World stock markets news summary (US, UK, Europe, Asia) (July 19, 2010)
Fears mounting of American double dip (Sunday Times) Worries about the American economy are replacing the Euro-Zone crisis as the biggest fear for markets. Weak US data has led to concern that it could be heading for a double dip.
The IMF wants to boost its lending resources to USD 1trl from USD 750bln in order to prevent future financial crisis, according to unnamed sources. (FT)
UK News
Rightmove House Prices (Jul) M/M -0.6% vs. Prev. 0.3%; Y/Y 3.7% vs. Prev. 5.0% (Sources) UK home sellers cut prices for the first time this year in July and will probably keep doing so for the remainder of 2010, according to Rightmove Plc.
BoE’s Sentance said a gradual interest rate increase from a record low to fight inflation will help support the economy. (BBC Radio 4)
US News
T-notes finished higher on Friday following a weaker than expected University of Michigan data. After touching on their best levels treasuries settled into range bound trade in what turned out to be a quiet end to the session. At the pit close t-notes finished up 13+ ticks at 123.06+. At 0630BST UST’s were trading up 2 ticks to 123.08+ as concerns over the health of the US economy linger after disappointing economic data last week.
China should cut its holdings of US Treasury securities when market demand is strong, according to Yu Yongding, a former academic adviser to the central bank and now a professor with the Chinese Academy of Social Sciences. (RTRS)
European News
Wen Pledges to back EUR saying that Europe remains a key market for China’s foreign-reserve investments and adding that China will keep its macroeconomic policies stable in the second half (WSJ)
Greece’s central bank governor Provopoulos said he expected a clean bill of health for the country’s banks adding that he is also optimistic about the country’s public finances. (Sunday Times/RTRS) In other news, Spain’s Cajas will get no nasty surprises with the releases of stress tests according to the director general of the Spanish Confederation of Savings Banks.
IMF says Greece making progress to put public finances on a sustainable path. (RTRS/Sources) IMF says Greek economy activity declining as expected with downturn expected to become more acute as year goes on. Says Greek state budget implementations on track, hospitals and social security funds present ‘clear risks’. Adds that Greek banks face continued liquidity pressures and some solvency erosion, buy plans are in place to deal with this.
Germany’s economy grew more than 1.5% in Q2, more than the governments forecast of 0.9%, citing an internal government estimate. (Der Spiegel) In other news, the country’s economics minister dismissed speculation that Germany would raise its value added tax as part of its wider efforts to overhaul the VAT system.
Asian News
Japanese market holiday.
Chinese Premier Wen Jiabao said China’s economy was responding appropriately to its stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand. (RTRS)
China’s exports are expected to grow about 16.3% Y/Y in the second half, with full year growth estimated at around 24.5%, according to country’s State Information Centre. (China’s Securities Journal/RTRS) In other news, China will maintain its tightening campaign to cool real estate prices, according to the Minister of Housing and Urban-Rural Development.
Forex
The IMF and EU have suspended a review of Hungary’s funding programme, meaning that the country will not have access to the remaining funds in its USD 25.1bln loan package until talks are concluded. (RTRS) Hungarian Forint (HUF) is already seen down about 2.4% vs. the EUR after IMF/EU talks failed.
