Nov. 11 (Bloomberg) -- Job openings in London’s financial- services industry rose to the highest level in a year last month, according to a survey by recruitment firm Morgan McKinley.
The number of openings climbed 15 percent to 4,410, the most recorded in any one month since October 2008, the London-based company said today.
“The City jobs market has seen and continues to see a general trend of improvement,” Andrew Evans, managing director of Morgan McKinley’s financial-services unit, said in an e- mailed statement. “Progress has been slow and somewhat unsteady over the course of 2009, but hiring within London’s financial services sector is following an upward trend.”
Prime Minister Gordon Brown is trying to revive the recession-mired economy in time for an election that must be held by June. The Office for National Statistics will say later today that U.K. claims for jobless benefits rose in October by the least since May 2008, according to the median forecast of 28 economists in a Bloomberg survey.
The average salary registered by the Morgan McKinley survey fell 1.5 percent to 51,350 pounds ($85,639) in October, from 52,142 the previous month. That compares with 48,021 pounds a year earlier, Morgan McKinley said.
KPMG LLP and the Recruitment and Employment Federation said in a Nov. 4 report that strains in the labor market eased in October. A measure of permanent job placements rose to 54.6, the highest in two years, from 51.3 the previous month.
Lloyds Banking Group Plc, Britain’s biggest mortgage lender, said yesterday it plans to cut about 5,000 jobs in its administration, insurance and mortgage units. Lloyds, which already announced more than 8,000 jobs cuts since its January takeover of HBOS Plc, follows Royal Bank of Scotland Group Plc and HSBC Holdings Plc in cutting jobs. The two lenders said last week they would eliminate a combined 5,400 positions.
Tuesday, November 10, 2009
Asian Stocks Advance as Japan Machinery Orders Beat Estimates
Nov. 11 (Bloomberg) -- Asian stocks rose, driving the MSCI Asia Pacific Index higher for a fourth day, after Japan’s machinery orders increased more than economists expected and shipping rates climbed.
Mori Seiki Co., a maker of precision lathes, advanced 1.9 percent as orders for Japanese machinery climbed 10.5 percent in September. STX Pan Ocean Co., South Korea’s biggest bulk carrier, climbed 3.2 percent in Seoul as the Baltic Dry Index posted its steepest jump in a month. Newcrest Mining Ltd., Australia’s largest gold producer, gained 0.7 percent as bullion advanced. Daikin Industries Ltd., the world’s No. 2 air conditioner maker, jumped 3.2 percent after lifting its annual profit forecast.
The MSCI Asia Pacific Index advanced 0.7 percent to 118.83 as of 9:54 a.m. in Tokyo, extending its four-day increase to 3.6 percent. South Korea’s Kospi climbed 0.5 percent, while Australia’s S&P/ASX 200 Index gained 0.6 percent.
Japan’s Nikkei 225 Stock Average added 0.7 percent to 9,922.12. The 10.5 percent increase in September for machinery orders, an indicator of business investment in three to six months, beat economist predictions for a 4.1 percent increase.
Asian investors are also awaiting data on industrial production, inflation and investments from China later this morning.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The gauge was little changed yesterday and the Dow Jones Industrial Average climbed to a 13-month high for a second day. Earnings from bond guarantor MBIA Inc., engineering company Fluor Corp. and the video-game publisher Electronic Arts Inc. disappointed investors, while American Express Co. and Bank of America Corp. rallied.
Mori Seiki, Komatsu
Mori Seiki gained 1.9 percent to 921 yen. Fanuc Ltd., the world’s largest maker of industrial robots, climbed 1.6 percent to 7,740 yen. Komatsu Ltd., the world’s second-biggest maker of construction equipment, advanced 0.9 percent to 1875 yen after the stock was raised to “neutral” from “underperform” at Merrill Lynch & Co.
“The bottom is probably behind us for capital spending,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way.”
