Stocks fell around the world this week amid growing concern that the economy is slowing. In the United States, the Dow Jones Industrial Average extended its longest weekly slump in more than eight years, while the Standard & Poor's 500 Stock Index has now been in decline for six straight weeks.
Global economic news
U.S. trade deficit narrows; China's surplus less than expected
The U.S. trade deficit unexpectedly narrowed amid record exports and a plunge in auto and oil imports. The gap shrank 6.7% to $43.7 billion, the lowest since December. Purchases of goods from Japan dropped by a record $3 billion in the aftermath of the earthquake and tsunami. Stocks rallied after the news, on hopes that trade would help boost economic growth. Meanwhile, China reported a less-than-expected $13.1 billion trade surplus in May as surging imports signaled that the nation's demand may support global growth while adding pressure for higher interest rates.
ECB signals rate increase; BOE keeps rates on hold
The European Central Bank signaled it is likely to raise interest rates in July. ECB President Jean-Claude Trichet said "strong vigilance" is needed to contain inflation. The bank raised rates in April for the first time in nearly three years and was the fifth major central bank in the developed world to begin raising rates from the lowest levels of the financial crisis. The Bank of England meanwhile kept its main rate at 0.5% for the twenty-seventh month in a row. Eurozone inflation was running at 2.7% in May, well above the ECB's target of just under 2%.
Bank of Korea raises rates; Indonesia rates unchanged
The Bank of Korea raised interest rates for a third time this year to rein in inflation, which has exceeded its target range, and to curb record household debt. The bank increased the benchmark seven-day repurchase rate to 3.25% from 3%. Korea's rate increase followed one by Thailand on June 1, as job growth and costlier energy caused consumer price gains to exceed the Bank of Korea's 4% ceiling. That was Thailand's fourth rate increase this year. Also this week, the Bank of Indonesia left its reference rate at 6.75%, as a strengthening currency helped contain inflation.
ECB opposes Greek bailout
The European Central Bank this week maintained its resistance to participating in a bailout of Greece. The Greek budget shortfall may amount to $130 billion through 2014. Governments have been trying to come up with a new aid package by a European summit on June 23 to June 24. The International Monetary Fund has threatened to withhold its share of Greece's bailout until governments that guarantee the financing needs for the next 12 months are covered. The IMF was due to turn over 3.3 billion this month.
Japan's GDP contracts 3.5%
Japan's economy contracted 3.5% in the three months ended March 31, less than the 3.7% contraction reported last month. The better-than-expected number is seen as a sign that the economic slump caused by the earthquake was not as deep as expected. An upward revision in inventories helped limit the depth of the downturn. Producer prices in the country rose for an eighth month in May, in line with the rise in energy and raw material costs. Prices companies pay for energy and unfinished goods rose 2.2% from a year earlier. On a more upbeat note, an index of the current business conditions, released by Japan's Cabinet Office, rose to 36 in May from 28.3 in April. However, readings under 50 indicate more pessimism than optimism.
Eurozone economy grows 0.8%
The eurozone economy grew 0.8% in the first quarter, up from 0.3% in the previous three months, according to the European Union's statistics office Eurostat. In year-on-year terms, GDP growth was 2.5%, up from 1.9% in the last three months of 2010. Investment, as well as household and government consumption, drove growth in the first quarter. On the flip side, European industrial orders declined more than expected in March, led by a drop in demand for durable consumer goods. Orders fell 1.8% from February. The drop suggests that the eurozone recovery may struggle to gather strength after having expanded at a solid pace in the first quarter.
U.S. jobless claims rise
Initial jobless claims unexpectedly increased last week, rising 1,000 to 427,000 in the week ended June 4. The numbers indicate that the labor market is still struggling.
Global corporate news
Toyota forecasts 31% profit drop
Toyota Motor forecast a 31% drop in annual profit after Japan's earthquake disrupted production and sales while the yen strengthened. The company said net income may fall to ¥280 billion in the 12 months ending March 31, 2012, from the¥408 billion that was expected by analysts.