Commodities
Oil prices fell below USD 76 a barrel overnight, extending the previous session’s decline, amid concerns about the US economic outlook after data showed consumer sentiment fell for the third month to a near one-year low. WTI crude futures were trading at USD 75.90, down USD 0.11, at 0622 BST. (RTRS)
BP plans to keep its Gulf of Mexico well sealed with a tight fitting cap until it permanently plugs the leak next month. (Sources) However, Engineers monitoring co.’s damaged well in the Gulf of Mexico detected seepage on the ocean floor that could mean problems with the cap that has stopped oil from gushing into the water, according to the US government’s top oil spill official. (RTRS)
Oil majors boost plans to expand Iraq oil output (WSJ)
Company News
Combination of soft economic data and unimpressive earnings from Bank of America (-9.16%) and Citigroup (-6.25%) weighed on investor sentiment throughout the session which as a result saw the major averages endure heavy losses. There was little in terms of fresh news flow but worth noting that Apple (-0.62%) announced they are to give away a free case to help resolve antenna issues. Finally, at the closing bell DJIA closed down 2.52% at 10097, S&P 500 closed down 2.88% at 1064 and NASDAQ 100 closed down 2.84% at 1803. Apple –Co. CEO says co. will give everybody a free case to fix antenna problem and if the customer is not happy the company will refund iPhone within 30days. (RTRS)
UK
BP – A federal official said Sunday that scientists are concerned about a seep and possible methane seen near BP’s busted oil well. Both could be signs there are leaks in the well that’s been capped off for three days. The official spoke anonymously because an announcement about the next steps had not yet been made. (AP) -The board will meet this week to decide the first in a series of massive sell-offs to help pay for the expected GBP 45bln bill. Thursday’s meeting is expected to approve the sale of assets in Argentina, where it owns 60% of oil company Pan American Energy, a stake worth about GBP 3.5bln, and oil and gas fields in Vietnam, Columbia and Venezuela worth an estimated GBP 1bln. Also likely to be approved for sale will be assets in Alaska’s Prudhoe Bay, worth a further GBP 5bln. (The Mail on Sunday) Options also include splitting up the group by selling its refineries and petrol stations, scaling back its American operations and ramping up in-house engineering instead of outsourcing. (WSJ/NY Post).
-According to the Observer BP ordered the owner of the Deepwater Horizon rig to overhaul a crucial piece of the rig’s safety equipment in China. The blow-out preventer subsequently failed to activate and is at the centre of investigations into what caused the disaster. Experts say that the practice of having such engineering work carried out in China, rather than the US, saves money and is common in the industry. But if the BOP was found to have been modified incorrectly by a Chinese contractor, BP could be found liable for damages on its behalf. (Observer) – Co. says first half of August remains current estimate of most likely date by which first relief well will be completed. The cost of response to date amounts to approximately USD 3.95bln, and the well integrity test on the MC252 exploratory well continues. (RTRS)
International Power – Co. says it is in preliminary discussions with GDF Suez to create an enlarged International Power which would be listed on the official list. Co. expected that shares in International Power would be issued to GDF Suez. (RTRS)
British Airways – Co.’s chief executive Willie Walsh is expected to step up his search for a new partner to join the alliance with Iberia and American Airlines. Some analysts believe either Australia’s Qantas or Hong Kong based Cathay Pacific would make a suitable partner. (The Mail on Sunday)
US
Goldman Sachs – Co. may face a “headwind” for business in Germany even after a settlement with the SEC. (Handelsblatt) Co. is set to pay as much as 45% of its 2010 revenues to its staff in a move that is likely to reignite political anger with the investment bank just days after it settled a high-profile fraud case with American regulators. (Telegraph)
JPMorgan – Co. has raised serious concerns about its commitment to its new GBP 1.5bln European headquarters at Canary Wharf because of anger within the bank at the lack of support for the financial sector in the UK. CEO Dimon is understood to have doubts about investing so heavily in London when there is uncertainty about future costs that could be imposed on banks. Some sources said the bank was “on the verge” of quitting the development. (Telegraph)
Intel – Co. may be interested in buying a stake Cheng Uei precision industry company. (Economic Daily News)
Google – Co. shares could rise 35% according to Barron’s on bright prospects given its Android search engine, YouTube and strong brand. (RTRS)
Boeing - Dubai’s Emirates Airline will announce on Monday an order for more than 30 Boeing 777 jetliners, with a catalogue value of more than USD 7bln, according to a person familiar with the matter. (WSJ)
AIG – Co. is to pay USD 725mln to a group of Ohio pension funds to settle a six year old class action lawsuit over allegations of securities fraud – a decision that could force the bailed out insurer to raise more than USD 500mln in new equity. (FT)
Motorola – The sale of the USD 1.2bln wireless-network equipment business to Nokia Siemens Networks could be announced as early as today. (WSJ)
Europe
GERMANY
MAN – Co.’s commercial vehicles unit has returned to a profit and will probably post positive earnings for the full year. Source – (Handelsblatt)
Allianz – Co. may grow its business in Eastern Europe by making acquisitions. (Die Welt)
Volkswagen – Europe’s largest automaker, received a banking license in Russia to issue car loans. (Kommersant).