STX Pan Ocean jumped 3.2 percent to 11,350 won. Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipping line operator by sales, rose 1.5 percent to 330 yen.
The Baltic Dry Index, a measure of shipping costs for commodities, surged 3.9 percent yesterday, a ninth consecutive gain and the steepest rally since Oct. 8.
Gold Futures
Newcrest added 0.7 percent to A$35.41. Gold futures in New York increased for an eighth-straight session today in after- hours trading, rising 0.5 percent to $1,107.60 an ounce.
The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, outpacing gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for the Stoxx.
Daikin rose 3.2 percent to 3,270 yen after raising its full-year forecast for net income, saying it sees signs of recovery in demand in China.
Mori Seiki Co., a maker of precision lathes, advanced 1.9 percent as orders for Japanese machinery climbed 10.5 percent in September. STX Pan Ocean Co., South Korea’s biggest bulk carrier, climbed 3.2 percent in Seoul as the Baltic Dry Index posted its steepest jump in a month. Newcrest Mining Ltd., Australia’s largest gold producer, gained 0.7 percent as bullion advanced. Daikin Industries Ltd., the world’s No. 2 air conditioner maker, jumped 3.2 percent after lifting its annual profit forecast.
The MSCI Asia Pacific Index advanced 0.7 percent to 118.83 as of 9:54 a.m. in Tokyo, extending its four-day increase to 3.6 percent. South Korea’s Kospi climbed 0.5 percent, while Australia’s S&P/ASX 200 Index gained 0.6 percent.
Japan’s Nikkei 225 Stock Average added 0.7 percent to 9,922.12. The 10.5 percent increase in September for machinery orders, an indicator of business investment in three to six months, beat economist predictions for a 4.1 percent increase.
Asian investors are also awaiting data on industrial production, inflation and investments from China later this morning.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The gauge was little changed yesterday and the Dow Jones Industrial Average climbed to a 13-month high for a second day. Earnings from bond guarantor MBIA Inc., engineering company Fluor Corp. and the video-game publisher Electronic Arts Inc. disappointed investors, while American Express Co. and Bank of America Corp. rallied.
Mori Seiki, Komatsu
Mori Seiki gained 1.9 percent to 921 yen. Fanuc Ltd., the world’s largest maker of industrial robots, climbed 1.6 percent to 7,740 yen. Komatsu Ltd., the world’s second-biggest maker of construction equipment, advanced 0.9 percent to 1875 yen after the stock was raised to “neutral” from “underperform” at Merrill Lynch & Co.
“The bottom is probably behind us for capital spending,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way.”
STX Pan Ocean jumped 3.2 percent to 11,350 won. Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipping line operator by sales, rose 1.5 percent to 330 yen.
The Baltic Dry Index, a measure of shipping costs for commodities, surged 3.9 percent yesterday, a ninth consecutive gain and the steepest rally since Oct. 8.
Gold Futures
Newcrest added 0.7 percent to A$35.41. Gold futures in New York increased for an eighth-straight session today in after- hours trading, rising 0.5 percent to $1,107.60 an ounce.
The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, outpacing gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for the Stoxx.
Daikin rose 3.2 percent to 3,270 yen after raising its full-year forecast for net income, saying it sees signs of recovery in demand in China.
Monday, November 9, 2009
MSCI Emerging-Markets Index May Rise 28%, Morgan Stanley Says
Nov. 10 (Bloomberg) -- Emerging-market stocks may rise 28 percent by the end of 2010, with gains slowing from this year’s pace amid concern interest rates and oil prices will increase, according to Morgan Stanley.
The MSCI Emerging Markets Index may rise to 1,200 by the end of next year, compared with the Nov. 6 level of 936.36, strategists led by Jonathan Garner said in a report. They set a forecast of 486 for the MSCI Asia Pacific excluding Japan Index, representing a 23 percent gain from last week, according to a separate report.
