Economy Updates

[Larry1234 10]

This thread is created to discuss important updates on an economy.

 

In this thread, folks are invited to post latest news on the economy which has an impact on the market. The news can be positive or negative to the market.

[Larry1234 10]

Updates -

 

ECB trims key lending rate to record-low 0.5%

 

Slowdown hits Chinese services sector

 

Initial unemployment claims decline in U.S.

 

Reserve Bank of India reduces key interest rate

[Larry1234 10]

Updates

 

Japan strengthens economic ties with Southeast Asia - Japan is reaching out to neighbors in Southeast Asia in an effort to overcome rising tensions with China that are hurting exporters. Japan's Finance Ministry said it will support neighbors' bond markets and help Japanese corporations raise capital in local currencies. Emergency monetary arrangements with Malaysia, Singapore and Thailand, which have lapsed, may be put back into effect.

 

Hiring brings U.S. joblessness down to 4-year low - Unemployment in the U.S. fell to 7.5% in April, a four-year low, as employers hired 165,000 people, the Labor Department said. Between November and April the economy created an average of 208,000 jobs a month, considerably more than the 138,000 monthly average during the previous six months.

 

Iranian inflation reaches 29.8%; IMF expects 1.1% GDP growth - The inflation rate in Iran declined to 29.8% between March 21 and April 20. The International Monetary Fund says it expects inflation to remain high because of a "sharp depreciation of the currency and adverse external conditions." The IMF predicts 1.1% growth in gross domestic product during the next year.

[Larry1234 10]

Updates

 

Asia-Pacific tries to cope with flood of foreign cash

 

For months, policymakers have been trying to curb the effect of a tidal wave of money pouring into Asian-Pacific economies, driving up the value of local currencies. New Zealand confirms it has been selling its currency to slow the strengthening of the kiwi. Australia has reduced interest rates to a historic low to weaken its dollar.

 

 

U.S. foreclosures hit lowest level in 6 years

 

Residential foreclosures declined 23% last month compared with April 2012. One in 905 housing units received a foreclosure notice, the smallest proportion since February 2007.

 

 

Chinese consumer inflation increases

 

China's consumer price index reached 2.4% last month, compared with 2.1% in March. Rising prices for fresh vegetables, because of scarce rainfall and unusually low temperatures, were a major factor. China's inflation target for the year is 3.5%.

 

 

U.S. produces almost as much oil as it imports

 

The U.S. is producing the most oil in 21 years, with the amount almost equal to imports. As the production gap narrows, futures prices of imported Brent crude and the traditionally less costly West Texas Intermediate crude are moving closer together. On Wednesday, the spread fell below $7.72 per barrel, the smallest number since December 2011.

[Larry1234 10]

More Updates

 

BoE holds benchmark rate at 0.5% and keeps QE steady

 

As expected, the Bank of England has maintained its key interest rate at 0.5% and has kept quantitative easing unchanged. Most analysts don't expect the central bank to make significant policy changes until incoming Governor Mark Carney takes over in July.

 

 

First-time jobless claims continue decline

 

Initial unemployment claims decreased last week to a five-year low as layoffs eased to a pre-recession level, the U.S. Labor Department says. About 323,000 claims were filed, the fewest since January 2008. The four-week rolling average, seen as a better labor-market indicator, declined by 6,250, to 336,750.

 

 

Yen hits 4-year low

 

Japan's yen fell to a four-year low of 100 to the U.S. dollar as Prime Minister Shinzo Abe's stimulus policies aimed at driving inflation up to 2% start to deliver results. Corporate giants began reporting sharply improved earnings this week.

[Larry1234 10]

Updates

 

 

India's consumer inflation eases to 9.39%

 

India's consumer price index declined in April, the second consecutive month of easing. The consumer price index fell from 10.39% in March to 9.39% in April.

 

 

Economists praise Mexico's financial reform plan

 

Economists who focus on Latin America are enthusiastic about the potential for Mexico's financial reform package to significantly boost employment and gross domestic product. Making more credit available to small and medium-sized businesses is central to the effort.

 

 

Germany seeks renewed talks over Turkey's EU membership

 

German Foreign Minister said negotiations over Turkey's application to join the EU should resume. Largely because of German opposition, talks on the possible membership of Turkey in the EU have achieved little progress since they began in 2005.

 

 

More Chinese automakers open operations in U.S.

 

Chinese automakers are moving to the U.S. by the dozens and investing in Detroit to become a part of the U.S. auto industry. The new Chinese firms are keeping a low profile, unlike Japan's Toyota and Honda, which triggered public resentment when they began competing aggressively with Chrysler, Ford and General Motors in the U.S. in the 1980s.

