Stocks suffered their worst one-day loss in two months, dropping the S&P 500 back into negative territory for the year in a broad-based sell-off, as investors reconsidered the health of the economy.
Shares of economically sensitive sectors such as financials, energy and materials led the S&P 500's decline. There was also a sharp drop in U.S. crude oil futures and other commodities. Crude oil prices fell about 4% to settle at $66.93/bbl.
The Chicago Board Options Exchange's Volatility Index (Chicago: VIX) jumped past the key 30 level for the market's favorite fear gauge, indicative of an expected period of high volatility on Wall Street.
This week's US$104b in auctions will mark the largest single-week of debt sales, as the U.S. government sells a record US$2t of bonds to finance bail-outs and stimulus programs.
10 US banks repaid bail-out cash, but Citi and BOA not in the list
Thursday, June 18, 2009
Ten banks have collectively repaid $68bn out of the $700bn provided through taxpayer money:
JP Morgan repaid $25bn
Goldman Sachs repaid $10bn
Morgan Stanley repaid $10bn
US Bancorp repaid $6.6bn
American Express repaid $3.4bn
Capital One Financial repaid $3.6bn
BB&T Corp repaid $3.1bn
Bank of Mellon New York repaid $3bn
State Street repaid $2bn
Northern Trust repaid $1.57bn
Before being allowed to pay back money, the banks had to be able to show that they were able to raise cash privately. The 10 banks were given the permission last week to return the funds after undergoing government financial stress tests but Wednesday was the first day they could return the money.
JP Morgan repaid $25bn
Goldman Sachs repaid $10bn
Morgan Stanley repaid $10bn
US Bancorp repaid $6.6bn
American Express repaid $3.4bn
Capital One Financial repaid $3.6bn
BB&T Corp repaid $3.1bn
Bank of Mellon New York repaid $3bn
State Street repaid $2bn
Northern Trust repaid $1.57bn
Before being allowed to pay back money, the banks had to be able to show that they were able to raise cash privately. The 10 banks were given the permission last week to return the funds after undergoing government financial stress tests but Wednesday was the first day they could return the money.
World stock tumble
Tuesday, June 16, 2009
U.S. stocks extended a global slide, sending the MSCI World Index down the most in two months, as falling oil and metal prices weighed on commodity producers. Treasuries rose and the dollar strengthened.
US stocks got off to a poor start Monday, with the major indices ending more than 2% in the red, as doubt grows over the sustainability of the recent rally.
This came after a weaker-than-expected regional manufacturing report dented hopes about the economy's health ? the New York Fed's Empire State index showed that the factory sector shrank at a much more severe pace in June vs. the street's expectation of a slight improvement.
The CBOE Volatility Index VIX, the benchmark gauge for U.S. stock volatility, jumped the most since April 20 as the Federal Reserve Bank of New York's general economic index fell to minus 9.4 from in June from minus 4.6. Readings below zero signal manufacturing is shrinking. Economists in a survey predicted minus 4.6. U.S. stocks fell even as the International Monetary Fund raised its outlook for the U.S. economy. The VIX, which ended at 30.81, also posted its biggest gain of 9.5% since late Apr.
The major stock indexes "are back above their 200-day averages, and it's increasingly tempting to conclude that a new bull market is under way," Toronto-based Ray Hanson wrote in a report dated June 12. However, the S&P 500 "has not yet achieved a golden cross" and "the steadily declining volume since early May suggests caution," he said.
US stocks got off to a poor start Monday, with the major indices ending more than 2% in the red, as doubt grows over the sustainability of the recent rally.
This came after a weaker-than-expected regional manufacturing report dented hopes about the economy's health ? the New York Fed's Empire State index showed that the factory sector shrank at a much more severe pace in June vs. the street's expectation of a slight improvement.
The CBOE Volatility Index VIX, the benchmark gauge for U.S. stock volatility, jumped the most since April 20 as the Federal Reserve Bank of New York's general economic index fell to minus 9.4 from in June from minus 4.6. Readings below zero signal manufacturing is shrinking. Economists in a survey predicted minus 4.6. U.S. stocks fell even as the International Monetary Fund raised its outlook for the U.S. economy. The VIX, which ended at 30.81, also posted its biggest gain of 9.5% since late Apr.
The major stock indexes "are back above their 200-day averages, and it's increasingly tempting to conclude that a new bull market is under way," Toronto-based Ray Hanson wrote in a report dated June 12. However, the S&P 500 "has not yet achieved a golden cross" and "the steadily declining volume since early May suggests caution," he said.
