Stocks Rally On Upbeat German Data, Optimism On Fiscal Cliff
Stocks
have moved sharply higher over the course of the trading day on
Tuesday, adding to the modest gains posted in the previous session. The
markets have benefited from some upbeat German economic data as well as
optimism about the looming fiscal cliff.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 120.59 points or 0.9 percent at 13,290.47, the Nasdaq is up 41.96 points or 1.4 percent at 3,028.92 and the S&P 500 is up 14.13 points or 1 percent at 1,432.68.
The
rally on Wall Street is partly due to the release of a report from the
Center for European Economic Research showing a bigger than expected
improvement in German investor confidence.
The report showed that the expectations index
climbed to a positive 6.9 in December from a negative 15.7 in November,
turning positive for the first time since May. The current conditions
index edged up to 5.7 from 5.4.
Positive sentiment has also been
generated by a report from the Wall Street Journal indicating that
negotiations between the White House and Republican House Speaker John
Boehner have progressed steadily in recent days.
Citing people familiar with the matter, the Journal said the talks have taken a marked shift recently, becoming more "serious."
The
reported progress on talks between Obama and Boehner comes as a number
of Republicans have indicated they would be willing to accept higher tax
rates on wealthy Americans in exchange for significant spending cuts
and reform to entitlement programs.
The strength on Wall Street also comes as traders look ahead to the
Federal Reserve's monetary policy announcement on Wednesday.
Many
analysts expect the Fed to announce a new round of Treasury securities
purchases to replace its "Operation Twist" program, which expires at the
end of the year.
Meanwhile, traders are also digesting a report
from the Commerce Department showing that the U.S. trade deficit came in
narrower than expected in the month of October.
The Commerce
Department said the U.S. trade deficit widened to $42.2 billion in
October from a revised $40.3 billion in September. Despite the increase
by the size of the deficit, it still came in narrower than the $42.8
billion deficit forecast by economists.
A separate Commerce
Department report said wholesale inventories increased by more than
expected in October, although wholesale sales showed a notable decrease.
Airline stocks are turning in some of the market's best performances in mid-day trading, with the NYSE Arca Airline Index up by 1.7 percent. With the gain, the index has risen to its best intraday level in well over a year.
Delta Air Lines has helped to lead the sector higher, jumping by 5.9 percent after announcing a deal to acquire a 49 percent stake in Virgin Atlantic for $360 million.
Significant strength has also emerged among semiconductor stocks, as reflected by the 1.9 percent gain being posted by the Philadelphia Semiconductor Index. Strong gains by Rubicon Technology and NXP Semiconductors have helped lift the index to a two-month high.
Reflecting strength throughout the technology sector, software, internet, and computer hardware stocks are also posting strong gains.
Most
of the other major sectors have also moved to the upside, with
considerable strength visible among biotechnology, brokerage, and steel
stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Hong Kong's Hang Seng Index and Australia's All Ordinaries Index rose by 0.2 percent and 0.4 percent, respectively. However, Japan's Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent.
The major European markets also moved to the upside on the day. The U.K.'s FTSE 100 Index inched up by 0.1 percent, while the German DAX Index and the French CAC 40 Index advanced by 0.8 percent and 0.9 percent, respectively.
In the bond market,
treasuries have come under pressure, more than offsetting the modest
gains posted in the previous session. Subsequently, the yield on the
benchmark ten-year note, which moves opposite of its price, is up by 3.6
basis points at 1.652 percent.
| Canadian Market |
 |
| CADUSD | Oil | Gold | Allbanc |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
TSX Extends Gains On Commodities, German Data
Canadian
stocks were extending gains for a third straight session Tuesday
morning as investors pinned hopes that the U.S. Federal Reserve will
announce fresh stimulus
measures ahead of the expiry of its Operation Twist bond-buying program
scheduled to expire at the end of the year. Also, trader sentiment
improved after Germany's economic confidence turned positive in December
for the first time since May 2012.
The S&P/TSX Composite Index
gained 65.31 points or 0.53 percent to 12,295.79, after adding about 80
points or 0.75 percent in the past two straight sessions.
The price of crude oil was lingering around its three-week low Tuesday morning as traders await cues from the two-day FOMC meeting. Meanwhile, in its monthly Oil Market Report released today, the OPEC held its 2013 world oil demand at 0.80 mbd and noted that the US oil demand moved from deep contraction to minor growth in the third quarter of 2012.
Crude for January eased $0.07 to $85.49 a barrel.
In the oil patch, Husky Energy and Coastal Energy rose about 2 percent each. Calfrac Well Services gained close to 3 percent.
Fertilizer maker Potash Corp. rose close to 3 percent and Agrium Inc. added over 1 percent.
Gold stocks were mixed amid flat bullion prices. Gold for February edged down $6.00 to $1,708.40 an ounce.
