Next week George Osborne, British Chancellor is going to present a report on the economic situation in the country. Experts consider it is probably the worst time as you can present it in any way you want but the general state of the economy remains pessimistic. Growth is low, unemployment is increasing, exports are falling and the deficit is exorbitant-over 10% of GDP. Until now
The Federal Reserve required 31 biggest US banks to assess their trading books and credit portfolios against acute recession and European region market shockwave to make sure they have adequate capital reserves to bear losses. Fed propose 8% drop in GDP, jobless rate at 13% and 21% tumble in home prices as the worst hypothetical scenario banks should be prepared for.
Steve Ricchiuto, chief economist at Mizuho Securities claims US credit rating might be downgraded in a few months or even in a few weeks as the supercommittee failed to arrive at consensus on debt-cut plan. Steve Ricchiuto expects S&P, Fitch or Moody's may downgrade US rating before December 23, date when regulation implementing supercommittee's plan should be ratified. In August S&P cut US credit
In October consumer prices in Hong Kong rose 5.8% on yearly basis, at the same rate as in previous month. Economists surveyed by Bloomberg made a forecast of 5.7%. The increase in inflation rate is mainly associated with surge in rental costs. John Tsang expects inflation to peak in 4th quarter IMF predicts Hong Kong's inflation to slow down to about 4%-5% in 2012.
On Tuesday European stock markets fell on an expensive Spanish bond auction and on US data that showed lower-than-expected GDP growth. France's CAC 40 index lost 0.8% and closed at 2,870.68, German DAX 30 index fell 1.2% to 5,537.39 while U.K's FTSE 100 index slumped 0.3% reaching 5,206.82. Spanish index IBEX 35 declined most and gave up 1.5% closing at 7,904.90.
On Wednesday most Asian equity markets experienced sharp decline after China reported disappointing manufacturing survey and added to anxiety regarding global slowdown. Shanghai Composite Index switched from modest gains and closed lower by 0.4%. Hong Kong's Hang Seng Index lost 2% while Australian S&P/ASX 200 and Korean Kospi fell 2% and and 2.4% respectively. Japanese markets today are closed.
According to managers' preliminary purchasing index Chinese manufacturing industry is expected to face contraction as home sales drop. This month index of 48 estimated by Markit Economics and HSBC Holdings Plc is 3 points less than in previous month. Any estimate below 50 denotes contraction. Analysts say the fall of the index is caused by a 25% decline in home sales last month.
Tech stocks increased on Tuesday: Nvidia Corp. edged up by 2% while Brocade Communications gained 6%. The overall indicator of the industry the Nasdaq composite index increased by 0.3% and Philadelphia Semiconductor Index increased 0.3%. However, HP suffered losses by 4% after the company cut its projected growth forecast. The Netflix Inc. declined by more than 4% after announcement about the sale of $400 million
The pound covered losses against USD after six-week low. US government announced a cut in US GDP growth forecast that caused greenback's decline against pound. GDP/USD rose by 0.07% to 1.5654. However, the pound was slightly lower against other currencies. EUR/GDP increased by 0.18% reaching 0.8639.
Spain's 3-month borrowing costs reached 5.11% more than double the rate requested during previous auction last month. Even Greece has lower yields for 3-month notes as Treasury paid 4.63% for 13-week bonds. Surge in Spanish yields took place after recently elected People's Party asked EU to rescue nation as it cannot afford to pay 7% on its 10-year debt.
Stocks of Thomas Cook declined dramatically after news about possible increase of the amount it iplans to borrow. The share price decreased by 65%. The bank is negotiating ВЈ100m credit that would increase its total debt from ВЈ900m to ВЈ1bn. Thomas Cook also announced its plans to close down 200 from its 1,200 High Street travel agencies and currency exchanges.
Stock exchange in Egypt was suspended after main share index EGX 100 index decreased by 5%. The decline has followed a sharp share decrease on Monday by 4%. The reason is mass demonstrations on the streets of Cairo lasting for three days already. The exchange was opened again after one hour and the day close was 5.5% lower. The Egyptian index is 47% lower since the beginning
European stocks prolonged losses after US statistics department reported less-than-expected GDP growth for third quarter. Stoxx Europe 600 Index gave up 0.3% reaching 224.15 at midday trading session in London. US economic growth in 3rd quarter reached 2% or 0.4 percentage points less than expected. Slowdown in GDP growth was mainly caused by cuts in company inventories and overall reduction in investment.