Deutsche Post – Rebates for corporate clients are being examined by Germany’s Federal Network Agency after complaints from competitors. (WirtschaftsWoche)
OTHER GERMAN COMPANIES
Deutsche Postbank – Deutsche Bank is pushing closer to a full takeover of listed local rival Postbank. (Euro am Sonntag)
FRANCE
Sanofi Aventis – Co. announced that Jevtana Injection is now available in the US for patients with metastatic hormone refractory prostate cancer previously treated with a docetaxel-based treatment regimen. The availability of Jevtana comes just one month following a priority test review and approval by the US FDA. (Sources)
GDF Suez – International Power says it is in preliminary discussions with co. to create an enlarged International Power which would be listed on the official list. International Power expected that shares in International Power would be issued to co. (RTRS)
AXA – National Australia Bank, takeover target AXA Asia Pacific and co. agreed to extend an USD 11.5bln acquisition agreement to Aug 31, signalling they were far from resolving regulatory obstacles. (RTRS)
EADS – Co. is expecting a bumper Farnborough air show with deals adding up to more than 100 planes during the week. (Sunday Times) Co. predicted that the group’s military business would become increasingly focused on markets in Asia, Latin America and the Persian Gulf and it hinted that the outsourcing of European aerospace jobs to those regions was all
Fears mounting of American double dip (Sunday Times) Worries about the American economy are replacing the Euro-Zone crisis as the biggest fear for markets. Weak US data has led to concern that it could be heading for a double dip.
The IMF wants to boost its lending resources to USD 1trl from USD 750bln in order to prevent future financial crisis, according to unnamed sources. (FT)
UK News
Rightmove House Prices (Jul) M/M -0.6% vs. Prev. 0.3%; Y/Y 3.7% vs. Prev. 5.0% (Sources) UK home sellers cut prices for the first time this year in July and will probably keep doing so for the remainder of 2010, according to Rightmove Plc.
BoE’s Sentance said a gradual interest rate increase from a record low to fight inflation will help support the economy. (BBC Radio 4)
US News
T-notes finished higher on Friday following a weaker than expected University of Michigan data. After touching on their best levels treasuries settled into range bound trade in what turned out to be a quiet end to the session. At the pit close t-notes finished up 13+ ticks at 123.06+. At 0630BST UST’s were trading up 2 ticks to 123.08+ as concerns over the health of the US economy linger after disappointing economic data last week.
China should cut its holdings of US Treasury securities when market demand is strong, according to Yu Yongding, a former academic adviser to the central bank and now a professor with the Chinese Academy of Social Sciences. (RTRS)
European News
Wen Pledges to back EUR saying that Europe remains a key market for China’s foreign-reserve investments and adding that China will keep its macroeconomic policies stable in the second half (WSJ)
Greece’s central bank governor Provopoulos said he expected a clean bill of health for the country’s banks adding that he is also optimistic about the country’s public finances. (Sunday Times/RTRS) In other news, Spain’s Cajas will get no nasty surprises with the releases of stress tests according to the director general of the Spanish Confederation of Savings Banks.
