Archive for category Trading Markets
Rising Oil Prices Pose New Threat to U.S. Economy
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Март 1st, 2011
The American economy just can’t catch a break. Last year, as things started looking up, the European debt crisis flustered the fragile recovery. Now, under similar economic circumstances, comes the turmoil in the Middle East.
Energy prices have surged in recent days, as a result of the political violence in Libya that has disrupted oil production there. Prices are also climbing because of fears the unrest may continue to spread to other oil-producing countries.
If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.
Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.
“We’ve gone beyond responding to the sort of brutal Technicolor of the crisis in Libya,” said Daniel H. Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “There’s also a strong element of fear of what’s next, and what’s next after next.” Read the rest of this entry »
Chinese police face down Middle East-style protests
Posted by Oksana Grebenjuk in Trading Markets on Февраль 28th, 2011
Police and security officials displayed a massive show of force here and in other Chinese cities Sunday, trying to snuff out any hint of protests modeled on the uprisings in the Middle East. In Shanghai, several hundred people trying to gather were dispersed with a water truck.
Premier Wen Jiabao, meanwhile, used a morning Internet chat to promise to purge senior officials who are corrupt and to rein in inflation and rising home prices, directly addressing some of the most common grievances of ordinary Chinese.
Since the January uprising in Tunisia spurred similar anti-government protests across the Middle East and North Africa, threatening long-entrenched authoritarian regimes, China’s Communist rulers have reacted nervously, with both defensive and aggressive tactics.
Officials have used state-run media outlets to dismiss any comparisons with China while at the same time stepping up public comments on the need to address «social conflict» and to tackle problems such as the growing income disparity between the rich and poor. They have also detained a number of activists and human rights lawyers, blocked Internet search terms considered sensitive, such as «Egypt,» «Tunisia» and even U.S. Ambassador Jon Huntsman Jr.’s Chinese name. And they have issued warnings to foreign journalists to be mindful of reporting restrictions. Read the rest of this entry »
Baghdad wants U.S. to pay $1 billion for damage to city
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Февраль 22nd, 2011
Iraq’s capital wants the United States to apologize and pay $1 billion for the damage done to the city not by bombs but by blast walls and Humvees since the U.S.-led invasion that toppled Saddam Hussein.
The city’s government issued its demands in a statement on Wednesday that said Baghdad’s infrastructure and aesthetics have been seriously damaged by the American military.
«The U.S. forces changed this beautiful city to a camp in an ugly and destructive way, which reflected deliberate ignorance and carelessness about the simplest forms of public taste,» the statement said.
«Due to the huge damage, leading to a loss the Baghdad municipality cannot afford…we demand the American side apologize to Baghdad’s people and pay back these expenses.»
The statement made no mention of damage caused by bombing.
Baghdad’s neighborhoods have been sealed off by miles of concrete blast walls, transforming the city into a tangled maze that contributes to massive traffic jams. Despite a sharp reduction in overall violence in recent years only 5 percent of the walls have been removed, officials said.
The heavy blast walls have damaged sewer and water systems, pavement and parks, said Hakeem Abdul Zahra, the city spokesman. Read the rest of this entry »
Chinese Express Wary Faith in Fannie, Freddie Debt
Posted by Oksana Grebenjuk in Trading Markets on Февраль 15th, 2011
China’s government, one of the biggest holders of debt from Fannie Mae and Freddie Mac, voiced confidence that Washington would continue to stand behind the obligations of the U.S. mortgage giants after the Obama administration outlined options for phasing them out.
The statement by the State Administration of Foreign Exchange, or SAFE, the arm of China’s central bank that manages foreign-exchange reserves, reflects Beijing’s continued concern about perceptions within China of the safety of its U.S. investments. Most of China’s $2.85 trillion in reserves is invested in dollar assets, and while China doesn’t disclose the size of its holdings of Fannie and Freddie securities, past records show it owning hundreds of billions of dollars of debt from them and other U.S. government-linked agencies.
Chinese officials have raised concerns about the possible impact of U.S. policy on the future value of China’s dollar holdings, saying loose monetary policy could hurt the value of U.S. assets. But the government has also rejected rumors that it has lost money on its existing holdings of Fannie and Freddie debt.
