Euro Falters on Growing Sovereign Debt Worries

123jump.com Staff
15 Jan, 2010
New York City

European markets closed mixed in nervous trading and the euro fell on the growing worries related to Greek budget deficit. Spain, Portugal and Italy are also worrying central bank regulators. November Euro area trade surplus was 4.8 billion euros and annual inflation increased 0.9%.

[R]11:00 AM New York – European markets closed mixed in nervous trading and the euro fell on the growing worries related to Greek budget deficit. Spain, Portugal and Italy are also worrying central bank regulators. November Euro area trade surplus was 4.8 billion euros and annual inflation increased 0.9%.[/R]

European markets traded mixed ahead of earnings season and growing concern about Greece and other smaller nations in the union.

The Euro decline 1.5% in the early trading in New York and in Frankfurt and credit default swaps linked to Greek bonds surged 340 basis points and hovered near record according to the data available from CMA DataVision.

Though ECB President Trichet publicly said no nation “will receive special treatment” market still worries that the central bank and Germany will have to bailout smaller nations that are running budget deficit for years.

Preliminary estimate of EA16 trade balance in November with rest of the world was 4.8 billion euro surplus, compared with a deficit of 7.0 billion a year ago month. Seasonally adjusted exports fell 0.4% in November from October.

Annual inflation of Euro area rose to 0.9% in December compared to rise of 0.5% of November. Monthly inflation was 0.3% in December 2009. Compared to year ago annual inflation of Euro area fell 1.4%.

The dollar advanced against the euro on the worries that Greece budget deficit may force the ECB and Germany to bailout the nation and Spain, Portugal and Italy may need additional assistance.

One euro traded at $1.436 and one dollar fetched 90.94 yen.

Earnings Review

Balfour Beatty plc plans to release final earnings for 2009 on March 4 and said that order book has increased to £13.7 billion and net cash for the second half of the year in excess of £300 million. Construction Services has had a particularly strong year with good performances from the building businesses, especially in the US.

Man Group Plc, the largest publicly traded hedge-fund firm said third quarter funds under management at December 31, 2009 of $42.4 billion compared to $44.0 billion at September 30.

Private investor sales for the quarter of $1.1 billion combined with low redemptions to give a small net outflow of $0.1 billion.

Man Group Plc, in the last one year traded as high as 373.60 pence in November 2009 and as low as 150.40 pence in March 2009. Based on the yesterday’s closing price of 300.10 pence the company has market cap of £5.15 billion.

Pernod Ricard SA, the producer and distributor of spirits and wines said first-half sales have been in line with management expectation. Sales declined 3%.

The company confirmed first half sales in fiscal 2010 to increase between 1% and 3%.

JPMorgan Chase & Co, the bank reported fourth quarter revenues rose 35% to $23.2 billion from $17.2 billion a year ago. Net income in the quarter rose 367% to $3.28 billion or 74 cents per diluted share compared to net income of $702 million or 6 cents per share a year ago.

Total net revenues for the fiscal year 2009 rose 49% to $100.4 billion from $67.3 billion a year ago. Net income for the year rose 109% to $11.7 billion or $2.26 per diluted share compared to net income of $5.6 billion or $1.35 per share a year ago.

Intel Corporation, the maker of computer microprocessors said fourth quarter revenues rose 29% to $10.6 billion from $8.2 billion a year ago. Net income in the quarter rose 883% to $2.3 billion or 40 cents per diluted share compared to net income of $234 million or 4 cents per share a year ago.

Net revenues for the fiscal year 2009 fell 7% to $35.1 billion from $37.6 billion a year ago. Net income for the year fell 17% to $4.4 billion or 77 cents per diluted share compared to net income of $5.3 billion or 92 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 74.42 or 0.68% to 10,982.10, and Hang Seng index in Hong Kong decreased 62.79 or 0.29% to 21,654.16, and CSI 300 index in China higher 13.69 or 0.39% to 3,482.74. ASX 200 index in Australia increased 1.60 or 0.03% to 4,899.60. The FTSE Bursa KL Composite index in Malaysia was higher 3.87 or 0.30% to 1,298.58.

The Kospi Index in South Korea increased 16.03 or 0.95% to close at 1,701.80. SET index in Thailand closed lower 2.90 or 0.39% to 746.52. JSE Index in Indonesia increased 1.91 or 0.07% to 2,647.09. The Sensex index in India decreased 30.57 or 0.17% to 17,554.30.

Europe Markets Review

In London FTSE 100 Index traded higher 14.18 or 0.26% to 5,512.38, in Paris CAC 40 Index increased 0.10 or 0.00% to 4,015.87 and in Frankfurt DAX index traded lower 32.90 or 0.55% to 5,955.98. In Zurich trading SMI increased 3.58 or 0.05% to 6,631.00.