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FinNews for the week ending May 25, 2012 Top Stories Facebook Inc.'s IPO continues to push more individual investors away from the stock market, counter to widespread hopes that its entrance would renew individual stock interest. (1) Friday, Standard & Poor cut the credit ratings of five Spanish banks, citing that "the country is headed into a double-dip recession." Bankia, one of the five, has reportedly asked for 19 billion euros in government aid. (2) Economic Releases & Statistics April's existing home sales rose 3.4 percent to a seasonally adjusted 4.6 million, up 10 percent from last year. The overall home inventory is 21 percent smaller than a year ago. (3) New home sales are also up, increasing 3.3 percent in April to a seasonally adjusted 343,000, the second-highest annual sales pace in two years. (4) These numbers indicate a slow but steady improvement for the U.S. housing market. U.S. durable goods rose 0.2 percent in April to a seasonally adjusted $215.53 billion, versus estimates for a 0.3 percent decline. (5) Ivory Coast is set to receive $5 billion in debt-relief next month, following its completion of the International Monetary Fund's program for indebted poor nations. Its economy is estimated to improve 8 percent this year. (6) Stocks & Earnings Due to Spain's depreciating finances and the possibility of Greece's exit from the euro, U.S. stocks and the euro eased slightly today. While S&P traded near break-even, Dow traded 0.15 percent lower. (7) Talbots Inc. (TLB)'s shares have plummeted 40 percent to $1.55, as its suitor Sycamore Partners "wasn't prepared to execute a transaction at this time." (8) Global Currencies In response to Spain's debt, the euro dropped to a 22-month low against the U.S. dollar. (7) In a U.S. ruling today, China has not been "manipulating its currency to gain an unfair trade advantage." However, the Chinese yuan is still weak in comparison to the dollar, and Beijing has made commitments to reform its currency. (9) Oil & Energies The Energy Information Association's weekly inventory release showed natural gas stockpiles rose by 61 billion cubic feet (bcf) to 2.667 trillion cubic feet. This is up 40.9 percent from last year and 773 over the five-year average. These high numbers reflect "low demand amid robust onshore output." (10) Crude oil stockpiles rose 900,000 barrels, up from estimates for a 750,000 barrel increase. Gasoline fell 3.3 million barrels, shooting past expectations for a 200,000 decrease. Distillates declined 300,000 barrels, versus forecasts for a 350,000 decrease. (11) Grains & Field Crops Monday's USDA Crop Progress report heralded that due to positive weather across the Corn Belt, corn, soybeans, and wheat are all faring favorably. (12) However, this year's corn and soybean harvest prices are on the rise, responding to a forecasted lack of rain which will prompt hot, dry weather and strain the crops. (13) China cancelled four Brazilian soybean shipments in response to their declining crushing margins. (14) Precious Metals Recent IMF figures show continued and increased gold buying from Central Banks. Since March, the Philippines' purchases totaled 32 tons. In April, Turkey purchased 29.7 tons of gold, followed by Mexico's 2.92 tons. Last year's total Central Bank gold purchases amounted to 450 tons, the highest in roughly 50 years. (15) India's gold prices are estimated to rise from June to August in response to the country's marriage season, during which jewellery demand traditionally increases. (16) Other Commodities Rains in Brazil are estimated to delay the region's coffee harvests by up to 30 days, particularly in Sao Paulo and Minas Gerais. (17) Brazil is forecasted to produce 52.2 million coffee bags in the 2012/13 crop, lower than analyst estimates for 54 to 56 million bags. (18) However, dry weather in Colombia is forecasted to prompt its yearly coffee output to rise to 9 million bags, up from the 7.8 million originally estimated. (19) Cocoa shipments from the Ivory Coast and Ghana will likely be delayed due to rainfall, though it may prompt pod development following earlier dry weather. (20) The sugar supply has finally surpassed demand, and "analysts are now projecting the biggest glut in six years." With a 7-8 million ton surplus, traders are estimating there to be a 4-8 million ton glut in 2012-13. Brazil, with an estimated 32-33 million ton harvest, is being looked to as the deciding factor in sugar's price. (21) Next Week:  2. http://www.latimes.com/business/money/la-fi-mo-spain-bankia-20120525,0,267898.story 3. http://www.usatoday.com/money/economy/housing/story/2012-05-22/previousy-owned-home-sales/55130586/1 4. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/23/BU5T1OMD2I.DTL 5. http://www.nasdaq.com/article/us-durables-orders-up-02-in-april-20120524-00644 7. http://www.reuters.com/article/2012/05/25/markets-global-idUSL1E8GPAPA20120525 8. http://online.wsj.com/article/BT-CO-20120525-711247.html 12. http://seekingalpha.com/article/607141-crop-progress-corn-condition-well-above-average 13. http://www.businessweek.com/news/2012-05-25/corn-soy-prices-after-harvest-rise-wheat-futures-gain 15.http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=152096&sn=Detail&pid=102055 16. http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=152122&sn=Detail&pid=102055 18. http://www.brecorder.com/agriculture-a-allied/183/1192988/ 19. http://www.bloomberg.com/news/2012-05-22/colombian-coffee-output-may-rise-to-five-year-high-1-.html 21. http://www.ft.com/cms/s/0/8b83f8fe-a5b1-11e1-a3b4-00144feabdc0.html#axzz1vuYg5LK2 _______________________________________________________________________________________ Disclaimer: Trading and investing involve a substantial degree of a risk of loss and are not suitable for everyone. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. The publisher, and/or its affiliates, staff or anyone associated with FinNews, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Information provided is compiled by sources believed to be reliable. Financial Media Corp, and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of the publisher. |
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