Global Economic Calendar (01-Feb-2011)

Global Economic Calendar for 1st February 2011

**Time is with respect to Singapore Time (GMT+8:00)

Egypt Crisis Spurs Jump in Developing Money-Market Rates

Money-market rates in developing nations are increasing at the fastest pace since 2008 as central banks from China to Brazil lift borrowing costs and banks hoard cash on concern unrest in Egypt may destabilize the Middle East.

The yield on JPMorgan Chase & Co.’s ELMI+ Index of short- term debt in emerging markets rose to 2.5 percent on Jan. 28 from a record-low of 1.74 percent on Dec. 31. Overseas borrowing costs also jumped, sending the extra yield on developing-nation dollar bonds over U.S. Treasuries to a four-month high of 2.79 percentage points, according to JPMorgan’s EMBI+ Index.

Inflation is accelerating in seven of the 10 biggest developing nations after surging prices for food, cotton and oil pushed the S&P GSCI Index of commodities toward the highest level since September 2008. Oil advanced 4.3 percent in New York trading on Jan. 28 and added 0.9 percent today as Egyptian protesters clashed with police in the most populous Arab country, calling for an end to President Hosni Mubarak’s 30-year rule. Middle East shares sank yesterday, sending Abu Dhabi’s index to its biggest drop in 14 months.

“The geopolitics is clearly a warning to investors,” said David Cohen, the head of Asian forecasting at Action Economics in Singapore. “Oil prices have spiked higher. That would be one more source of upward pressure on interest rates.”

The last time short-term borrowing costs in developing nations rose this fast was the second half of 2008, when the global financial crisis and record commodity prices pushed the world economy into a recession. The yield on JPMorgan’s ELMI+ Index jumped as high as 21 percent in October 2008, prompting central banks around the world to slash benchmark borrowing costs.

Consumer Spending in U.S. Rose More Than Estimated

Consumer spending in the U.S. rose more than forecast in December, capping its strongest quarter in more than four years.

Purchases, which account for about 70 percent of the economy, increased 0.7 percent after climbing 0.3 percent the prior month, Commerce Department figures showed today in Washington. Incomes increased for a third month, and the Federal Reserve’s preferred measure of inflation advanced at the slowest pace on record.

Households are driving demand at companies from Coach Inc. to Ford Motor Co. and bolstering the recovery. The economy needs even faster growth to reduce unemployment, which is projected to average more than 9 percent this year, one reason Fed policy makers are pushing ahead with a second round of monetary stimulus worth $600 billion.

“The consumer is doing OK, and household spending will continue to grow this year,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “We expect it to continue to play a part in this recovery.”

The median estimate of 67 economists surveyed by Bloomberg News called for a 0.5 percent advance in spending after a previously reported 0.4 percent gain in November. Projections ranged from increases of 0.2 percent to 0.8 percent.

Incomes climbed 0.4 percent for a second month, matching the median forecast in the Bloomberg survey.

Wages and salaries increased 0.3 percent after a 0.1 percent gain in November.

Global Economic Calendar (31-Jan-2011)

Global Economic Calendar for 31st January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Beating Estimates...

The Dow had to close above 11,871.84 to post a ninth straight weekly gain. Before today, it had risen 1 percent this week, supported by higher-than-estimated earnings. More than 74 percent of the 183 companies in the Standard & Poor’s 500 Index that reported quarterly earnings since Jan. 10 beat the average analyst projection, according to data compiled by Bloomberg.

Egypt overshadowed evidence the U.S. economy, the world’s biggest, is improving. GDP expanded at a 3.2 percent annual pace in the fourth quarter, up from 2.6 percent during the prior three months, as consumer spending climbed by the most in more than four years.

Investors who pushed the Dow above 12,000 for the first time since 2008 this week may be getting ahead of themselves. It surpassed that level the past two days. More U.S. stocks are trading above their 200-day average price than any time since April, when the Dow began a 14 percent slump. The cost to insure against S&P 500 losses with options has fallen to an almost three-year low.

Too Optimistic ...

The Dow may have surged too fast following its more than 2,000-point jump since August even as analysts forecast a third straight year of profit growth for the S&P 500, said James Investment Research Inc.’s Tom Mangan and BB&T Wealth Management’s Walter “Bucky” Hellwig. Mangan and BGC Partners LP’s Michael Purves see signs investors are too optimistic about the next few months.

