ZURICH, June 8 |
ZURICH, June 8 (Reuters) - Swiss stocks were poised to open lower on Friday, as investors eyed lower Asian stocks as a cue to take profits after comments from U.S. Federal Reserve Chairman Ben Bernanke dented hopes for fresh near term U.S. stimulus measures.
Futures for the blue-chip SMI index fell 32 points to 5840 points by 0809 GMT.
The following are some of the main factors expected to affect Swiss stocks on Friday:
NOVARTIS
Novartis AG's unit Sandoz is voluntarily recalling ten lots of its generic Introvale birth control pills after a consumer recently reported a packaging flaw.
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LOGITECH
Logitech International, the world's largest computer mouse maker, said it will cut about 450 jobs, or 13 percent of its worldwide non-direct labor workforce, as part of a previously announced restructuring.
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COMPANY STATEMENTS
* Zehnder Group plans to expand its Group Executive Committee with Dominik Berchtold as Deputy Chairman of the Group Executive Committee from January 1 as part of succession planning. Berchtold will replace Hans-Peter Zehnder as Chairman of the body in the second half of 2014.
* The World Council of Churches signed a contract with Implenia for the development of its plot in Grand-Saconnex, Geneva, including a new Ecumenical Centre. The development of the 34,000 square metre site will take place in several phases over the next five to ten years.
* Kudelski said SmarDTV has combined CI Plus and HbbTV to enable video-on-demand for cable networks. SmarDTV intends to launch the first CI Plus SmarCAM with Cable voice on demand this year.
ECONOMY
STOCKS NEWS EUROPE-Lamprell slumps on second profit downgrade - Reuters UK
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Asia stocks get hit after China rate cut, Fed - Marketwatch
By Sarah Turner and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Asian shares skidded Friday after China’s unexpected interest rate cut ahead of this weekend’s economic data drew attention to its slowing growth trajectory, and after Federal Reserve Chairman Ben Bernanke didn’t indicate further easing was in the offing.
The day’s biggest losses were seen in Tokyo, where the Nikkei Stock Average /quotes/zigman/5986735 JP:100000018 -2.09% tumbled 2.1% as jittery investors took profits after a 3-day rally and before the weekend, in the absence of a hint that the Fed stands ready to boost its asset purchases.
“I think the direction of the markets now reflect that nobody expects globally coordinated policy support for the markets. And that’s what it would take to turn [markets] around,” said Ben Collett, head of Japanese equities at Louis Capital Markets.
Bernanke testifies
Chairman Ban Bernanke tells Congress the Fed will act if Europe stresses get out of hand.
“The only way to make money in this market is to take profit very, very early... Trying to catch the bottom of this market is like trying to catch a bolt of lightning,” he added.
Despite the day’s steep fall, the Nikkei ended the week 0.2% higher, also snapping a nine-week losing streak.
Elsewhere, Australia’s S&P/ASX 200 index /quotes/zigman/1653884 AU:XJO -1.09% and Taiwan’s Taiex /quotes/zigman/1565586 XX:Y9999 -1.14% each gave up 1.1%, while South Korea’s Kospi KR:SEU -0.67% dropped 0.7%.
Hong Kong’s Hang Seng Index /quotes/zigman/2622475 HK:HSI -0.94% dropped 0.9% and China’s Shanghai Composite Index /quotes/zigman/1859015 CN:000001 -0.51% lost 0.5%, after the People’s Bank of China late on Thursday cut benchmark lending and deposit rates by a quarter point each. The central bank also let interest rates float lower. Read more on China rate cut.
Su-Lin Ong, strategist at RBC Capital Markets, said that after having expected cuts to Chinese banks’ reserve requirement ratio before any adjustment to interest rates, “the more forceful policy action may well signal greater concern over the current pace of Chinese growth and prospects.”
China is due to release a raft of economic data this weekend, including inflation, industrial production and retail sales for May, as well as monthly trade figures.
Matthew Sherwood, head of investment market research at Perpetual, said that cutting rates “will help on the margin,” but generally “the rate cut hasn’t sparked a good reaction,” as the economy is still slowing, Europe’s still a concern and there remains excess capacity in China. Read report on reaction to the Chinese rate cut.
The only way to make money in this market is to take profit very, very early... Trying to catch the bottom of this market is like trying to catch a bolt of lightning.
— Ben Collett, Louis Capital Markets
Chinese banks declined on concern the PBOC rate cut might hurt their interest-rate margins. Bank of Communications Co. /quotes/zigman/34374 HK:3328 -4.69% /quotes/zigman/527616/quotes/nls/bcmxy BCMXY +0.05% dived 4.7% and Industrial & Commercial Bank of China Ltd. /quotes/zigman/37346 HK:1398 -4.91% /quotes/zigman/529252/quotes/nls/idcby IDCBY 0.00% tumbled 4.9% in Hong Kong; in Shanghai, they gave up 1.3% and 0.7%.
