Weakening Global Economies

Bikram Pandey
20 Sep, 2012
New York City

World markets and indexes in New York closed down after economic data from the euro zone, China and Japan indicated weakening outlook. Global deal making continues despite market uncertainties. The U.S. dollar strengthened, oil decreased and gold and copper eased.

[R]4:15 PM New York – World markets and indexes in New York closed down after economic data from the euro zone, China and Japan indicated weakening outlook. Global deal making continues despite market uncertainties. The U.S. dollar strengthened, oil decreased and gold and copper eased.[/R]

U.S. indexes fell after weekly jobless claims slid and manufacturing index was flat in September and the outlook for orders for the next three to six months weakened.

Markets consolidated after manufacturing growth declined for the eleventh month in China, Japan said exports and imports declined and the euro zone recession deepened.

In corporate news, Exxon agreed to acquire Denbury’s Bakken shale assets for $1.6 billion. Avolon finalized $2.4 billion order with Boeing. ConAgra jumped on quarterly results and lifted fiscal outlook. CarMax quarterly net was nearly flat. IHS cuts fiscal guidance. Rite Aid loss narrowed and lowered fiscal outlook. Scholastic loss widened.

For the second time this week, demand exceeded at Spanish debt auction and yields fell today but the specter of larger bailout for Spain loomed.

In European corporate news, Peugeot agreed to sell 75% stake in Gefco to JSC Russian Railways for €800 million. Kleinwort Benson agreed to acquire BHF-BANK for €384 million. Liberty Global plans to launch a €35 a share cash offer for Telenet.

In economic news, German producer prices rose and Swiss trade surplus fell in August. The euro zone private sector contracted and French manufacturing PMI fell in September. Italian industrial orders rose unexpectedly in July. The UK retail sales fell less than estimated in August. The Irish economy stagnated in the second quarter.

The benchmark index in Tokyo dropped the most in three months after the latest economic data from China indicated a slowdown in manufacturing. The fall in exports and imports widened the August month trade deficit in Japan.

Australian markets lost ground after the latest economic data from China and Japan put investors on the defensive. Fortescue Metals agreed to pay $715 million royalty to Leucadia National and New Zealand based outdoor equipment retailer Kathmandu suggested better outlook in the current fiscal year.

Commodities, Bonds and Currencies

The yield on 10-year bond decreased to 1.78% and on 30-year bond fell to 2.96%.

The U.S. dollar inched higher to $1.29 to a euro and decreased against the Japanese yen to 78.26 yen.

Immediate delivery futures of Texas crude oil decreased 11 cents to $91.81 a barrel and Brent crude rose $2.2 to $110.35, futures of natural gas increased 0.05 cents to $2.81 per mbtu and gasoline price edged up 8.8 cents to 291.70 cents a gallon.

In metals trading, copper decreased 3.80 cents to $3.77 per pound, gold fell $1.50 to $1,770.20 per ounce and silver increased 11 cents to $34.72.