IMF says Greece making progress to put public finances on a sustainable path. (RTRS/Sources) IMF says Greek economy activity declining as expected with downturn expected to become more acute as year goes on. Says Greek state budget implementations on track, hospitals and social security funds present ‘clear risks’. Adds that Greek banks face continued liquidity pressures and some solvency erosion, buy plans are in place to deal with this.
Germany’s economy grew more than 1.5% in Q2, more than the governments forecast of 0.9%, citing an internal government estimate. (Der Spiegel) In other news, the country’s economics minister dismissed speculation that Germany would raise its value added tax as part of its wider efforts to overhaul the VAT system.
Asian News
Japanese market holiday.
Chinese Premier Wen Jiabao said China’s economy was responding appropriately to its stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand. (RTRS)
China’s exports are expected to grow about 16.3% Y/Y in the second half, with full year growth estimated at around 24.5%, according to country’s State Information Centre. (China’s Securities Journal/RTRS) In other news, China will maintain its tightening campaign to cool real estate prices, according to the Minister of Housing and Urban-Rural Development.
Forex
The IMF and EU have suspended a review of Hungary’s funding programme, meaning that the country will not have access to the remaining funds in its USD 25.1bln loan package until talks are concluded. (RTRS) Hungarian Forint (HUF) is already seen down about 2.4% vs. the EUR after IMF/EU talks failed.
Commodities
Oil prices fell below USD 76 a barrel overnight, extending the previous session’s decline, amid concerns about the US economic outlook after data showed consumer sentiment fell for the third month to a near one-year low. WTI crude futures were trading at USD 75.90, down USD 0.11, at 0622 BST. (RTRS)
BP plans to keep its Gulf of Mexico well sealed with a tight fitting cap until it permanently plugs the leak next month. (Sources) However, Engineers monitoring co.’s damaged well in the Gulf of Mexico detected seepage on the ocean floor that could mean problems with the cap that has stopped oil from gushing into the water, according to the US government’s top oil spill official. (RTRS)
Oil majors boost plans to expand Iraq oil output (WSJ)
Company News
Combination of soft economic data and unimpressive earnings from Bank of America (-9.16%) and Citigroup (-6.25%) weighed on investor sentiment throughout the session which as a result saw the major averages endure heavy losses. There was little in terms of fresh news flow but worth noting that Apple (-0.62%) announced they are to give away a free case to help resolve antenna issues. Finally, at the closing bell DJIA closed down 2.52% at 10097, S&P 500 closed down 2.88% at 1064 and NASDAQ 100 closed down 2.84% at 1803. Apple –Co. CEO says co. will give everybody a free case to fix antenna problem and if the customer is not happy the company will refund iPhone within 30days. (RTRS)
UK
BP – A federal official said Sunday that scientists are concerned about a seep and possible methane seen near BP’s busted oil well. Both could be signs there are leaks in the well that’s been capped off for three days. The official spoke anonymously because an announcement about the next steps had not yet been made. (AP) -The board will meet this week to decide the first in a series of massive sell-offs to help pay for the expected GBP 45bln bill. Thursday’s meeting is expected to approve the sale of assets in Argentina, where it owns 60% of oil company Pan American Energy, a stake worth about GBP 3.5bln, and oil and gas fields in Vietnam, Columbia and Venezuela worth an estimated GBP 1bln. Also likely to be approved for sale will be assets in Alaska’s Prudhoe Bay, worth a further GBP 5bln. (The Mail on Sunday) Options also include splitting up the group by selling its refineries and petrol stations, scaling back its American operations and ramping up in-house engineering instead of outsourcing. (WSJ/NY Post).