Shares of Ford Motor Co. plunged 13 percent as the automaker said profit slid 79 percent. Amazon.com Inc. declined 7.2 percent after saying earnings may miss analysts’ projections. The Chicago Board Options Exchange Volatility Index, which measures the cost of insurance against losses in U.S. stocks, jumped 24 percent, the most since May.

The NYSE Arca Airline Index lost 4.3 percent after oil jumped. Any disruption to Middle East oil supplies “could actually bring real harm,” U.S. Energy Secretary Steven Chu said on a conference call.

The Suez Canal, which connects the Mediterranean and Red Seas, is located in Egypt. One million to 1.6 million barrels a day of oil and refined products moved north to Europe and other developed economies in 2008 and 2009, according to the Energy Information Administration, the statistical arm of the U.S. Energy Department.

Stocks Drop Worldwide as Oil, Dollar Surge After Egypt Protests

Stocks worldwide plunged the most since November, crude oil posted the biggest jump since 2009 and the dollar rose versus the euro after protesters posed the biggest challenge to Egyptian President Hosni Mubarak’s 30-year rule. Egypt’s dollar bonds sank, pushing yields to a record.

The MSCI World All-Country World Index of stocks in 45 countries lost 1.4 percent at 4:59 p.m. New York time. The Dow Jones Industrial Average fell 1.4 percent to 11,823.70, preventing its longest weekly winning streak since 1995. Oil futures increased 4.3 percent to $89.34. The dollar appreciated 0.9 percent to $1.3611. Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51 percent. Gold futures jumped 1.7 percent, the most in 12 weeks.

Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to buildings. Mubarak imposed the curfew after tens of thousands of marchers chanted “liberty” and “change.” After U.S. markets closed, Mubarak said he asked the government to resign. The demonstrations offset data showing that growth in U.S. gross domestic product accelerated in the fourth quarter.

“The unrest in Egypt has people concerned,” said Mark Bronzo, who helps manage over $25 billion at Irvington, New York-based Security Global Investors. “When it comes to the Middle East, there’s worries the unrest is going to spread. It has negative implications for the world.”

Global Economic Calendar (28-Jan-2011)

Global Economic Calendar for 28th January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Fed Closes Ranks as Improving Economy Won't Derail QE2

Federal Reserve officials closed ranks to signal that an improving economy won’t derail their plan to cut unemployment by pumping $600 billion into the financial system.

The pace of recovery is “insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said yesterday in a statement in Washington that won unanimous support for the first time in 13 months.

“They’re trying very hard in their statement to get people to stop jumping the gun” with an expectation that the record stimulus will end before the planned conclusion in June, said Ethan Harris, head of developed-markets economic research at Bank of America Merrill Lynch in New York. The Fed is saying, “we’re continuing our buying program and we’re not going to move for a long time,” he said. Harris put the odds of completing the purchases at 95 percent.

Chairman Ben S. Bernanke and his colleagues are strengthening their commitment to the asset purchases as two new members, Philadelphia Fed President Charles Plosser and Dallas Fed chief Richard Fisher, joined the policy-setting panel. Both men, who earlier criticized the program, supported the committee in saying the easing was needed to “promote a stronger pace of economic recovery.”

Plosser and Fisher were among four regional Fed presidents who rotated into voting slots for the year at this week’s meeting. They replaced officials including the Kansas City Fed’s Thomas Hoenig, who favored tighter policy as the lone dissenter in all eight decisions last year.

Stanley Ho Suit Adds Twist to Family Dispute Over Fortune

The three-day public wrangle over Stanley Ho’s casino empire took yet another twist as a lawsuit accused family members of illegally taking control of his assets, a day after the Macau billionaire said the dispute was settled.

Amid conflicting statements made by Ho and his family, his lawyer Gordon Oldham filed the writ late yesterday in Hong Kong’s High Court. While the 89-year-old Ho announced on television that he no longer needed Oldham’s services, the lawyer says he still represents the tycoon and the writ appears to carry Ho’s signature.

Claim and counter-claim over the transfer of Ho’s 31.7 percent stake in Sociedade de Turismo e Diversoes de Macau SA has driven down the shares of SJM Holdings Ltd. by 7.4 percent this week. SJM, built by Ho over 5 decades into Asia’s biggest gambling company, runs most casinos in the Chinese city of Macau, where gambling revenue is four times that of the Las Vegas Strip.

