General News

US stock marketswent up, European stock markets’ benchmark index rose from a two-year low, American treasuries fell after French banks put to rest rumors that they had no access to financing, and investors for their part detected signs of progress in efforts to curb the debt crisis in the Euro zone. The Standard & Poor’s 500 Index went up 0.9% at 4:00PM in New York. The Stoxx Europe 600 Index increased 0.9%. Shares of Societe Generale SA, which added 8.1% a day earlier, increased 15% while BNP Paribas SA added 7.2% after a 12% drawdown. What helped stocks go back up again were the announcements by these banks that they were able to finance their operations. Yields on 10-year American bonds immediately rose four basis points to 1.99% and oil futures rose 2.3%. The MSCI Emerging Markets Index fell, continuing its drop from its peak so far this year to 20%. German newspaper Rheinishce Zeitung reported that Germany’s Minister of Finance...

Managers on the US money market, headed by Vanguard Group Inc and Legg Mason Group Inc, are cutting loans to French banks so fervently, that it may force these banks to increase their capital by selling stocks, said William Prophet, an analyst with Deutsche Bank Securities Inc. Meanwhile, Italian officials, led by Prime Minister Silvio Berlusconi, conducted negotiations with their Chinese colleagues about potential investments in the EU’s third-largest economy. Signs of the “Greek contagion” are threatening to infect Italy and have pushed yields on the country’s bonds to a record high since the Euro zone’s creation. Berlusconi’s government swiftly passed a 54 billion Euro austerity package through parliament to convince the European Central Bank to buy its debt. But DT Trading analysts note that over 60 billion Euros spent on buying up European bonds the past five weeks have not convinced investors to buy Italian bonds. American funds are reducing their shares in European banks amid fears that financial institutes...

Friday was “black” for European stock markets – the leading indices crashed 3-4% while the Milan stock market fell almost 5%. The panic attack among investors was instigated by European Central Bank executive board member Jurgen Stark’s resignation, which reflects the conflict among the bank’s leadership over buying up obligations from the Euro zone’s most troubled countries. Differences of opinion among Europe’s politicians about how to cope with the crisis are growing stronger. Because of this, market players are dumping shares of banks since they would suffer first in the event of a default in Greece or any other Euro zone country.  Shares of the French bank Societe Generale dropped 10% in one session; the Euro rolled back to settle at $1.37. America is also bringing investors some additional disappointments: Fed Chairman Ben Bernanke’s address didn’t reveal any concrete plans for preventing the recession in the country’s economy. In response, oil dropped to its lowest level of the week - a barrel...

President of the European Central Bank Jean-Claude Trichet announced at a press conference on Thursday that the Euro zone’s economic development will move at a much slower pace than had been predicted, while inflationary risks weakened for the medium term outlook. ECB economists revised their predictions on the Euro zone’s GDP growth downward. At the moment, ECB experts are expecting GDP growth in 2011 to be 1.4%-1.8%, although in June they had predicted 1.5%-2.3%; predictions on GDP growth for 2012 are currently 0.4%-2.2% versus June’s forecast of 0.6%-2.8% growth. Market players immediately took these announcements into consideration and directed them against the European currency, which lost more than 150 points against the US dollar after the start of the press conference. RoyalMaxBrokers experts noted that, while Trichet didn’t tell the market what it wanted to hear, he also didn’t signal that the central bank would refrain from raising the interest rate in the future. Trichet noted at the monthly press conference that...

Yesterday at an expanded session of Congress, US President Barack Obama expressed his disappointment with the national economy, a problem which is threatening his political career. He ordered Congress to pass a $447 billion plan to create jobs, tilted heavily toward the republican’s plan to lower taxes. Speaking before both houses of Congress, Obama demanded six times that lawmakers act “immediately” according to the plan which will increase spending on infrastructure, reduce the number of teachers who are approaching retirement age, and cut income tax paid by employees and small business owners twofold. “The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy,” Obama said to lawmakers yesterday. Employment growth ground to a halt while the unemployment rate has hovered at and above 9% for the past two years. The president’s approval ratings fell to a new low after US society’s doubts about his capability...