Among gold plays, Detour Gold was down 1 percent, while Agnico-Eagle Mines and Goldcorp. were edging up.
International pharmaceutical company Valeant Pharmaceuticals International Inc. moved up 1 percent after announcing the completion of its acquisition of Medicis Pharmaceutical Corp. for $44 per share, or a total of about $2.6 billion.
Food and beverages company Maple Leaf Foods said
it would sell its potato processing facility in Lethbridge, Alta., to
Cavendish Farms, for about $60 million. The stock was up 1.50 percent.
Meanwhile, crude oil company MEG Energy Corp. shed
over 3 percent after announcing C$1.9 billion capital investment plans
and guided a production target of 32,000 to 35,000 bpd for the year
2013.
Base-metals miner Platinum Group Metals dived 14 percent after announcing plans to raise about C$180 million through a marketed offering of common shares.
Minerals miner Colossus Minerals announced
the appointment of current Board member David Anthony as the Chief
Operating Officer and President, effective December 13. The stock
slipped 1 percent.
In economic news, Statistics Canada said the
nation's trade deficit with the world narrowed from $1.0 billion in
September to $169 million in October, as imports declined 1.2 percent
while exports increased 1.0 percent in October. Imports declined to
$38.3 billion, a 5.7 percent drop since reaching a record high in June
2012. Volumes were down 1.8 percent in October, as widespread decreases
were recorded. Exports increased to $38.1 billion in October, as both
prices and volumes were up.
From the U.S., the Commerce
Department said the trade deficit widened to $42.2 billion in October
from a revised $40.3 billion in September. Despite the increase by the
size of the deficit, it still came in narrower than the $42.8 billion
deficit forecast by economists.
Elsewhere, Germany's economic
confidence turned positive in December for the first time since May
2012, survey results from the Centre for European Economic Research
showed. The Indicator of Economic Sentiment climbed 22.6 points to 6.9
for December. Economists were forecasting the reading to rise to -11.5.
Meanwhile,
German wholesale price inflation eased more than expected in November,
data from the Federal Statistical Office showed. The wholesale price
index rose 3.2 percent annually in November, slower than 4.6 percent
rise in October. Economists expected the rate of inflation to ease to 4
percent.
| European Market |
| |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
European Markets Climbed On German Data & Fiscal Cliff Hopes
The
European markets finished Tuesday's session in the green, adding to the
modest gains of the previous session. The markets received a boost from
the sharp increase in the German ZEW economic sentiment result, which
turned positive for the first time since May. The 2-day FOMC meeting in
the United States also began today. Investors will be watching for the
results of the meeting tomorrow, and Fed Chairman Ben Bernanke's
comments.
Investors are also optimistic that a deal can be
reached in the United States to avoid the fiscal cliff before the end of
the year. Negotiations between Democrats and Republicans have
reportedly continued over the past few days, following the weekend
meeting between President Obama and House Speaker John Boehner.
There
have been reports that Mario Monti is considering running in next
year's elections in Italy. Monti announced over the weekend that he will
resign as Prime Minister after the country's 2013 budget is approved.
His resignation was followed the announcement that his predecessor
Silvio Berlusconi's PDL party had withdrawn their support for Monti.
The
German economy is likely to log a weaker growth next year as subdued
exports and business investment weigh on economic activity, the RWI
institute said Tuesday.
The think tank projects just 0.3 percent
growth for next year, down from an estimated 0.7 percent expansion in
2012. The institute earlier forecast a 1 percent growth for 2013 and 0.8
percent increase for this year.
Bank of
England Governor Mervyn King on Monday warned against countries using
"actively managed exchange rates" as an alternative to monetary policy
and said the trend is growing. In a speech in New York, King said he is
very much concerned that 2013 will see the growth of actively managed
exchange rates as an alternative to the use of domestic monetary policy.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.07 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.33 percent.
The DAX of Germany climbed by 0.78 percent and the CAC 40 of France advanced by 0.94 percent. The FTSE 100 of the U.K. rose by 0.06 percent and the SMI of Switzerland gained 0.43 percent.
In Frankfurt, ThyssenKrupp increased by 5.90 percent. The company, which reported a wider annual loss on Monday, scrapped its dividend.
Deutsche Post declined by 0.96 percent. JPMorgan downgraded the stock to ''Neutral'' from "Overweight.''
Deutsche Bank and Commerzbank climbed by 0.48 percent and 0.44 percent.
In Paris, banks were under pressure. Credit Agricole fell by 1.19 percent while BNP Paribas lost 0.05 percent. However, Societe Generale gained 1.53 percent.
Suez Environnement surged by 8.25 percent, after Exane BNP Paribas upgraded the stock to "Outperform" from "Neutral."
