European Stocks Wobble Before Fed - Wall Street Journal European Stocks Wobble Before Fed - Wall Street Journal

Wednesday, July 11, 2012

European Stocks Wobble Before Fed - Wall Street Journal

European Stocks Wobble Before Fed - Wall Street Journal

European stocks were trading in a tight range Wednesday as a round of profit warnings from U.S. companies and concerns about the euro-zone debt crisis prevailed, although hopes for another round of quantitative easing from the Federal Reserve were simmering.

The U.K.'s FTSE 100 was recently flat at 5665.15 and France's CAC-40 was 0.2% lower at 3168.64. But Germany's DAX was 0.7% higher at 6480.19.

"The lack of clarity from [European Union] finance ministers at meetings this week, as well as mixed data globally, has weighed on investor sentiment. Risky assets continue to trade listlessly despite positive developments at the EU summit and various central-bank actions over the past week or so," said Barclays in a note.

Moves in equity markets were pretty unspectacular and trading was range-bound ahead of the Federal Open Market Committee minutes, due after the European close at 1400 ET. Market participants will be looking for any clues on the possibility of further quantitative easing.

"The FOMC minutes today are likely to show a divided committee, in our view, and markets will likely struggle to assess the balance between those skeptical of further action and those calling for new asset purchases," said Credit Suisse. "We still see potential for additional asset purchases down the line and, in this regard, we will be on the lookout for any guidelines on policy makers' tolerance for deterioration in labor data."

The benchmark Stoxx 600 Index was recently flat at 255.71. The index came off earlier lows after Spanish Prime Minister Mariano Rajoy announced a raft of austerity measures amounting to €65 billion ($79.62 billion) in an effort to meet new budget deficit targets.

On the one hand, some traders saw the dramatic cuts as a positive move, with Spain's government wholeheartedly trying to get a grip on the country's finances. But on the other hand, some traders saw the severe cuts as economic suicide for the country. Spain's IBEX 35 Index was positive Wednesday, up 1.2% at 6806.80. Investors also warmed toward Spanish equities after details of the draft agreement accompanying its bank rescue were released. Spain will be made to give up most of the control over its banks to European institutions in return for a bailout of up to €100 billion.

Earlier, Germany raised cash for 10 years at record-low borrowing costs at auction Wednesday, indicating that investors were willing to forgo real returns in exchange for keeping their funds safe. The September bund was up 0.06 at 144.05, remaining fairly stable after Germany's auction of 10-year notes.

The 10-year Spanish government bond yield was down 0.15 percentage point at 6.64%, while the corresponding Italian yield was 0.1 percentage point lower at 5.84%, according to Tradeweb.

Although equity markets had managed to move off lows, investors were still concerned that earnings are being hit by the global slowdown, following a series of less-than-inspiring U.S. reports. So far, Advanced Micro Devices has cut its second-quarter revenue outlook, citing weaker-than-expected business conditions in China and Europe; Applied Materials has lowered its full-year revenue forecast; and truck-engine maker Cummins has cut its full-year sales estimate on slowing demand in the U.S., China and Brazil.

Investors were also rattled by comments from Italian Prime Minister Mario Monti, who said Tuesday that Italy may ask euro-zone governments to allow the region's bailout fund to buy Italian bonds to ease the country's borrowing costs. Italy's FTSE Mib was flat at 13,874.24.

In London, Burberry shares slumped 6.1% following the release of its first-quarter results. Bank of America Merrill Lynch said revenue of £408 million ($633.1 million) was around 2% weaker than consensus expectations. It added that consensus expectations of 15% earnings per share growth for 2013 look demanding considering the 11% reported revenue growth achieved in the first quarter, and management guidance of modest operating leverage.

In foreign exchanges, the euro was up against the dollar, fetching $1.2290 from $1.2249 late Tuesday in New York. The dollar was at ¥79.24 from ¥79.41.

In commodity markets, August Nymex crude oil futures were up $1.26 at $85.17 per barrel and the August Brent oil contract was up $1.07 at $99.04. Spot gold was at $1,579.80, up by $12.40.

U.S. stocks are expected to start just a touch higher, following a depressed session on Tuesday. The Dow Jones Industrial Average front month futures contract was up 0.4% at 12638 and the S&P 500 front month futures contract was also 0.4% higher, at 1340.6. Undoubtedly, investors will be focusing on the FOMC statement later Wednesday.

Write to Michele Maatouk at

Peregrine Financial files for liquidation after fraud lawsuit and founder's suicide attempt - Daily Telegraph

The CFTC alleged they falsified information in filings and overstated the company's bank deposits, leaving a shortfall that exceeded $200m.

It claims the Mr Wasendorf use the funds for purposes other than those intended by its customers, and said "the whereabouts of the funds is currently unknown".

The National Futures Association (NFA), responsible for monitoring PFG for compliance with reporting requirements, took an emergency enforcement action against PFG and Peregrine Asset Management on Monday.

