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FinNews for the week ending October 12, 2012 Top Stories The European Union was awarded a peace prize, despite ongoing economic crisis. (1) Standard & Poor's cut Spain's credit rating to BBB-minus. (2) Consumer sentiment hit the highest level since September of 2007 according to the Thomson Reuters/University of Michigan index reading of 83.1. Estimates placed expectations for a reading of between 75 to 81. (3) Economic Releases & Statistics According to the latest Freddie Mac survey, fixed mortgage rates dropped to, "new lows for the second straight week thanks to a Federal Reserve stimulus program." (4) August wholesale inventories were up in August, climbing 5.3 percent year-on-year. The 0.5 percent monthly gain was in line with economist expectations. (5) The US trade balance was wider than expected. The Commerce Department reported $44.2 billion for August versus forecasts for $44 billion, wider than the revised $42.5 billion for July. (6) The Producer Price Index (PPI) was up higher than expected in September, rising 1.1 percent following a 1.7 percent gain in August. Much of the gain was attributed to higher energy costs. (7) Stocks & Earnings JPMorgan Chase reported quarterly earnings up 34 percent from last year and reaching $5.7 billion. Earnings were $1.40 per share versus $1.02 year-on-year. (8) Wells Fargo also beat forecasts for third-quarter earnings, posting 88 cents per share versus estimates for 87 cents. A jump in mortgage lending was credited for the rise. (9) Global Currencies Japan's Finance Minister was quoted as telling Group of Seven counterparts that, "the strength of the yen is hurting the nation's economy and that countries should cooperate on foreign exchange if necessary." (10) Experts from the IMF suggested that consumption tax increases in Japan may not be enough to "eliminate all the economic threats." (11) A larger than expected gain in jobs in Australia boosted the Australian dollar and speculation that their central bank may cut rates next month. (12) Oil & Energies Crude oil supplies reported in this week's Energy Information Administration (EIA) release showed a build of 1.7 million barrels. Analysts were expecting a 1.5 million barrel gain. Gasoline supplies were down half a million barrels versus forecasts for them to remain unchanged. Distillates were down 3.2 million barrels compared to forecasts for a 400,000 barrel drop. (13) The EIA is also suggesting that supply tightness for heating oil will likely lead to "record-high prices" for consumers this winter. Inventories in the northeast were 43 percent below the five-year average for that week. (14) Increased tensions between Turkey and Syria precipitated a price increase in oil this week. (15) The International Energy Agency says that global markets will see improved supply over the next five years on increases in production and slower growth. (16) Natural gas in storage added 72 billion cubic feet last week. This was smaller than the 80 bcf injection forecast by analysts. (17) Grains & Field Crops This week's WASDE report from the USDA included lower wheat production numbers and reduced yields for corn. A 6.2 million ton drop in global wheat supply estimates are based on reduced production in Australia, Russia, and the EU. In the US, high corn plantings were more reportedly more than offset by reduced yields. (18) Grain export news noted that there were no Russian offers for Egypt this week, fueling speculation that Moscow may move to reduce grain exports on a weak harvest. Argentina stood out as a source for cheap wheat supplies. (19) China may only move to import corn this season "to rebuild reserves if prices are attractive." (20) Wet weather in England is reducing wheat yields and boosting food prices. (21) Precious Metals Gold liquidity problems are reported in Vietnam as domestic demand outpaces supply. (22) This week, Mineweb reported that, "holdings of gold by all ETFs tracked by newswire Reuters hit a new record at 2333.7 tonnes." (23) Mine worker strikes continued in South Africa with at least one person reportedly set on fire while another was shot. (24) Other Commodities Coffee production in Vietnam may drop from the all-time high of 1.6 million tons on dry weather crimping yields. (25) Favorable weather in Brazil was seen as a potential benefit to the upcoming coffee crop. Rains improve flowering prospects. (26) In sugar, analysts see recent price gains as short covering, and expect that the projected 2012-2013 supply surplus will keep rallies short-lived. (27) Next Week:
1. http://www.cbsnews.com/8301-202_162-57531115/european-union-wins-nobel-peace-prize/ 2. http://articles.chicagotribune.com/2012-10-11/business/sns-rt-us-spain-standardandpoors-downgradebre 4. http://www.latimes.com/business/money/la-fi-mo-mortgage-rates-20121004,0,434667.story?track=rss 5. http://www.reuters.com/article/2012/10/10/us-wholesale-inventories-idUSBRE8990X920121010 8. http://dealbook.nytimes.com/2012/10/12/jpmorgan-quarterly-profit-rises-34/ 9. http://www.reuters.com/article/2012/10/12/us-wellsfargo-earnings-idUSBRE89B0NV20121012 11. http://www.profi-forex.us/news/entry4000003970.html 12. http://www.businessinsider.com/australian-dollar-hops-higher-on-jobs-2012-10 13. http://www.businessweek.com/ap/2012-10-11/us-crude-oil-supplies-up-by-1-dot-7-million-barrels 15. http://www.reuters.com/article/2012/10/11/markets-oil-idUSL3E8LB1HY20121011 17. http://www.reuters.com/article/2012/10/11/us-markets-nymex-natgas-idUSBRE89A1GK20121011 18. http://www.usda.gov/oce/commodity/wasde/latest.pdf 19. http://www.agrimoney.com/news/argentina-replaces-russia-as-cheap-wheat-supplier--5062.html 20. http://www.brecorder.com/agriculture-a-allied/183/1246867/ 21. http://www.bbc.co.uk/news/uk-19890250 23. http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=160056&sn=Detail&pid=102055 27. http://www.agrimoney.com/news/brokers-warn-over-revived-hopes-for-sugar-prices--5075.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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