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FinNews for the week ending July 27, 2012 Top Stories British bank Barclays is in the midst of multiple lawsuits due to investigation of a rate-rigging scandal. The bank has announced net profit losses of 76 percent to $752 million for the first six months of the year. Barclays has confirmed that it will be fully cooperating with the F.S.A.'s investigation into the scandal. (1) Pressure is being put on Greece by the European Union to successfully implement reforms and cut costs in line with prior rescue loan program agreements. In order to continue receiving support from the eurozone, Greece is expected to cut through delays and deliver results. (2) Unemployment continues to rise in Spain, reaching 24.6 percent with 5.7 million out of work. Half of those unemployed are under the age of 25. Despite these numbers, the Spanish government is resolute in its refusal to seek foreign aid. (3) Economic Releases & Statistics New home sales declined 8.4 percent in June to a seasonally adjusted 350,000, putting a halt to two months of gains and marking the biggest drop since February 2011. June brought 144,000 new homes, only 1,000 above May's 143,000. With sales up 4.5 percent from last year, a slow, modest recovery may be underway. (4) Existing home sales fell 5.4 percent to a seasonally adjusted 4.37 million, versus estimates for a 2 percent rise. Home construction rose 6.9 percent, the highest level since October 2008. (5) Pending home sales fell 1.4 percent to 99.3, countering forecasts for a 0.2 percent rise. (6) June durable goods grew 1.6 percent to a seasonally adjusted $221.63 billion, shooting past forecasts for a 0.6 percent growth. The largest contributor was strong aircraft demand, as civilian and defense aircraft grew 14.3 percent and 23.9 percent, respectively. (7) From April to June the GDP grew 1.5 percent, the weakest quarterly growth since last fall. Consumer spending fell to an annualized rate of 1.5 percent, a drop from 2.4 percent during the first quarter. (8) Stocks & Earnings Following slow sales gains, narrow profit margins, and a lack of growth forecasts, Facebook Inc.'s stock ultimately fell 17 percent, earning $1.18 billion in revenue. Its shares are down 29 percent from its IPO price. (9) Amazon.com reported $12.83 billion in revenue, with a net income of $7 million, falling short of estimates for $12.88 billion in sales. (10) Starbucks Corp.'s fiscal third quarter earnings grew 19 percent, but saw shares decline by 11.12 percent. Expedia Inc. shares grew by 25.42 percent due to considerable hotel revenue growth. (11) Global Currencies Australian government bonds continue to decline, bolstering the Australian dollar against the U.S. dollar and the yen. This marks a 2.9 percent growth for the Australian dollar over the last month alone. (12) Egypt's central bank left opted to leave interest rates unchanged in the first meeting since Mohamed Morsi was elected president. (13) The Canadian dollar reached a 10-week high against the U.S. dollar. (14) Oil & Energies The Energy Information Administration reported natural gas storage grew 26 billion cubic feet to 3.189 trillion cubic feet, in line with estimates for a 23-27 bcf growth. (15) Crude supplies declined 133,000 barrels last week, less than estimates for a 1 million barrel decline. Gasoline grew 2.08 to 8.85 million barrels a day, greater than forecasts for a 300,000 barrel growth. Gasoline stockpiles have grown to 204.82 million barrels. Distillates fell 2.28 million barrels last week to 118.85 million barrels, versus estimates for a 1 million barrel gain. (16) Germany has overtaken Spain as Argentina's top biodiesel buyer. (17) Argentinean YPF SA reported a 19 percent decline in first-quarter net income. (18) China's oil demand fell 1.9 percent year-on-year to 36.84 million metric tons, the first decline in three years. (19) Grains & Field Crops Corn and soybean conditions throughout the Corn Belt have continued their decline. Corn in good/excellent condition fell 5 percent to 26 percent. 86 percent of the crop is silking, and 22 percent is doughing. Soybeans in good/excellent condition fell 3 percent to 31 percent, while 35 percent of the crop is in poor/very poor condition. 