It blocked new or additional customer accounts or funds, alleging PFG had failed to prove it had met capital and segregated funds requirements.

Asia stocks mixed as growth fears weigh - Financial Times

July 11, 2012 10:57 am

Australian Business Lending Industry Soars In a Stagnant Economy - YAHOO!

Leading Australian financial planning firm, Custom Wealth Solutions, updates its services in order to provide tailored financial advice and services to private and business clients, to help them gain financial stability, and to give a solution for the business market that continues to struggle through this economy.

Australia (PRWEB) July 11, 2012

Whether one is looking at job figures, Spain and Greece’s banking meltdown or the slowing down of economic powerhouses such as China and Brazil, the writing is on the wall for double-dip recession or at the very least a long, slow and painful recovery. However, if one is looking at Australia’s business lending sector, one may ask why all the complaining because things seem to be going just fine.

According to a recent analysis of Goldman Sachs data on business lending, Australia’s bank hit a three-year peak in May 2012. ANZ, the Australia and New Zealand Banking Group, which has reported a strong growth in recent years, was the engine behind the outstanding performance of Australian banks.

The good news for the lending sector is that these figures may forecast an ongoing growth pattern. At least that is what the Australian Prudential Regulation Authority is predicting. According to an analysis of Goldman Sachs data by Australian Prudential Regulation Authority, the growth of lending by Australian banks to non-financial corporations increased by 7.2% in the last year, while loan balances jumped by 1%.

Australia is not the only market enjoying a growth in lending. Goldman’s analyst Ben Koo predicts the world leading economies as a whole will enjoy a 6% growth across the board and qualifies the success of Australian banks as a result of worldwide growth.

Asia Pacific Markets

However, business lending in the Asia Pacific as a whole is still suffering. According to a report by Reuters, lending in the Asia Pacific (excluding Japan) dropped by 26% during the first semester of 2012 when compared to the same period in 2011. The cause for this seems to be the increase in bank funding costs, which has made lending expensive and discouraged companies from borrowing. Custom Wealth Solutions CEO Chris Appleyard says, “Banks are looking to take considerable levels of equity from all business owners due to their cautious outlook on the economy.” Appleyard further adds, “This has made further borrowing very difficult if you consider current valuations on business and personal assets.”

Japan is another country, together with Australia, that is showing resilience during the current economic slowdown. Currently Japan is Asia’s largest loan market. In 2012, Japan saw its lending increase from $138.7 billion to $163 billion. Apart from Japan, only China could boast a modest growth: less than $7 billion.

Housing Loans

Housing loans are also on the rise in Australia. Australia’s central bank reduced interest rates during the end of last year and consumers responded by increasing the number of loan applications. Successful loan applications also rose, albeit modestly, by 0.2%. The total value of Australian loans also grew by 1.2% to A$20.5 billion. What is particularly encouraging is that 16.4% of the homes financed in the month of April were loans for first-time buyers.

The lending sector can provide investors in self-managed super funds with lucrative returns at relatively low risk levels. However, it is crucial to have an in-depth knowledge of the market. Leading Advisory Firm, Custom Wealth Solutions has taken to the recruitment of specialist commercial bankers and lending experts to address this complex need for investors, as well as to provide a solution for the business market that continues to struggle through this economy.

Custom Wealth Solutions (CWS) is an Australian privately owned, independently operated private wealth and advisory firm. They provide comprehensive, holistic and customised financial strategies for private and business clients and are the industry leading professionals for financial advice, superannuation, SMSF's, insurance, lending and investments.

To know more about the company and their services, you may call them at 1300 001 297, or visit their website at

Chris Appleyard
Custom Wealth Solutions
1300 001 297
Email Information

Stocks fall for fourth day - San Mateo Daily Journal

NEW YORK — Stocks fell for the fourth straight day Tuesday following a profit slump at technology companies and a steep decline in oil prices, which sent energy stocks sharply lower.

The Dow Jones industrial average fell 83.17 points to close at 12,653.12. Aluminum maker Alcoa was the biggest loser in the Dow, giving up 4 percent after reporting a slump in revenue late Monday.

The broader Standard & Poor’s 500 lost 10.99 points to 1,341.47. The index is in its longest slump since May 18.

Chip maker Advanced Micro Devices fell sharply after reporting that a slowdown in China and Europe led to an 11 percent drop in second-quarter revenue. The company had previously forecast a gain of 3 percent.

That news sent other technology stocks down hard. The tech-heavy Nasdaq composite dropped 1 percent, the most of the three major indexes. It closed 29.44 points lower at 2,902.33.

The bad news outweighed hopeful developments in Europe earlier in the day. Before U.S. markets opened, European finance ministers announced they had agreed on the terms of a bailout for Spain’s banks. The first installment of $37 billion in aid can be ready by the end of the month.

Investors were concerned that some details seemed to be missing from the plan.

