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FinNews for the week ending August 31, 2012 Top Stories In an effort to obtain up to 100 billion euros in aid, Spain "overhauled its banks for the fifth time in three years on Friday." The Spanish government has created a bad bank to take over defaulted loans and unsalable property worth tens of billions of euros, which will begin operating later in the year. In the meantime, Spain is injecting its most problematic bank, Bankia, with emergency funds. Bankia lost 3 billion euros last year, and reported on Friday 4.4 billion in losses during the first half of this year. (1) One out of every four Spanish citizens is unemployed. (2) The Fed announced Friday during the Jackson Hole economic summit that it will be "forceful...in supporting a sustainable recovery." (3) Economic Releases & Statistics The U.S. GDP was revised Wednesday to a 1.7 percent growth between April and June, up from an earlier estimate of 1.5 percent. (4) Pending home sales rose 2.4 percent in June, exceeding estimates for a 1 percent gain and reaching the highest level since April 2010. (5) The pending-home-sales index grew to 101.7, up from 99.3. This marks the 15th consecutive month of contract activity gains. (6) July new home sales grew 3.6 percent to a seasonally adjusted annual rate of 372,000, matching May's two-year high. Sales have risen 25 percent over the last 12 months. (7) July's personal income grew 0.3 percent, marking the third month of growth. (8) U.S. consumer spending grew 0.4 percent, in line with forecasts and the largest growth in five months. Unemployment applications went unchanged at 374,000 last week, while new claims rose 1,500 to 370,250. The jobless rate grew to 8.3 percent. (9) Stocks & Earnings On Friday, American Airlines parent AMR Corp. announced plans to discuss a potential merger with US Airways Group, and recently had similar talks with British Airways. Non-disclosure agreements prevent either company from revealing more information until a deal is confirmed or called off. (10) Facebook's stock dropped 5 percent on Friday to a new low of $18.19. Over 40 percent of the company's shares will become eligible for sale in November. (11) SAIC Inc., government-services contractor, announced plans to separate into two separate publically traded companies. It aims to divide its government-services businesses from its heath, engineering, and security services. Peregrine Pharmaceuticals Inc. secured a $30 million term loan, aiming to strengthen its balance sheet in preparation for partnering discussions. (12) Global Currencies Sallie Mae Bank increased its money market account rate to 1.00 percent APY from 0.90 percent. The increase applies to all customers; there was no change to savings account yield, 0.80 percent. (13) The 1-year London InterBank Offered Rate fell to 1.033 percent, while the 6-month LIBOR went unchanged. The average 30-year fixed rate mortgage fell less than one point to 3.660 percent, while the average 15-year grew one basis point to 3.099 percent. The average 5-year grew to 3.107 percent. (14) Oil & Energies Natural gas inventories grew by 66 billion cubic feet to 3.374 trillion cubic feet, greater than forecasts for a 58 to 62 bcf rise. (15) Crude oil supplies grew 3.78 million barrels last week, countering estimates for a 2 million barrel drop. Gasoline inventories declined by 1.51 million barrels to 201.23 million, below analyst forecasts. Distillate fuels grew by 873,000 barrels to 126.08 million barrels, greater than expectations for no change. Refinery utilization went unchanged at 91.2 percent, greater than forecasts for a 0.25 percent decline. (16) On Thursday, Argentinean YPF announced its 5-year growth plan, in which it will invest $37.2 billion through 2017 to boost oil, natural gas, and refining spending. The company will raise its oil production by an estimated 32 percent, and its diesel and refining-product output by 37 percent. (17) Grains & Field Crops This week's Crop Progress report presented further weakening conditions. Corn in good/excellent condition fell 1 percent to 22 percent. 6 percent of the crop has been harvested, 76 percent is dented, and 26 percent has matured. Soybeans in good/excellent condition fell one percent to 30 percent while those in poor/very poor condition grew to 38 percent. 96 percent of the crop has set pots and 8 percent has dropped leaves. 