“This story continues to unfold in a dynamic way and it will continue to make the public shareholder base of SJM uncomfortable because of the possible strategic impacts of this volatility,” said independent industry consultant Jonathan Galaviz.

SJM shares rose 1.5 percent to HK$13.32 as of 11:14 am today after falling almost 5 percent yesterday.

Ho built his fortune after Macau’s colonial government in 1962 granted him and his partners a gambling monopoly. While that ended in 2004 with the entry of operators including Sheldon Adelson’s Las Vegas Sands Corp., Ho was ranked Hong Kong’s 13th- richest man, with a net worth of $3.1 billion, by Forbes magazine this month.

Sales of New Homes in U.S. Rose More Than Forecast

Purchases of new houses in the U.S. rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired.

Sales climbed 18 percent to a 329,000 annual pace, figures from the Commerce Department showed today in Washington. The percentage gain was the biggest since 1992, and was led by a record 72 percent jump in the West.

“The increase being driven by the West definitely looks suspicious,” said Daniel Silver, an economist at JPMorgan Chase & Co. in New York. “New-home sales are definitely lagging behind other economic indicators. As we see job growth and signs of economic stability, the housing market will improve, but when that will happen is hard to say.”

Following the industry’s worst year on record, builders may keep facing competition from a growing glut of foreclosed existing homes that is depressing prices. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons Federal Reserve policy makers today are expected to press on with a second round of stimulus that will pump $600 billion into financial markets by June.

Stocks rose after the report. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,296.42 at 10:17 a.m. in New York. The S&P Supercomposite Homebuilder Index jumped 2.6 percent.

The median estimate of 79 economists surveyed by Bloomberg News called for a rise to 300,000. Estimates ranged from 270,000 to 315,000. Last month’s sales pace was the highest since April. The Commerce Department revised November purchases down to 280,000 from a previously reported 290,000 rate.

Global Economic Calendar (27-Jan-2011)

Global Economic Calendar for 27th January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Obama Embraces Business Agenda on Exports, Taxes, Debt

President Barack Obama embraced much of the business community’s agenda last night, calling for progress on stalled trade pacts, investments in roads and education, reworking the corporate tax code, and freezing discretionary spending to cut the deficit.

The pledges in the State of the Union address by Obama, who tussled with business groups during the first two years of his term, match requests by chief executive officers from Verizon Communications Inc., Honeywell International Inc. and JPMorgan Chase & Co. in a report they presented to the administration last month.

Obama “has put an olive branch out to business, and it seems like a sincere offer,” said Jim Kessler, vice president for policy at the Third Way, a Washington-based policy group that describes itself as moderate. “The president seems to be focused on growth and making business a partner, not a foil.”

With Republicans taking control of the House of Representatives and U.S. growth still sluggish, Obama said his proposals were aimed at creating jobs and reorienting the economy to confront challenges from abroad.

Instead of pushing contentious issues such as health-care legislation and overhauling financial regulation, as he did in the first two years of his term, Obama focused on investments for growth, which should garner support from corporate leaders, Kessler said.

Boeing Forecast Trails Estimates on Pension, Delays

Boeing Co. tumbled the most in five months after forecasting 2011 profit that trailed analysts’ estimates amid delays to its two marquee jets, higher pension expenses and scaled-back defense spending in the U.S.

Net income will be $3.80 to $4 a share, including an increase of 58 cents a share in pension expenses, the Chicago- based company said in a statement today. That lagged behind the $4.53-a-share average estimate of 26 analysts surveyed by Bloomberg. Projected sales of $68 billion to $71 billion met estimates of about $69.5 billion.

Boeing has struggled with two of its newest planes, the 787 Dreamliner, which is three years late, and the 747-8, running a year and a half behind schedule, while the defense business has been hurt by military budget cuts. Boeing is responding by boosting output of other commercial jets to record rates as air- travel demand recovers from the recession.

Global Economic Calendar (26-Jan-2011)

Global Economic Calendar for 26th January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Google's Schmidt to Stay `as Long as It's Exciting'

Google Inc.’s Eric Schmidt said he has no plans to leave the owner of the world’s largest search engine, dismissing speculation he’s considering a career in the media or politics.

Schmidt said last week he will step down as chief executive officer in favor of Google co-founder Larry Page and become executive chairman. The executive is “committed to Google,” he told reporters at the Digital-Life-Design conference in Munich today. “How long are you committed to doing what you’re doing? As long as it’s exciting,” he said in response to a question about his plans.