Also weighing on the market: worries about a slew of upcoming corporate earnings reports. Financial analysts expect that earnings at companies in the S&P 500 fell 2 percent in the April-through-June period compared with a year ago, according to S&P Capital IQ. That would be the first drop in nearly three years.

“The past quarter was great, but going forward many companies may have problems,” said Joe Kinahan, chief derivatives strategist at TD Ameritrade, a brokerage. “People are confused about what to think.”   

A resolution to a labor dispute in Norway early Friday weighed on oil prices, which pushed energy stocks lower. Early Tuesday, the Norwegian government intervened to end a strike that threatened North Sea oil production.

Benchmark crude oil fell $2.08 to $83.91 a barrel in New York. Major energy companies dropped as a result, including Occidental Petroleum, down $1.95 at $83.24, and ConocoPhillips, down 90 cents at $53.43.

Natural gas producers took a hit from a sharp drop in the price of natural gas, which was down 5 percent at $2.74 per 1,000 cubic feet. Cabot Oil & Gas slumped $1.20 to $39.07 and Chesapeake Energy gave up $1.29 cents to $18.69.

Also weighing on commodities was a report from China that import growth fell in half in June from May, a signal its economy may be slowing more than expected. The Chinese economy, the world’s second biggest, is growing at its slowest pace since the 2008 financial crisis.

Copper fell 1 percent to $3.40 per pound. China is a big importer of the metal.

In stocks, the selling was broad. Eight of the ten industry groups in the S&P 500 fell. Industrial companies led the declines with a slump of 1.6 percent. Utilities and consumer staples, industries that fare better than others when the economy is struggling, rose slightly.

In Europe, the deal to aid Spain helped push the yield on its benchmark 10-year government bond down to 6.8 percent. On Monday, that country’s key borrowing rate surged to 7 percent, a dangerously high level. The lower yield means investors are less fearful about the country having trouble paying its debts.

Portugal, Ireland and Greece all had to ask for help from international lenders after spikes in their own borrowing rates made it unaffordable for them to raise money from selling bonds on the open market. Spain is the largest European country to date to seek international assistance.

In corporate news, Applied Materials, which makes equipment for chipmakers, cut its fiscal year profit and sales estimates because of weak demand. The stock fell 30 cents to $10.71. AMD, the chip maker hurt by slumping sales in China, plunged 63 cents to $4.99.

Embattled BlackBerry maker Research in Motion fell 38 cents to $7.29. The company’s CEO, Thorsten Heins, told a shareholders meeting that he isn’t satisfied with the company’s performance. Two weeks ago the company announced disappointing earnings, plans to cut 30 percent of its workforce and the latest delay in BlackBerry 10.

Alcoa lost 36 cents to $8.40 after a financial analyst cut his estimate for the company’s 2012 earnings. Alcoa reported Monday that it beat analyst estimate for earnings in the second quarter but that revenue dropped due to slowing world demand for aluminum.

Two stocks fell for every one that rose on the New York Stock Exchange. Volume was lighter than average at 3.4 billion shares.

LSE, SGX to offer trading in each other's top stocks - Reuters

SINGAPORE/LONDON | Wed Jul 11, 2012 6:52am EDT

SINGAPORE/LONDON (Reuters) - The London Stock Exchange (LSE.L) has signed an agreement with its Singapore counterpart (SGXL.SI) to allow the pair's largest stocks to be traded on both bourses, increasing access for investors and boosting liquidity.

Under the agreement, LSE members will be able to trade shares of the top 36 companies listed on the Singapore Exchange (SGX). In return, SGX members will be able to trade in the companies that make up Britain's blue-chip FTSE 100 index .FTSE, the LSE said on Wednesday.

The top 36 companies on the SGX include Southeast Asia's largest bank by assets, DBS Group Holdings (DBSM.SI), the region's biggest telecoms company, SingTel (STEL.SI), and the world's biggest builder of oil rigs, Keppel Corporation (KPLM.SI).

Trading hours for the most actively traded stocks in both markets will be extended to about 15 hours a day. London stocks currently trade for eight and a half hours, while the Singapore exchange is open for nine hours.

The stocks will trade on a new "International Board" in their respective currencies, allowing companies to be quoted on a second market without the need for a separate listing.

"The launch of our International Board is a bold first step towards creating an efficient, global trading network, unconstrained by geography," Tony Weeresinghe, head of global development at LSE Group, said in a statement.

The move is the latest by the LSE to secure links with exchanges in emerging economies. Last year it agreed to help the Bucharest Stock Exchange to promote Romanian companies to London investors. It also signed an agreement to help to restructure and develop the stock exchange in resource-rich Mongolia.

The LSE said that trading of SGX-listed shares in London was expected to begin by early next quarter, while LSE-listed stocks are due to begin trading in Singapore in the first half of next year.

(Reporting by Kevin Lim and Kylie MacLellan; Editing by David Goodman)

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