Markets and money – July 15

It’s a good day today for the markets:

mkt715

Halfway into the trading day, the US markets are poised to close higher for the third straight day following record breaking quarter results from financial giant Goldman Sachs and chipmaker Intel, which reported after the bell yesterday.  As of 1PM in New York, the Dow is up 188 points or 2.25% to 8,548 while the S&P500 is beyond the 911 key level, rallying 20 points ot 2.22% to almost 926.  The tech index Nasdaq acts as the leader with a 2.75% increase to 1,849.

Markets in Asia as well as Europe are also encouraged by the results, with the positive outlook from Intel driving tech stocks higher and the Goldman results doing the same for financials.  Some see Intel’s guidance as an indicator of improving economy, with consumers and capital spending both expected to be on the rise.  Here’s how the markets closed in Asia:

Hong Kong’s Hang Seng Index climbed 2.1% to 18258.66 and South Korea’s Kospi rose 2.6% to 1420.86.  Australia’s S&P/ASX 200 and Taiwan’s Taiex both advanced 1.5% each, while the Shanghai Composite rose a little less at 1.4%.  India’s Sensex closed up 2.9% and Singapore’s Straits Times Index jumped 3.4%.   Meanwhile, it was a more timid showing for the Nikkei which was only up by a tenth of a percent, after the central bank maintained the key lending rate and decided to extend its liquidity measures by 3 months, from end of the third quarter to end of year.

Moving to the other region, the FTSE 100 Index was higher by 2.6% to 4346.46, the German DAX pulled up 3.1% to 4928.44 and the French CAC40 Index continued to advance for the third day 2.9% to 3171.27.  The FTSE was resilient amidst data showing 281,000 jobs were shed during the quarter while initial jobless claims were lower than expected.

Next, it’s a different scenario for the currencies today.

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Meanwhile, the dollar is on a losing ground today as major currencies advance against the greenback after better than expected earnings for Intel and Goldman Sachs were released yesterday, leading to a rally in the broader markets and a more upbeat outlook.  It was also affected by news that China’s forex reserves have hit $2,130bn, with a significant increase for the month of May, pointing to a lot of hot money flowing into the economy.

The dollar fell 0.6 per cent to $1.4054 against the euro, some 0.3 per cent to $1.6359 against the British pound and a bigger 0.8 per cent to SFr1.0800 against the Swiss franc.

Rising commodity prices, including crude oil surpassing $60-a-barrel today in the markets, caused currencies tied to commodities to advance against the dollar.  The Australian dollar surged 0.5 per cent to $0.7981, higher than the Canadian dollar’s 0.2 per cent rise to C$1.1317.

Between the two safe haven currencies, the greenback was flat at Y93.58 against the yen.

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