The euro strengthened above $1.35 for the first time since 2011, metals gained and Treasuries fell as the Federal Reserve meets and European economic confidence rose more than estimated this month. European stocks declined from a 23-month high.The euro appreciated 0.5 percent to $1.3553 at 6:20 a.m. in New York, while the yen declined against all but one of its 16 major peers. Nickel advanced 1.6 percent and zinc climbed 1.7 percent, leading commodities to a three-month high. The Treasury 10-year yield climbed two basis points to 2.02 percent. The Stoxx Europe 600 Index slipped 0.4 percent, while Standard & Poor’s 500 Index futures swung between gains and losses. Amazon.com Inc. (AMZN) jumped 9.3 percent after reporting gains in sales and North American operating margins.Enlarge image
South Korea won notes are arranged for a photograph in Seoul, South Korea. Photographer: SeongJoon Cho/Bloomberg
6:45Jan. 30 (Bloomberg) -- Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd., discusses the euro, yen and potential impact of tighter Federal Reserve monetary policy on currency markets. He talks with Mark Barton and Caroline Hyde on Bloomberg Television's "On the Move." (Source: Bloomberg)
5:22Jan. 30 (Bloomberg) -- Nick Nelson, a strategist at UBS AG, discusses his stock recommendations and the outlook for U.S. and European banks. He speaks with Francine Lacqua on Bloomberg Television's "On the Move." (Source: Bloomberg)Enlarge image
Euro banknotes of various denominations are arranged for a photograph in Soka City, Saitama Prefecture, Japan. Photographer: Kiyoshi Ota/BloombergThe Fed’s latest round of bond buying will reach $1.14 trillion before it ends the program in the first quarter of 2014, economists forecast in a Bloomberg survey. The U.S. will report fourth-quarter economic growth today before monthly payroll data on Feb. 1. An index of executive and consumer sentiment rose to 89.2, surpassing the 88.2 reading forecast in a Bloomberg survey, the European Commission said today.“The world is shifting from fear to hunt for opportunity,” said Neil Jones, head of European head of hedge- fund sales at Mizuho Corporate Bank Ltd. in London. “Slowly but surely, economic data in the euro zone is going in the right direction and the numbers today were encouraging. The euro is leading the way today.”Euro Gains
The euro advanced for a second day against the dollar, reaching $1.3563, the highest level since November 2011. It appreciated to 85.99 British pence, the strongest since Dec. 7, 2011. Against the yen, Europe’s shared currency rose 1.1 percent.The yen weakened 0.7 percent to 91.33 per dollar, taking its January loss to 5 percent. That would be a fourth monthly decline, the longest losing streak since 2008. It reached 91.41 yen per dollar today, the weakest level since June 2010.South Korea’s won retreated 0.3 percent against the dollar after Deputy Finance Minister Choi Jong Ku said taxes on currency trading and bonds should be considered to help limit “speculative” inflows. The Israeli shekel slipped less than 0.1 percent after Stanley Fischer said yesterday he will step down as central bank chief in June.U.S. Treasuries dropped for a fifth day, the longest run of declines since August. Singapore bonds also fell, pushing 10- year yields nine basis points higher to 1.48 percent.The yield on Italy’s 10-year note rose five basis points to 4.22 percent as government sold 3 billion euros ($4.1 billion) of 2017 notes and 3.5 billion euros of bonds due in 2022.Metals Climb
The S&P GSCI gauge of 24 commodities climbed 0.3 percent to the highest since Oct. 11. Zinc, nickel, aluminum and copper rose at least 1.4 percent. Oil gained 0.3 percent to $97.84 a barrel. Palladium rose to a 16-month high. U.S. natural gas increased 0.9 percent, the first advance for the most-active contract in seven sessions.The Stoxx 600 retreated as oil-services companies tumbled after Italy’s Saipem SpA (SPM) cut its profit forecast. Saipem lost 35 percent. Petrofac Ltd. sank 5.6 percent in London trading, Technip SA retreated 6.4 percent in Paris and Subsea 7 SA declined 5.7 percent in Oslo.Imperial Tobacco Group Plc sank 4.8 percent as Europe’s second-biggest tobacco company said earnings will drop because of worsening conditions in Europe. Swedbank AB jumped 7.9 percent after raising its dividend payout ratio to 75 percent of profit as fourth-quarter net income more than quadrupled.Best Start
The S&P 500 extended its best start to a year since 1989 as profit beat the average analyst estimate at 76 percent of the 180 companies in the index that posted results so far this reporting season. The gauge, which has rallied 5.7 percent in 2013, is less than 4 percent below its record of 1,565.15 set in October 2007, while the Dow Jones Industrial Average is less than 2 percent from its all-time high.Amazon gained as the world’s largest Internet retailer said fourth-quarter sales climbed 22 percent to $21.3 billion. Operating margin in North America widened to 5 percent from 2.9 percent a year earlier.Data today is forecast to show U.S. economic growth slowed to 1.1 percent on an annualized basis in the fourth quarter, according to the median estimate in a Bloomberg survey. Expansion was 3.1 percent in the three months ended Sept. 30.Employers added 161,000 workers to payrolls in January after a 155,000 December increase, according to the median estimate of economists in a Bloomberg survey before the Feb. 1 Labor Department report.http://www.bloomberg.com/news/2013-01-30/asian-stocks-rise-for-second-day-as-won-strengthens-oil-falls.htmlEconomy Probably Slowed as U.S. Spending Gain Drained Stockpiles