Economists and analysts now predict a sharper dip in Singapore's GDP
Thursday, June 11, 2009
US stocks ended lower on Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort. U.S. stocks fell on Wednesday on worries that rising interest rates could put a damper on consumer and business spending, but stocks pared losses late in the session to finish off the day's lows. The market had extended losses after a 10-year Treasury note auction sparked a sell-off in bonds, pushing yields briefly above 4 percent for the first time since October. Stocks recovered from the sell-off after the bond market rebounded, with the yield at 3.9455 percent. Investors are worried that higher yields, which act as a benchmark for many lending rates, could handcuff an economic recovery. Interest rate-sensitive stocks, such as homebuilders and financials, were among the primary laggards, with the Dow Jones U.S. Home Construction index off 1.5 percent and the S&P Financial index down 1.6 percent. The Dow Jones industrial average fell 24.04 points, or 0.27 percent, to 8,739.02. The Standard & Poor's 500 Index slid 3.28 points, or 0.35 percent, to 939.15. The Nasdaq Composite Index dropped 7.05 points, or 0.38 percent, to 1,853.08.
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures. Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale. After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low. The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Economists and analysts now predict a sharper dip in Singapore's GDP for the full-year than they forecast in March, but continue to expect the rate of contraction to slow in the coming quarters, according to a quarterly survey by the Monetary Authority of Singapore, released yesterday. The survey showed that 19 professional forecasters polled in late May now expect Singapore's economy to shrink 6.5 per cent this year, worse than the 4.9 per cent contraction forecast in March. This comes in at the higher end of the official forecast of a 6 to 9 per cent contraction. For the second quarter, the median forecast from respondents was a 7.7 contraction in GDP from a year earlier, a larger decline than the 6.9 per cent fall predicted in March.
Property auctions are in vogue again, with deals touching $18.5 million in May alone. This is higher than the $17.9 million for the whole of Q1 this year, show Colliers International figures. Banks are playing their part by occasionally stepping aside and letting owners hock their own properties. This is because prices tend to slide when financial institutions repossess a property and offer it as mortgagee sale. After a slow start to the year, a total of $47.7 million worth of properties have been sold at auction in the first five months. Colliers deputy managing director and auctioneer Grace Ng is now predicting that the year would see about $150 million of auction deals - compared to $83.7 million for 2008, which was an 11-year low. The May figure is the highest since August last year, when auction sales touched about $22.7 million. But last August's number was bumped up by state auctions that raised $13.81 million, while no such special factor was at play in May.
Economists and analysts now predict a sharper dip in Singapore's GDP for the full-year than they forecast in March, but continue to expect the rate of contraction to slow in the coming quarters, according to a quarterly survey by the Monetary Authority of Singapore, released yesterday. The survey showed that 19 professional forecasters polled in late May now expect Singapore's economy to shrink 6.5 per cent this year, worse than the 4.9 per cent contraction forecast in March. This comes in at the higher end of the official forecast of a 6 to 9 per cent contraction. For the second quarter, the median forecast from respondents was a 7.7 contraction in GDP from a year earlier, a larger decline than the 6.9 per cent fall predicted in March.
Investors worry about the rally but also worry about missing it
Tuesday, June 9, 2009
US stocks started the first day of the week sharply lower, but subsequently recovered towards the end of the session to end mixed.
The market spent much of the day chasing the fall in commodity prices but also recovered ground as commodities came off their lows. Market watchers noted that commodities tend to rise along with investors' belief in an economic recovery, and fall when pessimism sets in.
While investors are starting to worry about the soundness of the market's rally, market watchers noted that investors are also worried about missing it and hence the strong buying in at lower levels.
Besides the drop in hard commodity prices, oil also fell 35 US cents to US$68.09/barrel on NYME. Meanwhile, over in Europe, investors are also starting to worry about the longevity of the rally ? the FTSE fell 0.8%, DAX fell 1.4% and CAC dropped 1.5%.
The market spent much of the day chasing the fall in commodity prices but also recovered ground as commodities came off their lows. Market watchers noted that commodities tend to rise along with investors' belief in an economic recovery, and fall when pessimism sets in.
While investors are starting to worry about the soundness of the market's rally, market watchers noted that investors are also worried about missing it and hence the strong buying in at lower levels.