Schmidt, 55, may be considering a career as a television host, the New York Post reported yesterday. Ken Auletta, author of “Googled: The End of the World as We Know It,” told Bloomberg TV that Schmidt may be weighing a role in the administration of U.S. President Barack Obama.

By turning to Page, Google may be looking to rekindle the entrepreneurial spirit that allowed it to grow into one of the world’s most valuable companies. The new CEO of the Mountain View, California-based company will confront challenges from Facebook Inc., Apple Inc., and startups such as Groupon Inc. in social networking, entertainment and retail.

Consumer Confidence in U.S. Rose More Than Forecast

Confidence among U.S. consumers rose more than forecast in January, reaching an eight-month high, as the outlook for jobs brightened.

The Conference Board’s sentiment index increased to 60.6 from 53.3 the prior month, figures from the New York-based private research group showed today. Another report showed home values dropped in November by the most in a year.

Growing optimism, an improving labor market and tax relief may combine to help spur consumer spending, which accounts for about 70 percent of the economy. At the same time, the absence of a sustained housing rebound and unemployment above 9 percent are among reasons the Federal Reserve may announce tomorrow it will stick to a plan for more stimulus.

Global Economic Calendar (25-Jan-2011)

Global Economic Calendar for 25th January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Tiger Global Puts New Private-Equity Fund Into Facebook...

Chase Coleman’s Tiger Global LLC is raising $1.25 billion for its sixth private-equity fund and has used some of the money to increase its stake in Facebook Inc., according to two people briefed on the plan.

Tiger Global, based in New York, has $1 billion in commitments and plans to line up an additional $250 million by next month, said the people, who asked not to be identified because the information is private. Coleman, 35, has steered about $80 million from the new pool into Facebook, whose more than 600 million users make it the top social-networking site.

The firm raised more than $2.5 billion for its previous private-equity partnerships, buying stakes in companies including Facebook, LinkedIn Corp., a professional networking site, and Youku.com, China’s largest online-video provider, the people said. Its $1.1 billion fifth fund has returned an average of 15 percent a year since its start in 2008, according to a September investor document reviewed by Bloomberg News.

Suicide Bombing at Moscow Airport Kills at Least 31....

The 30-stock Micex Index closed down 1.5 percent after falling as much as 2.4 percent, its steepest intraday decline since July 30. The ruble was 0.4 percent stronger against the dollar at 29.8250 at the 5 p.m. close of trading. Russia’s dollar bonds due 2020 climbed, pushing the yield 5 basis points lower to 4.992 percent.

Central bank Chairman Sergey Ignatiev told reporters in Moscow that “nothing will happen to the ruble or the banking system” as a result of the attack.

Domodedovo moved a record 22.3 million passengers last year, making it the busiest air hub in eastern Europe. It services 75 airlines and handles more than 600 flights a day. Deutsche Lufthansa AG was among airlines that cancelled flights in and out of Domodedovo indefinitely.

The airport’s security was breached in 2004, when terrorists bribed their way through security checks to board two passenger planes, which they subsequently brought down, killing all 90 people on board. The attacks were claimed by Islamist militants.

Metals Traders Worth $3 Million Amid Shortages as Wall Street Pay Shrinks...

After a year when U.S. President Barack Obama signed a law curbing risk-taking on Wall Street and pay at banks fell, metals traders are reaping bonus bonanzas.

The traders probably earned as much as 20 percent more last year than in 2009, with the most-profitable getting $2 million to $3 million, said Peter Henry, head of front-office search at Commodity Search Partners Ltd. The figure, confirmed by three other recruiters who declined to be identified because they aren’t authorized to speak publicly, compares with no change to a drop of 10 percent in pay across commodities personnel.

“Metals traders are an exception when there’s pressure on banks to cut remuneration,” New York-based Henry said. They “are making more money than other parts of the banks and the bonuses reflect that to some extent,” he said.

Metals traders are setting up for another banner year, with Barclays Capital predicting shortages and higher prices in copper, nickel and tin. Average pay across JPMorgan Chase & Co.’s investment bank and Goldman Sachs Group Inc. fell last year and Morgan Stanley cut its investment bank’s compensation pool, filings showed last week. The Dodd-Frank Act signed in July seeks to stop compensation that spurs too much risk-taking.

Brisbane Roads Circling Globe Twice Needed in Flood Disaster...

