Markets and money – July 13

Here’s a preview of the markets, about halfway into the trading session in the US:

mkt71309

The markets in the US are slightly up after positive earnings expectations for Goldman Sachs fill the waves.  The bank is scheduled to release numbers tomorrow, and JP Morgan, Citi and BofA are set to follow this week.  This is compounded by an upgrade on the bank by Meredith Whitney, giving it a ‘Buy’ and a price target above $180.  As of this writing, the Dow is at its session high, up 130 points or 1.60% at 8277, while the S&P 500 is up 13.40 points to 892, above the 870 support level.

It is about the same story in the European markets, with the major indices finishing positive for the day after bank stocks (and apparently Meredith Whitney’s story as well) gave them a lift.  The U.K. FTSE 100 index was up or 1.3%, at 4,181.36 while Germany’s DAX Xetra rose 1.8% to 4,660.45. The French CAC-40 index was up 1.5% 3,027.93.

However, Asian markets face uncertainties closing negatively after the Japanese Prime Minister Taro Aso, whose party is lagging behind polls, called an election for August 20th.  The Nikkei lost 2.6% to 9,050.33, its ninth straight losing session. One of the few that advanced is brewery giant Kirin and the news of its planned merger with Suntory Holdings, which could potentially create a beverage titan.  The stock surged 7.8%.

Earnings woes in the US didn’t help Asian markets.  In Hong Kong, the Hang Seng Index also lost 2.6% to close at 17,254.63 while Taiwan’s Taiex and South Korea’s Kospi each tumbled 3.5%. Australia’s S&P/ASX 200 Index dropped 1.5% and India’s Sensex ended down by 0.8%.  Singapore’s Straits Times slid 1.8%.

To currencies:

curr71309

On a week where earnings are bringing worries back to investors, the dollar and the yen are the winners as risk tolerance wanes and investors seek safe havens.  Add to that the economic numbers that are set to come out from the UK this week.  FT notes: UK June employment data released on Wednesday is expected to show 42,000 jobs were lost last month, while the June consumer price index data is forecast to show a further fall in inflation, with prices rising by 1.8 per cent points year-on-year compared to 2.2 per cent in 2008.

Sterling lost 0.8 per cent against the euro to €0.8684, and hit $1.6067, down 0.7 percent, a level that is about the 1-month low against the greenback.  Late Monday morning in New York, the euro was at $1.3969 from $1.3949 late Friday. The yen rose 0.4 per cent to Y92.11 against the dollar.  The Japanese currency also strengthened against the kiwi and the greenback. The dollar was at 1.0874 Swiss francs from 1.0849 Swiss francs.

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