Tuesday, 24 January 2012

Euro, S&P 500 Futures Drop Amid Debt Crisis; Natural Gas Climbs

Bloomberg on line !!

"Jan. 24 (Bloomberg) -- The euro fell from the highest level in almost three weeks, while U.S. equity futures declined and Japan’s stocks rose as investors weighed Europe’s efforts to tame the debt crisis. Bond risk in Australia and Japan dropped to the lowest since October.

The euro retreated 0.2 percent to $1.2994 as of 11:55 a.m. in Tokyo after climbing 0.6 percent yesterday. The Australian dollar weakened against 15 of its 16 counterparts. The Nikkei 225 Stock Average advanced 0.4 percent, while Standard & Poor’s 500 Index futures slid 0.3 percent. The MSCI Asia Pacific Index was little changed. Natural gas climbed after surging 7.8 percent yesterday. Treasuries held four days of declines.

Markets in China, Hong Kong, South Korea and Singapore are shut for the Lunar New Year holiday. Germany floated the idea of combining Europe’s two rescue funds yesterday, a concession to bolster the fight against the fiscal crisis as regional finance ministers balked at putting up more public money for Greece. India’s economic growth outlook has weakened and inflation remains elevated, the nation’s central bank said on Jan. 23, signaling it may leave interest rates unchanged today.

"The market has gotten used to developments in Europe," said Naoteru Teraoka, a general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $29.9 billion. "Investors are expecting things won’t get worse after they priced in negative factors."

U.S. Earnings

Apple Inc., McDonald’s Corp. and Johnson & Johnson are among U.S. companies scheduled to report quarterly results today. Earnings topped estimates at about 65 percent of the 52 companies in the S&P 500 that released results since Jan. 9, data compiled by Bloomberg show.

The 10-year Treasury yield was little changed at 2.05 percent. The Federal Reserve begins a two-day policy meeting today after which it will provide forecasts for the benchmark interest rate for the first time.

About the same number of stocks rose and fell in the MSCI Asia Pacific Index, which has rallied 6.4 percent this year. The gauge trades at 12.7 times estimated profit, 24 percent less than the six-year average, data compiled by Bloomberg show.

Elpida Memory Inc. advanced 2 percent for a sixth day of gains. The Japanese chipmaker is in talks with Micron Technology Inc. and Nanya Technology Corp. for a three-way merger, the Yomiuri newspaper reported, without saying where it got the information.

Purchasing Managers

Data later today may show a euro-area composite index based on a survey of purchasing managers in both manufacturing and services industries rose to 48.5 this month from 48.3 in December, according to the median economist estimate from a Bloomberg survey before the report from Markit Economics is released. That would be the fifth monthly reading below 50, indicating contraction.

Oil fluctuated below $100 a barrel in New York, failing to extend yesterday’s gain, as speculation U.S. supplies rose last week countered concern Iran will respond to a European ban on its crude exports by shutting the Strait of Hormuz. Crude for March delivery was little changed at $99.55 a barrel in electronic trading on the New York Mercantile Exchange.

Natural gas rose a third day in New York after Chesapeake Energy Corp., the second-largest U.S. producer, said it will cut production and reduce spending. The contract surged 7.8 percent yesterday, rebounding from a 10-year low on Jan. 19.

The cost of insuring corporate bonds in Australia and Japan against non-payment decreased, according to credit-default swap traders. The Markit iTraxx Australia index fell 5 basis points to 157, according to Westpac Banking Corp. The Australian benchmark slid to 157 basis points yesterday, its lowest level since Oct. 28, according to data provider CMA prices in New York. The Markit iTraxx Japan index declined 3.5 basis points to 168, Citigroup Inc. prices show. That’s on course for its lowest level since Oct. 31, according to CMA.



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Steven Morris CA (SA)
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