Germany Lowers Outlook, U.S. Production Rises; Boeing, Apple in Focus

Bikram Pandey
16 Jan, 2013
New York City

Indexes in New York held steady after inflation was unchanged in December and factory production increased at a slower pace. Germany lowered its economic growth outlook to 0.4% and said 2012 deficit to GDP ratio was 0.32%. Nikkei in Japan dropped 2.6% and indexes in Mumbai and Hong Kong fell.

[R]3:40 PM, New York – Indexes in New York held steady after inflation was unchanged in December and factory production increased at a slower pace. Germany lowered its economic growth outlook to 0.4% and said 2012 deficit to GDP ratio was 0.32%. Nikkei in Japan dropped 2.6% and indexes in Mumbai and Hong Kong fell.[/R]

Stocks in New York traded sideways after banks report rising earnings and inflation was unchanged in December and factory output increased at a slower pace in the month.

BNY Mellon, JP Morgan, M&T, Northern Trust and US Bancorp report higher earnings. Goldman Sachs said net jumped three-fold on a sale of hedge fund administration unit and the company is on track to cut $500 million in expenses in the next three years.

JPMorgan fourth quarter net soared 53% and Northern Trust quarterly net jumped 29%. Goldman Sachs fourth quarter net surged nearly three-fold. BNY Mellon net profit climbed 23%.

Boeing declined after Japanese airlines ground fleet of 787 Dreamliners after a second incident this week that forced emergency landing.

European markets recovered from early losses and institutional investors stepped up to add exposure to stocks. Investors expect another year of market gains across Europe in a survey conducted by the research team at 123jump.com.

German government cut its outlook for domestic economic growth to 0.4% from the 0.7% rise in 2012 according to an annual report from the Economy Ministry. The previous forecast for the growth this year was 1%.

European and German stocks traded lower in the morning after the release of the report but recovered in the late afternoon. German government also said it borrowed 22.5 billion in 2012, less than 28.1 billion estimated in the previous budget.

Federal government deficit declined to 0.32% of GDP in 2012 after adjusting for one-time effects and ahead of target of 0.35% set for 2016.

In company news, mining companies closed lower after commodities eased. AngloAmerican dropped 3% and Lonmin declined 4%. AngloAmerican plans to shutter four shafts in South Africa and cut platinum production and lay-off 14,000 workers. TUI Travel and TUI AG surged on talks of merger.

Stocks in Tokyo fell sharply from a 32-month high after the yen declined for the second day. Market indexes have surged more than 26% in the last two months. Aircraft parts suppliers declined after ANA grounded a fleet of Boeing 787 for inspection after an emergency landing.

In Mumbai trading, Sensex index declined 0.8%. Bajaj Auto dropped after third quarter net profit grew 3% and DEN Networks third quarter net profit surged nearly four-fold. Essar Oil third quarter net swung to profit. Ranbaxy and Daiichi Sankyo plan to merge businesses in Thailand.

Australian markets closed higher after auto sales jumped in December and banks gained. The latest read on consumer sentiment showed a positive bias. Boral, construction material company plans to trim 700 jobs.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond closed down to 1.82% and on 30-year bond edged up to 3.02%.

The U.S. dollar inched lower to $1.327 to a euro and increased against the Japanese yen to 88.51 yen.

Immediate delivery futures of Texas crude oil increased 83 cents to $94.11 a barrel and Brent crude gained 19 cents to $110.63, futures of natural gas decreased 6 cents to $3.40 per mbtu and gasoline traded up 1.77 to 272.33 cents a gallon.

In metals trading, gold decreased $3.30 to $1,680.10 per ounce and silver decreased 6 cents to $31.47 and copper closed down 2.65 cents to $3.61 a pound.