for International Settlements (BIS) says the new rules on banks' capital requirements, which it helped to draw up, will make the world "a safer place".Known as Basel III, the regulations require banks to hold more capital in order to absorb major losses.Stephen Cecchetti of the BIS told the BBC that the new rules reduced the likelihood of another financial crisis.However, the new rules have been accused of being soft on banks.
The number of people unemployed in the UK fell by 8,000 to 2.47 million in the three months to July, figures show.This meant the overall UK unemployment rate remained at 7.8%, the Office for National Statistics (ONS) said.However, the figures also showed the claimant count - those out of work and receiving unemployment benefit - rose by 2,300 in August to 1.47 million.Many economists fear unemployment will rise later in the year when government cuts begin to kick-in.

BBC Business News 15 September 2010

Hollingsworth Daily Post

2010-09-14T06:49:00.000-07:00

Global hunger has fallen this year but remains "unacceptably high", a report from the UN's Food and Agriculture Organization (FAO) has said.people in 2010, compared with 1.02 billion in 2009.
But it warned that the fight to reduce hunger would face additional obstacles if food prices continue to rise.A separate report from Action Aid estimates that hunger costs developing countries $450bn (£292m) a year.
US retail sales rose by 0.4% in August, official figures have shown, the strongest gain in five months.It was the second straight month of gains, and was slightly better than analysts had predicted, which has helped to ease concerns about the health of the US economy.The figures from the US Commerce Department were especially robust for clothing and fuel.But car sales fell 0.7% for the month after increasing by 1% in July.
Finnish phone giant Nokia has vowed to fight back as it battles for customers in the increasingly competitive smartphone market.The company unveiled three new smartphones - E7, C7 and an updated C6 - at London's Nokia World conference.Nokia is still the largest maker of smartphones but is facing stiff competition from the likes of Apple, Google and Blackberry maker RIM.Nokia's Niklas Savander told delegates the firm had been losing out to rivals.
Afghanistan's central bank has stepped in to take control of the troubled Kabul Bank.Central bank chief Abdul Qadir Fitrat said investigations had also been started into the dealings of the bank's top two directors and shareholders.Customers have been withdrawing money from the bank amid fears it may collapse following allegations of corruption and mismanagement.Earlier this month, Mr Fitrat said Kabul Bank was "safe and sound".
The yen has hit a new 15-year high against the US dollar after Japanese Prime Minister Naoto Kan won a vote for control of the ruling party.The dollar slid to 83.09 yen shortly after it was confirmed that Mr Kan had survived the leadership contest. It was later trading at about 83.40 yen.Analysts fear the rising yen is undermining Japan's recovery, making exports less competitive overseas.The record low for the dollar is 79.75 yen, reached in April 1995.
India's inflation rate fell in August to its lowest level since January, partly due to changes in the way it is calculated.
India's wholesale-price-index (WPI) inflation slowed to 8.5% last month, down from 9.8% in July, official figures show.The new index includes a wider range of consumer goods, such as computers, scooters and refrigerators.Under the old system August's inflation rate would have been 9.5%.
UK Consumer Prices Index (CPI) inflation remained unchanged in August at 3.1%, according to the Office for National Statistics (ONS).It means the rate remains well above the Bank of England's 2% target, and it brings to an end a three-month period during which the rate had been falling.The unexpectedly high rate was boosted by strong rises in air fares, clothing and food. Fuel prices fell.Retail Prices Index (RPI) inflation slowed to 4.7%, down from 4.8% in July.

BBC Business News 14 September 2010

Weekly Market Summary

2010-09-13T00:06:00.001-07:00

By Raymond Chatlani

On Monday, Asian stocks touched one-month highs after the latest U.S. jobs data pacified investors for now as they had been worried that a second recession in the world's biggest economy was high. European equities followed Asia higher. US financial markets were closed for their Labour Day holiday.

Asian markets closed mostly lower on Tuesday on profit taking after 4 days of gains. The Euro and European stocks fell on renewed concerns about the banking sector. US indices fell by over one percent on these concerns.

World stocks recovered on Wednesday to close higher as concerns receded as to the health of European banks. Also the Portugese Government's successful bond issue was well perceived helped the markets. US President Obama unveiling of a $50 Billion investment plan in transport infrastructure also helped stocks.

On Thursday, Asian markets rose again with the exception of China which was dragged down by banks and property companies share prices. European and US indices rallied as the US Labour Department said first-time claims for unemployment benefits fell to the lowest level in two months, adding to signs that employers aren't resorting to staff cuts as economic growth slows. The U.S. trade deficit narrowed a greater-than-expected 14 percent in July to $42.8 billion, which also boosted confidence.

Today, most Asian stocks gained after Japan said its economy grew more than estimated and on yesterday's better U.S. jobs and trade figures which eased fears that the world's largest economy might slip back into recession. Reports that China's imports during August increased by 35.2% which was more than the expected forecast of 26.1% and that this reduced China's August's trade surplus to $20 Billion from a forecast of $27.1 Billion suggest that the Chinese economy will not slowdown and lead the global economy.

It is looking increasingly unlikely that we are going to have a global recession or a double dip recession in the USA, but it is still early to be certain. The main news this week was that the labour market in the US is improving though hiring is still weak. Thus week we have started to invest a little bit into emerging markets for a few clients with the aim of increasing exposure further should economic data continue to improve in the coming weeks.

Hollingsworth Daily Post

2010-09-10T07:19:00.000-07:00

Finland's Nokia has appointed Microsoft business manager Stephen Elop as its new chief executive.Mr Elop - the first non-Finn to head Nokia - will replace Olli-Pekka Kallasvuo, a lifelong employee who had been chief executive since 2006.The appointment may mark a sea-change in strategy at the top of the company.In July, Nokia reported a 40% slump in second quarter profits, as it has struggled to maintain its lead in the booming smartphone market.
Shares in Deutsche Bank have fallen sharply on reports it will raise 9bn euros (£7.4bn, $11.4bn) in new equity.The move is being seen as the first shot in a string of fund-raisings by banks around the world.Germany's biggest bank saw its shares open down 5.5%, with shares in other banks across Europe also falling, including Barclays and Commerzbank.On Sunday, global banking regulators meet in Switzerland to approve new capital and liquidity rules.
China reported a surprise surge in imports during August, leading to a fall in its trade surplus to $20bn (£13bn).Imports rose 35.2% from a year ago, faster than the 26.1% markets expected.This means that imports grew slightly faster than exports, which rose by only 34.4%, as expected.The news, which follows a surprising contraction in the US trade deficit in July, may weaken critics of China's trade practices in the US.
7-Eleven, the largest convenience store chain in the US, has made a $2bn offer to buy smaller rival Casey's.The offer, of $40 a share, could spark a bidding war as Canadian retailer, Alimentation Couche-Tard, has previously made two bids for Casey's.7-Eleven operates more than 7,100 stores in the US and Canada, while Iowa-based Casey's has 1,531 stores.7-Eleven is owned by Japanese firm Seven & I which sees its future growth coming from the US.
The global economic recovery is slowing faster than forecast, but a return to recession is unlikely, a leading global economic group has said.The Organisation for Economic Co-operation and Development (OECD) said the slowdown had been more "pronounced than anticipated".As a result, it lowered its growth forecast for 2010 for the G7 leading economies to 1.5%, down from 1.75%.It added the economic outlook was characterised by "great uncertainty".
A German banker at the centre of a row over comments he made about immigration and race has agreed to stand down, the country's Central Bank has announced.Thilo Sarrazin, a board member of the Bundesbank, will leave his post at the end of this month.He has said that Jews "share a particular gene" and has accused Muslims of failing to integrate.Chancellor Angela Merkel was among several leaders who called for his removal from the board.
The US trade deficit was smaller than expected in July, figures have shown, as exports reached their highest level in almost two years.US Commerce Department figures showed the gap between imported and exported goods fell 14% to $42.8bn (£27.8bn).Exports rose by 1.8% as US-made goods such as aircraft, industrial machinery and computers proved popular.Imports dipped 2% as consumer demand for items such as clothing, televisions and toys fell.
The United States has been overtaken by Sweden and Singapore in the World Economic Forum's (WEF) competitiveness survey for 2010-11.The change meant that the US slipped two places to fourth in the WEF's latest ranking.Switzerland, which overtook the US last year, remains the top ranked economy.Germany rose to fifth, and was the best placed eurozone country. The UK, after falling back in recent years, moved up one place to 12th position.

