Dollar at One Month Peak; Oil at 2-year High; Stocks Look to China

Bikram Pandey
10 Nov, 2010
New York City

World markets traded sideways with a negative bias as the crude oil gained and precious metals declined. Earnings were in focus and General Motors reported sharply higher earnings ahead of its public offering. In Europe banks in the peripheral region of the EU declined on weaker earnings.

[R]4:00 PM New York – World markets traded sideways with a negative bias as the crude oil gained and precious metals declined. Earnings were in focus and General Motors reported sharply higher earnings ahead of its public offering. In Europe banks in the peripheral region of the EU declined on weaker than expected earnings.[/R]

U.S. stocks traded fractionally higher and currency traders looked for a direction as the G20 nations meet. The dollar traded volatile with a declining bias. Commodities and crude oil edged lower. U.S. Trade deficit declined to $44 billion and weekly jobless claims fell. Crude oil inched higher and lifted stocks in the energy complex.

General Motors reported third quarter earnings of $2.16 billion and for the nine-moth period earnings of $4.77 billion. The sharply higher earnings at the largest U.S. domestic automaker show the rising global vehicle sales. Auto sales around the world are expected to rise beyond 70 million units as markets in Asia and Latin America expand.

GM profit exceeded Toyota profit of $4.5 billion but trailed the $6.4 billion earnings at Ford.

Grand Canyon Education revenue increased 50%. Polo Ralph Lauren Corp second quarter revenue increased 11%. Tesla Motors third quarter revenue fell to $31.2 million. Washington Post declined as the company’s for-profit division face higher scrutiny.

European stocks closed lower as the euro advanced. Mixed earnings kept indexes trading lower. Holcim Ltd and Natixis SA fell on weaker than expected earnings. Henkel SA and Hannover Re closed higher.

UK indexes closed lower sharply after resource stocks fell. Weak commodities prices after China tightened the bank capital reserve ratio and let the yuan strengthen. Sainsbury’s reported better than expected adjusted earnings. SuperGroup reported latest quarterly sales surge 68%.

Stocks in Tokyo closed at a four-month high after banks, exporters and resource companies led the gainers.

Stocks in China region declined ahead of inflation data. Home prices increased at a slower pace but continue to attract savings and speculative money. October trade surplus was the second largest monthly surplus in the year with $27.1 billion. China also let the yuan appreciate 0.5% against the dollar.

Stock in Mumbai fell. Bharti Airtel Ltd. plunged 1.7% after net profit fell 27%. Empee Sugars and Chemicals gained 2.4% after net profit surged fourfold. Greenply Industries slumped 1.9% after net profit declined 86%. Tata Motors Limited gained 2.4% after net profit surged tenfold.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.68% and on 30-year bonds inched up to 4.27%.

The U.S. dollar increased to $1.37 to a euro and rose against the Japanese yen to 82.21 yen.

Immediate futures prices of Texas crude oil increased $1.01 to $86.73 a barrel, for natural gas fell 0.17 cents to $4.01 per mbtu and gasoline prices increased 4.94 cents to 223.43 cents a gallon.

In metals trading, copper prices decreased 5.75 cents to $3.98 per pound, gold fell $9.10 to $1,401.00 per ounce and silver declined $1.80 to $27.10.