J. Crew posts Q1 loss
J. Crew posted a loss for its fiscal first quarter because of costs related to its March buyout the company was taken private in early March in a $3 billion acquisition by a group of investors. In addition, the apparel retailer's bottom line was hurt by markdowns and promotions.
Showing posts with label toyota. Show all posts
Showing posts with label toyota. Show all posts
Friday, June 10, 2011
Friday, April 8, 2011
U.S. Economic News Week Ending April 8, 2011
In a week of sharp contrasts, encouraging economic news from the United States, Europe, and Asia mixed with fresh concerns regarding Portugal, which is now the third eurozone member to request a financial bailout. Meanwhile, the U.S. federal governments budget showdown was going down to the wire, with potential widespread impacts. The U.S. dollar weakened on uncertainty over the possible government shutdown. And just as Japan was taking steps toward regaining a sense of normalcy after the March 11 earthquake, a less powerful earthquake, measuring 7.1, hit the northeast area of the country Thursday, shaking buildings and nerves. Unrest continued in the Middle East, pushing the price of oil higher.
Late in the week, light crude oil for May delivery was trading at more than $111 per barrel. Gold for June delivery was above $1,470 while silver reached a 31-year high, rising above $40 an ounce partly in response to U.S. dollar weakness.
Trading in major global stock indices was fairly calm, as investors appeared hopeful the signs of economic recovery might offset the short-term political uncertainty.
Global economic news
U.S. budget battle showdown down to wire
With high stakes and credibility on the line, and facing a firm deadline of midnight Friday, Democrats and Republicans in the U.S. Congress kept negotiating the 2011 federal budget overnight Thursday into Friday morning. At issue: proposed spending cuts of $33 billion to $40 billion and political differences on various issues. At stake: shutting down all-but-essential government services, furloughing 800,000 federal employees, and cutting off paychecks to workers. Among many ripple effects: suspending government mortgage loan guarantees to lower-income families, closing national parks and leaving tourist industry workers without pay, and stopping government economic data collection. A 20-day government shutdown in late 1995 reportedly cut economic growth by a full percentage point in that quarter.
U.S. jobless claims shrink further
The number of new claims for unemployment benefits fell by 10,000 to 382,000 during the week ended April 2, marking the seventh decrease in 10 weeks. The four-week average fell by 5,750 to 389,500.
U.S. service sector growth eases
The U.S. nonmanufacturing sector grew in March, but at a slower pace than February, according to the Institute for Supply Management. The ISM nonmanufacturing purchasing managers index fell to 57.3 from 59.7 in February.
March retail sales strong
American consumers spent more freely in March, allowing retailers from discounters to sellers of luxury brands - to post strong sales figures. A group of 25 retailers tracked by Thomson Reuters posted a 1.7% rise in same-store sales in March. Costco reported a 13% rise in same-store sales, while Victoria Secrets parent firm Limited Brands increased sales by 14%. Higher-end retailers Saks and Nordstrom also had robust results. Target, Kohls, and JC Penney were among the retail chains with declining same-store sales.
ECB raises interest rates
The European Central Bank raised its benchmark interest rate on Thursday by 0.25 percentage points, as was widely anticipated. The ECB must walk a fine line, between controlling inflation, already at a 2.6% annual rate last month, and not creating obstacles to economic recovery for troubled eurozone member countries Greece, Ireland, and Portugal.
China raises interest rates for fourth time; inflation still high
Chinas central bank raised interest rates for the fourth time in six months in its latest effort to tame inflation and stop the worlds fastest-growing economy from overheating. Consumer prices in China rose 4.9% in February while producer prices were 7.2% higher. Even with tighter controls in place, many economists cited in The New York Times see Chinas economy growing 9% in 2011 with a 3% annual inflation rate.