BBC Business News 10th September 2010

Hollingsworth Daily Post

2010-09-06T03:00:00.000-07:00

British Airways and Iberia have drawn up a shortlist of up to 12 airlines which they hope to buy or merge with once their own tie-up has been completed.BA boss Willie Walsh did not name any of the airlines potentially involved.However they are reported to include carriers in emerging markets such as India or China.He made the comments in Mumbai while unveiling a code-sharing deal with India's Kingfisher Airlines.
Germany's coalition government has decided to extend the life span of the country's nuclear power plants by an average of 12 years, officials say.Under the agreement, some plants will now remain in production until the 2030s, instead of being phased out by 2021 as the previous government wanted.There will also be new fees on utility companies to fund renewable energy.Chancellor Angela Merkel argued that renewable sources are not developed enough to abandon nuclear power.
Google has proposed paying $8.5m (£5.5m) to settle a lawsuit brought over its Buzz social network.Launched in February, Buzz enrolled all Gmail users into a social network based around their contacts.The service was criticised because users initially had relatively little control over who could see their network of contacts.Several Gmail users took Google to court over Buzz saying the network violated personal privacy.
China is checking the qualifications of all its commercial pilots, after it emerged that more than 200 of them lied about their experience.The revelation follows an investigation last year by the Civil Aviation Administration of China (CAAC).Half the pilots worked for the parent company of an airline involved in a recent fatal plane crash.Shenzhen Airlines is the parent company of Henan Airlines, whose aircraft crashed last month killing 42 people.Fifty-four passengers and crew survived the crash, in which the plane missed the runway.
There is no longer any justification for the UK's EU budget rebate - worth about 6bn euros (£5bn) last year, the EU budget commissioner says.Janusz Lewandowski told the German daily Handelsblatt that UK income per head had grown markedly since former prime minister Margaret Thatcher negotiated the rebate in 1984."The rebate for Britain has lost its original justification," he said.Next year the UK rebate will fall to about 3bn euros, he added.
Severstal, Russia's largest steel producer, returned to profit in the second quarter, but missed analysts' expectations.It made a net profit of $192m (£125m) between April and June. It made a loss of $290m in the same period in 2009.The profit was hit by a loss from Severstal's discontinued Italian operations, which are up for sale.Severstal also said that restructuring its loss-making US assets was "the highest priority" for the company.
Shares in Australia's biggest investment bank, Macquarie, fell sharply after the company cut its profits forecast.Macquarie said weak global markets were hitting earnings at its key units, including currencies and commodities.First-half profits would be 25% lower than the same period a year earlier, the bank said. Analysts had been expecting an 11% rise.At one point the shares were down by 8%, although they finished down 4.7%.

BBC Business News 6th September 2010

Weekly Market Summary

2010-09-06T02:14:00.000-07:00

by Raymond Chatlani

Federal Reserve Chairman Ben Bernanke said lastFriday that the central bank was ready to step in if the U.S. economy showed further signs of weakening. Bernanke's comments sparked a stock market rally, with the Dow Jones industrial average jumping 1.7 percent Friday.
All major Asia stock markets followed the U.S. lead and rose Monday. They also got a boost from Japan's central bank deciding at an emergency board meeting to further ease monetary policy by extending more cheap loans to financial institutions. With UK markets closed, European bourses slid on worries over the outlook for the global economy. Wall street fell amid pessimism about the US economy as a report showed that personal incomes rose less than expected in July.
On Tuesday, Asian markets followed Japan's Nikkei 225 which fell on sentiment of a stronger Yen which erodes the earnings of Japanese exporters. This was caused by disappointment on Monday over the Japanese Central Bank's decision to ease monetary policy by expanding a low-interest low programme. Markets had been hoping for stronger action. European stocks closed mixed as investors fretted about lingering worries over the health of the U.S. economy ahead of key macroeconomic data. US indices closed flat and Latin American markets rose on a surprise jump in consumer confidence in the USA.

On Wednesday, Asian indices rose due to optimism on China's growth as China's official purchasing managers' index rose to 51.7 in August from a 17-month low of 51.2 in July, while Australia's economy grew a stronger-than-expected 1.2 percent in the second quarter. European markets were well up as Asia's data alleviated worries about a global economic slowdown and on signs of stronger US manufacturing data. US markets rose as investors reacted very positively to the improvement in manufacturing data in both China and the USA.

On Thursday, Asian markets strengthened as investors increased their risk appetite as they felt that the global economy is not slowing as quickly as feared. European indices closed mixed as the Bank of England and the EU Central Bank kept base rates at 0.5% and 1% respectively. US stocks rose after the National Association of Realtors said Thursday that the number of buyers who signed contracts to purchase homes rose 5.2 percent in July after hitting a record low in June.

On Friday, Asian stocks squeezed higher but gains were tentative ahead of important US jobs data which would be reported later in the day. US unemployment jumped to 9.6 percent in August, the Labor Department said on Friday, showing the recovering economy is still struggling to create jobs. The department said the economy lost 54,000 jobs last month, a better figure than the 120,000 loss expected by economists. Both European and US markets were up.

This was a positive week for equities and commodities with the exception of the price of crude oil which remained neutral. This was due to improving data on manufacturing in the USA and China and an unexpected rise in sales of previously owned homes and a pick up in factory orders in the USA and that US unemployment fell less than expected. Investors sentiment is changing towards the acceptance that there is less chance of a double dip as data is not as bad as feared.

Data this week shows that the global economy is still growing but at a slower pace. The chances of a double dip recession have lessened considerably based on economic statistics that were reported this week. It looks like the markets will continue going up and down throughout the rest of the summer.

