U.S. Stocks Gain, S&P 500 Jumps to Highest Level Since November

U.S. stocks rose, sending the Standard & Poor’s 500 Index to its highest level since November, as a gauge of future economic growth topped projections and speculation grew that CIT Group Inc. will avoid bankruptcy.
Caterpillar Inc. and Alcoa Inc. rallied at least 3.7 percent as the Conference Board’s gauge of the economic outlook increased for a third straight month. CIT Group jumped 79 percent as a person briefed on the board’s deliberations said the lender has reached a financing agreement with bondholders. Hasbro Inc. and Eaton Corp. gained at least 4.2 percent on earnings that beat analysts’ estimates.
The S&P 500 added 1.1 percent to 951.13 at 4:05 p.m. in New York, its best close since Nov. 5. The Dow Jones Industrial Average rallied 104.21 points, or 1.2 percent, to 8,848.15, erasing its loss for the year and closing at a six-month high. Europe’s Dow Jones Stoxx 600 Index climbed 1.2 percent and the MSCI Asia-Pacific Index increased 1.4 percent.
“Given the general weakness of the economy and concerns over corporate profitability going into the second quarter, reports to date have been a pleasant surprise,” said Dean Gulis, part of a group that manages .5 billion for Loomis Sayles & Co. in Bloomfield Hills, Michigan. “This week it’s going to continue to rally. The worm has turned a little bit. People are feeling better about the economy.”
Forecast Raised
All 10 industry groups in the S&P 500 rose today, led by consumer, commodity and industrial shares. Goldman Sachs boosted its forecast for the index, saying improving earnings will spur the steepest second-half rally since 1982. The bank raised its year-end target for the S&P 500 to 1,060, a 15 percent increase from strategist David Kostin’s projection of 940 on June 30.
Earnings topped analysts’ estimates by an average of 15 percent for S&P 500 companies that reported quarterly results since July 8, according to data compiled by Bloomberg, with 35 out of 43, or 81 percent, beating estimates. Analysts forecast profits fell an average 33 percent in the second quarter and will decrease 20 percent from July through September, according to data.
The S&P 500 jumped 7 percent last week as companies from Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson reported results that topped analysts’ estimates. The benchmark index has rebounded 41 percent from its 12-year low on March 9 amid speculation the economy is recovering.
Stocks rallied today after the index of leading U.S. indicators reinforced signs the economy may be emerging from the worst recession in five decades. The Conference Board’s gauge of the outlook for the next three to six months increased 0.7 percent, more than forecast, and climbed three straight months for the first time since 2004.
Anticipating Cash Return
U.S. equities are rallying as the market anticipates cash coming back into equities, Laszlo Birinyi president of Birinyi Associates Inc., wrote in a note to clients today.
“We would argue that the most critical element was simply that we are in a bull market,” wrote Birinyi, who helps oversee 0 million for the Westport, Connecticut firm. “When one has an oversold market with liquidity, negative investors, and obvious and articulated concerns, the market will rally.”
Alcoa, the largest U.S. aluminum producer, rose 3.7 percent to .60, while Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, added 2.7 percent to .
Metals Rally
Copper prices rose to a nine-month high in New York on speculation that metals consumption will gain as the global economy recovers. Gold, silver, zinc and tin also led a rally in metals.
CIT Group surged 55 cents to .25. The 101-year-old commercial-finance company seeking to ward off bankruptcy agreed to a billion loan for 2.5 years from a group of its bondholders, according to people who declined to be identified because the negotiations are private. The New York-based lender needed to strike a deal with bondholders to reduce debt after the U.S. declined to give the firm a second bailout.
“Its importance for the small-business sector is dramatic,” Kevin Shacknofsky, who manages billion for Alpine Mutual Funds in Purchase, New York, said of CIT. “The rest of the financial industry sees the importance of CIT and they didn’t’ let it fail. That gives the market confidence.”
Caterpillar, the world’s largest maker of construction equipment, surged 7.8 percent to .65 after being upgraded to “buy” from “hold” by Bank of America Corp., which cited a bottom in the construction market.
Hasbro, Eaton Jump
Hasbro Inc., the world’s second-largest toymaker, gained 4.2 percent to .45 after second-quarter profit rose from sales of toys based on “Transformers” and “G.I. Joe.” Net income increased to .3 million, or 26 cents a share, from .5 million, or 25 cents, a year earlier. Analysts projected profit of 23 cents a share on average.
Eaton Corp., the maker of circuit breakers and fuel pumps, jumped 8.9 percent to .94 after posting second-quarter earnings, excluding some items, of 23 cents a share that beat the average analyst estimate in a Bloomberg survey by 50 percent.
Human Genome Sciences Inc., the producer of gene-based therapies, more than tripled to .51. GlaxoSmithKline Plc and Human Genome said their experimental lupus drug reduced patients’ symptoms in a yearlong study. U.S. shares of Glaxo, the U.K.’s largest drugmaker, gained 4 percent to .81. CBS Corp. jumped 10 percent to .43 after the owner of the most-watched TV network was raised to “overweight” at Morgan Stanley, which said investors may be drawn to its local advertising business in 2010.
Wynn, Halliburton
Wynn Resorts Ltd., the casino company founded by Stephen Wynn, surged 10 percent to .83 for the second-best advance in the S&P 500 after CIT. Las Vegas Sands Corp. said it plans to apply for an initial public offering of shares in its Macau casinos. Wynn reported 61 percent of its revenue from Macau in the most-recent quarter, according to Bloomberg data. Las Vegas Sands jumped 15 percent to .86.
Halliburton Co. the world’s second-largest oilfield- services provider, gained 4.4 percent to .33 after posting second-quarter earnings, excluding some items, of 30 cents a share to surpass the average analyst estimate in a Bloomberg survey by 13 percent.
The cheapest valuations in at least 14 years are making energy companies too alluring to pass up for UBS AG and Guggenheim Partners LLC, even though earnings in the industry may fall 48 percent this year. Oil and gas producers in the MSCI World Index traded at .84 per dollar of profit this month, less than half the average of .10 in the gauge of developed markets and the widest gap since at least 1995, data compiled by Bloomberg show.
Bank of America, Tyson Slump
Bank of America lost 5 percent to .24 after FBR Capital Markets said the largest U.S. lender by assets may post further losses in the second half as the job market deteriorates. The lender was also downgraded to “in-line” from “outperform” at Fox-Pitt Kelton Cochran Caronia Waller. Tyson Foods Inc. sank 9.3 percent to .47. The largest meat producer was downgraded to “hold” from “buy” at Deutsche Bank and cut to “market perform” from “outperform” by BMO Capital Markets.

