admin No Comments

Asian Shares Advance As Fed Jitters Ease

Asian stocks advanced on Tuesday after New York Fed President John Williams noted the recent inflation surge is likely a temporary phase, helping ease investor concerns about the pace of expected monetary tightening.

Chinese shares ended notably higher, with the benchmark Shanghai Composite index rising 28.23 points, or 0.80 percent, to 3,557.41. Hong Kong’s Hang Seng index dropped 179.24 points, or 0.63 percent, to 28,309.76.

Japanese shares posted strong gains on economic recovery hopes. The Nikkei average jumped 873.20 points, or 3.12 percent, to 28,884.13, marking its biggest percentage gain since June last year. The broader Topix index closed 3.2 percent higher at 1,959.53, reversing Monday’s 2.4 percent slide.

Shipping stocks surged, with Mitsui OSK Lines climbing more than 10 percent after the company more than tripled its half-yearly net profit forecast. Rivals Kawasaki Kisen and Nippon Yusen also gained more than 10 percent each.

Automaker Suzuki Motor surged 7.4 percent, Honda Motor rallied 3.6 percent and Toyota Motor added 3.3 percent as the yen fell against the dollar on improved risk sentiment.

Market heavyweight SoftBank Group advanced 1.9 percent and Uniqlo operator Fast Retailing climbed 3.1 percent.

Australian markets rallied as investors favored value stocks on hopes they will do well in an economic recovery. The benchmark S&P/ASX 200 index climbed 106.90 points, or 1.48 percent, to 7,342.20 while the broader All Ordinaries index ended up 107.50 points, or 1.44 percent, at 7,592.70.

Energy stocks such as Woodside Petroleum and Santos jumped 2-3 percent as Brent oil hit $75 a barrel for the first time in more than two years amid signs of a rapidly tightening market.

The big four banks rose 1-2 percent while mining heavyweights BHP and Rio Tinto rallied 2.4 percent and 1.6 percent, respectively. Gold miner IGO surged 6.2 percent after saying it plans to invest A$1.4 billion into its local unit.

Seoul stocks rebounded on expectations the Fed is going to be relatively slow in tapering its asset purchase program. The Kospi average inched up 23.09 points, or 0.71 percent, to 3,263.88. Automaker Hyundai Motor jumped 3.4 percent and chemical firm LG Chem advanced 2.4 percent.

Producer prices in South Korea were up 6.4 percent year-on-year in May, the Bank of Korea said – accelerating from the upwardly revised 6.0 percent increase in April.

New Zealand shares eked out modest gains, with the benchmark NZX 50 index finishing up 35.44 points, or 0.28 percent, at 12,534.80. Fisher & Paykel Healthcare gained 1.9 percent, while Trustpower slumped 4.3 percent, a day after it agreed to sell its electricity, gas, broadband and mobile retail business.

U.S. stocks advanced overnight as banks and energy companies recovered some of last week’s steep losses following the Federal Reserve policy update.

U.S. Treasury yields dropped and the dollar’s rally paused after New York Federal Reserve Bank President John Williams said that the current economic recovery may be choppy and that he isn’t ready for the U.S. central bank to dial back the support it is giving the economy.

The Dow rallied as much as 1.8 percent to snap its five-day losing streak and post its best performance since early March, while the S&P 500 climbed 1.4 percent and the tech-heavy Nasdaq Composite index rose 0.8 percent.

admin No Comments

A Soft Opening Predicted in European Markets

Exuberance in the European stock markets is expected to abate on Wednesday as equities brace for a cautious trading day amidst re-emergence of taper-talk from the U.S. Wednesday is expected to sober down the smart rally of Tuesday that witnessed DAX 30 closing at a record high, CAC 40 closing at a 21 year high, Italy’s FTSE MIB closing at 13 year high and Spain’s IBEX 35 hitting a 16 month high. Overnight, the NASDAQ had shed 0.23 percent and the Dow Jones Industrial Average had gained 0.13 percent as cautious investors weighed in growth optimism with inflation fears and Fedspeak revealed dwindling headroom for forbearance on the monetary policy front.

On Tuesday, the European indexes had recorded a smart rally with the DAX 30 surging by 0.95 percent, FTSE 100 strengthening by 0.82 percent; pan European Stoxx 600 adding 0.75 percent, CAC 40 rallying by 0.66 percent and the Swiss SMI gaining 0.63 percent. Gold declined from five month highs as Manufacturing PMI of 61.2 reflected robust economic recovery in the U.S. The yellow metal is currently trading at $1898 per troy ounce, slightly down from Tuesday’s close of $1900.