Hollingsworth Daily Post

2010-09-03T05:05:00.000-07:00

The United Nations' food agency has called a special meeting of policy makers to discuss the recent rise in global food prices.The announcement came after Russian Prime Minister Vladimir Putin extended the country's ban on grain exports on Thursday.This added to fears that prices of food staples would continue to rise.The meeting will take place on 24 September, probably in Rome, the UN Food and Agriculture Organization said.
BP says the cost of its Gulf of Mexico oil spill has risen to $8bn (£5.2bn) - a rise of more than $2bn in the last month alone.The company said it had paid out about $399m in claims to those affected by the spill.Last week, responsibilty for the claims was transfered to the Gulf Coast Claims Facility (GCCF), which has so far paid out a total of $38.5m.Plans to permanently seal the well were also progressing well, BP said.The final sealing of the well is now expected to be completed later this month.
HSBC may move from London if the UK government decides to break up big banks, a senior executive has said.Stuart Gulliver, head of the Canary Wharf-based bank's investment banking division, made the warning at a banking conference.He said he was "genuinely concerned" that the UK's banking commission would recommend splitting up banks."[That] has significant implications clearly for where we may choose to headquarter our institution.""I want to be crystal clear. Our preference is to be headquartered in the UK," added Mr Gulliver.He also noted that no other country was looking at breaking up banks in response to the 2008 financial crisis.
Chinese investors have approached a Canadian pension fund about a possible rival bid for the fertiliser giant Potash Corporation.Alberta Investment Management said it was not interested in a rival bid and did not name the investors involved.Potash Corporation is currently the subject of a $40bn (£25.8bn) hostile takeover bid from Anglo-Australian mining giant BHP Billiton.The firm is based in the Canadian province of Saskatchewan.Potash - or potassium carbonate - is mined in the province and used for fertiliser production worldwide.
Russia will consider lifting its grain export ban only after the next year's harvest has been reaped, Russian Prime Minister Vladimir Putin has said.Mr Putin did not say when exactly the ban, originally introduced from 15 August to 31 December, would be lifted.Global wheat prices have risen by 1.4% on Thursday, after gaining more than 3% during the previous session.Russia, one of the world's biggest producers of wheat, barley and rye, was hit hard by a drought this summer.
The European Union has reached agreement on reforms to financial supervision, officials have said.EU states and the European Commission agreed to create agencies that from next year are to oversee banks, insurers, and financial markets.The deal must still be approved by European finance ministers and the European Parliament.Europe's move follows the sweeping Wall Street reforms that President Barack Obama signed into law in July.It is hoped the agreements in Europe and the US will help stop a repeat of the financial crisis in which loose supervision of companies was blamed for contributing to problems.
The government of Mozambique says price rises which have led to riots in the capital Maputo are "irreversible".The comments came after an emergency cabinet meeting on the two days of unrest in which seven people have died.Troops have been deployed to help clear up the debris while text messages are reported to have been circulating urging people to continue protesting.

BBC Business News 3rd September 2010

Hollingsworth Daily Post

2010-09-02T07:07:00.000-07:00

The European Central Bank (ECB) has raised its forecast for eurozone growth for this year and next year.ECB President Jean-Claude Trichet said the upgrade reflected the "stronger-than-expected rebound" in the zone's economy.He forecast GDP growth of between 1.4% and 1.8% for this year, and between 0.5% and 2.3% next year.Earlier, the ECB kept eurozone interest rates on hold at 1%, as had been expected.

The governor of Afghanistan's central bank has told the BBC he will not allow the country's largest commercial bank to collapse.His comments follow the resignation of the top two executives of Kabul Bank, amid allegations of corruption and mismanagement.Their departure has prompted crowds of account-holders to converge on the bank to withdraw their money.The bank is crucial as it handles payments to government workers.

Spanish clothing retailer Zara has opened its new online store in France, Spain, Italy, Portugal and the UK.The group already sells a home range online, but its revamped website will offer fashion lines which have only been available in its stores until now.The push into cyberspace is seen as a defensive move that comes amid fears of a decline in High Street spending.H&M will follow in the next fortnight; Gap began online sales for the first time outside the US last month.Consumer confidence is waning and many fear a further economic slowdown. Online fashion sales, meanwhile, are proving resilient.

Samsung has become the latest challenger to enter the tablet computer battle, unveiling its Galaxy Tab at the IFA conference in Berlin.The device will run on Google's Android operating system, with a capacity of 16 or 32Gb, expandable by 32Gb more.It weighs 380g (14oz), and has an 18cm (7in) screen - smaller and lighter than its principal rival the iPad.Vodafone has announced that it will distribute the device in European markets including the UK in October.The tablet can connect via 3G networks, as well as wi-fi and Bluetooth.

Apple has launched a social network as part of the latest version of its iTunes software.Ping, as it is known, allows users to build networks of friends and professional musicians, in a similar way to services such as Twitter.The service also builds playlists based on what friends are listening to.
Analysts said it represents a challenge to existing music-based social networks such as MySpace."It's a social network all about music," said Mr Jobs, launching the application at an event in San Francisco.

Pernod Ricard, the French drinks giant, says it will embark on a marketing campaign to encourage people to drink more of its products.The company, the second-largest spirits group after Diageo, saw net profit flat for the year.The company made 951m euros (£792m, $1.2bn), compared with 954m euros the year before.Pernod Ricard, whose brands include Absolut Vodka, says it will concentrate on cutting debt and boosting sales.Consumers in Spain, Greece and Ireland are shying away from premium priced brands as the economic downturn has hit hard in these countries.

Russian gas monopoly Gazprom has reported a threefold surge in profits for the first three months of the year, as the cold winter boosted demand.Net profit came in at 325bn roubles ($10.6bn; £6.9bn), compared with 103.7bn roubles a year earlier.Sales volumes to Europe rose by 37%, which helped to offset a fall in gas prices of 36%, boosting overall revenue to 957bn roubles.Gazprom supplies about one quarter of all Europe's gas needs.

BBC Business News 2nd September 2010

Hollingsworth Daily Post

2010-09-01T05:24:00.000-07:00

The US Federal Reserve will buy up more debt if the outlook worsen "appreciably", minutes from its August meeting have revealed.The central bank preferred to purchase US government bonds, but did not rule out buying further mortgage debts.The Fed has already bought $1.4tn (£910bn) of mortgage debt in its efforts to stimulate the economy.The minutes also showed that one of committee member voted against keeping its investment at this level.

China's purchasing manager's index, or PMI, has revealed its first gain in four months.
The purchasing managers' index, which measures manufacturing growth, rose to 51.7 in August from 51.2 in July.A separate HSBC survey also showed a rise, reaching a three-month high of 51.9 in August from 49.4 in July. Anything above 50 shows an expansion.However, the benchmark Shanghai Composite Index fell despite the positive news.

A three-year report into currency dealing shows rapid growth in trading, with the majority of business happening in London.Trade has jumped by 20% in the three years since the last survey was conducted by the Bank for International Settlements (BIS), which is sometimes called the "central bankers' bank".But London outpaced the average, with turnover up by 25% over the period.Some $4 trillion (£2.6tn) changes hands around the world every day.

The Australian economy grew at its fastest pace in three years in the second quarter of the year.The growth was fuelled by demand for the country's iron ore and other commodities, mainly from China.The figures released on Wednesday showed gross domestic product (GDP) expanded 1.2% in the April-June quarter from the previous quarter, compared with 0.7% in the first quarter.Australia has gone for 19 years without suffering a recession.

French media giant Vivendi has improved its outlook for 2010 after reporting a 4% rise in first-half profit.Vivendi saw a net profit of 1.53bn euros ($1.95bn; £1.26bn) in the first six months of the year, up from the 1.47bn euros it made a year ago.But revenues at its Universal Music Group fell 5.4%, because of "fewer major local and international releases and reduced demand".It now expects 2010 profit to exceed the 2.59bn euros it made in 2009.