Portuguese government to receive bailout package
The Portuguese government is seeking financial assistance from the European Union as it strives to regain solid financial footing. A package worth 90 billion ($129 billion) is being worked on involving the European Commission, European Central Bank, and International Monetary Fund. It could take several weeks to work out an austerity program that would accompany the bailout. Portugal is the third nation in the eurozone, after Greece and Ireland, to ask for a bailout.
Portuguese debt downgrade led to rising yields
Portugals debt rating continued to plummet and its government bond yields soared this week after Moodys Investor Service downgraded Portugals long-term bonds by one level, to "Baa1" from "A3." Standard & Poors lowered its rating for Portuguese debt by three notches in two cuts in the last couple of weeks. The Portuguese government paid an average yield of 5.117% on six-month Treasury bills at an auction on Wednesday, compared with 2.984% at a March 2 auction. The average yield on 12-month Portuguese Treasury bills rose to 5.902%, from 4.441% on March 16.
Japanese business confidence falls
Japanese business sentiment is sagging after Marchs devastating earthquake and tsunami, according to a quarterly survey released Monday by Japans central bank. Sentiment went from a reading of plus 3 before the earthquake to minus 2 afterwards. Economists believe overall industrial production slumped by 10% in March compared with February and the economic fallout could continue for months. Meanwhile, a so-called "economy watchers survey" that regularly questions hotel and restaurant workers, barbers, and tax drivers on economic sentiment fell to 27.7 in March from a reading of 48.4 in February.
Toyota, Japanese airlines to resume activity
Toyota said it would resume limited production from April 18 to 27 at its Japanese plants, where half of all its vehicles sold globally are built. Japans major airlines plan to restart flights to the Sendai airport, which had shut downs after the March 11 tsunami.
Eurozone business growth eases slightly
Private-sector growth in the eurozone eased a bit in March, according to a survey released this week by financial information firm Markit. Its eurozone composite output index eased to 57.6 from 58.2 in February. Any reading above 50 indicates economic growth.
German manufacturing orders, industrial production rise
German manufacturing orders were 2.4% higher in February than January, as domestic and eurozone demand improved. This adds to a 3.1% increase in January orders. Meanwhile, German industrial production rose 1.6% in February from January and 14.8% from February 2010, another strong sign of economic recovery in Germany.
Global corporate news
TI chips in $6.5 billion for National Semiconductor
Texas Instruments offered $6.5 billion in cash to buy its rival semiconductor chipmaker National Semiconductor. The bid represented a 78% premium over Nationals stock price at the time of the bid, indicating how highly TI values Nationals niche of making chips based on analog technology that are used in cell-phone radio signals and in the management of power consumption in computers.
Bombardier profits take off
Canadian plane, train and snowmobile maker Bombardier rode a big pickup in business-jet orders to much higher fourth-quarter earnings. The Montreal-based firm almost tripled its net aerospace orders in its latest quarter while selling 10 times as many business aircraft as a year earlier, propelling its profits 82% higher than the year-earlier quarter.
Bite taken out of Apples size on Nasdaq 100
Apple will have a large bite taken out of its weighting on the closely tracked Nasdaq 100 Index as part of a large and rare rebalancing of the index on May 2. After the rebalancing, Apple will make up 12% of the Nasdaq 100 versus 20% today. The rebalancing was partly driven by Apples meteoric rise, as the firms shares have grown more than fourfold in two years, causing Apple to have too great an impact on one of the most heavily traded stock indices. More than $330 billion of assets track the Nasdaq 100 through ETFs, mutual funds, options, and futures.
KB Home loss grows on weak home sales
Home builder KB Home saw its first-quarter loss more than double from a year earlier on falling orders and a substantial decrease in revenue. Deliveries fell 28% and net orders were 32% lower. The year-over-year comparison was unfavorable partly because of the temporary boost provided by last years federal tax credit for homebuyers.