Besides the drop in hard commodity prices, oil also fell 35 US cents to US$68.09/barrel on NYME. Meanwhile, over in Europe, investors are also starting to worry about the longevity of the rally ? the FTSE fell 0.8%, DAX fell 1.4% and CAC dropped 1.5%.
Stock down, Credit Card delinquecy rate up, Barclays sell BGI to BlackRock
Monday, June 8, 2009
Wall Street was set for a lower open Monday following declines in Europe and as investors look to take a pause in a three-month rally. Stock futures fell. Major European markets all fell by more than 1 percent. In afternoon trading, Britain's FTSE 100 fell 1.4 percent, Germany's DAX index declined 1.7 percent, and France's CAC-40 dropped 1.6 percent. Only Japan's Nikkei stock average rose 1 percent. The dollar rose against other major currencies, while gold prices fell.
The delinquency rate jumped to 1.32 percent this year, from 1.19 percent in the first three months of 2008. The average total debt on bank cards also rose, jumping to $5,776 from $5,548 last year. Depending on the impact of economic stimulus programs and the effects of unemployment, TransUnion said the rate of increase could taper off early next year, but the peak is not likely to be reached until late 2010 or early 2011.
Barclays Plc is in talks to sell Barclays Global Investors (BGI), the British bank said on Monday, with U.S. fund manager BlackRock the frontrunner to land the asset manager for about $12 billion.
The delinquency rate jumped to 1.32 percent this year, from 1.19 percent in the first three months of 2008. The average total debt on bank cards also rose, jumping to $5,776 from $5,548 last year. Depending on the impact of economic stimulus programs and the effects of unemployment, TransUnion said the rate of increase could taper off early next year, but the peak is not likely to be reached until late 2010 or early 2011.
Barclays Plc is in talks to sell Barclays Global Investors (BGI), the British bank said on Monday, with U.S. fund manager BlackRock the frontrunner to land the asset manager for about $12 billion.
3-month market rally raises question
The rally has added 2,220 points the Dow Jones industrial average to put it within a dozen points of being flat for the year. But the Dow is still down 5,400 points from its high of 14,164.53 in October 2007. But some analysts contend that investors are in danger of setting expectations too high for how quickly the economy can recover from the recession that started in December 2007.
Even if the worst is over for the economy, investors are still staring at a long list of worries. Housing remains in a funk and unemployment sits at a 26-year high. The government said Friday that employers shed 345,000 jobs last month, the fewest since September. But unemployment is still a high 9.4 percent after four straight months of slowing layoffs.
"Are we getting ahead of ourselves in terms of market levels? I believe that we are and I think investors would be wise to take some profits off the table," said Walter Gerasimowicz, chairman and chief executive of Meditron Asset Management as reported at Yahoo Finance.
Even if the worst is over for the economy, investors are still staring at a long list of worries. Housing remains in a funk and unemployment sits at a 26-year high. The government said Friday that employers shed 345,000 jobs last month, the fewest since September. But unemployment is still a high 9.4 percent after four straight months of slowing layoffs.
"Are we getting ahead of ourselves in terms of market levels? I believe that we are and I think investors would be wise to take some profits off the table," said Walter Gerasimowicz, chairman and chief executive of Meditron Asset Management as reported at Yahoo Finance.
New US jobless claims dip for third week, but Malaysia export drop 26.3%
Friday, June 5, 2009
The Labor Department said that the number of initial claims for jobless benefits in the week ending May 30 dipped to 621,000 from the previous week's revised figure of 625,000.
Malaysia's April exports dropped 26.3 percent year on year, according to official data released Thursday. The trade ministry said in a statement that exports fell to 41.12 billion ringgit (11.7 billion dollars) from a year ago while imports plunged 22.4 percent year on year in April to 33.76 billion ringgit.
Singapore, China, US, Japan and Thailand were the top five export destinations, accounting for 52.4 percent of exports for April. In April Malaysia's exports to China shrank 9.4 percent to 5.11 billion ringgit compared with a year ago, due to lower exports of palm oil and rubber. Exports to the US during the same period plunged 38.2 percent, due to lower exports of electrical and electronic products,
Malaysia's April exports dropped 26.3 percent year on year, according to official data released Thursday. The trade ministry said in a statement that exports fell to 41.12 billion ringgit (11.7 billion dollars) from a year ago while imports plunged 22.4 percent year on year in April to 33.76 billion ringgit.