-According to the Observer BP ordered the owner of the Deepwater Horizon rig to overhaul a crucial piece of the rig’s safety equipment in China. The blow-out preventer subsequently failed to activate and is at the centre of investigations into what caused the disaster. Experts say that the practice of having such engineering work carried out in China, rather than the US, saves money and is common in the industry. But if the BOP was found to have been modified incorrectly by a Chinese contractor, BP could be found liable for damages on its behalf. (Observer) – Co. says first half of August remains current estimate of most likely date by which first relief well will be completed. The cost of response to date amounts to approximately USD 3.95bln, and the well integrity test on the MC252 exploratory well continues. (RTRS)
International Power – Co. says it is in preliminary discussions with GDF Suez to create an enlarged International Power which would be listed on the official list. Co. expected that shares in International Power would be issued to GDF Suez. (RTRS)
British Airways – Co.’s chief executive Willie Walsh is expected to step up his search for a new partner to join the alliance with Iberia and American Airlines. Some analysts believe either Australia’s Qantas or Hong Kong based Cathay Pacific would make a suitable partner. (The Mail on Sunday)
US
Goldman Sachs – Co. may face a “headwind” for business in Germany even after a settlement with the SEC. (Handelsblatt) Co. is set to pay as much as 45% of its 2010 revenues to its staff in a move that is likely to reignite political anger with the investment bank just days after it settled a high-profile fraud case with American regulators. (Telegraph)
JPMorgan – Co. has raised serious concerns about its commitment to its new GBP 1.5bln European headquarters at Canary Wharf because of anger within the bank at the lack of support for the financial sector in the UK. CEO Dimon is understood to have doubts about investing so heavily in London when there is uncertainty about future costs that could be imposed on banks. Some sources said the bank was “on the verge” of quitting the development. (Telegraph)
Intel – Co. may be interested in buying a stake Cheng Uei precision industry company. (Economic Daily News)
Google – Co. shares could rise 35% according to Barron’s on bright prospects given its Android search engine, YouTube and strong brand. (RTRS)
Boeing - Dubai’s Emirates Airline will announce on Monday an order for more than 30 Boeing 777 jetliners, with a catalogue value of more than USD 7bln, according to a person familiar with the matter. (WSJ)
AIG – Co. is to pay USD 725mln to a group of Ohio pension funds to settle a six year old class action lawsuit over allegations of securities fraud – a decision that could force the bailed out insurer to raise more than USD 500mln in new equity. (FT)
Motorola – The sale of the USD 1.2bln wireless-network equipment business to Nokia Siemens Networks could be announced as early as today. (WSJ)
Europe
GERMANY
MAN – Co.’s commercial vehicles unit has returned to a profit and will probably post positive earnings for the full year. Source – (Handelsblatt)
Allianz – Co. may grow its business in Eastern Europe by making acquisitions. (Die Welt)
Volkswagen – Europe’s largest automaker, received a banking license in Russia to issue car loans. (Kommersant).
Deutsche Post – Rebates for corporate clients are being examined by Germany’s Federal Network Agency after complaints from competitors. (WirtschaftsWoche)
OTHER GERMAN COMPANIES
Deutsche Postbank – Deutsche Bank is pushing closer to a full takeover of listed local rival Postbank. (Euro am Sonntag)
FRANCE
Sanofi Aventis – Co. announced that Jevtana Injection is now available in the US for patients with metastatic hormone refractory prostate cancer previously treated with a docetaxel-based treatment regimen. The availability of Jevtana comes just one month following a priority test review and approval by the US FDA. (Sources)
GDF Suez – International Power says it is in preliminary discussions with co. to create an enlarged International Power which would be listed on the official list. International Power expected that shares in International Power would be issued to co. (RTRS)
AXA – National Australia Bank, takeover target AXA Asia Pacific and co. agreed to extend an USD 11.5bln acquisition agreement to Aug 31, signalling they were far from resolving regulatory obstacles. (RTRS)
EADS – Co. is expecting a bumper Farnborough air show with deals adding up to more than 100 planes during the week. (Sunday Times) Co. predicted that the group’s military business would become increasingly focused on markets in Asia, Latin America and the Persian Gulf and it hinted that the outsourcing of European aerospace jobs to those regions was all