The Dollar Index recovered 0.09 percent from yesterday’s level of 89.83 and is currently at 89.91 while U.S. ten year bond yields remain stable at 1.61 percent reflecting receding fears of interest rate hardening in the U.S.

Brent Crude is trading near two year high of $70.40 levels, up from $70.25 level on Tuesday, primarily driven by forecasts of likely fall in inventory levels and the delay in supply of Iranian crude. Prospects of vaccine led rebound in major economies continue to outweigh the coronavirus second wave induced demand drop in Asia.

The American stock futures are trading in negative territory and so are India’s Sensex, Singapore’s STI and China’s Shanghai Composite. STI has corrected by 0.85 percent, Shanghai Composite has declined by 0.64 percent and BSE Sensex has lost 0.42 percent. However the mood is mixed and the Australian ASX 200 has traded 0.93 percent higher, whereas Japan’s Nikkei 225 has risen around 0.50 percent.

Markets also await the Retail Sales data for April from Germany, Unemployment Change for May from Spain, Consumer Credit, Mortgage Lending and Mortgage Approvals for April from U.K. and the IBD/TIPP Economic Optimism Index for June from the U.S. later today.

Monetary Policy stance and the way forward, likely to be enunciated by E.C.B. President and key U.S.Fed officials later today are likely to be singled out for scrutiny by stock markets, as stimulus curbs and inflation fears intermittently, loom and linger. Eurozone’s recent inflation reading rising above the ECB comfort level is bound to haunt markets, as investors weigh-in inflation worries and growth prospects in more and more economies that reopen.

admin No Comments

Australian Construction Work Climbs 2.4% In Q1

The value of total construction work done in Australia was up a seasonally adjusted 2.4 percent on quarter in the first three months of 2021, the Australian Bureau of Statistics said on Wednesday – coming in at A$51.975 billion.

That beat expectations for an increase of 2.2 percent following the upwardly revised 0.4 percent increase in the three months prior (originally -0.9 percent).

Building construction was up 2.5 percent on quarter, while residential building gained 5.1 percent, non-residential building fell 1.6 percent and engineering rose 2.2 percent.

On a yearly basis, the value of total construction work fell 1.1 percent. Building construction was down 1.8 percent on year, while residential building gained 4.2 percent, non-residential building fell 10.4 percent and engineering eased 0.3 percent.

admin No Comments

Virgin Media – O2 Merger Approved in the U.K

The UK’s Competition & Markets Authority or CMA announced its final approval of the 50:50 joint venture between Liberty Global and Telefonica to combine Virgin Media and O2.

The CMA cleared the transaction without remedies and now all regulatory conditions are met in alignment with the original terms and the transaction is now expected to close by June 1, 2021.

Last month, the CMA said it provisionally cleared the proposed merger of Virgin Media Inc. (VMED.L, VMED) and Virgin Mobile with O2.

Virgin Media and Virgin Mobile are owned by Liberty Global plc, while O2 is owned by Spanish telecom major Telefonica SA (TDE.L, TEF).

Liberty Global and Telefonica announced the joint venture last May, bringing together Virgin Media, the UK’s fastest broadband network, and O2, mobile operator. The joint venture is expected to deliver substantial synergies valued at 6.2 billion pounds on a net present value basis after integration costs and will create a nationwide integrated communications provider with 11 billion pounds of revenue.

Liberty Global and Telefonica announced last month the appointment of Lutz Schüler as Chief Executive Officer and Patricia Cobian as Chief Financial Officer of the combined company upon completion of the transaction.

Schüler is currently Chief Executive Officer of Virgin Media and Cobian is Chief Financial Officer at O2.

admin No Comments

BNP Paribas Q1 Profit Climbs On Strong Revenues

French lender BNP Paribas (BNPQY.PK, BNP.L) reported Friday that its first-quarter net income attributable to equity holders came to 1.77 billion euros, up 37.9 percent from last year’s 1.28 billion euros.

Excluding the effect of exceptional items and the impact of taxes and contributions subject to IFRIC 21, net income was 2.82 billion euros.

Meanwhile, net income declined 7.8 percent from the first quarter 2019, prior to the Covid crisis.

Pre-tax income was 2.82 billion euros, 57.3 percent higher than last year’s 1.80 billion euros, and up 5.2 percent from 2019.

Operating income grew 79 percent year-over-year to 2.34 billion euros.

At 11.83 billion euros, revenues were up 8.6 percent from last year’s 10.89 billion euros. Revenues increased 12 percent at constant scope and exchange rates. Revenues were 6.1 percent higher than in the first quarter 2019.

admin No Comments

S&P 500 To New Record Closing High Above 4,000

Stocks showed a strong move to the upside during trading on Thursday, with technology stocks helping to lead the way higher once again. With the upward move, the S&P 500 ended the session at a new record closing high above 4,000.