Treasury prices slightly increased while the dollar suffered losses after the US government announced the decrease in its projected GDP growth from 2.5% to 2% in Q3. The dollar index was traded at 78.23 down from 78.20. The euro gained on the dollar index decrease and was $1.3523 from $1.3527. Yields on 10-year notes declined by one basis point to 1.96%.
Dollar Tree Inc agreed to buy back $300 million of its shares from Wells Fargo Bank to facilitate its buyback programme. Dollar Tree already plans to repurchase $200 million of shares from JPMorgan Chase & Co under approved buyback budget of $500 million. Many companies now consider repurchasing its stock as markets remain extremely volatile. The stocks of Dollar Tree closed at $75.69 yesterday gaining
US economy develops slower than expected. The Commerce Department decreased its projected growth rate from 2.5% to 2% in Q3. Lower growth rate was mainly caused by companies reducing inventories and decreasing investments. Experts expect the growth cut to 2.3%. However, the rate is quite promising as it is the highest since the end of 2010.
Nasdaq Composite Index dropped 1.9% or 49.36 points closing at 2,523.14 following other US market indices' downward path as US supercommittee failed to approve budget cuts on Monday. Among major negative contributors to the index were Gilead Sciences Inc which lost 9% after announcing plans to acquire drug developer Pharmasset Inc and Analog Devices Inc which traded 2.72% down after announcing financial results for the last quarter and
On Monday Dow Jones Industrial Average Index gave up 2.11% or 248.85 points and closed at 11,547.31. Monday's decline has pushed the index in negative annual return area attaining 0.3% off. All 30 of Dow Jones constituents sank. Bank of America lost 5%, while Boeing Co declined by 4.7%. However, the index still is about 900 points above its close price of 10,655.30
On Monday S&P 500 extended its biggest decline since September and closed at 1,192.98, 1.86% or 22.67 points down compared to previous trading. Index was mainly hit by financial firms on growing anxiety about US inability to cut spending by $1.2 trillion. All 10 industries in the index experienced shrinkage. Hewlett-Packard Co and Caterpillar Inc each tumbled about 2.9%. Gilead Sciences Inc plummeted 9% after announcing plans
On Tuesday Japanese Nikkei 225 index prolonged its losses and closed at 8,314.74, 0.4% or 33.53 points down compared to Monday. Despite overall decrease in index, Japanese automakers and tech-companies managed to recover. Honda Motor Co. added 2%, Toyota gained 0.1% and Nissan Motor Co inched up by 1.8%. Samsung Electronics Co and Toshiba Corp each advanced 1.4% and 4.5% accordingly. Nevertheless, analysts warn about general
Although most of Asian markets declined on Tuesday's trading session, Hang Seng Index managed to recover from losses and closed higher. Hang Seng ended at 18,251.59, 0.1% or 25.74 points higher than in the previous session. Hong Kong index received positive contribution from globally exposed firms. Ports operator Cosco Pacific Ltd added 1.8% and Li & Fung surged 3.4% while Tsingtao Brewery Co gained 1.6%. Among main decliners
Spain's Treasury sold 3 billion euros of three and six-month bills today despite essentially increased yields after Sunday's elections. The Treasury bills sold for 2.1 billion euros generate yield of 5.22%, while the same bills sold less than a month ago produced only 2.35% yield. The current sale has bid-to-cover ratio of 4.94% as compared to October's sale ratio of 2.59%.
On Tuesday the FTSE 100 Index advanced 0.4% reaching 5,245.05 in morning trading session. Markets reflected relief as major rating agencies confirmed US credit rating despite failure to approve debt-cut plan. Financial institutions and resource equities were among the major gainers on Tuesday. HSBC Holdings PLC and Heavyweights Standard Chartered PLC each added about 1.7% while Lloyds Banking Group gained 1.3%. Mining companies Rio Tinto PLC and Anglo American PLC
The net borrowing of the UK's public sector decreased more than expected. The figure for October is ВЈ6.5bn being lower than ВЈ7.7bn in previous year, the Office for National Statistics reported. Experts predicted the borrowing to be around ВЈ6.8bn. The decrease signals slight improvement of the economic situation in the country; however, the general picture is not optimistic, said Brian Hilliard, chief UK economist at