Source | Forex News | http://forexnews-4all.blogspot.com/2009/07/us-stocks-gain-s-500-jumps-to-highest.html

Pound/Euro exchange rate forecast November 2012

Monday 12th November 2012
Good morning everyone. As usual for a Monday, today I'm going to take stock of last weeks movement in exchange rates, look at why GBP/EUR rates have climbed. In addition I will analyse what may happen in the coming weeks to affect the rate, and of course as usual give you a detailed breakdown of economic data releases that I think will affect exchange rates this week.

In this week’s Report: 

•  Pound/Euro rates hit 5 week high


• Eurozone growth forecasts could affect UK 


• Round up of the week’s other data that may affect rates  

Sterling vs. Euro; 

Pound/Euro rates had a very good run indeed last week, with Sterling hitting a 5 week high against the Euro. In this report we will look at the reasons rates have increased, and look at what the coming weeks and months may hold for the Sterling/Euro cross.

First things first; Why have Pound/Euro rates gone up?

The main reason for the gains was the fact the Bank of England left interest rates on hold, and the size of its Quantitative Easing bond-buying programme unchanged. The decision had been broadly expected after recent strong UK third quarter growth figures, however some investors had positioned themselves for more QE, so when this didn’t happen the Pound gained strength as a result, pushing GBP/EUR rates up.

Only a few weeks ago, everybody convinced further QE was pretty much a given, and that it would happen the first week in November. In the last few weeks however, we have seen very robust UK data, including the fact the UK came out of recession recently, growing 1% between July and September.