The major averages all closed firmly positive, although the tech-heavy Nasdaq posted a particularly strong gain. The Nasdaq soared 233.24 points or 1.8 percent to 13,480.11, while the S&P 500 jumped 46.98 points or 1.2 percent to 4,019.87 and the Dow climbed 171.66 points or 0.5 percent to 33,153.21.

The extended rally by technology stocks, as reflected by the spike by the Nasdaq, was partly in reaction to upbeat news out of the semiconductor sector.

Shares of Micron Technology (MU) surged up by 4.8 percent after the chipmaker reported better than expected fiscal second quarter results and provided upbeat guidance for the current quarter.

Taiwan Semiconductor (TSM) also showed a strong move to the upside after unveiling capacity expansion plans amid rising chip demand.

Tech stocks also benefited from a pullback by treasury yields, with the yield on the benchmark ten-year note moving notably lower after ending the previous session at its highest closing level in over a year.

Positive sentiment was also generated in reaction to a report from the Institute for Supply Management showing the pace of growth in U.S. manufacturing activity accelerated by much more than anticipated in the month of March.

The ISM said its Manufacturing PMI jumped to 64.7 in March from 60.8 in February, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to inch up to 61.3.

With the much bigger than expected increase, the Manufacturing PMI reached its highest level since hitting 69.9 in December of 1983.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rebounded from their lowest level in a year in the week ended March 27th.

The report said initial jobless claims rose to 719,000, an increase of 61,000 from the previous week’s revised level of 658,000.

Economists had expected jobless claims to edge down to 680,000 from the 684,000 originally reported for the previous week.

The downwardly revised number of claims in the previous week was the lowest since the week ended March 14, 2020, just before the start of the coronavirus lockdowns.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for March.

Economists currently expect employment to jump by 647,000 jobs in March after climbing by 379,000 jobs in February. The unemployment rate is expected to drop to 6.0 percent from 6.2 percent.

Traders were also reacting to President Joe Biden’s speech regarding his $2 trillion infrastructure and economic recovery plan.

Sector News

Gold stocks moved sharply higher over the course of the session, driving the NYSE Arca Gold Bugs Index up by 4.4 percent.

The rally by gold stocks came as the price of gold for June delivery climbed $12.80 to $1,728.40 an ounce, extending the rebound seen in the previous session.

Substantial strength was also visible among semiconductor stocks, as reflected by the 3.7 percent spike by the Philadelphia Semiconductor Index.

Oil stocks also showed a significant move to the upside on the day, with the NYSE Arca Oil Index surging up by 3.3 percent. The strength in the sector came as the price of crude oil for May delivery spiked $2.29 to $61.45 a barrel.

Software, brokerage and commercial real estate stocks also saw considerable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index spiked by 2 percent.

The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the French CAC 40 Index and the German DAX Index climbed by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries rebounded after coming under pressure late in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.7 basis points to 1.679 percent.

Looking Ahead

Reaction to the monthly jobs report is likely to drive trading early next week, although reports on service sector activity, factory orders, the U.S. trade deficit, and producer prices may also attract attention.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may shed additional light on the Fed’s economic outlook.

admin No Comments

Thai Bourse May Crack Resistance At 1,600 Points

The Thai stock market bounced higher again on Thursday, one day after it had ended the five-day winning streak in which it had advanced more than 25 points or 1.6 percent. The Stock Exchange of Thailand now rests just shy of the 1,595-point plateau and it may extend its gains on Friday.

The global forecast for the Asian markets is upbeat, with technology and oil stocks expected to lead the markets higher. The European and U.S. bourses were up and the Asian markets are tipped to follow suit.

The SET finished modestly higher on Thursday following gains from the financial shares and a mixed performance from the energy producers.

For the day, the index rose 7.91 points or 0.50 percent to finish at 1,595.12 after trading between 1,590.33 and 1,600.60. Volume was 29.161 billion shares worth 76.941 billion baht. There were 798 decliners and 784 gainers, with 465 stocks finishing unchanged.

Among the actives, Thailand Airport skidded 1.09 percent, while Asset World dropped 0.98 percent, Bangkok Asset Management shed 0.46 percent, Bangkok Bank jumped 1.59 percent, Bangkok Expressway retreated 1.14 percent, BTS Group added 0.52 percent, Charoen Pokphand Foods sank 0.85 percent, Gulf gained 0.75 percent, Kasikornbank rallied 2.07 percent, PTT fell 0.61 percent, PTT Exploration and Production rose 0.44 percent, PTT Global Chemical improved 0.80 percent, Siam Commercial Bank collected 1.35 percent, Siam Concrete lost 0.50 percent, TMB Bank climbed 1.63 percent and Advanced Info, Bangkok Dusit Medical, Krung Thai Bank, PTT Oil & Retail and SCG Packaging were unchanged.

