The dollar weakened against other major currencies in cautious trade ahead of next week's Federal Reserve monetary policy meeting.]]> |||
New York - The dollar weakened against other major currencies on Friday in cautious trade ahead of next week's Federal Reserve monetary policy meeting, expected to mark an end to its massive asset-purchase program.
The market already has largely priced in the Fed's exit from its easy-money quantitative easing program, said David Song of DailyFX.
The US central bank began tapering the QE monthly purchases last December, when they stood at $85 billion, and the amount now is down to $15 billion.
The Federal Open Market Committee, which meets Tuesday and Wednesday, is also expected to stick to its outlook on keeping its benchmark interest rate near zero to mid-2015.
“Caution ahead of policymakers' October 28-29 meeting caused the dollar to settle into a narrow range against its rivals,” said Joe Manimbo of Western Union Business Solutions.
The greenback fell to $1.2666 to one euro from $1.2647 late Thursday.
The euro gained support ahead of the results Sunday of the European Central Bank's unprecedented stress tests on some 130
Analysts are confident that because banks have been taking action for months now to plug any holes in their balance sheets, there will not be any nasty surprises.
“We expect that the majority of banks will pass the assessment,” said credit rating agency Fitch.
Meanwhile the confirmation late Thursday of the first Ebola case in New York City “had limited evident impact in currency markets,” said XE Currency Blog.
2100 GMT Friday Thursday
EUR/USD 1.2666 1.2647
EUR/JPY 136.97 136.93
EUR/CHF 1.2062 1.2066
EUR/GBP 0.7873 0.7888
USD/JPY 108.14 108.27
USD/CHF 0.9522 0.9540
GBP/USD 1.6086 1.6032 - Sapa-AFP]]>
US equities enjoyed their best week in months as buying fever returned to the market following a month-long swoon on solid earnings.]]> |||
New York - US equities enjoyed their best week in months as buying fever returned to the market following a month-long swoon on solid earnings and easing anxiety about the Ebola virus outbreak.
The S&P 500 jumped 77.82 points (4.12 percent) to 1,964.58 on Friday, the biggest weekly increase in percentage terms since late 2012.
The Dow Jones Industrial Average rose 425.0 (2.59 percent) to 16,805.41, while the tech-rich Nasdaq Composite Index leaped 225.28 (5.29 percent) to 4,483.72.
The gains snapped a four-week skid that had dropped some leading indices by about 10 percent, a decline considered a market correction.
The week's trade showed the market's penchant for buying the dip has been restored, at least for the time being.
“Some say, 'That's the biggest correction I've seen in 2014, I'm buying now,'“ said Art Hogan, chief market strategist at Wunderlich Securities.
“The money waiting on the sideline sees it as an opportunity.”
Market sentiment had at times veered near panic earlier in the month on worries about slowing economic growth in Europe and China and, more recently, Ebola.
But analysts pointed to a few key data points, including a euorozone purchasing managers index of business activity, which edged up to 52.2 in October from a 10-month low of 52.0 in September.
“Even though the numbers still weren't very good, they allowed European economists to dismiss the risk of a recession, at least for this quarter,” said Chris Low, chief economist at FTN Financial.
Low said Chinese growth figures, while also lacklustre, came in better than expected, while worries that US retail sales could “collapse under the weight of some kind of Ebola panic also subsided this week.”
Corporate earnings reports were generally “good enough,” he added.
Among the better performers in terms of earnings, Apple finished the week at an all-time high after fiscal fourth-quarter earnings jumped 13 percent to $8.5 billion on soaring sales of its newest iPhone models.
Dow member Microsoft's earnings bested expectations following strong sales from its Xbox consoles and Internet “cloud” services for enterprises, fortifying confidence in recently installed chief executive Satya Nadella.
Airlines also prospered, as giant carriers American Airlines and United Airlines, among others, benefited from strong consumer demand and lower fuel prices. Industry officials also expressed confidence at the sector's ability to manage the Ebola risk.
But not all the week's reports were standouts.
Perhaps the biggest major laggard was IBM, which reported its 10th consecutive quarter of lower revenues as “Big Blue” continues to struggle with its effort to shift away from low-return commodity products and toward growing sectors such as data analysis and cloud computing.
Shares tumbled 11 percent since IBM's earnings report was released on Monday.
Amazon was another underperformer, as shares sank 8.3 percent after the online retailer's third-quarter loss rose tenfold to $437 million due to the costs of product launches including new phones, tablets and television programs.
Earnings season continues next week with reports from Pfizer, DuPont, ExxonMobil and Facebook, among others.