To build an average house, you need 6,200 bricks, 2,950 roof tiles, 785 floor tiles and 15 cans of paint -- multiply that 28,000 times and you get a picture of the task to rebuild Brisbane after Australia’s worst flood.

It gets worse: the state of Queensland will need to rebuild 90,000 kilometers (56,000 miles) of roads, enough to circle the globe twice, thousands of kilometers of rail line, almost 100 schools, an unknown number of bridges, several regional airports, power lines, sewers and water treatment -- the list goes on.

Australian companies, including its largest building- materials seller Boral Ltd., the No. 1 furniture and electrical retailer Harvey Norman Holdings Ltd., paint maker DuluxGroup Ltd. and plumbing supplier Reece Australia Ltd., will benefit from the reconstruction estimated to cost A$20 billion ($20 billion). The floods are the most expensive natural disaster in the nation’s history and have claimed at least 20 lives.

Global Economic Calendar (21-Jan-2011)

Global Economic Calendar for 21st January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Initial Jobless Claims in U.S. Fell to 404,000 Last Week

The number of Americans filing first-time claims for unemployment insurance payments fell more than forecast last week, adding to evidence the labor market is healing.

Applications for jobless benefits decreased 37,000 in the week ended Jan. 15, the biggest decline since February 2010, to 404,000, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments rose.

Employers may be retaining workers after the economy showed signs of strengthening at the end of last year. Economic growth may need to accelerate further and encourage companies to ramp up the hiring necessary to reduce an unemployment rate that’s hovering close to a 26-year high.

Global Economic Calendar (20-Jan-2011)

Global Economic Calendar for 20th January 2011

**Time is with respect to Singapore Time (GMT+8:00)

Citigroup Profit Misses Analysts' Estimates on Credit Spreads...

Citigroup Inc., the third-largest U.S. bank, said earnings were $1.31 billion, less than analysts estimated, as narrowing credit spreads reduced pretax profit by $1.1 billion.

Fourth-quarter net income was 4 cents a share, compared with a $7.58 billion loss, or 33 cents, in the same period in 2009, New York-based Citigroup said today in a statement. Eight analysts had predicted in a Bloomberg survey that Citigroup would report a per-share profit of 7 cents.

The $10.6 billion in 2010 earnings mark the first profitable year under Chief Executive Officer Vikram Pandit, 54. Pandit took over in December 2007 and led Citigroup to losses of $29.3 billion during the next two years. The U.S. Treasury, which gave the bank a taxpayer-funded $45 billion bailout in 2008, also sold the last of its stake in the fourth quarter. Citigroup stock rose 43 percent during the year.

Orphanides Says Fund Could Buy Bonds Instead of ECB

The ECB is pressing governments to take more responsibility for Europe’s sovereign debt crisis so that it can withdraw non- standard measures and return to its traditional role of inflation fighting. Euro-area finance ministers meeting in Brussels today have signaled they’re considering expanding their response to the crisis, which may include mandating the 440 billion-euro ($585 billion) EFSF to purchase debt.

German two-year government notes advanced for the first time in five days, pushing the yield down five basis points to 1.11 percent at 10:52 a.m. in London. The euro initially dropped before recovering to be little changed at $1.3287.

Orphanides’ comments “show that frustration at the ECB over government handling of the crisis and constantly having to act as the first line of defense is coming close to boiling point,” said Carsten Brzeski, an economist at ING Group NV in Brussels.

Cheapest Stocks Get Cheaper After 10% Global Rally

Even after global stocks rallied 10 percent last year, valuations around the world fell the most in a decade, leaving companies in Norway, Italy and Mexico the cheapest of all.

The average price-earnings ratio of global equities dropped as profits in the 45-nation MSCI All-Country World Index rose faster than the gauge, which has rallied to the highest level since August 2008, data compiled by Bloomberg show. Investors are finding bargains outside the U.S., where the biggest two- year rally since the Internet boom has sent the Standard & Poor’s 500 Index’s income multiple to almost a seven-month high.

Of the 45 nations in the all-country index, only Egypt and Ireland will see earnings fall this year, according to analyst estimates compiled by Bloomberg. That’s the fewest since 2004. The gauge rose 0.2 percent to a two-year high on Jan. 14, completing its seventh straight weekly advance, after European officials stepped up efforts to solve the debt crisis and Japan pledged to buy bonds to aid Ireland and Greece. The measure slipped 0.2 percent at 10:30 a.m. in London today.