Asian Stocks, Euro, Oil Rise on Stimulus Speculation - Bloomberg Asian Stocks, Euro, Oil Rise on Stimulus Speculation - Bloomberg

Tuesday, June 5, 2012

Asian Stocks, Euro, Oil Rise on Stimulus Speculation - Bloomberg

Asian Stocks, Euro, Oil Rise on Stimulus Speculation - Bloomberg

The euro weakened, erasing earlier gains, while oil fell and European stocks pared their advance after a report showed the region’s manufacturing and services industries shrank the most in almost three years. The Dollar Index snapped a two-day decline and German bunds climbed.

The euro depreciated 0.5 percent to $1.2433, reversing a gain of as much as 0.3 percent, at 10:20 a.m. in London. The Australian dollar strengthened against all 16 major peers after the central bank cut rates. The yield on the German 10-year bund fell three basis points to 1.18 percent. The Stoxx Europe 600 Index (SXXP) added 0.2 percent. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent, erasing an earlier advance of as much as 0.6 percent. Oil dropped 0.3 percent in New York.

A gauge of euro-area services and manufacturing slid to 46 in May, the lowest since June 2009, London-based Markit Economics said today, before a report that will probably show U.S. service industries held at a four-month low. Leaders from the Group of Seven countries are holding a conference call to discuss the European debt crisis today ahead of the G-20 meeting this month. The Reserve Bank of Australia lowered its key interest rate by 25 basis points to 3.5 percent, the lowest level since 2009.

“There’s unlikely to be too much positive news out of today’s data,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London. “There are still a lot of structural headwinds, and the data isn’t particularly constructive.”

Dollar Index Climbs

The euro slid 0.7 percent versus the yen, snapping a two- day advance. The so-called Aussie dollar rose 0.2 percent against its U.S. peer. The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed 0.4 percent, rising for the first time in the past three days.

The yield on the two-year German note approached zero after it fell to minus 0.012 percent at the end of last week. The yield on the Italian 10-year bond advanced five basis points to 5.71 percent. The yield on the 10-year Treasury note rose three basis points in Asia trading.

Two stocks advanced for every one that retreated on the Stoxx 600 as the gauge rebounded from its lowest level since Dec. 19. U.K. markets are closed for second day of holidays.

The drop in U.S. futures indicated the S&P 500 Index will fall. The Institute for Supply Management’s gauge of service industries may hold at 53.5 percent in May, the same rate as in April, according to economists surveyed by Bloomberg News.

Emerging Markets

The MSCI Emerging Markets Index (MXEF) rose 0.2 percent, rebounding from a six-month low. Benchmark gauges in South Korea, Indonesia and Taiwan climbed more than 1 percent. The Shanghai Composite index gained 0.2 percent, while Russia’s Micex Index fell 0.2 percent.

Oil dropped for the fifth time in six days. West Texas Intermediate futures for July delivery on the New York Mercantile Exchange fell to $83.76 a barrel. Brent crude in London lost 0.7 percent to $98.16 a barrel.

Gold fell for a second day, reversing an earlier advance. Immediate-delivery bullion slid as much as 0.4 percent to $1,612.80 an ounce. The metal earlier climbed 0.3 percent. Futures were little changed on the Comex in New York.

To contact the reporters on this story: John Buckley in Amsterdam at

To contact the editor responsible for this story: Stephen Kirkland in London at

Enlarge image Asian Stocks Advance on Policy Stimulus Speculation; Oil Rises

Asian Stocks Advance on Policy Stimulus Speculation; Oil Rises

Asian Stocks Advance on Policy Stimulus Speculation; Oil Rises

Tomohiro Ohsumi/Bloomberg

In Seoul, the Kospi index gained 0.8 percent, while the Nikkei 225 Stock Average rose 0.5 percent in Tokyo. Japan’s broader Topix Index, which entered a bear market yesterday as it plunged to a level not seen since 1983, added 1 percent.