The highlight on the calendar is the Federal Reserve's two-day monetary policy meeting that opens Tuesday. The Federal Open Market Committee is widely expected to announce the end of the central bank's asset-purchase program and keep the federal funds interest rate near zero, where it has been since late 2008.
The week's economic data include the first estimate of third-quarter economic growth and the Conference Board's consumer confidence index for October. - Sapa-AFP]]>
South Africa's rand hovered near the previous day's five-week highs against the US dollar.]]> |||
Johannesburg - South Africa's rand hovered near the previous day's five-week highs against the dollar on Friday, still anchored by a well-received medium term budget statement mid-week, in the absence of more immediate drivers.
Despite announcing a slightly wider budget deficit forecast for 2014/15, Finance Minister Nhlanhla Nene bolstered investor confidence in the currency and local bonds on Wednesday by vowing to clamp down on spending.
Analysts lauded his statement on the whole, saying it would go a long way to lessen the chances of more credit downgrades for Africa's most advanced economy.
The rand traded at 10.9300 to the dollar at 17:45 SA time, up 0.4 percent from Thursday's close.
It was within a whisker of Thursday's high of 10.9235, the currency's strongest level since Sept 17.
The rand was however caught in a narrow range for much of Friday's session, reflecting a dearth of market moving news and data on the day.
“We've had a very quiet day and that goes for just about all the forex markets,” RMB trader Jim Bryson said.
“There's a lack of drivers, no real news.”
The rand was still among the strongest performers in a basket of 20 emerging currencies tracked by Reuters, surpassed only by Brazil's real, the Polish zloty and Latvia's lats.
The debt market was also sluggish, with the yield for the 2026 secondary market benchmark dipping just half a basis point to 7.91 percent. - Reuters]]>
South African stocks fell for a third straight session, with iron ore producer Assore down sharply.]]> |||
Johannesburg - South African stocks fell for a third straight session on Friday, with iron ore producer Assore down sharply as the commodity's price was on track for its first weekly drop in a month due to Chinese steel mills keeping stockpiles low.
Assore was the biggest decliner among blue chips, shedding 4.4 percent to 210.32 rand and taking its losses for the year to 38 percent amid concerns about cooling demand in China, the world's top consumer of the key steel-making ingredient.
Kumba Iron Ore lost 0.94 percent to 279.50 rand.
Iron ore has recovered from a five-year low of $77.50 (R850) at the end of September, but has struggled to sustain gains in the face of a supply glut.
More generally for South African equities, uncertainty is setting in after Finance Minister Nhlanhla Nene signaled in the Treasury's medium-term budget outlook that a tax shake-up was looming.
“We don't see changes to the tax system in South Africa very often and so this creates uncertainty,” said Christie Viljoen of NKC Independent Economists.
“It could be higher VAT which will hurt consumers, or it could be a higher corporate tax which will hit all of the listed companies as there will be less money for profits and dividends,” he said.
Viljoen also noted that South African companies were working on budgets for the next financial year amid uncertainty over what impact taxes might have.
The benchmark Top-40 index shed 0.57 percent to 42,676.13 while the broader All-share index ended 0.47 percent lower at 47,879.45. - Reuters]]>
US stocks were little changed, as disappointing earnings from Amazon were offset by gains in Microsoft after its quarterly results.]]> |||
New York - US stocks were little changed on Friday, as disappointing earnings from Amazon were offset by gains in Microsoft after its quarterly results.
Amazon plunged 7.3 percent to $290.45 as the biggest drag on both the S&P 500 and Nasdaq 100 after the online retailer's sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts.
But Microsoft, up 1.3 percent at $45.63 (R501) , helped offset the drop in Amazon after it reported higher-than-expected quarterly revenue while keeping its profit margins largely intact.
Procter & Gamble gained 2.9 percent to $85.67 to also help boost the Dow and S&P 500 after the world's largest household products maker posted quarterly results and said it would split its Duracell battery business into a separate company.
The S&P 500 is up 3.5 percent for the week, putting the index on pace for its first weekly gain in five and best week since the start of 2013, powered largely by solid corporate earnings reports.
The benchmark index is down 2.8 percent after slumping more than 7 percent from its record high on September 18 while volatility has spiked.
“The global growth scare that set everything into a tailspin seems to have calmed down a little bit, the world is not coming to an end,” said John De Clue, chief investment officer of the Private Client Reserve at US Bank Wealth Management in Minneapolis, Minnesota.
“We were lulled into a sense of complacency and now the market is on high alert, people perceive both threats and opportunities and they are poised to take action pretty quickly.”