Toyota faces possible downgrade
Moodys Investor Service said it has put Toyota Motor and its subsidiaries on review for a possible downgrade as a result of the financial impact caused by the March 11 earthquake and tsunami and the resulting interruption of automobile and auto parts production. Moodys is also closely watching the quakes impact on Nissan Motor and Honda Motor.
Dish wins Blockbuster deal
In a dramatic marathon bankruptcy auction, Dish Network made a winning $320-million bid for the assets of Blockbuster, the movie-rental chain. Dish may use some Blockbuster stores to sell subscriptions to its service and is reportedly interested in some synergies from Blockbusters on-demand business in a potential effort to challenge Netflix.
Late in the week, light crude oil for May delivery was trading at more than $111 per barrel. Gold for June delivery was above $1,470 while silver reached a 31-year high, rising above $40 an ounce partly in response to U.S. dollar weakness.
Trading in major global stock indices was fairly calm, as investors appeared hopeful the signs of economic recovery might offset the short-term political uncertainty.
Global economic news
U.S. budget battle showdown down to wire
With high stakes and credibility on the line, and facing a firm deadline of midnight Friday, Democrats and Republicans in the U.S. Congress kept negotiating the 2011 federal budget overnight Thursday into Friday morning. At issue: proposed spending cuts of $33 billion to $40 billion and political differences on various issues. At stake: shutting down all-but-essential government services, furloughing 800,000 federal employees, and cutting off paychecks to workers. Among many ripple effects: suspending government mortgage loan guarantees to lower-income families, closing national parks and leaving tourist industry workers without pay, and stopping government economic data collection. A 20-day government shutdown in late 1995 reportedly cut economic growth by a full percentage point in that quarter.
U.S. jobless claims shrink further
The number of new claims for unemployment benefits fell by 10,000 to 382,000 during the week ended April 2, marking the seventh decrease in 10 weeks. The four-week average fell by 5,750 to 389,500.
U.S. service sector growth eases
The U.S. nonmanufacturing sector grew in March, but at a slower pace than February, according to the Institute for Supply Management. The ISM nonmanufacturing purchasing managers index fell to 57.3 from 59.7 in February.
March retail sales strong
American consumers spent more freely in March, allowing retailers from discounters to sellers of luxury brands - to post strong sales figures. A group of 25 retailers tracked by Thomson Reuters posted a 1.7% rise in same-store sales in March. Costco reported a 13% rise in same-store sales, while Victoria Secrets parent firm Limited Brands increased sales by 14%. Higher-end retailers Saks and Nordstrom also had robust results. Target, Kohls, and JC Penney were among the retail chains with declining same-store sales.
ECB raises interest rates
The European Central Bank raised its benchmark interest rate on Thursday by 0.25 percentage points, as was widely anticipated. The ECB must walk a fine line, between controlling inflation, already at a 2.6% annual rate last month, and not creating obstacles to economic recovery for troubled eurozone member countries Greece, Ireland, and Portugal.
China raises interest rates for fourth time; inflation still high
Chinas central bank raised interest rates for the fourth time in six months in its latest effort to tame inflation and stop the worlds fastest-growing economy from overheating. Consumer prices in China rose 4.9% in February while producer prices were 7.2% higher. Even with tighter controls in place, many economists cited in The New York Times see Chinas economy growing 9% in 2011 with a 3% annual inflation rate.
Portuguese government to receive bailout package
The Portuguese government is seeking financial assistance from the European Union as it strives to regain solid financial footing. A package worth 90 billion ($129 billion) is being worked on involving the European Commission, European Central Bank, and International Monetary Fund. It could take several weeks to work out an austerity program that would accompany the bailout. Portugal is the third nation in the eurozone, after Greece and Ireland, to ask for a bailout.
