Markets and money – July 14

On the day Goldman Sachs earning reported impressive numbers, here’s an overview of the global markets halftime in the trading day:

mkt714

US markets are just about flat, going back and forth from negative to positive territory, despite the Goldman numbers that beat just about all expectations.  Apart from that are earnings report from Johnson and Johnson, as well as retail sales, which although higher was only caused by purchases of automobiles and gasoline.  Sales in restaurants, department stores etc. were still down removing expectations from many that the recession is over.  PPI or producer price index are also up, albeit only slighty, again driver more by food and energy prices.  At this moment, the Dow is up 14.8 points while the Nasdaq is up 3.14 and the S&P higher by almost 2.75 points.

European markets rode on the strong finish by the US market yesterday as well as the strong figures from Goldman Sachs, closing positive for the day.  The FTSE closed about 6/10 percent higher, while the CAC was up by almost a percent, at 0.98%, while the DAX had the strongest showing with 1.12% increase – that amid reports of falling investor confidence in Germany and that the house prices in the UK may have begun to stabilize after a survey conducted by the Royal Institute of Chartered Surveyors indicated that some people are pointing to higher home prices.

Markets in Asia are closed when the Goldman numbers were released but the futures are pointing to another day on the green.  The Nikkei finally ended a 9-day losing streak closing 2.3 per cent up to 9,261.81 while the broader Topix index rose 1.9 per cent to Y868.57.  Banks, energy, and auto sectors were the stars of the day for these Asian markets, leading the Australian index to rally the most so far this year, while the Hang Seng has rallied the most in a month, and the Shanghai index has reached its highest level in 13 months.

The Hang Seng rose 3.7 percent to close at 17,885.73, while the Shanghai Composite index advanced 2.1 per cent to 3,145.16.  The Indian Sensex was up 3.4 per cent to 13,853.70, the Taipei index rose 1.7 per cent to 6,639.41, the Straits Times index in Singapore gained 1.9 per cent to 2,310.55 and the Korean Kospi in Seoul climbed 0.5 per cent to 1,385.56.

Moving on to the currencies:

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The pound is up against the dollar after some economic data improve market sentiments and increase hopes of recovery.  Numbers such as retail sales and housing price show to have improved, moving some investors to retreat from the dollar, which is a safe haven when risk appetite decreases.  FT is reporting: The pound rose 0.5 per cent to $1.6320 against the dollar, climbed 0.5 per cent to £0.8563 against the euro and gained 0.7 per cent to Y151.88 against the yen.

It is a bit of a different story for the euro that is at $1.3950 from $1.3994 late Monday, and the dollar bought ¥92.87 from ¥92.95.  The euro also fetched ¥129.55 from yesterday’s ¥130.08.

Many Asian currencies are up against the greenback after some positive news about Singapore’s economy walking out of a recession after it grew at an annualized 20.4% last quarter.  From the FT: The dollar fell 0.6 per cent to $0.7876 against the Australian dollar and eased 0.1 per cent to $0.6334 against the New Zealand dollar.  The South Korean won rose 1.1 per cent to Won1,294.20 against the dollar. The yen is still stronger against the dollar, but weaker against others.  From Bloomberg: The yen traded at 129.47 per euro at 10:44 a.m. in New York, compared with 129.95 yesterday. The yen gained 0.1 percent to 92.86 per dollar from 92.97. The yen lost 0.3 percent to 73.02 against the Australian dollar and weakened 0.6 percent to 81.26 versus the Canadian currency.

Just to expand a little on currencies, looking at the ruble – it rose the steepest against the dollar after crude oil has rallied past $60 a barrel, after days of hovering below it.  Russia’s currency gained 1.7 percent to 32.2282 per dollar, its strongest advance since March 19, and it was also higher by the same percent against the euro to 45.0061 after the strong Q2-performer Goldman Sachs Group Inc. stated that an increase to 44 would be a “fair value” for the ruble against the euro.

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