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FinNews for the week ending June 29, 2012 Top Stories After an overnight summit meeting ending on Friday, the European Union's adopted three concrete growth stimulus measures: EU bailout funds will be funneled directly to suffering euro-zone banks, $149 billion will be deployed as growth stimulus from existing reserves, and will ease austerity measures for funding. (1) Congress passed new legislation on Friday that looks to inject $100 billion into highway and transit programs, ultimately salvaging 2.8 million jobs. The bill also halted the doubling of student loan interest rates. (2) Economic Releases & Statistics The U.S. first quarter GDP rose 1.9 percent at an annual rate, on par with forecasts. Consumer spending grew 2.5 percent, lower than the 2.7 percent originally reported. Business inventories increased $54.4 billion, down from an earlier $57.7 billion. Exports grew 4.2 percent, down from an earlier 7.2 percent. (3) May new home sales grew 7.6 percent to a seasonally adjusted 369,000, the highest level in over two years. Sales have rebounded 35 percent since 2011's low numbers. (4) Pending home sales also rose to a two-year high, growing 5.9 percent to 101.1. (5) U.S. durable goods orders rose 1.1 percent in May to a seasonally adjusted $217.15 billion, surpassing estimates for a 0.4 percent increase. U.S. payrolls grew 69,000, the lowest growth yet this year. (6) Unemployment applications fell to a seasonally adjusted 386,000, down from 392,000. Employers added an average 73,000 jobs per month in April and May, far removed from the 226,000 earlier this year. (7) Personal income rose 0.2 percent, while personal spending faced no changes, with a 0.0 percent change despite small technical outlays. (8) The following is a paid third-party advertisement:  Stocks & Earnings Nike's reported Q4 earnings fell 7.6 percent due to higher marketing costs. Research in Motion suffered a 17 percent loss in shares, noting that it aims to cut 5,000 jobs by the year's end. Smith & Wesson saw a 17 percent share growth. Meanwhile, Constellation Brands Inc.'s earnings dropped 3.4 percent due to rising interest expenses, though the company plans to buy half of Crown Imports LLC for $1.85 billion from Anheuser-Bush InBev. KB Home saw a 10 percent shares rise. Fushi Copperweld Inc. saw a 12 percent rise. (9) Global Currencies The EU summit announced that "banks can be recapitalized directly by bailout funds." Due to the Philippine's improved economy, the peso rose 3.2 percent since May. The yuan grew 0.16 percent since the end of June, while the Malaysian ringgit rose 0.4 percent. Indonesia's rupiah and Thailand's baht both fell 0.1 percent respectively. (10) The rupee has fallen "more than 20% against the dollar since August", prompting a rise in India's gold prices. (11) Oil & Energies Crude inventories dropped 133,000 barrels, versus forecasts for a 1 million barrel decline. Gasoline storage rose 1.8 percent, 2.08 million barrels a day to 8.85 million, shooting past estimates of a 300,000 barrel rise. Distillates fell 2.28 million barrels, countering forecasts for a 1 million barrel rise. (12) Natural gas supplies rose 57 billion cubic feet to 3.06 trillion cubic feet last week, exceeding forecasts for a 51 to 55 bcf rise. (13) Due to falling oil prices, speculators may be storing oil in supertankers off of several European countries. (14) The European Union's crude oil embargo against Iran has aided in its oil export decline over the last six months. Iran currently exports 1.5 million barrels of oil per day, a 40 percent drop in exports. (15) Grains & Field Crops Friday's Grain Stocks reported corn acres at 96.4 million, the highest since 1937, above forecasts for 95.962 million acres. Soybeans acreage is at an estimated 76.1 million. (16) Dry soil and moisture stress hit crops hard across the Corn Belt. Corn fell in this week's Crop Progress report, with corn rated excellent down 1 percent to 11, and good corn down seven points to 45 percent, versus forecasts for a 2 to 3 percent rating drop. The poor to very poor crop rose 5 percent to 14. Soybeans in excellent condition fell 1 percent to 8, and good fell 3 percent to 48. (17) (18) The following is a paid third-party advertisement:  Precious Metals Due to the rupee's fall against the dollar, Indian gold prices have risen. Indian gold demand could further rise if normal monsoon rains pass over the country, helping to stabilize prices. (11) In an attempt to weather the European debt crisis, buyers may prompt Chinese gold-investment may gain more than 10 percent this year. (19) Other Commodities Coffee prices this year have fallen 28 percent on speculation that Brazil's inventories will rise. (20) Brazil coffee may be bolstered by recent heavy rains, which damaged their harvest crop and lessened demand following higher prices. (21) Colombia's top coffee region is expected to recover slowly over the next four years, as the nation's output rises to 8 million bags this year. (20) As Ivory Coast is set to face heavy rain next week, fear of the spread of crop disease prompted a growth in prices for cocoa, sugar, and coffee. (22) Despite attempts to dissolve the heavy use of child labor on cocoa farms in Ivory Coast, recovery from the area's civil war has slowed efforts. Roughly 600,000 children work on farms there. (23) The Ghana COCOBOD is set to supply local farmers with 20 million hybrid cocoa seedlings for free this year, in an attempt to counter the Cocoa Swollen Shoot Virus Disease. (24) Next Week:
1. http://world.time.com/2012/06/29/e-u-summit-up-all-night-but-consensus-finally-reached/ 2. http://www.cbsnews.com/8301-250_162-57463926/congress-passes-student-loans-highway-jobs-bill/ 3. http://in.reuters.com/article/2012/06/28/usa-economy-gdp-idINL2E8HRBV820120628 4. http://www.latimes.com/business/realestate/la-fi-new-home-sales-20120626,0,3545915.story 6. http://www.nasdaq.com/article/us-durable-goods-orders-rise-11-20120627-00506 9. http://blogs.wsj.com/marketbeat/2012/06/29/stocks-to-watch-research-in-motion-nike-smith-wesson/ 11. http://online.wsj.com/article/SB10001424052702304870304577489913738390308.html 13. http://www.cbsnews.com/8301-505245_162-57462721/natural-gas-supplies-rise-more-than-expected/ 14. http://in.reuters.com/article/2012/06/25/oil-storage-idINL6E8HP7V320120625 15. http://www.dailytimes.com.pk/default.asp?page=2012%5C06%5C27%5Cstory_27-6-2012_pg14_7 17. http://www.agriculture.com/news/crops/cn-takes-dive-in-crop-progress-rept_2-ar24870 20. http://www.bloomberg.com/news/2012-06-28/colombia-s-top-coffee-region-to-recover-gradually-1-.html 23. http://www.foxnews.com/world/2012/06/29/child-labor-still-issue-on-ivory-coast-cocoa-farms/ _______________________________________________________________________________________ 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. This email contains third-party advertisements for a product or service that is not offered, recommended or endorsed by the publisher and neither the company nor its affiliates bear responsibility or control over the content of the advertisement and the product or service offered. Proceed at your own risk. |
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