Singapore, China, US, Japan and Thailand were the top five export destinations, accounting for 52.4 percent of exports for April. In April Malaysia's exports to China shrank 9.4 percent to 5.11 billion ringgit compared with a year ago, due to lower exports of palm oil and rubber. Exports to the US during the same period plunged 38.2 percent, due to lower exports of electrical and electronic products,
Temasek Holdings has divested its entire 2% stake in UK bank Barclays Plc and has suffered a loss of £500-600m (S$1.2-1.4bn)
Thursday, June 4, 2009
Stocks took a breather on Wednesday, halting a four-day winning streak, as falling oil prices hit energy shares, while less upbeat economic reports rekindled worries about recovery prospects. Oil prices slipped more than 3% to US$66.12/bbl after a surprise build-up in inventories.
On the economic front, data showed the vast service sector contracted for the eight straight month in May and a report showing employers axed 532,000 private-sector jobs last month. The data fell short of expectations and indicated that profit growth for companies will take longer than expected. The employment data is typically indicative of the government's unemployment report, due on Friday. The unemployment rate is forecast to jump to 9.2% from 8.9% in April.
Back in Singapore, Keppel is in Focus. SKEIE Drilling and Production (SKDP), a customer of Keppel Corp, is at risk of filing for bankruptcy if a proposed restructuring falls through. SKDP has proposed to restructure its balance sheet by i) extending the delivery dates of the 3 N-class rigs at Keppel yard by 4-6 months and ii) raising additional US$170m together with Wideluck Pte Ltd (Keppel's subsi) via US$85m equity and private placements. Keppel Corp's stake in the 3 rigs is estimated at about 10%. However, SKDP's proposal have been rejected by a group of bondholders which hold majority share of its 3 secured bond loans issued by SKDP. We have a SELL rating on Keppel Corp with a target price of S$7.10.
Temasek Holdings has bailed out of another banking investment: it has divested its entire 2% stake in UK bank Barclays Plc and has suffered a loss of £500-600m (S$1.2-1.4bn) in the process.
Temasek's loss is in sharp contrast to Abu Dhabi which sold more than 11 percent of the bank's shares on Tuesday, making a $2.5 billion profit in just seven months
Temasek first invested in Barclays in mid-2007 when Barclays was pitted against Royal Bank of Scotland in an ultimately unsuccessful bid to buy ABN Amro. At the time, Temasek purchased 135m shares, or about 1.61 per cent of Barclays. Last year, Temasek said it would spend up to £200m when Barclays launched a placing to raise £4.5bn. However, it did not disclose how many shares it actually purchased. It declined to comment on this year's sale, saying: "It is inappropriate for us to comment on individual share transactions."
Source:
http://www.ft.com/cms/s/0/eab5c5a6-509f-11de-9530-00144feabdc0.html
http://online.wsj.com/article/SB124402933796181059.html?mod=googlenews_wsj
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL334812220090603
On the economic front, data showed the vast service sector contracted for the eight straight month in May and a report showing employers axed 532,000 private-sector jobs last month. The data fell short of expectations and indicated that profit growth for companies will take longer than expected. The employment data is typically indicative of the government's unemployment report, due on Friday. The unemployment rate is forecast to jump to 9.2% from 8.9% in April.
Back in Singapore, Keppel is in Focus. SKEIE Drilling and Production (SKDP), a customer of Keppel Corp, is at risk of filing for bankruptcy if a proposed restructuring falls through. SKDP has proposed to restructure its balance sheet by i) extending the delivery dates of the 3 N-class rigs at Keppel yard by 4-6 months and ii) raising additional US$170m together with Wideluck Pte Ltd (Keppel's subsi) via US$85m equity and private placements. Keppel Corp's stake in the 3 rigs is estimated at about 10%. However, SKDP's proposal have been rejected by a group of bondholders which hold majority share of its 3 secured bond loans issued by SKDP. We have a SELL rating on Keppel Corp with a target price of S$7.10.
Temasek Holdings has bailed out of another banking investment: it has divested its entire 2% stake in UK bank Barclays Plc and has suffered a loss of £500-600m (S$1.2-1.4bn) in the process.
Temasek's loss is in sharp contrast to Abu Dhabi which sold more than 11 percent of the bank's shares on Tuesday, making a $2.5 billion profit in just seven months
Temasek first invested in Barclays in mid-2007 when Barclays was pitted against Royal Bank of Scotland in an ultimately unsuccessful bid to buy ABN Amro. At the time, Temasek purchased 135m shares, or about 1.61 per cent of Barclays. Last year, Temasek said it would spend up to £200m when Barclays launched a placing to raise £4.5bn. However, it did not disclose how many shares it actually purchased. It declined to comment on this year's sale, saying: "It is inappropriate for us to comment on individual share transactions."
