Wednesday, 2 June 2010

Market brief 2/6: US upbeat, EU down but positive economic news, Asia looks mixed

Mỹ: bắt đầu có tín hiệu lạc quan (không như The Economist dọa "Fear returns, how to avoid double dips - As I believe, market changes everyday)

U.S. equities rebounded after yesterday’s drop dragged benchmark indexes to near three-month lows. Stocks extended gains in the morning as pending sales of existing homes rose to the highest level since October as buyers took advantage of a tax credit. The S&P 500 jumped to its session high in the final hour as bank stocks rallied after Bank of America and Wells Fargo & Co. reported signs of improving credit markets.

We’re in an oversold market plus we have economic data such as U.S. home sales coming out ahead of expectations,” said Hank Smith, who helps oversee $6 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “The fundamentals are improving, notwithstanding the problems in the banking system in Europe.”

Người ta bắt đầu "form exuberance"

“There’s a V-shaped economic recovery going on,” James Swanson, chief investment strategist at Boston-based MFS Investment Management, which oversees about $197 billion, said on a conference call today. “The European bank crisis does not have the scale and scope of Lehmann and AIG and it doesn’t have the ingredients to bring down the banking system.”

An S&P gauge of homebuilders rallied 2.3 percent, with D.R. Horton Inc., Pulte Group Inc. and Toll Brothers Inc. pacing gains in all 12 companies in the index.

The index of pending home resales rose 6 percent, exceeding the median forecast of economists surveyed by Bloomberg News, following a revised 7.1 percent gain in March, the National Association of Realtors said. A plunge in mortgage applications signals sales will soften in subsequent months following the April 30 deadline to sign contracts and obtain as much as $8,000 in government assistance.

‘Positive Backdrop’

“This data is still very much influenced by the expiring $8,000 tax credit but even so the sustained recovery in activity is a credible indicator of a repair to the psyche of the existing and new home markets,” Michael Shaoul, chief executive officer of Oscar Gruss & Son Inc. in New York, wrote in a note to clients. “Low interest rates, moderate home prices and improving employment represent a positive backdrop for the housing market.”

Nhưng phải công nhận kinh tế Mỹ nhìn khả quan nhất trong các nền kinh tế lớn hiện nay. Đơn giản, nó đi lên từ đáy.

Tin kinh tế châu Âu tiếp tục khá

On the economic front, U.K. construction activity increased for the third consecutive month in May. The Markit /Chartered Institute of Purchasing & Supply/construction purchasing managers' index rose to 58.5 in May from 58.2 in April. This marks the highest level for the headline PMI since September 2007. A rise in new orders drove the increase in activity and also led to an increase in employment. All three of the construction sectors registered growth during May.

A report released by the Bank of England showed that the number of loans approved for house purchases in the U.K. totaled 49,871 in April, higher than the March’s 49,008. Economists had expected the number of approvals to be 49,500. Total net lending to individuals rose by 0.4 billion pounds in April compared to a 0.3 billion pound increase in March. The twelve-month growth rate was unchanged from a revised 0.8% rate for March.

Eurostat reported that producer prices in the eurozone jumped sharply in April, with the index rising 2.8% in April compared with the previous year. That was slightly above analyst forecasts for a 2.6% gain after the 0.9% increase in March.

Nhưng thị trường châu Âu vẫn mất điểm

The major European averages are trading lower on Wednesday following a mixed performance in yesterday’s session. The major averages opened lower and are seeing further losses, with the French CAC 40 Index and the German DAX Index receding 0.79% and 0.61%, respectively, while the U.K.’s FTSE 100 Index is declining 1.08%.

Châu Á

Mixed trading was witnessed across Asia with the markets in China, India, and Singapore having ended in positive territory, while the markets in Australia, Japan, Hong Kong and Taiwan ended in negative territory with modest losses amid concerns about global economic recovery.

Gold: Profit taking

Gold’s eight-day run to near the $1230 area appeared to run into a bit of profit-taking overnight as the euro stopped crumbling. At the same time, not much was given up in values as apprehensions about European bank writedowns remained visible. The Economist features a cover that looks much like a poster for the next installment of the movie “Jaws” and the title “Fear Returns” right on top of it.

This level of fear was also reflected in the lowest yields on two-year Treasurys in a week, which indicated a continuing flight to safety amid fears that Europe might tip certain economic recoveries into a double-dip. To wit, copper prices fell for a third day as the ideas that China is indeed slowing, Europe could fall back into a stall, and the US is still not fully back on track took hold among speculators.

However, it is not just the Chinese economy that is being questioned by global investors as we round the corner into the upcoming second half of 2010. Certainly not if judged by the latest collapse of the commodities’ sector. In fact, the single biggest slump in commodities’ prices since the time of the Lehman Brothers Holdings Inc. implosion is fast making mincemeat out of bullish forecasts not only for accelerating economic growth but also for higher prices for ‘stuff’ – basically, everything from copper to crude oil.

While the OECD (as we reported here) raised its global growth forecasts for 2010, worried investors who loaded up on oil heavily and drove copper prices to a doubling in values in 2009 are now bailing out of their commodities’ positions at the fastest clip in recent memory. Shades of the summer of 2008 being replayed in the (soon to come) summer of 2010 are unmistakable.

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