The US financial regulator has dropped possible fraud charges against rating agency Moody's over a computer glitch.The Securities and Exchange Commission (SEC) was investigating top-ranking AAA ratings given by the agency in error to complex debt products in 2007.Moody's said that a bug in its computer simulation model meant that it thought the "constant proportion CDO" products were much safer than they really were.The regulator said it was uncertain it had authority to pursue the case.

BBC Business News 1st September 2010

Hollingsworth Daily Post

2010-08-30T07:39:00.000-07:00

The Bank of Japan (BOJ) has announced measures to boost lending aimed at combating the rising value of the yen.Following an emergency meeting, the central bank said it would increasing lending to commercial banks by 10 trillion yen ($117bn; £75bn).The measure is designed to stem the value of the currency, and boost lending to businesses.Meanwhile the Japanese government has announced its own plans for a 920 billion yen stimulus package.
US consumer spending rose by a faster-than-expected 0.4% in July, as shoppers saved less of what they earned.It was the fastest growth rate since March, though total spending remains well below its pre-recession highs.Personal income however grew only 0.2%. Economists had expected both numbers to rise by 0.3%.The data means that the savings rate in the US - the percentage of income that households choose not to spend - fell to 5.9% from 6.2% in June.
Federal Reserve chairman Ben Bernanke has laid out four "unconventional" policy options to boost the US economy.Top of the list is more "quantitative easing" - mass purchases of debt.Speaking to fellow central bankers at the annual Jackson Hole symposium in Wyoming he said the recovery had slowed to "a pace somewhat weaker" than forecast.Hours earlier economic growth for April to June was revised to an annualised rate of 1.6%, down from 2.4%.
Central banks may have to provide more economic support amid a fragile global recovery, the deputy governor of the Bank of England has warned.Charles Bean said policymakers had prevented a financial market collapse but further action might be required.He was speaking at the Economic Policy Symposium in Jackson Hole, Wyoming.At the same event, US Federal Reserve chief Ben Bernanke set out "unconventional" policy options to boost the US economy.

BBC Business news 30th August 2010

Hollingsworth Weekly Market Summary

2010-08-27T08:17:00.000-07:00

Last week, global markets fell due to poor labour data and regional manufacturing reports in the USA which indicated that the economy is slowing. Investors are not happy with the data coming out of the USA and are concerned that a double dip is on the horizon.

On Monday, Asian stocks were mixed after the large falls last week. European markets rose boosted by merger and acquisition news and on gains in the mining sector on hopes a planned Australian mining tax could be scrapped. US indices finished lower on lingering worries over the economy.

On Tuesday, Asian markets retreated as investors anticipated more bad news from US reports this week. European and US stocks fell sharply following dismal US housing data and fears of a recession in the UK economy. Existing home sales fell 27 percent during July which was the largest monthly drop in the four decades that records have been kept. Together with last weeks poor labour data, investors are concerned that the US economy may be facing a double dip recession. Metals fell sharply and crude oil dropped to $72 a barrel on the uncertain economic recovery while US treasuries gold appreciated as investors sought safety.

On Wednesday, Asian indices followed global indices down as investors pared risk on poor US housing data and slowing Japanese exports due to a stronger yen. European markets fell as Ireland’s credit rating was cut one step by Standard & Poor’s to AA-, the lowest since 1995, on concern the rising cost of supporting the country’s struggling banks will swell the budget deficit. U.S. stocks staged a comeback on bargain hunting after suffering steep early losses on disappointing data after the Commerce Department reported that durable goods orders rose only 0.3 percent last month, much worse than the 2.8 percent growth forecast and that new home sales fell in July to their lowest rate since records from 1963. Buying interest picked up at the end of the session as traders hunted for beaten down stocks.

On Thursday, most Asian stocks rose snapping a lengthy losing streak, but gains were modest as they followed the rebound in US markets. European indices rose as a batch of strong corporate results offset investors' worries over the economic outlook. US markets fell although the Labour department said that claims for unemployment benefits fell to 473,000 last week after climbing to over 500,000 the week before as such jobless claims figures are still considered as being too high.

Asian stocks were mixed on Friday on optimism that the Japanese Government would be doing something to stop the yen from appreciating and persistent worries over whether the U.S. economy may suffer another recession kept investors dour. European indices were up after US second quarter GDP data was reported at 1.6%, slightly above the 1.4% growth that was expected but turned negative in the afternoon after Federal Reserve chairman Bernanke's remarks about the weak US economy.. US markets opened higher after Federal Reserve chairman Bernanke stated that the Fed will consider making further large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare, although the FED chief stopped short of committing to any specific action.

Global markets fell sharply this week on very weak housing data in the USA, slowing Japanese exports due to a strengthening Yen, fears of recession in the UK, slowing EU and Chinese economy and fears of a double dip recession in the USA as second quarter GDP growth came in at only 1.6% after growing 3.7% over the first quarter.

The deteriorating data that we have seen this week confirms that it is still too risky to buy stocks. Until we see an improvement in the housing sector and better employment figures it will be difficult for these markets to takeoff.

Hollingsworth Daily Post

2010-08-27T03:43:00.000-07:00

Boeing is delaying delivery of its first new-generation 787 Dreamliner aircraft until early 2011.Japan's All Nippon Airways was due to take delivery of the aircraft at the end of this year.The 787 project has already been delayed for more than two years, following a series of hitches.

Japan's core consumer prices index fell for the 17th month in a row in July, underlining the country's entrenched problems with deflation.The index, which excludes fresh food, fell 1.1% from July last year.Deflation is adding to economic worries in Japan, where the strong yen is making exports more expensive.Japan's "lost decade" of deflation in the 1990s hit company profits as consumers delayed purchases to await even cheaper deals.

Toyota has announced another recall involving more than one million cars in the US and Canada with potentially faulty engine control systems.The models affected are the Corolla and Matrix made between 2005 and 2008.TheJapanese carmaker said three unconfirmed accidents were "alleged to be related" to the problem, one of which resulted in a "minor injury".Last month, Toyota recalled 700,000 cars worldwide and has now recalled about 10 million in the past year.

The Pensions Regulator has been asked to decide on the funding of the main EMI pension scheme because the trustees and the company cannot agree.It will be the first time the regulator has decided how much extra cash should be pumped into a company scheme to clear its deficit.The shortfall in the EMI fund is estimated at between £115m and £217m.But the company has hinted that if the regulator's ruling is too harsh it might tip the firm into insolvency.

Hewlett Packard (HP) has raised its bid in the battle with rival Dell to take control of data storage firm 3Par, with an offer of $1.8bn (£1.2bn).The move comes just hours after Dell agreed a deal to take over 3Par, having matched HP's earlier bid of $1.6bn, tabled on Monday.HP said its offer was "superior" and it was in a better position than its rival to execute the deal.Observers are now waiting to see if Dell can again match HP's offer.

Defence manufacturers have asked David Cameron to clear up confusion over how the replacement for Britain's nuclear deterrent will be funded.The chairman of the industry body ADS, Ian Godden, said uncertainty over the Trident missile system was unsettling both investors and the UK's allies.There are concerns as to what way the successor to Trident would impact on wider defence spending.