Concerns over the spread of Ebola continued to vex the market.
A doctor who worked in West Africa with Ebola patients was in an isolation unit in New York City on Friday after testing positive for the virus while the World Health Organization set out plans for speeding up development and deployment of experimental Ebola vaccines.
At 10:04 a.m. (16:04 SA time) the Dow Jones industrial average rose 6.07 points, or 0.04 percent, to 16,683.97, the S&P 500 lost 0.64 points, or 0.03 percent, to 1,950.18 and the Nasdaq Composite added 1.97 points, or 0.04 percent, to 4,454.76.
Sales of new US single-family homes rose to a six-year high in September, up 0.2 percent to a seasonally adjusted annual rate of 467,000 units.
The largest percentage gainer on the S&P 500 was Edwards Life, which rose 10.2 percent, while the largest decliner was Amazon.
On the Nasdaq 100 the largest gainer was KLA Tencor, which rose 8.3 percent, while the largest decliner was Amazon.
Among the most active stocks on the NYSE were Petrobras, up 7.18 percent to $12.98; Ford Motor, down 2.85 percent to $13.99 and Bank Of America, up 0.06 percent to $16.61.
On the Nasdaq, DryShips, down 26.3 percent to $1.48; Microsoft and Apple, down 0.1 percent to $104.77 were among the most actively traded.
Declining issues outnumbered advancing ones on the NYSE by 1,472 to 1,289, for a 1.14-to-1 ratio on the downside; on the Nasdaq, 1,153 issues rose and 1,131 fell for a 1.02-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 20 new 52-week highs and two new lows; the Nasdaq Composite was recording 29 new highs and 17 new lows. - Reuters]]>
US stock index futures fell, putting the S&P 500 on track to trim its weekly advance.]]> |||
New York - US stock index futures fell on Friday, putting the S&P 500 on track to trim its weekly advance, following disappointing earnings from Amazon and as the first diagnosed case of Ebola in New York City raised concerns about the spread of the virus.
Amazon plunged 9.9 percent to $282.23 (R3,096) in premarket trade after the online retailer's sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts.
Microsoft, up 2.6 percent at $46.17 before the opening bell, may help curb declines after it reported higher-than-expected quarterly revenue while keeping its profit margins largely intact.
Procter & Gamble gained 2 percent to $84.90 in premarket after the world's largest household products maker posted quarterly results and said it would split its Duracell battery business into a separate company.
The S&P 500 is up 3.4 percent for the week, putting the index on pace for its first weekly gain in five, powered largely by solid corporate earnings reports.
The benchmark index is down 3 percent from its record high on September 18.
Concerns over the spread of Ebola continued to vex the market.
A doctor who worked in West Africa with Ebola patients was in an isolation unit in New York City on Friday after testing positive for the virus, becoming the fourth person diagnosed with the disease in the United States and the first in its largest city.
Ford Motor Co's third-quarter earnings beat Wall Street expectations on a strong showing in North America and China.
Shares of the automaker edged up 0.4 percent to $14.45 in premarket trade.
New home sales data for September is due at 10:00 a.m. (16:00 SA time).
Expectations call for a seasonally adjusted annual rate of 470,000 units, down from the 504,000 in the prior month.
Ebola-related shares advanced over worries about a possible spread of the virus.
Biotechnology company Ibio Inc jumped 14.1 percent to $1.86, hazmat suits maker Lakeland Industries Inc surged 19.6 percent to $18.25 and face mask maker Alpha Pro Tech Ltd climbed 21.5 percent to $5.59 before the opening bell.
Futures snapshot at 8:10 (SA time 14:10):
* S&P 500 e-minis were falling 7.25 points, or 0.37 percent, with 233,855 contracts changing hands.
* Nasdaq 100 e-minis were down 16.5 points, or 0.41 percent, in volume of 37,181 contracts.
* Dow e-minis were down 44 points, or 0.26 percent, with 39,600 contracts changing hands. - Reuters]]>
US stock futures tumbled while safe-haven assets such as the yen and US bonds gained.]]> |||
Tokyo - US stock futures tumbled while safe-haven assets such as the yen and US bonds gained on Friday after a doctor who returned to New York City from West Africa tested positive for Ebola.
S&P 500 mini futures fell as much as 0.7 percent, slipping from two-week highs hit the previous day on budding optimism from corporate earnings and the global economy.
European shares looked set to slip, with France's CAC 40 seen falling by as much as 0.7 percent and Germany's DAX and Britain's FTSE by 0.5 percent.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent, though Japan's Nikkei share average bucked the trend rising 1.0 percent, led by gains in drug companies.