The Obama administration on Friday issued a white paper on plans to reduce U.S. government involvement in the mortgage market, including an eventual phaseout of Fannie and Freddie, which the government took over in 2008. But the White House’s report emphasized that it «will not waver from its commitment» to ensuring that the two «have sufficient capital to honor any guarantees issued now or in the future and meet any of their debt obligations.»
SAFE’s statement, posted on its website Saturday, said the White House plan «has aroused widespread public interest and concern that our foreign-exchange reserve investments could be damaged.» The statement said China has not had losses on its Fannie and Freddie holdings, and added that SAFE «took particular notice that the U.S. government’s commitment to support [Fannie and Freddie] hasn’t changed.» Read the rest of this entry »
U.S. Economy Quickens on Gains in Spending, Exports
Posted by Oksana Grebenjuk in Trading Markets on Февраль 9th, 2011
The U.S. economy accelerated in the fourth quarter of 2010 as consumer spending climbed by the most in more than four years.
Gross domestic product grew at a 3.2 percent annual rate, Commerce Department figures showed today in Washington, falling short of the 3.5 percent median forecast of 85 economists surveyed by Bloomberg News because of a slowdown in inventories. Excluding stockpiles, the economy rose at a 7.1 percent pace, the most since 1984.
“The consumer really drove the economy in the fourth quarter,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who accurately forecast the rate of growth. “The economy has moved beyond recovery to a stable state of growth.”
The dollar advanced on expectations the revival in demand will extend into this year, boosting sales at companies including General Electric Co. and Apple Inc. At the same time, the report showed the Federal Reserve’s preferred measure of inflation climbed at the slowest pace on record, bolstering forecasts the central bank won’t raise borrowing costs until 2012.
Stocks dropped on growing concern over the unrest in Egypt and as shares of Ford Motor Co. and Amazon.com Inc. retreated. The Standard & Poor’s 500 Index fell 1.8 percent to 1,276.34 at the 4 p.m. close in New York. The dollar advanced against the euro for the first time in nine days, strengthening to $1.3611 per euro from 1.3734 late yesterday. Read the rest of this entry »
Microsoft Gets `Little Credit’ for Office Unit Gains Amid Windows Concerns
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Февраль 1st, 2011
Microsoft Corp. fell after a report showing a shortfall in Windows revenue raised concerns about demand for the operating system and outshined better-than- predicted second-quarter sales and profit.
Windows sales of $5.05 billion missed the $5.2 billion average of analysts’ estimates compiled by Bloomberg. That differed from the 55 percent gain in the Xbox unit, and numbers showing Microsoft’s Office and Server businesses topped projections.
The contrast suggests that Microsoft may be losing sales as customers opt for competing devices, such as Apple Inc.’s iPad or Macintosh computers, rather than a new Windows-based machine, said Tony Ursillo, an analyst at Loomis Sayles & Co. in Boston. As rival operating systems gain ground, Microsoft’s other products, such as Office, may also suffer, he said.
“The execution at this company has actually been pretty good over the last year,” said Ursillo, whose firm manages $150 billion, including Microsoft shares. “The stock has gotten very little credit for it because the market is worried about the continued erosion of the Windows franchise and the potential erosion of the Office franchise.”
Microsoft, based in Redmond, Washington, fell $1.12, or 3.9 percent, $27.75 at 4 p.m. New York time on the Nasdaq Stock Market. The shares lost 8.4 percent in 2010. Read the rest of this entry »
Copper Market 2011 Deficit May Be as Much as 600,000 Tons
Posted by Oksana Grebenjuk in Trading Markets on Январь 21st, 2011
The world refined copper market is expected to have a 500,000-metric-ton to 600,000-ton deficit in 2011, even with a significantly weaker demand scenario, according to JPMorgan Securities Ltd.
Disruptions last year seemed to have wiped out most of mine supply growth, metals strategist Michael Jansen told a conference in Shanghai. “As demand further recovers into 2011, supply-side issues will become more influential,” he said.
Copper for delivery in three months in London advanced to a record of $9,754 a metric ton on Jan. 4 after rising 30 percent last year as the improving global economy and rising investment demand for commodities prompted buying. The International Copper Study Group is expecting a 435,000-ton global deficit in the refined metal this year.