However, a succession of poor economic indicators and corporate results has led many observers to believe that the economy is still weak, leading to speculation that more QE would be needed, just not right now. Indeed, the minutes from the last MPC meeting in October showed that some members thought more QE would be required at some point in the future.

All in all, for the moment the UK’s economic position looks relatively healthy, and this is the main reason for the strong Pound at present.

Pound/Euro rates also being driven by events in Europe 

The European Central Bank (ECB) also decided to keep rates on hold at 0.75%, with President Mario Draghi saying a euro zone recovery is likely to be slow and gradual but solid. Explaining the decision, he said that economic activity in the euro area was "expected to remain weak".

The weak data coming out of the Eurozone is another reason for the gains in the GBP/EUR rate. As the Euro weakens it becomes cheaper to purchase, pushing rates up. This was compounded on Thursday when data showed German exports fell in September at the fastest pace in nearly a year, raising concerns about the effects of the euro zone crisis on Europe's largest economy.

The European Commission has also cut its 2013 growth forecast from 1% to just 0.1% and said it expected unemployment to continue rising next year. This is stoking fears that the Eurozone crisis is far from over, and has caused further weakness in the Euro.

So if the Euro weakens GBP/EUR rates will continue to rise? 

Not necessarily. It’s extremely important to remember that around half of Britain's trade is with Europe. If the revised growth forecasts are accurate then this could have a significant effect for the UK in terms of our exports. While the UK is enjoying growth and a strong pound, weakness in the Eurozone could easily cause investors to also shun the Pound, and this is what is keeping GBP/EUR rates in check. Indeed on Friday rates stopped climbing and started to drop back away, indicating we had already hit the peak on Thursday afternoon.

Regardless of whether you need to buy or sell Euros, there is so much going on in the currency markets that rates could move either way in the coming weeks. In the last few weeks alone rates have fluctuated by over 2.5%, meaning a €250,000.00 purchase has differed in price by over £5000.00 in just a few weeks, clearly showing how quickly things can change and the impact it can have on your currency requirement.

If you need the best exchange rates, the first step is to contact us to have a free consultation. We can then let you know the options available to you, making sure you are not caught out by adverse exchange rate movements, and ensure you make the most of your currency.

Click here to send a free no obligation enquiry now. 

Weekly Economic Data that may affect exchange rates 

Monday – We’re fairly light on data releases today as it’s a market holiday in America and France. We do have some German Whole sale prices in addition to the Eurogrup meeting, which is attended by Finance Ministers of each Member State of the euro area. There are no UK releases of note. 

Tuesday – UK data today comprises of House prices, Retail Sales, and a raft of the latest inflation numbers. We also have inflation numbers from France, Germany and Europe. Also in the EU we will see the latest Economic Sentiment surveys. In the USA we have a monthly budget statement and a Business Optimism survey. 

Wednesday – Various UK releases today including Average Earnings, Unemployment, Jobless Claims, a BoE Inflation report and a Speech by Mervyn King. Expect volatility in the value of Sterling today. In Europe we have French Inflation, Spanish Unemployment & GDP, in addition to EU wide Industrial Production. Stateside we have Retail Sales, Inflation data, and the latest minutes from the FOMC. 

Thursday – Another important day for GBP/EUR. Starting in the Eurozone, we have GDP numbers from Spain, Germany, Italy and France. We also see EU wide inflation numbers. In the UK the only release today are the latest Retail Sales numbers, which are a good barometer of overall economic activity. Over in the USA we have inflation numbers, Jobless Claims, Manufacturing numbers, and speech’s by various members of the Federal Reserve. 

Friday – We end the week on a quieter note, with nothing released from the UK. There are global Trade Balance numbers from Europe however that could still affect Pound/Euro prices. Industrial Production numbers from the states round off the week.

 

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.
 

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Source | Foreign Exchange Rate Forecasts | http://foremostcurrencygroup.blogspot.com/2012/11/poundeuro-exchange-rate-forecast.html