In London, Whitbread
climbed by 2.47 percent. The hotel and restaurant group reported
double-digit sales growth for the third quarter, supported by strong
performance by its Premier Inn and Costa chains, and added that it is on
track to deliver full-year results in line with expectations.
Online fashion retailer ASOS
reported a 30 percent increase in first-quarter revenues and total
retail sales. The company remains positive in its outlook and continues
to trade in line with expectations. The stock gained 3.77 percent.
Imagination Technologies rose by 4.45 percent, reportedly on a positive broker recommendation.
Tullow Oil
dropped by 8.44 percent, after issuing an operational update. The
company's Okure-1 exploration in Ghana has encountered low net to gross
oil bearing reservoir in a secondary objective.
Diageo said talks with JB y Compania S.A. de C.V. and Lanceros S.A. de C.V., regarding the future of the Cuervo
brand, has ended. Both parties would currently work to ensure the
orderly termination of the current distribution deal. Diageo fell by
1.64 percent.
Victrex finished lower by 5.07 percent, after reporting annual results.
HSBC
finished higher by 0.56 percent. The lender agreed with the U.S.
authorities to pay $1.92 billion related to its investigations regarding
inadequate compliance with anti-money laundering and sanctions laws.
The bank also anticipates finalizing an undertaking with the UK
Financial Services Authority, shortly.
Polymetal International gained 2.67 percent. The miner agreed to acquire Ovoca Gold for 775,000 shares of Polymetal stock.
IG Group Holdings said revenues for the first half fell 14 percent from last year. The stock decreased by 2.20 percent.
Swatch dipped by 0.17 percent in Zurich. UBS raised the stock to ''European Luxury Goods Most Preferred List.''
Germany's
economic confidence turned positive in December for the first time
since May 2012 as the largest euro area economy is expected to avoid a
recession, a closely watched survey of financial market experts showed
Tuesday.
The Indicator of Economic Sentiment climbed sharply by
22.6 points to 6.9 for December, survey from the ZEW Centre for European
Economic Research revealed. Economists had forecast the reading to
improve to -11.5.
German wholesale price inflation eased more than expected in November, data from
the Federal Statistical Office showed Tuesday. The wholesale price
index rose 3.2 percent annually in November, slower than 4.6 percent
rise in October. Economists expected the rate of inflation to ease to 4
percent.
France payroll employment in principally market sectors
dropped 0.3 percent or 41,700 sequentially in the third quarter, the
statistical office Insee showed Tuesday. The decline follows a 0.1
percent or 16,100 decrease in the second quarter.
A leading
indicator of the British economy declined for the first time in four
months in October, driven mainly by continued weakness in business
confidence, data from a survey by the Conference Board showed Tuesday.
The leading economic index decreased to 102 in October from 102.4 in September, marking the first decline in four months.
The
pace of decline in British house prices accelerated in November, a
survey by the Royal Institution of Chartered Surveyors' (RICS) showed
Tuesday.
The RICS house price balance fell to -9 in November from
-7 in October. The October reading was the least negative in more than
two years. Economists expected the balance to improve to -5. London was
the only region to record an increase in prices.
With the value
of exports falling at a faster rate than the value of imports in the
month of October, the Commerce Department released a report on Tuesday
showing that the U.S. trade deficit for the month widened compared to
the previous month.
The Commerce Department said the U.S. trade
deficit widened to $42.2 billion in October from a revised $40.3 billion
in September. Despite the increase by the size of the deficit, it still
came in narrower than the $42.8 billion deficit forecast by economists.
Wholesale
inventories in the U.S. increased by more than expected in the month of
October, according to a report released by the Commerce Department on
Tuesday, although the report also showed a notable drop by wholesale
sales.
The report said wholesale inventories increased by 0.6
percent in October after rising by 1.1 percent in September. Economists
had expected inventories to increase by about 0.4 percent. |
| Asia Market |
Indian Shares Reverse Early Gains
India shares fell on Tuesday, with benchmark Sensex
tumbling more than 300 points from the day's high, after both houses of
Parliament adjourned before taking up the Banking Amendment Bill and data released
by the Director General of Foreign Trade showed India's exports
contracted for the seventh month in a row in November due to slowdown in
demand in developed markets.
Meanwhile, the government said it
has no hesitation in holding an inquiry on reports of Walmart lobbying
in the US to open the way for foreign equity in retail trade in India.
Both houses of Parliament were adjourned today on this issue.
India's
exports contracted 4.2 percent to $22.3 billion in November from a year
earlier, while imports jumped to $41.5 billion, leaving a trade deficit
of $19.3 billion, a trade ministry official said today.
Other
factors such as October industrial output data and monthly inflation
figures due on Wednesday and Friday, respectively, and the upcoming
mid-quarter monetary policy review meet on December 18 also rendered the
underlying mood cautious to some extent.
The benchmark Sensex reached an intra-day high of 19,612 early in the session before dropping to a low 19,285 in the afternoon.