Blackberry-maker Research in Motion has said it is willing to work with India to support the country's need for "lawful access" to encrypted services.RIM and the Indian government are holding last-minute talks ahead of a 31 August deadline, when a ban on the devices is due to begin.India wants the ability to monitor secure e-mail and instant messaging services provided by the firm.

Brazil's government has given the formal go-ahead for the building on a tributary of the Amazon of the world's third biggest hydroelectric dam.After several failed legal challenges, President Luiz Inacio Lula da Silva signed the contract for the Belo Monte dam with the Norte Energia consortium.Critics say the project will damage the local ecosystem and make homeless 50,000 mainly indigenous people.

BBC Business News 27 August 2010

Hollingsworth Daily Post

2010-08-25T01:29:00.000-07:00

Mining giant BHP Billiton has seen its annual profits rise nearly 70% thanks to a recovery in commodity prices.The company said it made $19.6bn (£12.7bn) in the 12 months to June, up from $11.6bn made in the previous year.Last year's results were hit by a slump in demand for commodities following the economic crisis.In its results BHP gave no update on its $40bn bid for fertiliser maker Potash Corp, which was rejected by the company's board last week.

Sales of existing homes in the US plunged 27.2% in July compared with June to their lowest level in more than 10 years, figures suggest.Home sales completed in the month stood at an annualised rate of 3.83 million, according to the National Association of Realtors (NAR).The main reason for the drop was the end of tax credits designed to boost sales, the body said.

Demand for gold jewellery will help underpin the price of the precious metal for the rest of 2010, according to the World Gold Council (WGC).The price of gold has soared during the recession as investors sought a safe haven as shares and other assets fell.In its latest quarterly bulletin, the WGC says retail investors appear to be big drivers of demand for gold.And the WGC also anticipates growing demand from China if the country relaxes restrictions on the market.

The price of oil has dropped to below $72 a barrel, its lowest level in more than two months, on renewed fears about the strength of the global recovery.US light crude fell by $1.4, or 2%, to $71.66 a barrel, while London Brent dropped by the same amount to $72.26, after disappointing US home sales data.Figures showed that existing home sales fell by 27% in July compared with the previous month, to a 10-year low.The figures also pushed shares on Wall Street lower.The main Dow Jones index closed down 134 points, or 1.3% at 10,045.

Cairn Energy has discovered gas off the coast of Greenland, a sign that could lead to a possible oil discovery.Edinburgh-based Cairn, the first company for a decade to drill for oil offshore in Greenland, said it had "early indications of a working hydrocarbon system" in Baffin Bay.But environmental campaigners have raised concerns in the wake of BP's Gulf of Mexico oil spill disaster.

Private defence company Blackwater has been fined $42m (£27m) for violating US export and arms traffic laws.The nearly 300 breaches include the export of illegal weapons to Afghanistan and the unauthorised training of foreign nationals.The alleged violations were revealed in US State Department documents.The multi-million dollar settlement means that Blackwater, now known as XE Services, will be able to bid for government contracts.

The yen has hit a new 15-year high against the dollar amid continued uncertainty about whether the government will intervene.Speaking at an emergency press conference, Japanese Finance Minister, Yoshihiko Noda, declined to comment on any potential currency intervention.But said that he was monitoring the situation "extremely closely, with grave concern".The strength of the yen is a major worry as it puts a strain on exporters.

US bookstore chain Barnes & Noble has reported a loss between April and June, in part due to legal costs incurred in a battle with a major shareholder.The chain posted a net loss for the quarter of $63m (£41m), against a profit of $12m a year ago.Almost $10m of the loss related to the chain's fight to block billionaire investor Ron Burkle's attempts to take a controlling stake in the company.

BBC Business News 25th August 2010

Hollingsworth Magazine Article - The Savvy Shopper

2010-08-24T06:46:00.000-07:00

The Savvy Shopper 2010
By Vivian Nagel, MSI

I published my first Savvy Shopper article last summer and was delighted with the number of emails I received thanking me for the tips and providing me with more.

I have detailed new ways to be save money with purchases here and thank all of those who sent tips in. Any readers who missed the first of these articles can contact me to receive a copy.

www.bookdepository.co.uk
A wide choice of books including books for children at English Schools in Cyprus at vastly cheaper prices than locally, delivered free.

www.discount-supplements.co.uk
Ships worldwide and offers big savings on vitamins and other supplements when compared to local prices.

www.chemistdirect.co.uk
Massive savings to be gained on toiletries etc, delivery to Cyprus is ₤9.95 nut you can order a fair amount of goods before the weight restriction applies. I ordered 6 hair colours, 4 deodorants, 6 dental floss, 4 packs of face wipes and 4 toothpaste and saved much more than the cost for shipping compared to what I would pay locally.

www.voucherline.com
You can buy nearly all UK high street retailers gift vouchers from this site; it costs ₤3.95 to mail it to the recipient. There are no discounts but rather than send a heavy gift to friends/relatives from Cyprus you now have the option to send them a gift voucher.

www.isubscribe.co.uk
In my last article about savvy shopping I advised readers to subscribe to magazines that they regularly buy in Cyprus to make substantial savings. This site has many of the major publications all on one site.

www.lakeland.co.uk
A well known UK store deliver to Cyprus for a basic charge of ₤10 (more depending on order size)

www.mandco.com
Formerly known as Mackays this clothing retailer offers good quality goods at a fraction of the cost of most clothing stores in Cyprus. Delivery to Cyprus costs ₤7.50

www.newlook.com
Again a clothing retailer that offers fashions at much cheaper prices than equivalent shops in Cyprus. Their website does not give Cyprus as a delivery area but they have emailed me to confirm that they do deliver here for a fee of ₤5.00

Many of the UK stores that have a presence in Cyprus do not deliver here but if you are fortunate enough to still have family or friends there you can have your purchases delivered to them and they can post them onto you.

Others that do not have a Cyprus outlet may deliver to other European countries but not Cyprus! I would strongly advise you to email those stores that you wish to use that do not deliver and ask them to do so. If there are enough of us requesting it they may add Cyprus to their list.

Don’t forget
www.mycelebrityfashion.co.uk
This site has a section called discounts where many fashion stores offer discounts between 20 & 40%. Not all of them deliver to Cyprus but you can have them delivered to a relative for onward posting.

I hope you find these tips of benefit and if you have any tips that you would like to pass on please let me know and I will incorporate one in another article on savvy shopping later in the year.

Happy shopping.

Mrs. Vivian Nagel, MCSI
Hollingsworth International Financial Services Ltd
Tel: Cyprus +357 99579149, Malta +356 21316298
E-mail: viviann@hollingsworth-int.com Website: www.hollingsworth.eu.com
Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457

Hollingsworth Magazine Article

2010-08-11T03:34:00.000-07:00

The versatile portfolio manager

myth often observed by investors is that in order to spread your risk into more sophisticated investments and alternative strategies requires substantial capital. The reality is that you can gain exposure to hedge funds, managed futures and structured notes etc at very low entry levels so long as you have a portfolio manager who is able to pool investors’ capital.

