The markets managed to hold onto their gains today, despite some disappointing earnings results, which were offset by news out of China, which reported GDP growth which beat expectations. Citigroup (C) was the latest bank to report earnings, which missed analysts expectations by a wide margin, on both profit and revenue.
TD Ameritrade (AMTD) announced on Tuesday that it earned $152 million, or 27 cents a share, for its fiscal first quarter, beating analyst estimates by a penny. The company earned $145 million, or 25 cents per share, in the same period last yaer.
Jan. 17 (Bloomberg) — U.K. Sinha, chairman of the Securities and Exchange Board of India, talks about new regulations and measures for the markets. He also discusses the implications of Europe’s sovereign debt crisis for India’s economy and financial markets. He spoke yesterday in Hong Kong with Bloomberg Television’s John Dawson. (Source: Bloomberg)
In trading on Tuesday, metals & mining shares were relative leaders, up on the day by about 2.6%. Leading the group were shares of Usec (USU), up about 13% and shares of Denison Mines (DNN) up about 12.4% on the day.
In trading on Tuesday, general contractors & builders shares were relative laggards, down on the day by about 1%. Helping drag down the group were shares of Standard Pacific (SPF), off about 2.4% and shares of Meritage Homes (MTH) down about 2.2% on the day.
Jan. 17 (Bloomberg) — Wang Tao, a Hong Kong-based economist for UBS AG, talks about the China economy and the nation’s central bank monetary policy. China’s economy expanded at the slowest pace in 10 quarters as export demand moderated and a prolonged campaign against consumer and property-price gains cooled growth. Wang speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)
The Bank of Canada held its target for the overnight rate at 1.00%. The Bank noted on the Canadian economy: “While the economy had more momentum than anticipated in the second half of 2011, the pace of growth going forward is expected to be more modest than previously envisaged, largely due to the external environment. Prolonged uncertainty about the global economic and financial environment is likely to dampen the rate of growth of business investment, albeit to a still-solid pace. Net exports are expected to contribute little to growth, reflecting moderate foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar. In contrast, very favourable financing conditions are expected to buttress consumer spending and housing activity. Household expenditures are expected to remain high relative to GDP and the ratio of household debt to income is projected to rise further.”
Jan. 17 (Bloomberg) — Nobel Prize-winning economist Joseph Stiglitz talks about China’s economic growth and Europe’s sovereign debt crisis. He also discusses the U.S economy and the credibility of credit-rating agencies. He speaks in Hong Kong with John Dawson on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)
Source: ForexYard
A positive Chinese GDP report, combined with a better than expected German ZEW Economic Sentiment figure led to some investor risk taking throughout today’s trading. The euro received a significant boost against its safe-haven currency rivals as a result of the news. Against the US dollar, the euro rose as high as 1.2807 before retreating during the evening session. Still, the EUR/USD remains well above the 17-month low reached last week at 1.2624. The EUR/JPY, which recently hit an 11-year low, shot up well over 100 pips before hitting resistance during the afternoon session.
Analysts continue to warn that any gains the euro makes for the foreseeable future are likely to be short lived. The problems surrounding the euro-zone debt crisis are too big to ignore and are likely to grow unless significant action takes place in the near future. At the moment, investors remain concerned that Greece will have to default on its debt, while it is widely expected that the EU will cut interest rates in the near future. While positive global data is likely to boost riskier currencies like the euro in the short-term, they may not be able to help them stage a long-term recovery.
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Investors will be ringing in the new holiday shortened trading week cautiously assessing the impact of the S&P European downgrades. Good morning and Happy New Year, this is Sayoko Murase with the Week Ahead Market Report for Tuesday January 17, 2012.