 

 

IPOs in U.S. on track for biggest year since 2007

 

At the current pace of capital-raising, the U.S. initial public offering market is headed for its best year since before the financial crisis. IPOs listed in the U.S. have raised $16.8 billion from investors this year, according to data provider Dealogic. That's ahead of the $13.1 billion raised during the same period in 2012.

[Larry1234 10]

Updates

 

Housing and employment data point to strengthening U.S. economy

 

Labor and housing data suggest the economy is slowly but steadily recovering. The Labor Department said initial jobless claims last week decreased 23,000, to a seasonally adjusted 340,000. The Commerce Department said sales of new single-family homes increased 2.3% in April.

 

 

Survey finds German exporters increasingly pessimistic

 

Export-dependent companies in Germany are much less optimistic than they were only a short time ago, according to a survey by the Association of German Chambers of Commerce and Industry. The group has downgraded its forecast for economic expansion this year to 0.3%, from 0.7%.

 

 

Eurozone consumer confidence keeps climbing

 

Consumer sentiment in the euro zone has increased for the sixth consecutive month, reaching a 10-month high in May.

 

 

Analysis: ECB and Fed head in different directions

 

The European Central Bank, facing economic weakness, is considering adding policies. Meanwhile, the Federal Reserve is looking into reining in stimulus as the U.S. economy slowly improves. The central banks' efforts highlight diverging fortunes in Europe and the U.S.

[sidra 10]

I have some interesting news to share here:

 

- Italian markets cheered by new government

 

- Japan GDP trumps expectations under Abenomics

 

- Eurozone economy shrinks again

[ntrader 10]

Bank of Japan Governor said the country's financial institutions have sufficient buffers against losses they may incur from rises in bond yields, as long as the market moves are driven by prospects of an economic recovery. The central bank will also be vigilant to any signs of overheating of asset prices or excessive risk-taking by financial institutions

[Larry1234 10]

More updates

 

Brazil posts record current-account deficit for April

 

The Brazilian current-account deficit hit $8.318 billion last month, the biggest April amount since 1980. Much of the deficit came from falling commodity prices and a soaring bill for imported fuel. Also, foreign companies pulled more profit out of Brazil.

 

 

Japan remains world's biggest creditor nation

 

In 2012, Japan was the world's No. 1 creditor nation, a title it has held for 22 years. China and Germany were next in the ranking. Analysts are uncertain whether Japan will hold the title much longer.

 

 

Rate-cut speculation sends yield on Indian 10-year bond falling

 

The yield on India's 10-year bond fell to its lowest level since 2009 as bond buyers speculated that the RBI is getting ready to lower interest rates for the fourth time this year. The yield on India's 8.15% bond maturing in around 10 years fell to 7.33%.

 

 

Germany drops austerity and embraces eurozone economic stimulus

 

Germany abandoned calls for austerity and is backing plans to spend billions on revitalizing the economies in Southern Europe. Germany plans to dramatically expand lending and investing in financially stressed eurozone countries, using its own capital, rather than waiting for the European Commission to take the lead. Germany's efforts will first focus on Spain.

[Larry1234 10]

IMF scales back growth forecast for China

 

The IMF cut its forecast for Chinese economic growth this year and in 2014 to 7.75%. In April, the IMF projected 8% growth this year and 8.2% in 2014. The IMF has recommended that China implement policy reform to make its economy more sustainable.

 

 

Europe's transaction tax alarms bond-market participants

 

Concerns are rising about Europe's proposal to tax financial transactions, including debt. Taxes on debt are traditionally levied on issuance, but Europe plans to tax trading on secondary markets.

 

 

Germany says youth unemployment could tear Europe apart

 

German Finance Minister said that failure to deal with skyrocketing unemployment among young workers threatens to tear Europe apart and could spark a revolution. The youth employment crisis will be a central theme of a June EU leaders' summit, and German Chancellor Angela Merkel has invited EU labour ministers to a conference in Berlin on July 3.

[Larry1234 10]

China launches trading platform for smaller businesses

 

China opened an over-the-counter equity-trading platform designed to make it easier for small and midsize businesses to raise capital. On its first day, the Qianhai Equity Exchange in Shenzhen listed 1,200 companies, immediately making it the biggest among regional financial markets.

 

 

Existing-home sales increase in U.S.

 

In April, sales of previously owned homes reached a seasonally adjusted annual rate of 4.97 million, the highest level in 3½ years, the National Association of Realtors says. During the past year, signed contracts, which usually result in a completed sale in one or two months, have increased 10.3%, the trade group says.

 

 

Japan's rising industrial production calms investors

 

A stronger-than-anticipated increase in Japanese factory output has calmed investors, after a sell-off sent the Nikkei 225 index falling 5.2% on Thursday. Between March and April, industrial production grew 1.7%. Exports showed signs of recovery last month but remained below the April 2012 level.