“Just when markets got some relief on the world economy, we had this news. Obviously people who have just made bullish bets (on the economy) will close their positions as no one can tell exactly what is going to happen,” said the head of currency trading at a Western bank's Tokyo branch.
The first diagnosed case of Ebola in the world financial hub of New York sent investors rushing to traditional safe-haven assets.
As US bond prices gained, the 10-year US yield fell back to 2.250 percent from Thursday's two-week high of 2.300 percent.
In the currency market, the yen gained 0.3 percent to 107.95 yen to the dollar.
Risk asset prices had risen on Thursday after upbeat US corporate earnings, solid US economic data, and an unexpected uptick in euro zone business sentiment helped ease concerns that the global economy was losing momentum.
Results from Caterpillar Inc and 3M Co reassured investors that companies with large overseas revenue streams could deliver solid profits, despite concerns about global economic growth.
The markets had ignored positive earnings earlier this month, when the world's share prices hit multi-month lows, overwhelmed by fears that sluggishness in Europe and Asia could deal a severe blow to the US economy as well.
But a steady flow of solid earnings helped to ease many such concerns for now.
With 177 of the S&P 500 companies having posted third-quarter results, 69.5 percent have beaten expectations, better than the 67 percent beat rate over the past four quarters, and higher than the 20-year average of 63 percent, Thomson Reuters data showed.
New claims for US unemployment benefits also held below 300,000 for a sixth straight week last week.
In the euro zone, a survey showed businesses performed much better than anyone expected this month, even though it also pointed to strong deflationary pressure in the region.
The euro drew some support from the surprise strength in the euro zone data, but was still near a two-week low of $1.2614 hit on Thursday. It last stood at $1.2657.
Investors are turning cautious ahead of Sunday's release of the European Central Bank's stress test results on the euro zone's 130 biggest banks.
In addition, some focus could fall on the parliamentary election in Ukraine on Sunday. Stability could benefit the European economy, which has suffered from the fall in trade with Russia on tit-for-tat sanctions between the West and Moscow.
“I suspect one often overlooked reason for the market's rebound since the middle of this week was signs of easing tensions between Russia and Ukraine,” said Soichiro Monji, chief strategist at Daiwa SB Investments, pointing to progress in gas talks between Russia and Ukraine last week.
President Petro Poroshenko's bloc holds a big lead, but if the populist Oleh Lyashko's Radical party makes a very strong showing, Poroshenko may have the awkward task of seeking the support of a politician who has been sharply critical of his peace plan and his contacts with Russian President Vladimir Putin.
Sunday will also see presidential election in Brazil, where stocks and the currency have suffered on expectations that the current President Dilma Rousseff is likely to beat her rival, Aecio Neves, who is seen as more market-friendly.
The Bovespa stock index hit a six-month low while the Brazilian real slumped to a 9-1/2-year low on Thursday. - Reuters]]>
European shares fell, reversing the previous session's gains as investors fretted about news that a doctor who recently returned to New York from West Africa had tested positive for Ebola.]]> |||
Paris - European shares fell in early trading on Friday, reversing the previous session's gains as investors fretted about news that a doctor who recently returned to New York from West Africa had tested positive for Ebola.
Shares in luxury group Kering featured among the top losers, down 3.8 percent after posting a drop in sales at its Gucci brand.
BASF fell 2.1 percent after the world's largest chemicals company by sales cut its 2015 earnings forecast on weak demand in its European home markets.
Bucking the trend, shares in global truck maker Volvo jumped 9.6 percent after posting a surprise rise in core earnings.
Belgacom also surged, up 6.5 percent after the Belgian telecoms group raised its 2014 profit forecast after a surprise increase in the third quarter due to improved mobile income and lower costs.
So far in Europe's earnings season, about a fifth of STOXX 600 companies have reported results, of which 68 percent have met or beaten analyst forecasts, according to Thomson Reuters Starmine data.
In absolute terms, companies have posted a 13.7 percent rise in quarterly profits, well above the 6.8 percent rise posted by S&P 500 companies.
At 09:47 SA time, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,310.68 points, halting a rebound started late last week.
A New York City doctor who treated Ebola patients in West Africa became the first person to test positive for the virus in America's largest city, setting off fresh fears about the spread of the disease.
US stock index futures fell on the news while safe-haven assets such as the yen and US bonds gained ground.
“When the story broke that a doctor in New York was confirmed to have Ebola the Dow futures shed over 100 points,” Capital Spreads trader Jonathan Sudaria said.
That trend carried over into European trading.
