News10.net Futures Slip as Traders Digest Data, Earnings Fox Business As of 9:06 a.m. ET, Dow Jones Industrial Average futures fell 20 points to 13812, S&P 500 futures dipped 3.8 points to 1493 and Nasdaq 100 futures slumped 5.8 points to 2732.
EUR/USD Current price: 1.2585 View Live Chart for the EUR/USD The EUR/USD struggles around the 1.2600 level after Draghi gave the market what was leaked out yesterday. News are of a sterilized short term bond buying, with no rates or caps for yields.
Asian shares steady, growth worries limit gainsReutersAfter a deluge of weak data from several countries, topping with Friday's dismal Chinese trade and new bank loan figures, investors will be eyeing July U.S.
To people like grains analyst Robert Bresnahan, the U.S. Department of Agriculture took a big step on Wednesday toward restoring its credibility, which had been damaged by two years of volatile data and far-off forecasts...
-CHICAGO, July 11 (Reuters) -
The USDA, often criticised for making modest, incremental monthly adjustments to its crop forecasts that fail to reflect real conditions, cut its forecast for the drought-damaged U.S. corn crop by 12 percent, far more than analysts had expected, yet in line with what many of them believe is probably right.
The cut may not be enough to wipe away the memory of volatile stockpile reports and "fuzzy math" forecasts that have roiled the market and infuriated many traders, but it may help temper a growing view that the world's gold standard in grain fundamentals had lost its Midas touch.
"It was a major stand to regain some credibility," said Bresnahan of Trilateral Inc In Chicago. "Money managers are going to pay a lot closer attention to them now."
Cutting its yield estimate put the USDA almost on par with some of the private crop forecasters that have sprung up to satisfy the demand for data from deep pocketed money managers and other investors who have turned to grains to diversify their assets.
Weather-related crop failures in Russia, Australia and other major grains producers have fueled rallies at the Chicago Board of Trade, the global citadel for grains trading, netting windfalls for those with access to accurate data.
The first USDA report to cause a ruckus was issued on June 30, 2010. The agency's estimated quarterly corn stocks came in 288 bushels below the average forecast, kicking off a rally that took prices to a record $7.99-3/4 a bushel last June.
In an accompanying report on the same day, the USDA forecast of how many acres would be planted with corn in the United States was 1.35 million acres less than expected in a survey of analysts, a bullish factor for prices.
In the next quarterly report on Sept. 30, 2010, the USDA revised up its estimate of U.S. corn stocks by nearly 300 million bushels more than the average estimate of traders.
CONSERVATIVE APPROACH ABANDONED
Many traders had expected the USDA to maintain on Wednesday its traditionally conservative approach to adjusting its estimates, despite weeks of evidence that the worst drought in a quarter-century was inflicting serious damage on the corn crop.
Instead, the USDA cut its yield estimate by an unprecedented 20 bushels to 146 bushels per acre, sending Chicago Board of Trade corn futures up more than 3 percent. Prices ended lower when weather bureaus forecast rain.
Econ 201: Everything You Need to Know about GoldBig ThinkIn the aftermath of the 2008 economic crisis, Ron Paul's suggestion that we implement the gold standard, tying each dollar of US currency to 1$ worth of gold.
Daily MailBarclays trading floor's culture of fear 'led to staff rigging interest rates'Daily MailA former senior employee has claimed it is 'impossible' that reports of Libor fixing were not reported up to ex-chief executive Bob Diamond (pictured)...
Winnipeg Free PressTSX dips on central bank moves; awaits US jobs dataReutersTSX ends down 96.96 pts, or 0.8 pct, at 11816.91 * Energy shares lead losses; SXC falls 6 pct * ECB, China, BoE moves fail to lift market * Traders look to Friday's U.S.
Weekly Review: Major indexes closed mixed last week, but the overall market tone was negative despite some indexes managing small gains...
The 30 point loss in the S&P 500 index last Thursday, with a coincident decline of more than 250 points in the Dow Jones Industrial Average, could prove to be the defining moment of the short-term advance that followed the June 4 Minor Cycle lows (1266.74—S&P 500). We say that not only because index pricing faded sharply after reaching our upside measured move target (1360—S&P 500) twice last week, as calculated from that same June 4 bottom, but because it also underscored apparent weakness on the larger Intermediate Cycle which may still take center stage in the weeks just ahead. In other words, there are once again bearish rumblings in the wings.
Market Consensus before announcement The Reuter's/University of Michigan's consumer sentiment index in June fell 5.2 points to 74.1, putting the index at a 2012 low. The latest sentiment report was for the first two weeks of this month and it showed sharp weakness in expectations, down 5.4 points to 68.9 and another 2012 low, and nearly as sharp weakness in current conditions, down 5.1 points to 82.1 which is yet another low for this year...
Definition The University of Michigan's Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. Among economic reports, consumer sentiment refers to the Michigan survey while consumer confidence refers to The Conference Board's survey.