[ntrader 10]

Demonstrations spread throughout Turkey on Sunday as protests sparked by plans to demolish a park in Istanbul transformed in their third day into general anti-government unrest. After violent clashes on Friday, riot police withdrew from Istanbul's central Taksim Square late on Saturday afternoon.

[Larry1234 10]

Updates on 2nd June 13

 

 

China becomes Iraq's biggest oil customer

 

Iraq became one of the world's largest oil-producing countries after the U.S. invasion in 2003, and China's has become its top customer. China buys almost 1.5 million barrels a day from Iraq, nearly half of its production, and is working on deals to expand that volume.

 

 

Anti-government protests shake Turkish markets

 

Despite a decade of impressive economic growth, Turkey's financial markets are under pressure from violent demonstrations nationwide. Last week, the yield on the 10-year Turkish bond jumped 40 basis points, and the lira fell to a 17-month low against the U.S. dollar.

 

 

Eurozone appears set to recover, ECB's Draghi says

 

European Central Bank President Mario Draghi said the euro zone economy appears to be set for a recovery this year. "The economic situation in the euro area remains challenging but there are a few signs of a possible stabilization, and our baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year.

 

 

U.S. consumer spending declines

 

As consumers' income growth disappeared, they cut spending in April at the sharpest rate in nearly a year. The Commerce Department said seasonally adjusted consumer spending dropped 0.2%. The department also said that the Income growth was flat.

[Larry1234 10]

Updates on 4th June

 

Chinese companies reportedly consider returning to U.S. IPO market

 

Chinese companies are deciding whether to go public on U.S. stock exchanges, which would be the first such move since 2011. Alibaba Group Holding is widely believed to be preparing an initial public offering that would be valued in the billions of dollars and is evaluating whether to launch its offering in New York, Hong Kong or elsewhere.

 

 

U.S. manufacturing hits lowest level in 4 years

 

Industrial activity stopped rebounding in May, posting its first decline in six months and dropping to its lowest level in almost four years, according the Institute for Supply Management's index of factory activity. The index fell to 49, from 50.7 in April, on a scale in which anything below 50 indicates contraction.

 

 

Eurozone manufacturing edges toward growth, data show

 

The eurozone's industrial sector is steadily moving toward expansion, according to purchasing managers indexes for manufacturing. Industrial activity rose to 48.3 in May, from 47.8 in April, putting May's reading at the highest level in 15 months.

 

 

Record exports drive Spain's economic rebound

 

Spanish businesses are building a path out of recession based on exports, as they face the worst economy in more than 30 years of democracy. Last year, exports reached a record $291 billion. The EU expects Spanish exports to increase 4.1% this year, nearly double the anticipated EU average.

[Larry1234 10]

Updates on 5th June

 

 

U.S. bans import of some Apple products

 

The U.S. International Trade Commission has banned some older versions of the iPhone and the iPad from being imported. Apple plans to appeal the decision, which says the devices violate a Samsung Electronics patent.

 

 

China relaxes controls to boost foreign investment

 

The Chinese Commerce Ministry says the government is implementing regulatory and legal reform to encourage more foreign investment. Measures include tougher protection of intellectual property and foreign firms' ability to participate in Chinese research and development.

 

 

Australian central bank keeps rate steady

 

Australia's central bank elected to leave its cash rate at 2.75%. The record low rate appears to be succeeding in driving investment, although the bank in a statement did acknowledge that the Australian dollar "remains high" in value in light of sluggish exports.

 

 

Rising imports drive up U.S. trade deficit

 

The trade deficit increased by 8.5% between March and April, to $40.3 billion, as imports accelerated faster than export growth, the Commerce Department says. Americans bought more foreign cars, cellphones and other consumer products, boosting imports by 2.4%. Exports expanded 1.2% amid weak demand.

[Larry1234 10]

Updates on 6th June

 

 

Australian dollar hits lowest level since September 2010

 

The Australian dollar has reached its lowest value in 2½ years, amid low interest rates and disappointing economic data. Shortly after markets opened Thursday, Australia's dollar fell below 95 U.S. cents and went on to reach an intraday low of 94.34 U.S. cents.

 

 

Japan bars price cutting tied to consumption-tax hikes

 

The Japanese parliament is banning stores from advertising prices discounted to compensate for increases in consumption tax, scheduled to take effect in 2014 and 2015. The law requires retailers to raise prices to reflect the tax hikes.

 

 

Worker productivity and private payroll gain modestly

 

U.S. worker productivity edged up in the first quarter, and the private sector added employees last month. However, improvement for both indicators is slowing. The Labor Department says productivity rose at a 0.5% seasonally adjusted annual rate in Q1. Payroll service ADP says private employers added 135,000 jobs in May, well below the monthly average of 200,000 between November and February.