“Economies and earnings are recovering and it is likely too soon in the cycle for a major peak in emerging-market equities,” Garner, Morgan Stanley’s chief Asian and emerging- market strategist, wrote in the report dated yesterday. “However, we do face the headwinds of monetary policy tightening and a higher oil price.”
Emerging markets have led the rally in global stocks this year, making up all 10 best performers among the 89 country benchmarks tracked by Bloomberg. The MSCI index for 22 developing nations has climbed 65 percent in the year till Nov. 6, set for its best annual performance since 1993, while the MSCI Asian excluding Japan index has rallied 60 percent during the same period.
The MSCI Emerging Markets Index rose 2.5 percent to 959.66 yesterday. Garner, who predicted in June that the measure will rise to 985 over a 12-month period, said shares in developing nations tend to reach a “local peak in performance” before the Federal Reserve’s first rate increase.
“Micro” themes will dominate emerging markets next year, and investors should favor energy, financial and so-called consumer discretionary stocks, the brokerage said. They cut technology stocks to “equal-weight” because of valuations and “historical sensitivity to a global rate hike cycle,” according to the note sent to clients.
Morgan Stanley said China is the bank’s biggest country “overweight” while South Africa is the largest “underweight.”
The MSCI Emerging Markets Index may rise to 1,200 by the end of next year, compared with the Nov. 6 level of 936.36, strategists led by Jonathan Garner said in a report. They set a forecast of 486 for the MSCI Asia Pacific excluding Japan Index, representing a 23 percent gain from last week, according to a separate report.
“Economies and earnings are recovering and it is likely too soon in the cycle for a major peak in emerging-market equities,” Garner, Morgan Stanley’s chief Asian and emerging- market strategist, wrote in the report dated yesterday. “However, we do face the headwinds of monetary policy tightening and a higher oil price.”
Emerging markets have led the rally in global stocks this year, making up all 10 best performers among the 89 country benchmarks tracked by Bloomberg. The MSCI index for 22 developing nations has climbed 65 percent in the year till Nov. 6, set for its best annual performance since 1993, while the MSCI Asian excluding Japan index has rallied 60 percent during the same period.
The MSCI Emerging Markets Index rose 2.5 percent to 959.66 yesterday. Garner, who predicted in June that the measure will rise to 985 over a 12-month period, said shares in developing nations tend to reach a “local peak in performance” before the Federal Reserve’s first rate increase.
“Micro” themes will dominate emerging markets next year, and investors should favor energy, financial and so-called consumer discretionary stocks, the brokerage said. They cut technology stocks to “equal-weight” because of valuations and “historical sensitivity to a global rate hike cycle,” according to the note sent to clients.
Morgan Stanley said China is the bank’s biggest country “overweight” while South Africa is the largest “underweight.”
Asian Stocks Advance on Commodity Prices, Brokerage Upgrades
Nov. 10 (Bloomberg) -- Asian stocks climbed, lifting the MSCI Asia Pacific Index for a third day, as a rally in commodities boosted materials producers and brokerages upgraded Australian financial shares.
Newcrest Mining Ltd., Australia’s biggest gold producer, added 1 percent as bullion advanced to a record. Commonwealth Bank of Australia rose 1.3 percent after UBS AG recommended buying the shares and Axa Asia Pacific Holdings Ltd. gained 2.6 percent after Credit Suisse Group AG lifted the stock to “neutral.” Hyundai Motor Co., South Korea’s largest automaker, rallied 3.4 percent after China’s auto sales climbed.
“A rise in gold futures will lure investors and gold- related stocks will be bought,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
The MSCI Asia Pacific Index gained 0.8 percent to 118.53 as of 10:18 a.m. in Tokyo, set to close at the highest level since Oct. 26. Japan’s Nikkei 225 Stock Average rose 1.4 percent to 9,950.19. South Korea’s Kospi Index added 1.2 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 2.2 percent yesterday for its sixth straight increase as the Group of 20 nations pledged to maintain stimulus measures until economic recoveries take hold.