Historically, a typical investment portfolio would consist of overseas and local equities (typically bank shares), bonds (including emerging markets) and possibly equity or bond fund(s) from an overseas company registering their funds in Malta. Whilst the choice in the local market is improving, liquidity issues remain a concern and an investor is not diversifying enough away from the local marketplace. Given the choice, most investors would prefer to invest in global opportunities, if the risks and prospects are properly explained.

A diversified portfolio
Having your capital protected is very popular, especially to the new investor. Some of the local banks offer such products on mass and clients can participate in this ‘plain vanilla approach’. But what if the investor wants to invest in gold or oil or the Brazilian stockmarket as opposed to the traditional standard FTSE or Eurostoxx offerings ? Can his advisor do this for him and protect his capital also ? Typically the response is negative as minimum levels for such structures are often in the region of €1 million. If on the other hand, your advisor or portfolio manager can gain access to international banks then the door is opened to a world full of choice. Whereas the minimum trade may be €1 million, the manager can pool individual trades, often from as little as €10,000 then place the one aggregate trade of €1 million.
The same principle applies to many hedge funds or alternative investments. Often perceived only for the rich and famous, investors can now trade from low levels if their manager has a good relationship with the fund managers. Having a sizable asset base allows the manager to bring in new investors who piggy back onto the fund without having to commit large amounts.

Exchange Traded Funds
If you do elect to invest internationally, a mistake often made by investors is to only consider investment funds from recognised banks and financial institutions. There is however a much cheaper, easily accessible ways of investing into almost any global stockmarket, commodity or currency in the world. Exchange Traded Funds (ETFs) and IShares are used by many portfolio managers to allow them to trade intra day without surrender penalties or lock in periods like many investment funds. Imagine therefore the following hypothetical portfolio :

Commodities Equity Indices Alternatives
Gold Bullion ETF IShares Brazil FTSE100 Autocall 11%
Short Silver ETF IShares Eastern Europe Blue Chip Income Note 8.1%
Leveraged Crude Oil ETF IShares Australia 3 Year Phoenix Note 18%
Grains ETF
Global Nuclear Energy ETF

The above contains a truly global exposure to commodities, equities and income notes, the latter being in the form of structured income notes that pay a fixed income with inbuilt capital protection. To the average investor, the use of ETFs and IShares will be unheard of but they are a fabulous way of investing cheaply and effectively into almost any market you choose. You avoid initial fees that you incur with fund managers and also they also carry a much lower annual management fee.

A portfolio manager’s job is not only about performance but controlling costs also. If he can give the investor a truly international portfolio that includes alternative investments, capital protection and the use of low cost trading tools then the investor is really getting a portfolio that may be perceived to require a very high capital investment. In reality the manager could offer his services and give a diversified approach for in the region of €50,000 upwards – therefore appealing to a lot wider clientele and not just the super rich.

Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd
Tel: +356 21316298
e-mail: info@hollingsworth-int.com
Website: www.hollingsworth.eu.com

Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457

Hollingsworth Daily Post

2010-08-10T07:29:00.000-07:00

Investors are waiting for the outcome later of the Federal Reserve's policy meeting, which will indicate how the central bank views the US economy.Financial markets have priced in possible stimulus measures. However, economists are split over whether the bank will take action now.One Fed option is to start buying up Treasury securities again - an action last taken during the financial crisis.In July, Fed boss Ben Bernanke said the outlook was "unusually uncertain".

Tata Motors has reported a return to profit thanks to strong domestic demand for its cars and increased sales of its Jaguar and Land Rover brands.Net profit for the three months to the end of June came in at 19.9bn rupees ($429m; £273m), compared with a loss of 3.3bn rupees a year earlier.Revenue grew by 64% to 271bn rupees as car sales in India grew by more than a half, to 77,858 cars.

China's import growth slowed in July, which economists are seeing as a sign that the country's rapid economic expansion is cooling.Imports climbed by 22.7% compared with a year ago to $116.8bn, well below the 53% expansion seen in June.However, exports rose by 38.1%, from June's 35.2%, as China's trade surplus increased.There are worries that if China's demand for imports slows it could hinder the global economic recovery.

Shares in Europe's biggest travel operator, TUI Travel, have fallen 8% after the Thomson Holidays owner said several factors had hit its UK trading.These included airspace closures due to volcanic ash, good weather encouraging people to stay at home and uncertainty about the impact of government cuts.As a result, booking volumes were about 10% lower in the three months to the end of June compared with last year.This meant revenue fell to £3.4m, down from £3.6m a year ago.

The UK's trade deficit narrowed in June by more than expected after exports rose sharply from the previous month.The deficit on goods and services fell to £3.3bn, against £3.8bn in May, the Office for National Statistics said.The goods deficit was £7.4bn, compared with £8bn a month earlier, largely due to a £900m boost to exports. Trade in services produced a surplus of £4.1bn.

BBC Business News 10th August 2010

Weekly Market Summary

2010-08-06T08:02:00.001-07:00

By Raymond Chatlani

On Monday, Asian indices were up after South Korea's exports grew faster than expected and China's manufacturing data confirmed that the economy was growing at a lesser pace which heightened expectations that the Chinese Authorities would now relax policy tightening measures. European stockmarkets also rose on strong manufacturing data, HSBC's reported doubling of profits and BNP Paribas profits which also exceeded forecasts. US markets also appreciated on news that the index of manufacturing activity for July was better than expected.

On Tuesday, Asian equities rose for a second day following the previous day's rally in European and US markets. EU and US indices fell on a report showing that US personal income and spending was flat in June and that pending sales on previously owned home fell to a record low.

On Wednesday Asian equities fell on US economic data. European indices were mixed while US markets rose on reports that the US added more workers in July than forecast and that the services sector is expanding.

On Thursday, Asian markets were mixed due to reports that the Chinese Government would stress test local banks. European and US stocks dropped on an unexpected rise in weekly US jobless claims which underscores a weakening economy. As expected, the Bank of England and the EU Central Bank kept base interest rates unchanged at 0.5% and 1% respectively.

On Friday, Asian stocks closed mixed as investors waited for the results of US non-farm payroll figures. European and US indices fell for a second straight day as private employers in the USA added a total of 71,000 only in July, far below the 200,000 jobs needed every month to reduce the unemployment rate.

A lot of mixed signals and markets were flat this week. The employment figures out of the US confirm that although the economy is growing, it is slowing down.

In previous weeks we have seen good earnings reports from companies which is due to cost cutting rather than an increase in sales. This weeks employment and jobless claims data confirm this. Until a clear trend emerges, the risks of getting back into this market are still elevated.

The markets will be driven next week by the results of the Federal Reserve Bank meeting on Tuesday. Investors should react depending on whether the FEDS do nothing or introduce new stimulatory policies.

Hollingsworth Daily Post

2010-08-06T07:37:00.000-07:00

Royal Bank of Scotland's pre-tax profit has risen to £1.14bn in the first half of the year from £15m a year earlier.The bank reported an operating profit of £1.6bn compared with an operating loss of £3.4bn in 2009.RBS, which is 84%-owned by the taxpayer, has announced 23,000 job losses worldwide since October 2008, including 17,100 in the UK.It also announced it had sold an 80% stake in its payments business GMS, in a deal which valued the unit at £2bn.