The U.S. economy probably grew in the fourth quarter at the weakest pace in almost two years as a pickup in spending drained inventories and exports slumped, economists said before a report today.Gross domestic product rose at a 1.1 percent annual rate, down from a 3.1 percent gain in the prior three months and the least since the first quarter of 2011, according to the median forecast of 83 economists surveyed by Bloomberg. Consumer purchases, the biggest part of the economy, probably accelerated.Enlarge image
Record-low mortgage rates are aiding a rebound in residential real estate. Combined sales of new and previously owned properties last year rose 9.9 percent, the biggest annual gain since 1998. Photographer: Sam Hodgson/Bloomberg
5:36Jan. 29 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group Inc., talks about the drop in U.S. consumer confidence in January, the outlook for Federal Reserve monetary policy and the global economy. He speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "Market Makers." (Source: Bloomberg)Bolstered by a drop in fuel prices and rising incomes, households overcame superstorm Sandy, a bitter presidential contest and Washington budget battles. The gain in spending may be difficult to sustain this quarter as a tax increase takes a bigger chunk from paychecks, one reason why Federal Reserve policy makers, meeting today, are projected to press on with plans to pump money into the world’s largest economy.“It’s the story of a moderately growing economy,” said Michael Gapen, a New York-based senior economist at Barclays Plc and former Fed economist. “The modest-growth environment will keep the Fed on its current plan.”The Commerce Department’s report is due at 8:30 a.m. in Washington. Economists’ estimates for GDP, the volume of all goods and services produced in the U.S., ranged from 0.3 percent to 2.1 percent.At 8:15 a.m., figures from the Roseland, New Jersey-based ADP Research Institute may show companies added 165,000 workers to payrolls in January following a 215,000 gain the prior month, according to the Bloomberg survey median.
A U.S. flag is displayed on top of a Ford Motor Co. vehicle displayed for sale on the lot at Golf Mill Ford car dealership in Niles, Illinois. Photographer: Tim Boyle/BloombergGross domestic product dropped at a 0.1 percent annual rate, weaker than any economist forecast in a Bloomberg survey and the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession, Commerce Department figures showed today in Washington. A decline in government outlays and a smaller gain in stockpiles subtracted a combined 2.6 percentage points from growth.Rising auto sales led the advance in consumer spending last quarter as a drop in fuel prices and the largest income gain in four years enabled the biggest part of the economy to overcome superstorm Sandy and Washington budget battles. Little inflation and a stop-and-go expansion are why Federal Reserve policy makers, who wrapped up a two-day meeting today, pressed on with plans to pump more money into financial markets.“I’m not going to say growth is particularly strong, but this is not a recessionary signal by any means,” said Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, Massachusetts, whose team projected a 0.3 percent gain, the lowest in the Bloomberg survey. “This really was a story about a payback in national defense spending. Consumer- spending growth picked up, fixed investment was fairly strong.”Stocks fell, dragging benchmark indexes from five-year highs. The Standard & Poor’s 500 Index declined 0.4 percent to 1,501.96 at the close in New York.
The chart clearly shows that both Stillwater and North American Palladium (PAL) have an ideal mix of revenue streams to benefit from the ongoing surge in demand for both platinum and palladium. Also, North American Palladium has sizable exposure to gold, which means that it can also benefit from an unexpected rise in gold prices in the future (The market is currently bearish on gold, which means a decline in gold prices has already been factored into the stock).The Street estimates Stillwater to post EPS of 5 cents on revenue of $216 million. The company is expected to report on Feb 18.Page 1 of 2Next >>See All
The EPA yesterday called for a mandate of 16.55 billion gallons for renewable fuels. Photographer: Daniel Acker/Bloomberg
Fermentation tanks stand at the Mid Missouri Energy ethanol plant in Malta Bend, Missouri. Photographer: Patrick Fallon/Bloomberg“Following a number of high-profile RIN fraud cases, EPA expects its rulemaking to improve the overall liquidity in the RIN market and in particular make it easier for smaller renewable fuel producers,” the agency said in a statement.A 2007 federal law requires that refiners such as Exxon Mobil Corp. (XOM) blend certain amounts of renewable fuels with gasoline each year, with the amount determined by their share of the fuel market. Instead of producing the fuels themselves, refiners can buy credits, or RINs, from other producers to fulfill their obligations.Under the proposal issued yesterday, purchasers of the renewable-fuel credits would have them verified through third- party audits. The rule would also specify the conditions under which invalid RINs must be replaced, and by which party would be responsible to pay.