Source:
http://www.ft.com/cms/s/0/eab5c5a6-509f-11de-9530-00144feabdc0.html
http://online.wsj.com/article/SB124402933796181059.html?mod=googlenews_wsj
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL334812220090603
PM Lee says Recession far from bottoming out
Wednesday, June 3, 2009
Singapore Prime Minister Lee Hsien Loong has warned that it may be too hasty to pronounce that the recession has bottomed out. Even though the US has spoken of potential green shoots in the economy, Mr Lee noted that what has happened is that things are turning bad slower.
Even as governments focus on fixing the economy, Mr Lee pointed out that they must not neglect long-term issues like climate change. To read more at CNA.
Even as governments focus on fixing the economy, Mr Lee pointed out that they must not neglect long-term issues like climate change. To read more at CNA.
Pending Home Sales See Biggest Rise since 2001
Tuesday, June 2, 2009
The number of Americans signing contracts to buy previously owned homes climbed 6.7 percent in April, more than forecast and the fourth increase in five months, as lower prices attracted buyers.
Foreclosure-driven declines in values and tax incentives may put more homes within reach of first-time buyers, helping to stabilize the market and stemming the biggest drag on economic growth. Still, with mortgage rates no longer dropping and unemployment climbing, the real-estate industry may flounder near recent lows for months before a sustained recovery.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
Foreclosure-driven declines in values and tax incentives may put more homes within reach of first-time buyers, helping to stabilize the market and stemming the biggest drag on economic growth. Still, with mortgage rates no longer dropping and unemployment climbing, the real-estate industry may flounder near recent lows for months before a sustained recovery.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
NOL - Right Issue Finally
When markets improved, many companies rushing into the market to raise funds. Another S$1bln of liquidity will be taken out from the market by NOL. Neptune Orient Lines Limited said that the Company is undertaking a renounceable underwritten rights issue of new ordinary shares in the Company to raise gross proceeds of approximately S$1.437 billion on the basis of three (3) Rights Shares for every four (4) Shares at S$1.30 for each Rights Share.
In the US, the Dow Jones closed up 2.6%. In London the FTSE 100 closed up 2.0%. Frankfurt's Dax rose 4.1% and the Cac40 in Paris gained 3.1%. Reports on the manufacturing sectors in China, the US and the UK gave fresh hope that the battered sectors were on the road to recovery.
Also in the US, consumer spending was better than expected and construction spending rose for the second month. Two measures of manufacturing in China showed the sector expanded in May.
In the US, the Dow Jones closed up 2.6%. In London the FTSE 100 closed up 2.0%. Frankfurt's Dax rose 4.1% and the Cac40 in Paris gained 3.1%. Reports on the manufacturing sectors in China, the US and the UK gave fresh hope that the battered sectors were on the road to recovery.
Also in the US, consumer spending was better than expected and construction spending rose for the second month. Two measures of manufacturing in China showed the sector expanded in May.
GM filed for bankruptcy and yet expect stunning opening at US stock market
Monday, June 1, 2009
GFT on Monday forecast a "stunning opening" for the first trading day of summer, expecting the Dow Jones industrial average will open up 120 points while the S&P 500 opens up 15 points. "We saw a positive PMI number from China overnight which has given traders further confidence in the recovery story," the firm wrote. "It feels like the driver today is fear amongst fund managers that they are missing the rally.
General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration's plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government. GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.
General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration's plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government. GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.
Olam sells share to Temasek
The S&P 500 spent nearly the entire session gyrating within a nine point range amid light trading volume, but managed to close at session highs following a late flurry of buying and a spike in trading volume.
In what was May's final trading session, more than 1.8 billion shares traded hands on the NYSE, the most in more than one month.
Olam International said on Monday it has agreed to sell 13.76 percent of its enlarged capital to state investor Temasek Holdings for S$437.5 million ($303.2 million). Olam said the deal, which would make Temasek the second biggest shareholder in the commodity company, is aimed to boost its future growth.
In what was May's final trading session, more than 1.8 billion shares traded hands on the NYSE, the most in more than one month.
Olam International said on Monday it has agreed to sell 13.76 percent of its enlarged capital to state investor Temasek Holdings for S$437.5 million ($303.2 million). Olam said the deal, which would make Temasek the second biggest shareholder in the commodity company, is aimed to boost its future growth.
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