79 percent of U.S. soybeans have bloomed. Of the spring wheat crop, 60 percent is in good/excellent condition, with only 11 percent in poor/very poor. 82 percent of winter wheat has been harvested. (20) Argentine agricultural companies have begun expressing interest in expanding their international presence, most notably in China. Despite a corn trade agreement settled in February, China's restrictions on genetically modified crops have delayed shipments. (21) Precious Metals Due to economic slowdowns and poor monsoon rains, Indian gold demand is forecast to decline as consumers are forced to cut spending. (22) More than half of the platinum mines in South Africa are facing losses, and continued price drops for the metal could significantly harm the area's labor economy. (23) Other Commodities Brazil's monthly coffee exports are forecast to be roughly 2 million bags, a slight gain over last month's 1.88 million bags. (24) Though the nation received dry weather this week, water damage from rain in the area will likely boost arabica prices. (25) Dunkin' Donuts announced plans to expand throughout Chile, Colombia, and Peru, establishing 125 new restaurants over the next ten years. (26) French chocolate maker CEMOI aims to improve its Ivory Coast grinding capacity by 43 percent, improving its Ivorian factory's grind capacity to 100,000 tons. (27) Ivory Coast aims to sell 70 percent of its 2012-13 cocoa crop before the harvest. As cocoa processors have been making use of existing cocoa-butter inventories, an industry shortage of 93,000 tons is forecast for the 2012-13 season. The threat of an El Niño could further curb production. As the holiday season approaches, factories may be forced to hasten processing, further straining inventories. (28) With the death of John Atta Mills, Ghana's former president, disruptions in policy have forecast the nation's cocoa output to drop to 890,000 tons in 2011-12. (29) With the development of a sugar surplus and the end of Ramadan, demand for the sweetener is declining. Monsoon rains in India and forecast rain in Brazil may improve next year's crops. (30) China's cotton reserve policy, now at 31.8 million bales, may help protect the cotton market from a surplus. (31) Next Week:
1. http://dealbook.nytimes.com/2012/07/27/barclays-profit-falls-amid-rate-rigging-scandal/ 2. http://www.sfgate.com/news/article/Greece-warns-against-letting-it-fall-out-of-euro-3736273.php 5. http://online.wsj.com/article/BT-CO-20120719-710275.html 6. http://www.foxbusiness.com/industries/2012/07/26/pending-home-sales-unexpectedly-fall-in-june/ 10. http://seattletimes.nwsource.com/html/businesstechnology/2018781341_amazon27.html?syndication=rss 11. http://online.wsj.com/article/BT-CO-20120727-711696.html 13. http://online.wsj.com/article/BT-CO-20120726-715257.html 15. http://www.boston.com/cars/news/articles/2012/07/26/us_natural_gas_supplies_grew_last_week/ 17. http://www.reuters.com/article/2012/07/26/argentina-biodiesel-idUSL2E8IPGVM20120726 19. http://www.loansafe.org/chinas-oil-demand-declines-in-june-for-first-time-in-three-years 20. http://seekingalpha.com/article/741861-crop-progress-bad-gets-worse 21. http://www.chinadaily.com.cn/business/2012-07/27/content_15623329.htm 23. http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=155714&sn=Detail&pid=102055 25. http://online.barrons.com/article/SB50001424053111904346504577531002112621284.html?mod=BOL_twm_mw 26. http://www.cnbc.com/id/48314248 27. http://www.confectionerynews.com/Financial/CEMOI-to-up-cocoa-grind-capacity-in-Ivory-Coast 29. http://www.agrimoney.com/feature/impact-on-cocoa-of-ghana-heads-death-may-lie-months-ahead--159.html 30. http://www.reuters.com/article/2012/07/27/markets-europe-sugar-physical-report-idUSL6E8IRDLK20120727 31. http://www.reuters.com/article/2012/07/27/cotton-prices-idUSL2E8IR3EK20120727 _______________________________________________________________________________________ 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. The publisher 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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