89 percent of the spring wheat crop has been harvested. (18) Heavy rain in Argentina is forecast to greatly help its corn and soy planting, having faced between 60 and 160 millimeters of rain this month. (19) In reaction to the U.S.' poor harvests, Argentina aims to plant "a near-record soy crop in the coming season." Aided by abundant ground moisture, its 2012/13 soy output is forecast at 53 million tonnes, a 12.5 million tonne rise from last season. (20) The total soybean output from Brazil, Argentina, Paraguay, Bolivia, and Uruguay is forecast to rise as much as 31 percent next year. (21) This season, South Africa is forecast to reap 12 percent less wheat at 1.76 million metric tons, just above forecasts a 1.75 million ton yield. (22) Precious Metals 12,000 of South African Gold Fields' workers went on strike Wednesday due to union disagreements. (23) Following the August 16 shooting, a majority of Marikana's 28,000 miners have kept their distance. Next week Lonmin Plc is planning on resuming government-mediated talks with workers in order to end their three week strike. (24) Chilean mining company Antofagasta has increased its copper output by 16.5 percent and almost doubled its gold production during the first half of this year. As such, it will continue its "full year production guidance of 700,000 tonnes of copper" and 280,000 ounces of gold. (25) Other Commodities Brazil's coffee growing sectors are looking to flourish as weather has been optimal for fruit development until harvest in May. If an El Niño pattern rises, wetter conditions would guarantee even more moisture for crops as they develop. Brazil estimates a 2012 crop of 50.45 million 60-kg bags. (26) Colombia is looking to an El Niño to help boost its coffee production, with a 2013 harvest estimate of 9 million bags. (27) Due to drier weather in Vietnam, the country's robusta coffee crop may fall 10 percent to 1.40 million metric tons from a high of 1.55 million tons. (28) Cooler weather and cloud cover has helped spawn an outbreak of black pod disease in Ivory Coast. Due to a delay in government-assisted chemical distribution, many farmers are fighting the disease on their own. (29) Cocoa Day, which is held to promote cocoa's health benefits and reward farmers in Accra, Ghana, was held on Thursday. The Alliance of Cocoa Producing Countries celebrates the day to motivate younger cocoa farmers and honor those in the industry. (30) Dry weather at Brazil's ports helped loading, as sugar waiting to be loaded fell 10 percent to 1.91 million metric tons. The weather also helped improve processing by 14 percent to 44.2 million tons. (31) Next Week:
1. http://www.reuters.com/article/2012/08/31/us-spain-bank-idUSBRE87U0II20120831 2. http://buzz.money.cnn.com/2012/08/31/spain-unemployment/ 4. http://www.thedailybeast.com/cheats/2012/08/29/us-gdp-revised-up.html 7. http://www.usatoday.com/money/economy/housing/story/2012-08-23/housing-reports-august-28/57234792/1 9. http://www.reuters.com/article/2012/08/31/us-economy-idUSBRE87S0ID20120831 11. http://buzz.money.cnn.com/2012/08/31/facebook-stock-2/ 12. http://blogs.wsj.com/marketbeat/2012/08/31/stocks-to-watch-splunk-zumiez-saic/ 14. http://www.bestsyndication.com/?q=20120831_current_mortgage_rates_today_sti_key.htm 15. http://www.boston.com/cars/news/articles/2012/08/30/us_natural_gas_supplies_grew_last_week/ 17. http://www.foxbusiness.com/news/2012/08/31/ypf-ceo-unveils-five-year-growth-plan-in-argentina/ 18. http://seekingalpha.com/article/831641-crop-progress-slightly-worse-conditions-at-harvest 19. http://www.chinapost.com.tw/business/americas/2012/08/29/352476/Record-Argentine.htm 20. http://www.agprofessional.com/news/Argentina-to-help-fill-global-soy-gap-167733345.html 23. http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=157999&sn=Detail&pid=102055 24. http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=157993&sn=Detail&pid=102055 25. http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=157905&sn=Detail&pid=102055 26. http://www.reuters.com/article/2012/08/30/us-coffee-brazil-flowering-idUSBRE87T14420120830 29. http://www.reuters.com/article/2012/08/27/us-cocoa-ivorycoast-weather-idUSBRE87Q0O020120827 30. http://www.dailyguideghana.com/?p=59026 31. http://www.bloomberg.com/news/2012-08-30/brazilian-sugar-at-ports-drops-10-in-a-week-on-dryness.html _______________________________________________________________________________________ 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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