The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, exceeding gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx.
Gold Rises
Newcrest added 1 percent to A$35.65. Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, surged 3.6 percent to A$4.04. Mitsui & Co., which generates more than half its profits from commodities dealing, climbed 2.8 percent to 1,201 yen.
Gold futures for December delivery added 0.2 percent to $1,104 an ounce in New York after reaching a record $1,111.70 yesterday. Crude oil climbed 2.6 percent to $79.43 a barrel. The London Metals Index, a measure of six metals including copper and zinc, gained 0.9 percent.
Commonwealth Bank rose 1.3 percent to A$55.82. The nation’s biggest lender was raised to “buy” from “neutral” at UBS. The company said yesterday first-quarter unaudited cash profit totaled about A$1.4 billion ($1.3 billion).
Axa Asia Pacific, which yesterday rejected an unsolicited $10 billion takeover bid from parent Axa SA and wealth manager AMP Ltd., gained 2.6 percent to A$5.85. Credit Suisse lifted the shares to “neutral” from “underperform.”
Hyundai Motor, which cited growth in China for its record quarterly profit in the three months to Sept. 30, gained 3.4 percent to 106,000 won. NSK Ltd., a maker of bearings for autos, added 2.7 percent to 582 yen. JTEKT Corp., a maker of power steering, jumped 2.7 percent to 989 yen.
China’s passenger-car sales rose 76 percent last month as economic growth and government stimulus measures spurred demand in the world’s largest auto market. Sales climbed to 946,400 units, the China Association of Automobile Manufacturers said.
Newcrest Mining Ltd., Australia’s biggest gold producer, added 1 percent as bullion advanced to a record. Commonwealth Bank of Australia rose 1.3 percent after UBS AG recommended buying the shares and Axa Asia Pacific Holdings Ltd. gained 2.6 percent after Credit Suisse Group AG lifted the stock to “neutral.” Hyundai Motor Co., South Korea’s largest automaker, rallied 3.4 percent after China’s auto sales climbed.
“A rise in gold futures will lure investors and gold- related stocks will be bought,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
The MSCI Asia Pacific Index gained 0.8 percent to 118.53 as of 10:18 a.m. in Tokyo, set to close at the highest level since Oct. 26. Japan’s Nikkei 225 Stock Average rose 1.4 percent to 9,950.19. South Korea’s Kospi Index added 1.2 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 2.2 percent yesterday for its sixth straight increase as the Group of 20 nations pledged to maintain stimulus measures until economic recoveries take hold.
The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, exceeding gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx.
Gold Rises
Newcrest added 1 percent to A$35.65. Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, surged 3.6 percent to A$4.04. Mitsui & Co., which generates more than half its profits from commodities dealing, climbed 2.8 percent to 1,201 yen.
Gold futures for December delivery added 0.2 percent to $1,104 an ounce in New York after reaching a record $1,111.70 yesterday. Crude oil climbed 2.6 percent to $79.43 a barrel. The London Metals Index, a measure of six metals including copper and zinc, gained 0.9 percent.
Commonwealth Bank rose 1.3 percent to A$55.82. The nation’s biggest lender was raised to “buy” from “neutral” at UBS. The company said yesterday first-quarter unaudited cash profit totaled about A$1.4 billion ($1.3 billion).
Axa Asia Pacific, which yesterday rejected an unsolicited $10 billion takeover bid from parent Axa SA and wealth manager AMP Ltd., gained 2.6 percent to A$5.85. Credit Suisse lifted the shares to “neutral” from “underperform.”
Hyundai Motor, which cited growth in China for its record quarterly profit in the three months to Sept. 30, gained 3.4 percent to 106,000 won. NSK Ltd., a maker of bearings for autos, added 2.7 percent to 582 yen. JTEKT Corp., a maker of power steering, jumped 2.7 percent to 989 yen.