Despite the tentative rebound in stocks earlier this week, investors continued to slash exposure to European equities, with US-based funds invested in European shares seeing outflows for a third straight week, according to Lipper data.
A Lipper survey of 109 US-domiciled funds investing in European shares, including exchange-traded funds (ETFs), shows redemptions of $958 million (R10.5 billion) in the seven days to October 22, adding to the record weekly outflows of $1.33 billion in the previous week. - Reuters]]>
Japanese shares rose, with the Topix index posting its biggest weekly rally in 18 months, amid optimism for US earnings and European growth.]]> |||
Tokyo - Japanese shares rose, with the Topix index posting its biggest weekly rally in 18 months, amid optimism for US earnings and European growth.
Stocks pared gains today as the yen strengthened after a doctor tested positive for the Ebola virus in New York City.
Fujifilm Holdings gained 2.5 percent after saying its Avigan drug may be included among experimental Ebola treatments to be tested by aid group Doctors Without Borders.
Hitachi surged 3.6 percent after preliminary profit beat its forecast.
Construction-machinery maker Komatsu climbed 1.5 percent after industry bellwether Caterpillar reported earnings that exceeded estimates.
Japan Airlines fell 0.6 percent, leading carriers lower, after the Ebola case was reported.
The Topix advanced 0.8 percent to 1,242.32 at the close of trading in Tokyo, with all but three of its 33 industry groups climbing.
The measure posted a 5.5 percent advance this week, the most since April 2013, after sliding 12 percent the previous three weeks.
The Nikkei 225 Stock Average added 1 percent to 15,291.64 today.
The yen rose 0.3 percent to 107.95 per dollar after tumbling 1 percent yesterday.
“Strong US earnings are a signal of a strong economy, which means Japan’s economy and earnings will be good,” said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd.
“America’s economy is big so if the spread of Ebola leads to a withering of the economy there, then the global economy will also wither.”
Futures on the Standard & Poor’s 500 Index slipped 0.4 percent today.
A New York City doctor tested positive for Ebola after returning from aid work in West Africa, in the first case of the virus diagnosed in the most populous US city.
Officials are monitoring those who were with him before he was hospitalized as they seek to reassure the public that the risk is minimal.
The Topix Pharmaceutical Index led gains among the industry groups on the broader gauge.
Fujifilm gained 2.5 percent to 3,587.5 yen.
The company, which makes the Avigan drug used as part of clinical trials in Ebola patients, said Doctors Without Borders may use the drug among its experimental treatments.
Japan Airlines slid 0.6 percent to 2,878 yen and ANA Holdings lost 0.3 percent to 244.2 yen, with both companies reversing earlier gains following the Ebola report.
The S&P 500 rose 1.2 percent yesterday as earnings from Caterpillar to 3M topped analysts’ expectations and data showed fewer Americans filed applications for unemployment benefits over the past month than at any time in 14 years.
Komatsu climbed 1.5 percent to 2,428 yen.
Robotics maker Fanuc added 1 percent to 18,715 yen. Hitachi Construction Machinery rose 2 percent to 2,015 yen.
The Topix Machinery index posted the second-biggest gain among the industry groups.
Economic data yesterday suggested the euro-area economy may have moved a step away from another recession.
A Purchasing Managers’ Index showed manufacturing in the region unexpectedly grew this month, and Spain’s third-quarter unemployment dropped to the lowest since 2011.
German factory activity rebounded from a slump in September.
“Concerns for the global economy are easing following the macro and micro news from the US and Europe,” said Juichi Wako, a Tokyo-based equity strategist at Nomura Holdings, Japan’s biggest brokerage.
“While there are positive and negative Japanese earnings, there’s still room for them to be revised upwards just because of the weaker yen.” - Bloomberg News]]>
Hong Kong shares finished lower, dragged down by weak Chinese property data and corporate results from major companies.]]> |||
Shanghai - Hong Kong shares finished lower on Friday, dragged down by weak Chinese property data and corporate results from major companies.
The Hang Seng Index unofficially closed down 0.1 percent at 23,302.20 points.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong fell 0.5 percent.
For the week, the two indexes were up 1.2 percent and 1.5 percent, respectively, posting the biggest weekly gains since early September.
Property shares fell following a fifth straight month of declines in home prices in China in September and the prospect of a greater supply of flats in Hong Kong as the government tries to rein in prices.
China's biggest maker of sport utility vehicles Great Wall Motor fell 5.1 percent after it reported a 22 percent decline in its third-quarter profit.
Kingsoft Corp plunged 11.9 percent after the company issued a profit warning on Thursday that it would record a significant decline in operating profit for the third-quarter. - Reuters]]>