While current prices are sufficient to encourage brownfield and greenfield developments, longstanding issues, including capital availability, relative merit of projects, resource nationalism, and geotechnical issues, remain key impediments for supply increase, said Jansen.
“Copper is also increasingly being seen as scarce and is in many ways adopting some store of value attributes normally associated with precious metals,” he said in his presentation. Read the rest of this entry »
Iran’s Mir-Kazemi Says $100 Oil Would Not Warrant OPEC Emergency Meeting
Posted by Oksana Grebenjuk in Trading Markets on Январь 20th, 2011
Iran, which holds the rotating presidency of OPEC, sees no need for the producer group to hold an emergency meeting if crude prices rise to $100 a barrel, echoing a view that Kuwait’s oil minister expressed last week.
“The increase in oil prices toward $100 is not worrisome enough to warrant a call for an emergency meeting,” Iranian Oil Minister Masoud Mir-Kazemi told a news conference in Tehran. “None of the OPEC members considers this figure as being unreasonable.”
The Organization of Petroleum Exporting Countries accounts for 40 percent of global oil supply, and Iran is the group’s second-biggest producer after Saudi Arabia.
Brent crude for February settlement rose 62 cents, or 0.6 percent, to expire on Jan. 14 at $98.68 a barrel on the London- based ICE Futures Europe exchange. Earlier, it touched $99.20, the highest intraday price since Oct. 1, 2008, the last date the North Sea benchmark grade traded above $100 a barrel. Costlier oil is fanning concern that the global economic recovery may suffer if prices continue to rise. Read the rest of this entry »
Europe Failed to Clear `Skepticism’ on Debt Crisis
Posted by Oksana Grebenjuk in Trading Markets on Январь 18th, 2011
Europe has yet to allay investor “skepticism” about the sustainability of the region’s debt, and any spread of the crisis would cloud the global economic outlook, the International Monetary Fund’s No. 3 official said.
“At least for now it looks like the spillover from the European sovereign crisis to areas outside of the region will be limited,” Naoyuki Shinohara, deputy managing director at the IMF, said in an interview in Tokyo yesterday. “However, if the European sovereign-debt problems were to become bigger, we need to keep in mind that that could bring about considerable downside risks.”
European officials have indicated they’re ready to expand their efforts to contain the crisis that erupted last year and has led to bailout packages for Greece and Ireland. German Chancellor Angela Merkel this week expressed willingness to take whatever steps are needed to stem the turmoil.
The extra yields investors demand to hold Greek and Irish bonds rather than German bunds “still remain very high, despite the rescue packages,” Shinohara said.
“That means skepticism over the sustainability of their debt in the market hasn’t been cleared away,” said Shinohara, 57, a former top currency official at Japan’s Ministry of Finance. “It’s important that countries reduce their budget deficit, but they also need to tackle structural issues including boosting growth and lowering unemployment.” Read the rest of this entry »
Tax cuts raise expectations for economy in 2011
Posted by Oksana Grebenjuk in Trading Markets on Декабрь 23rd, 2010
Expectations for economic growth next year are turning more optimistic now that Americans will have a little more cash in their pockets. A cut in workers’ Social Security taxes and rising consumer spending have led economists to predict a strong start for 2011.
Still, most people won’t feel much better until employers ramp up hiring and people buy more homes. Analysts are predicting economic growth next year will come in next year close to 4 percent. It would mark an improvement from the 2.8 percent growth expected for this year and would be the strongest showing since 2000.
«Looking ahead, circumstances are ripe for the economy to develop additional traction,» said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York. He is estimating growth for 2011 to be above 3.5 percent.
The economy grew at a moderate pace last summer, reflecting stronger spending by businesses to replenish stockpiles, the Commerce Department reported Wednesday. Gross domestic product increased at a 2.6 percent annual rate in the July-September quarter. That’s up from the 2.5 percent pace estimated a month ago. While businesses spent more to build inventories, consumers spent a bit less.
Many analysts predict the economy strengthened in the October-December quarter. They think the economy is growing at a 3.5 percent pace or better mainly because consumers are spending more freely again. Read the rest of this entry »
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