But some Chinese property firms advanced in Hong Kong, with China Overseas Land & Investment Ltd. /quotes/zigman/13931 HK:688 +2.49% /quotes/zigman/13933/quotes/nls/caovf CAOVF -5.23% rising 2.5% and China Resources Land Ltd. /quotes/zigman/14892 HK:1109 +2.05% /quotes/zigman/292800/quotes/nls/crbjy CRBJY 0.00% gaining 2.1%.
“We expect this rate cut to be taken positively by the market with a focus on more highly-geared mass market developers... Yet, we believe that any rally is unlikely to be any more than short-term beneficial for property developer stocks and we would see any rally as an opportunity to exit,” property analysts at Barclays Capital wrote in a report.
Some of Australia’s biggest mining firms, which count China as a major customer, rose after the rate cut, with BHP Billiton Ltd. /quotes/zigman/180893 AU:BHP +1.04% /quotes/zigman/270355/quotes/nls/bhp BHP +1.88% rising 1%, and Rio Tinto Ltd. /quotes/zigman/176317 AU:RIO +0.31% /quotes/zigman/182541/quotes/nls/rio RIO +3.84% gaining 0.3%.
But others declined after a sharp fall in metals futures, with OZ Minerals Ltd. /quotes/zigman/516210 AU:OZL -4.61% losing 4.6%, and PanAust Ltd. /quotes/zigman/157518 AU:PNA -2.83% tumbling 2.8%. Read more on metals.
Metals shares also dropped in Tokyo, with Pacific Metals Co. /quotes/zigman/197048 JP:5541 -5.28% /quotes/zigman/197054/quotes/nls/pfmtf PFMTF -2.70% shrinking 5.3% and Nippon Light Metal Co. /quotes/zigman/196058 JP:5701 -1.85% lost 1.9%.
Japanese exporters — which had helped fuel much of this week’s gains in Tokyo as the yen lost value — were likewise among the notable decliners Friday, with sentiment weighed a bit by pre-market data showing a widening trade deficit. Read more on trade deficit figures.
Toshiba Corp. /quotes/zigman/197500 JP:6758 -5.32% /quotes/zigman/529244/quotes/nls/tosyy TOSYY -0.49% dropped 3.4% and Sharp Corp. /quotes/zigman/197304 JP:6753 -5.31% /quotes/zigman/197313/quotes/nls/shcaf SHCAF -2.04% plummeted 5.3%.
Sony Corp. /quotes/zigman/197500 JP:6758 -5.32% /quotes/zigman/197524/quotes/nls/sne SNE -2.06% surrendered 5.3% after Morgan Stanley downgraded the stock to equal-weight, and as the Nikkei business daily reported that the company may make a major share investment in scandal-hit Olympus Corp. /quotes/zigman/196968 JP:7733 -3.64% /quotes/zigman/196973/quotes/nls/ocpnf OCPNF +10.92%
Panasonic Corp. /quotes/zigman/194943 JP:6752 -1.27% /quotes/zigman/525474/quotes/nls/pc PC +1.18% , also named in the report as a possible buyer for a major Olympus stake, fell 1.3%. Olympus shares dropped 3.6%. See report on possible investment in Olympus.
Renesas Electronics Corp. /quotes/zigman/326601 JP:6723 +18.80% /quotes/zigman/593649/quotes/nls/rnecy RNECY -8.58% rallied 18.8% under such weak market conditions, and in strong trading volume, after a report that the firm will shelve a planned share issue. Read more on Renesas share-issue plan.
Stocks help lift U.S. household wealth in first quarter - Daily Oklahoman
Household net worth rose 4.7 percent to $62.9 trillion last quarter, according to a Federal Reserve report released Thursday. The main reason was a 12 percent jump in the Standard & Poor's 500 index, which padded the portfolios of Americans who own stocks.
Home values increased 2.3 percent.
But since March ended, the progress Americans have made to recover the wealth they lost in the Great Recession has hit another bump. Stocks sank 6 percent in May amid rising fears about Europe's debt crisis and a weakening U.S. economy.
Household wealth, or net worth, reflects the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards. It bottomed during the recession at $49 trillion in the first quarter of 2009. It's still about 5 percent below its pre-recession peak of $66 trillion.
Shares rise and fall
The overall gain in Americans' net worth was driven by the biggest quarterly rise in the S&P 500 in 14 years. But the stock index has since shed about half that increase.
The surge in stocks also didn't help as many Americans as it would have in the past. The percentage of U.S. households that own individual stocks or stock mutual funds declined to 46 percent last year, from 59 percent in 2001, according to the Investment Company Institute.
For most American households, home equity, not stocks, represents their main source of wealth.
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