Portuguese debt downgrade led to rising yields
Portugals debt rating continued to plummet and its government bond yields soared this week after Moodys Investor Service downgraded Portugals long-term bonds by one level, to "Baa1" from "A3." Standard & Poors lowered its rating for Portuguese debt by three notches in two cuts in the last couple of weeks. The Portuguese government paid an average yield of 5.117% on six-month Treasury bills at an auction on Wednesday, compared with 2.984% at a March 2 auction. The average yield on 12-month Portuguese Treasury bills rose to 5.902%, from 4.441% on March 16.
Japanese business confidence falls
Japanese business sentiment is sagging after Marchs devastating earthquake and tsunami, according to a quarterly survey released Monday by Japans central bank. Sentiment went from a reading of plus 3 before the earthquake to minus 2 afterwards. Economists believe overall industrial production slumped by 10% in March compared with February and the economic fallout could continue for months. Meanwhile, a so-called "economy watchers survey" that regularly questions hotel and restaurant workers, barbers, and tax drivers on economic sentiment fell to 27.7 in March from a reading of 48.4 in February.
Toyota, Japanese airlines to resume activity
Toyota said it would resume limited production from April 18 to 27 at its Japanese plants, where half of all its vehicles sold globally are built. Japans major airlines plan to restart flights to the Sendai airport, which had shut downs after the March 11 tsunami.
Eurozone business growth eases slightly
Private-sector growth in the eurozone eased a bit in March, according to a survey released this week by financial information firm Markit. Its eurozone composite output index eased to 57.6 from 58.2 in February. Any reading above 50 indicates economic growth.
German manufacturing orders, industrial production rise
German manufacturing orders were 2.4% higher in February than January, as domestic and eurozone demand improved. This adds to a 3.1% increase in January orders. Meanwhile, German industrial production rose 1.6% in February from January and 14.8% from February 2010, another strong sign of economic recovery in Germany.
Global corporate news
TI chips in $6.5 billion for National Semiconductor
Texas Instruments offered $6.5 billion in cash to buy its rival semiconductor chipmaker National Semiconductor. The bid represented a 78% premium over Nationals stock price at the time of the bid, indicating how highly TI values Nationals niche of making chips based on analog technology that are used in cell-phone radio signals and in the management of power consumption in computers.
Bombardier profits take off
Canadian plane, train and snowmobile maker Bombardier rode a big pickup in business-jet orders to much higher fourth-quarter earnings. The Montreal-based firm almost tripled its net aerospace orders in its latest quarter while selling 10 times as many business aircraft as a year earlier, propelling its profits 82% higher than the year-earlier quarter.
Bite taken out of Apples size on Nasdaq 100
Apple will have a large bite taken out of its weighting on the closely tracked Nasdaq 100 Index as part of a large and rare rebalancing of the index on May 2. After the rebalancing, Apple will make up 12% of the Nasdaq 100 versus 20% today. The rebalancing was partly driven by Apples meteoric rise, as the firms shares have grown more than fourfold in two years, causing Apple to have too great an impact on one of the most heavily traded stock indices. More than $330 billion of assets track the Nasdaq 100 through ETFs, mutual funds, options, and futures.
KB Home loss grows on weak home sales
Home builder KB Home saw its first-quarter loss more than double from a year earlier on falling orders and a substantial decrease in revenue. Deliveries fell 28% and net orders were 32% lower. The year-over-year comparison was unfavorable partly because of the temporary boost provided by last years federal tax credit for homebuyers.
Toyota faces possible downgrade
Moodys Investor Service said it has put Toyota Motor and its subsidiaries on review for a possible downgrade as a result of the financial impact caused by the March 11 earthquake and tsunami and the resulting interruption of automobile and auto parts production. Moodys is also closely watching the quakes impact on Nissan Motor and Honda Motor.
Dish wins Blockbuster deal
In a dramatic marathon bankruptcy auction, Dish Network made a winning $320-million bid for the assets of Blockbuster, the movie-rental chain. Dish may use some Blockbuster stores to sell subscriptions to its service and is reportedly interested in some synergies from Blockbusters on-demand business in a potential effort to challenge Netflix.
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