China’s passenger-car sales rose 76 percent last month as economic growth and government stimulus measures spurred demand in the world’s largest auto market. Sales climbed to 946,400 units, the China Association of Automobile Manufacturers said.
Sunday, November 8, 2009
IMF Signals Record-Low U.S. Rates Funding Global ‘Carry Trade’
Nov. 9 (Bloomberg) -- The International Monetary Fund signalled record low U.S. interest rates are funding global “carry trades” and the dollar is still overvalued as concerns mount that new financial imbalances are forming.
“There are indications that the U.S. dollar is now serving as the funding currency for carry trades,” the IMF said in a report published on Nov. 7. “These trades may be contributing to upward pressure on the euro and some emerging-economy currencies.” While the dollar “has moved closer to medium-run equilibrium,” it is still “on the strong side.”
With investors able to borrow at near-zero rates in the U.S., some economists are concerned that markets may become distorted as traders plow those funds into riskier assets. Nouriel Roubini, the economist who forecast the financial crisis in 2006, said Nov. 4 that investors are milking the “mother of all carry trades.”
“U.S. interest rates look to remain near zero through the first half of 2010 at the very least, which provides traders plenty of time to continue with carry trades,” said Boris Schlossberg, director of currency research at the online currency trader GFT Forex in New York. “Labor-market conditions are still very challenging in the U.S., and the rest of the world is improving faster. The dollar remains the weakest link.”
Dollar’s Slide
The dollar has dropped about 13 percent against a basket of currencies from its major trading partners in the past seven months. Meanwhile, the MSCI All-Countries World Index of global equities has gained about two-thirds since March and sugar has soared 90 percent this year.
U.S. Federal Reserve policymakers, at the end of a two-day policy meeting on Nov. 4, reiterated their intention to keep interest rates “exceptionally low” for “an extended period.”
Speculation that the Fed will keep rates on hold into next year was further fueled by U.S. Labor Department figures on Nov. 6 that showed the nation’s unemployment rate jumped to 10.2 percent in October, exceeding 10 percent for the first time since 1983.
In a carry trade, investors borrow in countries with low interest rates to invest in higher-yielding assets. Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. compare with 7 percent in South Africa and 2.5 percent in New Zealand, making the yen and dollar favored targets for investors seeking to fund carry trades.
Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York, said the dollar carry trade is likely to continue in coming months, and he expects the U.S. currency will decline further.
Risk Appetite
“The key wildcard to dollar carry trades is whether people continue to show an appetite for risk,” Chandler said. “That’ll weigh on the dollar.”
The euro’s exchange rate “is on the strong side of its equilibrium,” the Washington-based IMF said.
The fund, which published the report as officials from the Group of 20 nations gathered in St. Andrews, Scotland, also said that China’s yuan is “significantly undervalued.”
The Chinese currency “has depreciated in real effective terms in tandem with the U.S. dollar and remains significantly undervalued from a medium-term perspective,” the IMF said.
China has kept the exchange rate at about 6.83 to the dollar since July 2008, after letting the currency strengthen 21 percent in the previous three years. Appreciation was halted to help sustain exports amid a global recession.
Chinese central bank Governor Zhou Xiaochuan told Bloomberg News on Nov. 6 that “the pressure from the international community to allow yuan appreciation is not that big,” deflecting calls from Europe and Japan to let it rise.
Since President Barack Obama took office this year, “the U.S. hasn’t been as vocal” about the Chinese currency as it was previously, Brown Brothers’ Chandler said.
“There are indications that the U.S. dollar is now serving as the funding currency for carry trades,” the IMF said in a report published on Nov. 7. “These trades may be contributing to upward pressure on the euro and some emerging-economy currencies.” While the dollar “has moved closer to medium-run equilibrium,” it is still “on the strong side.”
With investors able to borrow at near-zero rates in the U.S., some economists are concerned that markets may become distorted as traders plow those funds into riskier assets. Nouriel Roubini, the economist who forecast the financial crisis in 2006, said Nov. 4 that investors are milking the “mother of all carry trades.”