In Seoul, the Kospi index gained 0.8 percent, while the Nikkei 225 Stock Average rose 0.5 percent in Tokyo. Japan’s broader Topix Index, which entered a bear market yesterday as it plunged to a level not seen since 1983, added 1 percent. Photographer: Tomohiro Ohsumi/Bloomberg

June 5 (Bloomberg) -- Simon Flood, chief investment officer at Lion Global Investors Ltd., talks about the impact of Europe's sovereign debt crisis on global financial markets and his investment strategy. He speaks from Singapore with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

June 5 (Bloomberg) -- David Cassidy, an equity strategist at UBS AG, talks about Australian stocks. He also discusses the local currency, central bank monetary policy, and Qantas Airways Ltd.'s profit forecast. He speaks from Sydney with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

June 5 (Bloomberg) -- Ajay Kapur, head of Asian equity strategy at Deutsche Bank AG, talks about Europe's sovereign debt crisis, the outlook for China's economy and his investment strategy. He speaks with Susan Li on Bloomberg Television's "Asia Edge." (Source: Bloomberg)

SE Asia Stocks-Thai stocks falter on politics; others up - Reuters UK

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Market volatility has money managers seeking to preserve client capital - Philadelphia Daily News

With the current volatility in both stock and bond markets, most money managers aren’t as worried about taking risks in a portfolio as they are about preserving your capital and protecting income from dividend-oriented or growth stocks and bonds.

Still, they are all having a hard time reading what has been an unusual investing climate.

Such is the case with local money manager Bob Costello, who manages $55 million at his own shop, Costello Asset Management in Huntingdon Valley. A La Salle graduate, he started out at W.H. Newbold’s Son & Co., then went on to Boenning & Scattergood Inc. before setting up his own advisory firm.

"I try to buy businesses that have recurring revenue and are not as dependent on business cycles. That’s why I like Visa Inc.," he said.

Trading under the ticker symbol "V," Visa has a market capitalization of more than $77 billion compared with $18 billion when it went public in 2008. "We are living in a cashless society. While it’s not a cheap stock, it’s growing. Can they grow to a $200 billion stock? I think so."

And despite the historic low prices in natural gas, he also likes Piedmont Natural Gas Co. Inc. (symbol: PNY) and UGI Corp. (UGI), a diversified energy company in Valley Forge.

In March, UGI said it would develop the Commonwealth Pipeline, a 200-mile, 30-inch pipeline transporting Marcellus Shale gas from northeastern Pennsylvania to major markets in the Mid-Atlantic states. And UGI recently declared a 4 percent increase in its stock dividend, maintaining a 25-year trend of increasing the dividend. "The natural gas industry is dirt cheap," he added.

Finally, Costello also owns the French energy giant Total S.A., a stock he predicts he could hit $60 for its American depositary receipts (TOT), which closed at $42.50 Monday. "Their dividend yield is 7 percent and it is selling at six times earnings," a level cheaper than its peers, he said.

Portfolio managers all over are harking back to other times when the markets were this volatile — and remark that everyone appears to be hiding in the same investment plays (dividend stocks, corporate and municipal bonds, precious metals).

"I’ve been in finance since 1973 at the Federal Reserve Bank in New York," recalled Ray Stone, cofounder of Stone & McCarthy Research Associates in Princeton, whose firm supplies much of the economic data and analysis to Wall Street. "What is so different? We had a series of bubbles over time. The equity bubble in the late 1990s, then a second bubble for housing that affected more people. Few of us have large stock portfolios, but many of us own homes. We’re underwater, and that has made the financial fallout particularly difficult."

He added: "Financial crises are often longer than recessions. We are on the right track out of the recession, however."

U.S. economic growth remains a tepid but steady 2.5 percent annually. Still, the recovery doesn’t feel as good because the unemployment rate has reached what seems like a permanently higher level at 8.2 percent as of last Friday’s jobs numbers. Inflation shouldn’t be a problem, according to Stone. "We still have loads of slack in the economy, and that should contain inflation."

The only time Stone recalls this type of market volatility was a period in the early 1980s "when the Fed was targeting money supply and short-term swings in the bond market were more acute. But today, we have more crosscurrents like the federal deficit in the U.S. And now credit-related news [such as Greece’s possible default] has a huge impact."

Nonetheless, the Treasury market in the U.S. remains a haven, as last week’s record low yield on 10-year bonds showed. But it can’t last forever. The question is, just how long will it last?


Special-needs planning

Financial advisers specializing in planning for special-needs kids say it’s more important than ever to make sure there is a trust set up in the child’s name — and that the children not receive money directly.

Planners with Firstrust Financial Resources, a wealth management firm that represents MetLife (symbol: MET) point out that in Pennsylvania, special-needs children can’t hold assets in their own name — otherwise their government subsidies could stop. In such cases, it’s common that they and their families have to reapply for Medicaid and Social Security once the assets in the child’s name run out.

With government subsidies under fire, it is important to make sure your special-needs child doesn’t miss out because of financial assets held in their name.

Another common mistake: Parents of special-needs kids leave money to other children and ask them to take care of their brother or sister, but have never discussed the responsibility. If you leave all your money to your non-special needs child, who then gets divorced, half of those assets could go to their ex-spouse.