Pimco's Bill Gross wrote, “The countdown begins when investable assets pose too much risk for too little return.” Photographer: Tim Boyle/BloombergThe record monetary stimulus of the Federal Reserve, triggering near-zero interest rates, has crippled savers and prior business models that were based on a positive real return, he said. Real growth of the economy has suffered in the process as net interest margins at banks fall, insurance companies struggle to make returns and pension funds are increasingly underfunded.Investors should position for eventual inflation as the “end stage of a supernova credit explosion” is likely to produce more inflation than growth by holding Treasury Inflation Protected Securities, Gross wrote. “Get used to slower real growth; QE and zero-based interest rates have negative consequences. Move money to currencies and asset markets in countries with less debt and less hyperbolic credit systems” such as Australia, Brazil, Mexico and Canada.Following the end of it two-day rate-setting meeting yesterday, the Federal Open Market Committee kept its debt purchasing, in its latest quantitative easing program, at the rate of $85 billion a month. The Fed is purchasing $40 billion a month of mortgage bonds and $45 billion a month of Treasuries. The Fed has held its target rate in a range of zero to 0.25 percent since December 2008.
Home prices fell 0.4 percent across Australia’s eight major cities in 2012, to an average of A$483,000, after dropping 3.8 percent the previous year, according to the RP Data-Rismark home value index. Photographer: Ian Waldie/Bloomberg
The Mirvac Group logo is displayed on a crane at the construction site of a residential apartment block, left, in Sydney. Photographer: Ian Waldie/BloombergStockland (SGP), Australia’s biggest residential developer, is giving rebates and gift cards of as much as A$30,000 ($31,300) in Victoria, Queensland and New South Wales states. Devine Ltd. (DVN) is matching deposits in South Australia and taking over mortgage payments for as long as a year in Melbourne. Peet Ltd. (PPC) has been offering discounts of as much as A$50,000 in Western Australia, Queensland and Victoria.Central bank interest rate cuts of 1.75 percentage points since November 2011 have failed to spur housing demand amid slowing job growth. New home sales in December were 6.6 percent below the level of a year earlier, and loan approvals to build or buy new homes the same month were 31 percent below an October 2009 peak.“The discounts this time ’round are bigger than we’ve seen before because the response we’ve seen to rate cuts has been far more muted,” said Stuart Cartledge, managing director of Melbourne-based Phoenix Portfolios, part-owned by Cromwell Property Group. (CMW) “Affordability based on mortgage costs has improved, but people are worried about losing their jobs. House buyer confidence isn’t there.”
PulteGroup Inc., the largest homebuilder by market value, was the biggest gainer on the Standard & Poor’s 500 Index last year, rising 188 percent, helping an index of 11 builders more than double since the end of 2011, and raising concern among analysts including Michael Widner of Stifel Nicolaus & Co. that growth is already priced in. Photographer: Daniel Acker/BloombergThe firm’s unit that caters to individuals and families with more than $5 million, put client money in a partnership that bought more than 5,000 single family homes to rent in Florida, Arizona, Nevada and California, said David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank. Investors can expect returns of as much as 8 percent annually from rental income as well as part of the profits when the homes are sold, he said.The bank’s wealthy clients are joining a growing number of private-equity firms and individuals buying rental homes in the regions hardest hit by the U.S. housing crash. Blackstone Group LP (BX) has spent $2.7 billion, and said last month it accelerated purchases as home prices rise faster than anticipated. Even after home values in November gained by the most in six years, investors are wagering on rental properties as an alternative to housing-related stocks and mortgage debt that’s already soared.“The traditional places people might look -- homebuilder stocks and appliance makers -- probably aren’t the best places for new investments,” said John Buckingham, chief investment officer at Al Frank Asset Management in Aliso Viejo, California, which oversees about $4.5 billion. “They’ve had fantastic runs.”
A man counts Indonesian rupiah at a money at currency exchange in Jakarta. Photographer: Dimas Ardian/Bloomberg
Food stalls stand in front of buildings in the financial district of Jakarta. As profitable as lending in Indonesia is, banks have made loans to only 28 percent of the population, or about 67 million people, according to World Bank data. Photographer: Dimas Ardian/Bloomberg
A customer purchases fruit from a market stall in Jakarta. Indonesia’s history of inflation, averaging 7.3 percent in the past 10 years, has kept benchmark interest rates for the past year at 5.75 percent, one of the highest among major economies, data compiled by Bloomberg show. Photographer: Ed Wray/Bloomberg“I don’t have the money to pay in cash,” said Suryadi, who like many Indonesians goes by one name. “Paying in installments is all I can afford.”Borrowers like Suryadi have helped make Indonesian lenders the most profitable among the 20 biggest economies in the world, according to data compiled by Bloomberg. The average return on equity, a measure of how well shareholder money is reinvested, is 23 percent for the country’s five banks with a market value more than $5 billion, the data show.