 

 

Revised FHA rule means bigger payments for home buyers

 

A U.S. Federal Housing Administration rule that took effect this week will increase monthly payments of people who rely on FHA-insured mortgages to buy homes. The rule lengthens the period during which borrowers must pay premiums for their mortgage insurance. The FHA backs nearly 14% of the residential-mortgage market.

[Larry1234 10]

Updates on 7th June

 

ECB keeps rates at record low

 

The European Central Bank maintained interest rates at a record low of 0.5% and discussed a variety of policy options if the economy doesn't improve. President Mario Draghi said other options, such as initiatives intended to bolster the asset-backed securities market, are "on the shelf." "There was a common assessment that the changes that have taken place are not sufficiently one-directional as to grant action now," Draghi said.

 

 

Brazil leans toward rate hike to cool inflation

 

Brazil's Central Bank Monetary Policy Committee released minutes showing concern that "inflation is showing persistence" and promising that the trend will be "reversed." The document's hawkish language left analysts expecting that the central bank is getting ready to raise the benchmark interest rate by 50 basis points.

 

 

Unemployment claims in the U.S. fall

 

The number of initial applications for jobless benefits in the U.S. fell to 346,000 last week, in line with what most experts anticipated, the Labor Department said. The four-week rolling average -- which most economists consider a more accurate picture of the U.S. labor market -- rose 4,500, to 352,500. The overall percentage of adults who have a job remains close to its lowest level in 30 years.

 

 

Analysis: U.S.-China summit could benefit both countries

 

The U.S. and China have a real opportunity to recast their relationship to be more constructive and mutually beneficial if Chinese President Xi Jinping and U.S. President Barack Obama are willing to deal with some immediate points of conflict at their upcoming summit. "Mr. Xi needs to send a signal that cybertheft will not be tolerated," the magazine notes. "Mr. Obama needs to push to lift some [u.S. export] restrictions."

[wallst.tra4der 10]

Good news for companies in Brazilian mining industry:

 

"This afternoon, Brazil's government proposed the much- anticipated bill to overhaul its mining laws, which had been in need of modernization over the last several years… The proposal calls for a cap of 4% royalty fees from the current 2% rate, and it would be placed on gross revenue, rather than the current method of net revenue. It also calls for a new national regulatory council for mining policy. All of these announcements were in line with expectations and slightly better than what some analysts had projected, which was a royalty fee rate north of 5%. )"

 

Jim Cramer recommends buying VALE

[Larry1234 10]

  wallst.tra4der said:

Good news for companies in Brazilian mining industry:

 

"This afternoon, Brazil's government proposed the much- anticipated bill to overhaul its mining laws, which had been in need of modernization over the last several years… The proposal calls for a cap of 4% royalty fees from the current 2% rate, and it would be placed on gross revenue, rather than the current method of net revenue. It also calls for a new national regulatory council for mining policy. All of these announcements were in line with expectations and slightly better than what some analysts had projected, which was a royalty fee rate north of 5%. )"

 

Jim Cramer recommends buying VALE

 

Hello,

 

Thanks a lot for sharing the same.

 

Are you also aware of the time horizon for VALE, recommended by Jim Cramer ?

[wallst.tra4der 10]

  Larry1234 said:

Hello,

 

Thanks a lot for sharing the same.

 

Are you also aware of the time horizon for VALE, recommended by Jim Cramer ?

 

Cramer seems to be a short term trader mostly concerned with how stocks look now. He's probably looks at VALE as a currently unappreciated stock and fairly short term investment that he will sell off and lock in profits as the price goes up.

 

His end of the week analysis from his action alerts plus portfolio from Friday:

 

Vale (VALE:NYSE; $13.65; 4,100 shares; 2.00%; Sector: Basic Materials): Brazil proposed its anticipated mining code overhaul this week and the key changes were a 4% cap on royalty fees based on gross revenues (compared to the prior 2% on net revenues) as well as improved procedures that should ease investments in the sector. The shares reacted positively to the news as it removed a major overhang and the royalty rate was not as high as some investors feared. Unfortunately, iron ore declines of 20% year to date continue to pressure shares even though the company has been able to deliver on earnings, cost controls and profitability. The shares are discounting a ton of bad news at 4.2x 2014 EBITDA, a 26% discount to its peers and a 35% discount to its historical average. Our target is $18.

 

TheStreet.com

[ntrader 10]

Sales of new U.S. homes increased more than forecast in May to the highest level in almost five years, while home prices increased more than forecast in the 12 months through April. More Americans signed contracts in May to buy previously owned homes than at any time in more than six years.

[tradingwizzard 10]

  ntrader said:

Sales of new U.S. homes increased more than forecast in May to the highest level in almost five years, while home prices increased more than forecast in the 12 months through April. More Americans signed contracts in May to buy previously owned homes than at any time in more than six years.

 

while this is encouraging, I am still looking to see how the US economy will perform without the current stimulus......extremly bearish outlook for the usd IMO