Yahoo! News (blog) Futures take a rest after extended run to 1500 U.S. News & World Report NEW YORK (AP) — Stock futures are heading lower after the Standard & Poor's 500 index ended an eight-day positive streak, the longest in eight years.
Debt crisis: ECB buying Spanish and Italian debt 'makes no sense' says Belgian bank governor. Mr Coene said that the central bank's efforts to calm markets last summer with around €135bn of additional debt purchases on the secondary ...
Thursday is jobs day in the U.S., with initial unemployment claims expected at 8:30 a.m. Key monetary policy reports from South Korea and the ECB will drive markets overnight. Here's what you need to know.
The E-Mini S&P 500 (ESU2) dropped hard on disappointing jobs numbers.
The forecasts for the US Unemployment report were +90,000 to +125,000.
Yesterday, the US Initial Jobless Claims decreased 14,000 to a seasonally adjusted 374,000. The number of extended benefits decreased 12,113 to 47,425 as of June 16th...
The US ADP National Employment Report on private sector jobs added +176,000 up from the forecasts of +105,000. Note the US economy must create at least 125,000 per month to keep the unemployment rate on an even keel. The US economy grew at a 1.9 % annual pace in the first quarter of 2012. When today's US Unemployment came in +80,000, the market tumbled! Perhaps if it was worse, the investors may think that QE3 was on the table, but it simply may be not enough to move the Fed. Some traders may still feel that the data may fuel further thoughts of QE3. The Unemployment rate remains at 8.2 %. The average hourly earnings did increase 6 cents to $23.50 and the average work week increased to 34.5 hours. The next US Federal Open Market Committee meeting is slated for July 31st through August 1st. At the last Federal Open Market Committee meeting, Operation Twist was extended to the end of the year with an added $267 billion added in bond purchases. The market was disappointed with the move still hoping for a QE3! The central bank has purchased $2.3 trillion in government debt to keep borrowing costs down and stimulate the economy.
Monday, the forecast for the US Federal Reserve Consumer Installment Credit is forecast at 11.50 billion in May after the previous 6.50 billion reading. This may be due to an increase in auto purchases and student loans. Monday, we also kick off earnings season with Alcoa reporting!
Trading volume should increase as traders return to the markets after the 4th of July holiday week.
Crude Oil Weekly Technical Outlook Crude oil faced strong resistance below 38.2% retracement of 110.55 to 77.28 at 89.99, formed a temporary top at 88.98 and retreated sharply last week. Initial bias remains neutral for ...
S&P 500 technical positioning hints the benchmark stock index may be readying a reversal downward while the US Dollar is drifting cautiously higher.
THE TAKEAWAY: S&P 500 technical positioning hints the benchmark stock index may be readying a reversal downward while the US Dollar is drifting cautiously higher. S&P 500 – Prices took out resistance at 1363.90 but overall positioning now appears to be tracing out a Rising Wedge chart pattern, a setup indicative of forthcoming bearish reversal. A Doji candle at the would-be Wedge top warns of ebbing bullish momentum, hinting the move lower might be ready to commence. The 1363.90 level has been recast as support, with a turn lower from here initially exposing the 1334.40-41.90 area anew. Alternatively, a break upward targets 1392.10.
Banks in Europe and China announced measures to address concern about waning economic growth, a response that was all the more striking because it was uncoordinated...
WASHINGTON — Concerned about waning economic growth, central banks in Europe and China announced measures Thursday to increase borrowing and spending by businesses and consumers, a response that was all the more striking because it was uncoordinated.
Three major central banks announced policy changes in the space of an hour. China’s central bank unexpectedly cut regulated bank lending rates for the second time in four weeks. The European Central Bank cut its benchmark interest rate to 0.75 percent, the lowest level in its 14-year history. And the Bank of England announced it would expand its holdings of government bonds
Stocks were mostly higher Monday, rebounding from earlier losses after a shockingly bad report on U.S. manufacturing showed that sector contracting in June for the first time in three years. Futures are flat Tuesday morning.
A STAMP collection in Berlin’s German Historical Museum sums up what, to many Germans, is the price of economic recklessness...
A Weimar-era postage stamp worth five pfennigs in 1920 doubled in price the following year, then jumped to ten marks in 1922. It cost 30 marks in January 1923, 1,000 marks in May and 800,000 marks in October. By the end of 1923, sending a letter took ten billion marks. Next to this “document of an insane era”, the museum shows how worthless banknotes were defaced by Nazis with caricatures of Jewish speculators. It was at the height of hyperinflation, explains the display, that Hitler staged his failed Munich beer-hall putsch.
The moral is clear: profligacy leads to economic chaos, political extremism and ultimately to catastrophe for all of Europe. For today’s Germans, prosperity and democratic order must be based on sound money. The German chancellor, Angela Merkel, is in tune with this domestic mood when she insists that the euro zone must embrace a culture of financial stability if it is to overcome its debt crisis.