The falling of EU Manufacturing PMI of August below 50 in the contracting territory to 49 while the markets were waiting for 49.5 from 50.4 in July raised the markets worries about the growth outlook in the Euro zone showing its needs for stimulation while it's required currently from most of the Euro zone countries to implement governmental austerities plans cutting its spending and raising its taxes for improving their financial situation amid continued investors' concerns about the debt crisis in the Euro zone. These weak manufacturing data have come in line with the falling of Aug Germane IFO last week to 108.7 while the markets were waiting for from decreasing to 111.3 from 112.9 in June following the big drop of Aug EU ZEW to -40 while the consensus was referring to improving to -7.6 from -7 in July and also this week earlier release of EU consuming confidence index falling to -17 in August while it has been forecasted...

On the eve of publication of data on housing prices, DT Trading economists are predicting the biggest drop in a year ending in June, which assumes stagnation in the housing market and a continuing slow recovery in the US. According to the average estimate from 31 economists polled by Bloomberg, the S&P/Case-Shiller Home Prices Index in 20 cities dropped 4.6% since June 2010, which was the biggest drop in 12 months, since November 2009. Another report may show that consumer confidence fell in August to the lowest level in 10 months. It will probably only be possible to speak about a recovery in housing prices a few years from now, when the stream of cheap housing being offered as a result of unpaid mortgages finally dries up. The unemployment level is contributing more to the depressed situation on the housing market; it is hovering around 9%, while strict crediting regulations are painfully hitting borrowers’ pockets. DT Trading analysts explain that...

American treasury obligations increased in price, steadily moving to a record-high price last seen in December 2008. Yields on 10-year American government bonds fell 2 basis points and are currently at 2.16%. The Japanese yen appreciated in the morning after statistics coming out of the US showed that the Consumer Confidence Index in that country fell sharply. The MSCI Asia Pacific Index is sometimes in the positive zone, sometimes in the negative. American stock exchanges closed in the positive zone and futures on the major American indexes are also in the positive zone. Asian stock markets are so far winning back  positively from yesterday’s American trading session, although some export companies in the Asian region are under pressure from the negative reports coming out of the US and Europe yesterday. Europeans’ certainty in the economic situation dropped unexpectedly to a level not seen since December 2008. The indicator, which reflects the sentiment of managers and consumers in the Eurozone, fell to...

The heads of the world’s central banks gathered in Jackson Hole, Wyoming last week and seemed to agree that monetary policy itself cannot maintain global economic growth. Federal Reserve Chairman Ben Bernanke spoke in favor of adopting a “good, active housing program” in order to turn around the depressed US housing market and warned lawmakers against taking any moves that may negatively affect short-term growth. This statement seemed to refer to attempts by the Republicans in Congress to cut the budget proposed by President Obama’s democratic administration. Ewald Nowotny, member of the European Central Bank’s governing council, also sent a clear signal to Eurozone governments that they should broaden the authority of their regional financial aid funds. “A big part of the economic policy which supports stable economic growth in the long-term perspective is located outside the central bank’s authority,” Bernanke said. For his part, head of the European Central Bank Jean-Claude Trichet said that “there is huge potential to reform...

“Gold Cartel Trifecta And Another Temper Tantrum "They say the price of gas could soon be under $3 a gallon. Do you know what that means? You can now afford to drive by the house you used to live in, go by the job you used to have, and go see the bank where you used to have money." … Jay Leno GO GATA! Gold was on fire last night, rising to $1917 at one point. Then it began to drift off back to $1900. From thereon in it was all vintage Gold Cartel stuff. Gold began to plummet at 3 AM NY time (PLAN A). The AM Fix was $1886.50, with the PM Fix dipping to $1876. As soon as the PM Fix concluded, The Gold Cartel really went to work with one of their patented PLAN B attacks. Gold was pummeled down to $1852. With the kind of move gold has had, a correction such as this is quite normal. What is...