Recouping some losses, the Sensex finally ended the session down 23
points or 0.12 percent at 19,387, with 20 of its components retreating.
The broader Nifty index
fell by 10 points or 0.17 percent to 5,899, while the BSE mid-cap and
small-cap indexes lost about a percent each. Realty, power and
technology stocks bore the brunt of the selling, while FMCG stocks rose on defensive buying, helping limit the downside.
Among the prominent decliners in the Nifty pack, Reliance Industries, Coal India, ONGC, NTPC, HCL Technologies, DLF, BHEL and Hindalco fell 1-3 percent. Software services exporter TCS retreated 1.5 percent on concerns over the industry outlook. Cairn India lost over 2 percent on a brokerage downgrade. Bharti Airtel fell 1.1 percent after its tower infrastructure unit Bharti Infratel launched its IPO for subscription.
GMR Infrastructure tumbled 3.4 percent and GVK Power & Infrastructure
declined 2.5 percent on reports that the civil aviation ministry will
likely slash airport development fee by 54 percent at Delhi and Mumbai
airports. IndusInd Bank fell 1.3 percent as it raised Rs 2,000 crore through a QIP issue.
Apollo Hospitals Enterprise
slipped 0.2 percent after it agreed to sell its healthcare business
process outsourcing unit Apollo Health Street to U.S.-based Sutherland
Global Services for an enterprise value of rupees 10 billion.
Among those that gained ground, ACC, HDFC, UltraTech, SunPharma, Hindustan Unilever, Jindal Steel, Ambuja Cement and Bajaj Auto rose 1-2 percent.
Kingfisher Airlines hit the 5 percent upper circuit limit following reports that Etihad Airways is close to buying a 48 percent stake in the debt-laden Indian carrier for over Rs 3,000 crore.
NMDC rallied 2.8 percent ahead of its share sale tomorrow. Mahindra Satyam rose nearly 2 percent after the Andhra Pradesh High Court stayed a provisional order by the Enforcement Directorate
(ED) attaching deposits to the tune of Rs.822 crore belonging to a
money laundering case involving the erstwhile Satyam Computer Services.
Bartronics India soared 20 percent after its wholly-owned subsidiary,
Bartronics Asia Pte, bought a controlling stake in U.S.-based Systems
America.
On the global front, other Asian markets ended mostly
higher, paring some early gains, as investors pinned hopes that the U.S.
Federal Reserve will announce fresh stimulus
measures ahead of the expiry of its Operation Twist bond-buying program
scheduled to expire at the end of the year. The Fed's two-day policy
meeting begins today, with analysts expecting the central bank to
announce monetary stimulus package of continued bond purchases of $45
billion per month after its meeting.
European stocks struggled
for direction before moving higher after data showed German investor
confidence jumped to a seven-month high in December. Survey results from
the Centre for European Economic Research showed that the indicator of
economic sentiment in Germany climbed 22.6 points to 6.9 in the month,
turning positive for the first time since May 2012
| Commodities |
| |
| USDCAD | USDEUR | USDGBP | USDJPY |
 |  |  |  |
| Please click on the images to view our interactive charts |
|
OPEC Maintains 2013 Global Oil Demand Forecast
The Organization of the Petroleum Exporting Countries maintained its 2013 world oil demand
growth forecast at 0.80 million barrels per day (mbd) and that of its
world economic growth projection at 3.2 percent for 2013.
In its monthly Oil Market
Report released Tuesday, the OPEC held its 2013 world oil demand at
0.80 mbd and noted that the US oil demand moved from a deep contraction
to a minor growth in the third quarter of 2012.
However, the cartel upped its oil
demand growth forecast for the fourth quarter of 2012 to 1.0 mbd
year-over-year, which is almost double the growth in the third quarter
of 2012, on higher demand from the US.
Meanwhile, the OPEC
revised down its world economic growth forecast for the year 2012 to
3.0 percent from the earlier 3.1 percent, while maintaining that of 2013
at 3.2 percent. In Japan, a significant deceleration has led to a
revision in growth to 1.6 percent from 2.2 percent in 2012 and to 0.6
percent from 1.1 percent in 2013. The contraction in the Euro-zone
appears to have bottomed out in 3Q12 and the growth forecast has been
revised to minus 0.4 percent from minus 0.5 percent for 2012, while next
year's growth is forecast unchanged at 0.1 percent for 2013.
The cartel expects non-OPEC oil supply to grow by 0.5 mbd in 2012, while forecasting 2013
non-OPEC supply to grow by 0.9 mbd, supported by strong anticipated
growth from the US and Canada, despite disruptions in some countries.
Light Sweet Crude Oil futures for January delivery, are adding $0.44 to $86.00 a barrel. |
|
|
|
No comments:
Post a Comment