The lead from Wall Street is broadly positive as stocks opened higher on Thursday and gathered steam as the day progressed, closing near daily highs.

The Dow climbed 171.66 points or 0.52 percent to finish at 33,153.21, while the NASDAQ spiked 233.23 points or 1.76 percent to end at 13,480.11 and the S&P 500 jumped 46.98 points or 1.18 percent to close at 4,019.87.

The rally by technology stocks in the NASDAQ reflected solid earnings news and a retreat by treasury yields, with the yield on the benchmark ten-year note moving lower after ending the previous day at its highest closing level in a year.

Traders were also reacting to President Joe Biden’s speech regarding his $2 trillion infrastructure and economic recovery plan.

In economic news, the Institute for Supply Management said U.S. manufacturing activity accelerated more than expected in March. Also, the Labor Department said first-time claims for U.S. unemployment benefits rebounded from their lowest level in a year last week.

Crude oil prices moved sharply higher Thursday on news that OPEC has agreed to incremental increases in crude production for three months starting in May. West Texas Intermediate Crude oil futures for May ended higher by $2.29 or 3.9 percent at $61.45 a barrel.

admin No Comments

Ford Cuts Production In Six Plants Due To Chip Shortage

Ford Motor Co. (F) has announced cuts to production at six of its manufacturing plants in North America, as the automotive industry faces shortage in semiconductor chips.

The impacted plants are in Illinois, Ohio, Kentucky, Michigan, Missouri and Ontario, Canada. These plants manufacture several vehicles, including F-150 pickups, Ford Explorer SUV and Ford Escape crossover.

The company’s production changes include overtime shift cancellations, as well as temporary production halts for up to three weeks from April through June.

Ford’s production at its truck plant in Dearborn, Michigan, will be down for two weeks in April, and truck production at its Kansas City plant will halt for one week.

Ford previously said it expected the shortage could negatively impact its earnings by $1 billion to $2.5 billion in 2021. The company said it “will provide an update on the financial impact of the semiconductor shortage” when it reports its first quarter earnings on April 28.

admin No Comments

Japanese bank Nomura says it’s facing a loss of $2 billion as a hedge fund blow up

  • Japanese investment bank Nomura announced on Monday it’s facing a $2 billion loss on a US client.
  • Nomura said in a press release it didn’t believe the loss would impact the company’s solvency.
  • The announcement follows a wild week for markets dominated by a reported liquidation of positions held by Archegos Capital Management.

Japanese bank Nomura announced on Monday that it is facing a $2 billion loss.

The financial hit, it said in a statement, came out of “a significant loss arising from transactions with a US client.” The firm declined to name the client.

Nomura said it would no longer be issuing planned US dollar senior notes, noting that “an event that occurred after pricing that could impact the company’s consolidated financial results,” according to Reuters.

Following the news, Nomura’s shares were trading down 15% Monday morning.

The loss follows a wild week for markets dominated by a reported liquidation of positions held by Archegos Capital Management, an investment firm led by Tiger Asia founder Bill Hwang. The liquidation appears to have been led by Goldman Sachs and Morgan Stanley.

The two investment banks sold billions of dollars worth media and Chinese stocks, with ViacomCBS and Discovery dropping as much as 35% on the heavy selling. Chinese companies Tencent, Baidu, and Vipshop also saw a major drop. Market watchers told The Wall Street Journal the “size and speed” of the sell-off was “unprecedented.”

Despite the sell-off, the market saw a last-minute rally on Friday, with the Dow ending up 450 points and the S&P 500 closing at a record high.

Nomura said the $2 billion loss shouldn’t impact operations.

“As of the end of December 2020, Nomura maintained a consolidated Common Equity Tier 1 ratio of over 17 percent, which is substantially higher than the minimum regulatory requirement,” the statement continued. “Accordingly, there will be no issues related to the operations or financial soundness of Nomura Holdings or its US subsidiary.”

Nomura operates in 30 countries worldwide, as has total assets of $432.2 billion.

admin No Comments

European Economics Preview: UK Mortgage Approvals Data Due

Mortgage approvals data from the UK is due on Monday, headlining a light day for the European economic news.

At 1.00 am ET, consumer and industrial confidence survey results are due from Finland.

At 4.00 am ET, IHS Markit releases Austria’s manufacturing PMI survey results.

Half an hour later, the Bank of England publishes mortgage approvals data for February. The number of mortgages approved in February is seen at 95,000 versus 99,000 in January. At 6.00 am ET, February retail sales data is due from Ireland. Sales had declined 21.8 percent on month in January.