German insurer Allianz has reported a 46% drop in second-quarter net profit, after seeing an increase in costs related to natural disasters.Allianz said claims from natural catastrophes hit 255m euros ($335m; £210m) in the April-June quarter.Net profit fell to 1.16bn euros from 1.87bn euros last year, when results were boosted by asset sales.However, operating profit jumped 23% to 2.2bn euros, and the firm maintained its outlook for the full year.

Russia is to ban the export of grain from 15 August to 31 December after drought and fires devastated crops."I think it is advisable to introduce a temporary ban on the export from Russia of grain and other agriculture products made from grain," Russian Prime Minister Vladimir Putin said.Russia, one of the biggest producers of wheat, barley and rye, exported a quarter of its 2009 grain output.Mr Putin's announcement sent wheat prices to a 23-month high.

US food giant Kraft has reported higher-than-expected first quarter profit, helped in part by its purchase of UK confectionery maker Cadbury.Kraft said net profit was $937m (£590m), up from $827m in the same period a year earlier earlier.Net revenue rose 25.3% to $12.3bn, boosted by the addition of Cadbury, which it acquired in a controversial takeover at the beginning of the year.Kraft was criticised for breaking pledges over Cadbury plant closures.

Greece's efforts to tackle its public deficit have had a "strong start", the International Monetary Fund (IMF) and European Union (EU) have said.The comments came after a delegation of staff from the IMF, EU and European Central Bank visited the country to check on the progress.In May, the EU and the IMF agreed to loan Greece 110bn euros ($145bn; £91bn) over three years.An IMF official said he was "confident" Greece would get the next instalment.

Nigeria's Securities and Exchange Commission (SEC) has fired the director-general of the Nigerian Stock Exchange, Ndi Okereke-Onyuike, and suspended its chairman.The move is being seen as an effort to restore investor confidence following growing fears over governance issues.The action was taken by SEC head Arunma Oteh who took office at the beginning of 2010 promising tougher regulation.The SEC has named ex-Deloitte executive Emmanuel Ikazoboh as its new chief.The former chief executive of Deloitte in West and Central Africa will now be responsible for managing sub-Saharan Africa's second-biggest stock exchange for a caretaker period.

The Texas Rangers baseball team owned by Liverpool FC co-owner Tom Hicks has been auctioned off for $593m (£374m).It came after Mr Hicks' ownership group defaulted on loans, with the sale being finalised in a US bankruptcy court.The franchise has been sold to a group led by Hall of Fame pitcher and Texas Rangers president Nolan Ryan and Pittsburgh lawyer Chuck Greenberg.Liverpool FC is the subject of a number of potential bids, including from China, which the club is assessing.

BBC Business News 6th August 2010

Hollingsworth Daily Post

2010-08-05T06:15:00.000-07:00

UK banking giant Barclays has reported pre-tax profits of £3.95bn for the first half of 2010 - up 44% on the same period last year.The vast majority of the profits came from the bank's investment banking arm, Barclays Capital, which made £3.4bn.Barclays also said it lent £18bn to UK households and businesses over the six month period.Earlier this week rival HSBC reported first-half profits of £7bn, while Lloyds made £1.6bn.Royal Bank of Scotland will announce its results on Friday.

Japan's prime minister has suggested the country's economy may need additional stimulus spending.Naoto Kan said that while the economy was still growing, there was concern about the level of unemployment and the health of the global economy.The Japanese economy expanded at an annualised rate of 5% between January and March, but economists say the rate of growth has since slowed.

Rio Tinto's profits for the January to June period have reached a record first-half high for the firm, fuelled by Chinese demand for its iron ore.The Anglo-Australian group saw its half-year net profits more than triple to $5.8bn (£3.7bn).This compares with $1.6bn for the same six months last year.Earnings from Rio's iron ore operation, the biggest part of its business, more than doubled to $4.1bn, up from $1.9bn a year ago.

Rupert Murdoch's News Corporation has reported fourth quarter net income of $875m (£551m), against a $203m loss in the same period in 2009.News Corp was helped by the sale of a Bulgarian TV station, cash from a BSkyB legal settlement, and some tax credits.It owns TV stations, film studios, book firms, cable networks and newspapers.

Air traffic for Ryanair grew by 13% while British Airways flew 2.6% fewer passengers during July when compared with July 2009.Ryanair sold 7.61 million seats last month, smashing a previous record of 6.8 million seats sold in August 2009.BA carried 3.19 million passengers last month, down from 3.21 million in July 2009.BA enjoyed a strike-free July after cabin crew restarted talks about pay and conditions.The long-running dispute has so far cost BA £150m ($240m).

Shares in Barnes & Noble, the largest US bookstore chain, have jumped 20% after it said late on Tuesday it was considering putting itself up for sale.The chain said it believed its shares were "significantly undervalued".Founder Leonard Riggio said he might make a bid for the struggling retailer, as part of a wider investor group.The chain struggled during the downturn as consumers looked to discount bookstores.

BBC Business News 5th August 2010

Hollingsworth Daily Post

2010-08-04T05:14:00.000-07:00

Quarterly profits at Societe Generale have more than tripled after what it called an "excellent performance" in its retail banking division.The French bank said net profit for the three months to June came in at 1.08bn euros ($1.4bn; £900m) compared with a profit of 309m euros a year ago.The result comfortably beat analysts' forecasts of a 732m euro profit.

Japanese carmaker Toyota has reported its biggest quarterly profit in two years, with sales recovering as the company seeks to put the recall of millions of vehicles behind it.Toyota made a net profit of 190.4bn yen ($2.2bn; £1.4bn) in the three months to June, bouncing back from a 77.8bn yen loss in the same period a year ago.Group revenues increased 27% on last year to 4,872bn yen.

Almost three-quarters of the oil spilled in the Gulf of Mexico has been cleaned up or broken down by natural forces, the US government says.White House energy adviser Carol Browner announced on Wednesday that only a quarter of the leaked oil posed any further danger to the environment.The majority has either been captured, burned off, or evaporated, she said.

Lloyds Banking Group has reported a return to profit for the first half of the year, largely due to a drop in the amount set aside to cover bad loans.Pre-tax profit at the bank, which is 41%-owned by UK taxpayers, came in at £1.6bn, compared with loss of £4bn in the same period a year earlier.Money set aside to cover bad loans fell from £13.4bn to £6.5bn.
On Tuesday, Northern Rock reported a return to profit for the period, while on Monday HSBC posted a profit of £7bn.

German sports goods maker Adidas has reported a jump in profits for the April to June quarter thanks to a sales boost from the recent World Cup.The company posted a net profit of 126m euros ($167m; £104m) compared with 9m euro ($12m; £7.5m) a year earlier.Sales were up 13%, reflecting the success of its sales of replica World Cup shirts, boots and balls.

UK media regulator Ofcom has referred the market for pay-TV movies to the Competition Commission, amid concerns that Sky's role is too dominant.It said it had "reasonable grounds" to suspect that Sky's distribution of major Hollywood films restricted or distorted competition.Consumers were unlikely to benefit from more choice and innovation without intervention, it said.

Wheat prices have hit a 22-month high after a severe drought and ensuing wildfires in Russia devastated crops.Chicago Board of Trade (CBOT) wheat for September delivery broke through the $7-a-bushel level in US trade for the first time since September 2008, before falling back to $6.93.Prices have risen 50% since late June.