Planning strategies aren’t just for the wealthy. They can be used to protect your family.


Erin Arvedlund is a finance reporter in Philadelphia. Contact her at 646-797-0759 or Read more of her columns at



Sixth annual global summit on financial literacy in Chicago reveals UAE ranks high for financial education - AME Info
Attended by senior Visa representatives from across the MENA region, the event explored potential solutions to improving financial literacy worldwide as part of both organisation's commitment to improving financial literacy rates.

Moderated by Janet Bodnar, editor of Kiplinger's Personal Finance Magazine, one of the most trusted personal finance publications in the U.S., and featured U.S. Consumer Financial Protection Bureau, Governor Jos Daro Uribe of the Colombian Central Bank and Canadian Parliamentary Finance Committee Chair James Rajotte. It also hosted a special panel presentation of original financial education research that explored ways financial knowledge and behavior can be improved.

"The public-private partnership between the Federal Reserve Bank of Chicago and Visa in hosting this Summit is a model on how we can improve financial literacy in the United States and around the world," said Charles Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago.

As part of Visa's global commitment to achieving greater community engagement and youth education within the field of Corporate Social Responsibility (CSR), the agency's objective was to develop a locally designed campaign to launch the global Financial Literacy programme in the GCC and help drive visitors to its Middle East financial literacy website:, Visa's aim is to reach 20 million people worldwide with financial literacy information by May 2013.

Global Financial Literacy Barometer: Key Findings
As part of the Summit, Visa and Kiplinger's Personal Finance Magazine released the results of the 2012 Global Financial Literacy Barometer that assessed and ranked the financial literacy levels of people in 28 nations.

Overall, the UAE ranked top of the countries surveyed in the MENA region, scoring just under ten points below the leading country Brazil. Brazil was followed by Mexico, Australia, the United States and Canada as having the most financially literate people.

The results show that parents in the UAE have a particularly positive approach to encouraging financial literacy among their children compared to most wealthy countries, with 78% believing it is important to speak to their children about their financial future on a regular basis.

Among the other key findings of the survey:

• 25% of respondents with a high income say they do not have enough funds to cover a personal economic emergency fall into high income categories. A high level of respondents in the UAE (70%) admitted that they do not have the funds necessary to survive a personal economic emergency lasting more than three months.
• Respondents in more than half of the 28 countries surveyed believe that overall, teenagers and young adults do not understand money management basics, such as budgeting, savings, debt and spending responsibly.
• Across the globe, the youngest and oldest citizens face the most personal economic risk in the sense that they have the smallest emergency reserves and they are least likely to follow a budget.

"The Barometer clearly demonstrates that while there have been great strides made in advancing financial education there is still much more to be done," said Oliver Jenkyn, Group Executive, North America, Visa Inc..

"That is why Visa and the Federal Reserve Bank of Chicago share a commitment to helping people of all ages gain the financial tools necessary to become better money managers. The annual Financial Literacy Summit is an important part of this effort."

Money may drive FSU to the Big 12 - Daily Journal

This is a critical time for the ACC's leadership to reach out to each of its member teams and settle some nerves.

The message is simple: The ACC can catch up it must catch up in football.

Yes, the ACC has a chance to re-open its television contract in five years. By then, it's entirely possible Florida State will have rejoined the nation's elite and become a championship contender yet again.

That would make ACC football a more valuable product. That would bring more revenue into the league.

But the burden simply can't be placed on the shoulders of one program. The ACC's place in the pecking order of big-time football is a league problem.

Blame Florida State all you want for how its program has stumbled through the last 10 years, but do so at your own risk.

It's certainly true that FSU failed to compete at a championship level since Chris Weinke left town. But there was no law that prohibited Clemson, Virginia Tech, Miami, Georgia Tech or anyone else from winning national titles the last 10 years.

And that's why Florida State fans should not quickly dismiss the rumors that continue to swirl about a move to the Big 12.

One of the key reasons Florida State joined the Atlantic Coast Conference in the first place was money. Back then, basketball drove the money train in college athletics and the ACC had the cash that other leagues didn't.

That's simply not the case any longer. Football climbed into the driver's seat in the last five years and, with a playoff system coming soon, the sport looks like it will continue to call the shots when it comes to television revenues.

The disparity in money is simply too much for FSU to completely ignore. A $4.9-million gap? In this economy? How do you not question things right now?

That's why it has to be repeated one more time: The Big 12 has money. The ACC should be worried.

And Florida State fans? Well, never say never.

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