But is she drawing the wrong lessons from history? It was not hyperinflation in the 1920s but depression and mass unemployment in the 1930s that propelled Hitler to power. Like the hapless Weimar chancellor, Heinrich Brüning, Mrs Merkel is accused by critics of hastening disaster by pushing austerity during a deep recession. But whereas the 1930s is seared in American memory, it is less clearly remembered in Germany. The reason, says Professor Carl-Ludwig Holtfrerich of the Free University of Berlin, is that Germany returned to full employment more quickly, thanks partly to Hitler’s own form of Keynesian stimulus: notably autobahn-building and rearmament.
The prospect of a 1930s-like breakdown now is perhaps most palpable in Greece. In the fifth year of recession, Greeks chose in May to vote in large numbers for the extreme left and right, punishing mainstream parties that supported the austerity and reforms which came as conditions of the country’s bail-out. Even in the best scenario, in which centrists return to power in this weekend’s second election, a “Grexit” might only be delayed. And once the idea takes hold that a euro member can be pushed out, nobody knows where it will stop.
Contagion from Greece has clearly spread to Spain, which this week was promised up to €100 billion ($125 billion) in euro-zone loans to prop up its crippled banks. If Spain is touched, Italy is sure to follow and France may not be so far behind. As one observer in Berlin puts it, Germany’s real fear is not that the euro zone unravels to the Alps, but that it collapses all the way up to the Rhine. That is an existential threat for Germany, not just economically but also politically; its post-war rehabilitation and prosperity is built on reconciliation with France and deeper European integration.
The mood in the chancellor’s ultra-modern offices, opposite the reconstructed Reichstag, is a mix of scorn, gloom and outrage at being misunderstood by the world. The plea from America, much of Europe and even from Germany’s opposition parties is for Mrs Merkel to act decisively to save the euro, starting at the European summit at the end of June. To stop a run on banks, there needs to be a “banking union”, including a Europe-wide system to guarantee bank deposits, a fund to wind up troubled banks and the use of rescue funds to recapitalise them. To stop the run on sovereigns, there should be some kind of joint Eurobonds partly to mutualise debt.
That the charge is being led by France, under its new Socialist president, François Hollande, is the cause of huge irritation in Berlin. Germany is being asked to stand fully behind the euro. Its already large (though circumscribed) liability in the euro zone, through bail-outs to individual countries, could become something like an unlimited liability for the public and private debts of others. This is not what Mrs Merkel means when she talks, with increasing fervour, of the need for “more Europe”.
Under pressure, Mrs Merkel may be ready to consider hitherto unthinkable steps, including transfers to the neediest countries and European-level taxes. But before pooling liabilities Germany wants to pool control of economic policies. How could German taxpayers stand behind French debt when Mr Hollande is reducing, not raising, the pension age for some workers to 60? France may demand a “growth compact” to balance the “fiscal compact”. But for Germany this treaty to toughen fiscal rules is only the start of integration. It wants tougher European supervision of big banks (perhaps by the European Central Bank), commitments to boost competitiveness, and perhaps harmonised taxes. All this must go with progress towards “political union”: the European Commission acting more as a European government, with a stronger European Parliament holding it to account. Then, and only then, might Germany talk about sharing its credit card.
Back to the museum?
The refrain in Berlin is that European leaders like to talk of mutualising national liabilities, but hate to discuss sharing national sovereignty. As a federal state, Germany can easily imagine shifting powers to Brussels. But such ideas will test France, where the Fifth Republic gives the president huge power. Such fundamental changes would also require a rewriting of European treaties and perhaps even a new German constitution.
The danger is that the euro may be gone before all this can be done. Faced with the impossible choice of presiding over the chaos of the euro’s demise or guaranteeing trillions of euros’ worth of debt, Mrs Merkel can be forgiven for trying to muddle through. But if Europe’s single currency became a museum curiosity, history would judge Mrs Merkel a failure, a bit like Mr Brüning.
Highlights The alarm you hear is the Philly Fed's monthly report where contraction is gripping the Mid-Atlantic manufacturing sector this month. The general business conditions index shows contraction for a second month and, at a minus 16.6 level, much more severe contraction than May's minus 5.8, a reading that in itself was a shock. High mid-teen negative readings sweep the details including new orders, unfilled orders, shipments, deliveries, and the workweek. Employment shows very slight growth but follows slight contraction in the prior month. Price pressures are going into reverse as oil eases and overall demand eases....
Indications on the manufacturing sector have been mixed with hard data weak vs strength in anecdotal data. But this anecdotal report joins the hard data to signal that the manufacturing sector may have a slow summer.
Market Consensus before announcement The general business conditions index of the Philadelphia Fed's Business Outlook Survey for May dropped to minus 5.8 from plus 8.5 in April. New orders were discouraging as the index fell 3.9 points to minus 1.2, indicating mild contraction for May.
Definition The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production. Why Investors Care