German carmaker BMW has reported a surge in profits, thanks to a recovery in global markets, demand from China and strong sales of new models.The firm made 834m euros (£692.8m; $1.1bn) between April and June, up from 121m euros a year earlier. Sales climbed by 18.3% to 15.35bn euros.The results impressed investors, pushing the firm's share price up by 3.1% in Tuesday trading.

BBC Business News 4th August 2010

Hollingsworth Daily Post

2010-08-02T01:40:00.000-07:00

The UK's biggest bank HSBC has reported pre-tax profits of $11.1bn (£7bn) for the first six months of 2010 - more than double it profits for the same time last year.The bank said it was profitable in every region, except for North America where it saw losses of $80m.HSBC shareholders will receive a second dividend this year, totalling $1.4bn.

Former chairman of the US Federal Reserve, Alan Greenspan, has warned that the US economy could be heading towards a double-dip recession.There is currently a "pause" in the US recovery, he told US television, so that it feels like a "quasi-recession".When asked if the US could fall back into recession, he replied, "It is possible."

The iPhone manufacturer Foxconn has reopened a factory in India which was shut down temporarily when 250 workers fell sick, sending its shares up 9%.The plant in Madras (Chennai), which makes mobile phone parts, was closed last Monday after workers complained of nausea and giddiness.Work resumed on Saturday after the firm received clearance from the government.

French bank BNP Paribas has seen its second-quarter profit grow, thanks to gains in its retail banking division offsetting declines in its investment banking operations.Net profit for the three months to July rose 31% from a year earlier to 2.1bn euros ($2.7bn; £1.75bn).Retail banking saw "huge revenue growth" driven by strong demand for mortgages, BNP said.

Two Gulf states have announced bans on some functions of the Blackberry mobile phone, claiming security concerns.The United Arab Emirates is to block sending e-mails, accessing the internet, and delivering instant messages to other Blackberry handsets.Saudi Arabia is to prevent the use of the Blackberry-to-Blackberry instant messaging service.

Chinese manufacturing output grew at its slowest rate for 17 months in July, as the government continues efforts to rein in rapid economic growth.The official purchasing managers' index of manufacturing output fell to 51.2 in July from 52.1 in June, said the China Federation of Logistics and Purchasing.Analysts said the slowdown came as banks continue to make it harder for firms to borrow money.

Pan-Asian restaurant chain Wagamama is being put up for sale by its private equity owner, it has been reported.Majority owner Lion Capital is hoping to sell the company for as much as £250m, according to the Sunday Times.The UK private equity group, which bought an 88% stake in Wagamama for £102m in 2005, has not been available for comment.

BBC Business News 2nd August 2010

Weekly Markey Summary

2010-07-30T07:54:00.000-07:00

By Raymond Chatlani

On Monday, European and US markets closed higher on US home sales that were sharply higher in June compared to May's slide to a record low since 1963. This reaction may have been overdone as new sales only comprise 7% of all house sales compared to an annual average of 15% of all house sales in the past. Also a better than expected profit outlook from transportation stock Fedex Corp also helped to boost market sentiment.

On Tuesday, Asia started mostly down on thin volume due to rumours that Chinese banks are facing rising default risks on loans to real estate developers, but recovered towards the end of the session. While European markets were up, US indices fell slightly as the Consumer Confidence Index fell as Americans worry about job prospects and skimpy wage growth. Spot gold fell to a three month low of $1,162 an ounce as deflation worries continue.

On Wednesday, Asian equities were positive at the end of the session after being neutral earlier due to mixed earnong reports from the USA and the drop in consumer confidence. European and US markets fell as orders for durable goods dropped 1 percent in June and the Federal Reserve beige book report painted a picture of a less than robust recovery.

On Thursday, Asian stocks were mostly higher as the US dollar dipped due to fears that the US economy is slowing. European and US markets fell due to these fears which may be confirmed if US second quarter GDP figures confirm this slowdown.

ON Friday, Asian markets fell due to reports out of Japan that the jobless rate unexpectedly rose, deflation deepened and industrial production fell the most in a year amid worries that US GDP growth would be lower than expected. Both European and US markets fell for a second straight day as second quarter US GDP growth was reported at 2.4% which was down from 3.7% in the first quarter of 2010.

Equities and especially commodities had a second consecutive positive week but have given up their gains over the past two days. Markets are going up and falling without any clear direction although July was mainly a positive month for stocks and commodities. Although reported earnings by companies have been good, this has largely been achieved by strict cost cutting without an increase in revenues. Without increasing sales, these earnings cannot be sustained in coming quarters. The present risk reward ratio is negative and a prudent stance should be taken for now. Also, we can expect thin volumes over the next 6 weeks as most traders will be away on their holidays.

Hopefully, we shall see opportunities materalise in September and go back in the market into the sectors that we feel offer value. After its recent pullback, gold look interesting. We expect the price of gold to fall back further over the next few weeks and are looking to launch a gold structured product with one of the institutions that we know.

Hollingsworth Daily Post

2010-07-30T05:40:00.000-07:00

A consortium headed by Hong Kong billionaire Li Ka-Shing has agreed a deal to buy the UK networks of French power group EDF for £5.8bn ($9.1bn).The group includes his holding company Cheung Kong Infrastructure (CKI), Hongkong Electric, which is 40%-owned by CKI, and the Li Ka-Shing Foundation.The bid has been mooted for a number of months.

British Airways has revealed a steep loss for the April-to-June quarter after being hit by cabin crew strikes and disruption caused by the volcanic ash cloud from Iceland.BA reported a pre-tax loss of £164m, larger than the £148m loss it made in the same period last year.BA said the impact of all the disruptions was £250m in the quarter, in line with previous estimates.

Entertainment giant Walt Disney has announced the sale of its Miramax film division for about $660m to a group of private equity investors.The investors, Filmyard, includes construction magnate Ron Tutor and investment firm Colony Capital.Disney has been negotiating with potential buyers for months to sell the division, which has made films such as Pulp Fiction and Shakespeare in Love.

Assets bought by the US to bail out AIG and Bear Stearns are showing a paper profit for the first time, the Federal Reserve Bank of New York has said.This increases the likelihood that US taxpayers will get repaid the tens of billions of dollars used to stop the financial giants going bust.Only when the assets held by the bank are sold will any profit be realised.

Banking giant Citigroup has agreed to pay $75m (£48m) to settle civil charges that it misled investors over potential losses from high-risk mortgages.It agreed the settlement with US financial watchdog the Securities and Exchange Commission (SEC).The SEC said Citigroup had repeatedly made misleading statements about the extent of its exposure to subprime loans as the housing market slumped.

China has allowed the publication of an International Monetary Fund (IMF) staff report for the first time since 2006.China had previously blocked the annual report's release because it objected to the IMF's view that its currency, the yuan, needed to be a lot stronger.The report contained some criticism, saying "several directors agreed that the exchange rate is undervalued", but added that others disagreed.

The Financial Services Authority (FSA) has announced plans to update its guidelines on bankers' pay, following the agreement of new European rules earlier this month.The rules include tighter restrictions on bonus payments and pension deals, and will now apply to more than 2,500 City firms.Previously, only the biggest banks were subject to FSA pay rules.The changes are due to come into force in October after consultation.

BBC Business News 30th July 2010