“U.S. interest rates look to remain near zero through the first half of 2010 at the very least, which provides traders plenty of time to continue with carry trades,” said Boris Schlossberg, director of currency research at the online currency trader GFT Forex in New York. “Labor-market conditions are still very challenging in the U.S., and the rest of the world is improving faster. The dollar remains the weakest link.”
Dollar’s Slide
The dollar has dropped about 13 percent against a basket of currencies from its major trading partners in the past seven months. Meanwhile, the MSCI All-Countries World Index of global equities has gained about two-thirds since March and sugar has soared 90 percent this year.
U.S. Federal Reserve policymakers, at the end of a two-day policy meeting on Nov. 4, reiterated their intention to keep interest rates “exceptionally low” for “an extended period.”
Speculation that the Fed will keep rates on hold into next year was further fueled by U.S. Labor Department figures on Nov. 6 that showed the nation’s unemployment rate jumped to 10.2 percent in October, exceeding 10 percent for the first time since 1983.
In a carry trade, investors borrow in countries with low interest rates to invest in higher-yielding assets. Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. compare with 7 percent in South Africa and 2.5 percent in New Zealand, making the yen and dollar favored targets for investors seeking to fund carry trades.
Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York, said the dollar carry trade is likely to continue in coming months, and he expects the U.S. currency will decline further.
Risk Appetite
“The key wildcard to dollar carry trades is whether people continue to show an appetite for risk,” Chandler said. “That’ll weigh on the dollar.”
The euro’s exchange rate “is on the strong side of its equilibrium,” the Washington-based IMF said.
The fund, which published the report as officials from the Group of 20 nations gathered in St. Andrews, Scotland, also said that China’s yuan is “significantly undervalued.”
The Chinese currency “has depreciated in real effective terms in tandem with the U.S. dollar and remains significantly undervalued from a medium-term perspective,” the IMF said.
China has kept the exchange rate at about 6.83 to the dollar since July 2008, after letting the currency strengthen 21 percent in the previous three years. Appreciation was halted to help sustain exports amid a global recession.
Chinese central bank Governor Zhou Xiaochuan told Bloomberg News on Nov. 6 that “the pressure from the international community to allow yuan appreciation is not that big,” deflecting calls from Europe and Japan to let it rise.
Since President Barack Obama took office this year, “the U.S. hasn’t been as vocal” about the Chinese currency as it was previously, Brown Brothers’ Chandler said.
Most Asian Stocks Gain; Financial Companies Rise After Axa Bid
Nov. 9 (Bloomberg) -- Most Asian stocks climbed, led by financial companies after a takeover bid in Australia’s insurance industry. Japanese shares declined after the yen rose to the strongest in a week, hurting overseas sales for exporters.
Axa Asia Pacific Holdings Ltd. soared 29 percent after rejecting an unsolicited offer from its French parent Axa SA and Australian asset manager AMP Ltd. Olympus Corp., the world’s biggest maker of endoscopes, slumped 3.9 percent as the company’s first-half operating profit dropped 11 percent, partially due to the strong yen. Nissan Motor Co., which gets about three-quarters of its sales abroad, lost 2.6 percent.
The MSCI Asia Pacific Index advanced 0.2 percent to 116.56 as of 9:26 a.m. in Tokyo, with about four stocks rising for every three that fell. In New York on Nov. 6, the Standard & Poor’s 500 Index climbed 0.3 percent, as a report showing unemployment exceeded 10 percent prompted speculation the Federal Reserve will maintain a loose monetary policy.
“The employment data is positive for the stock market as that means monetary relaxation will continue,” said Tomochika Kitaoka, chief strategist in Tokyo at Mizuho Financial Group Inc. “Doubts will be eliminated that Japanese companies will post higher profits this fiscal year.”
Japan’s Nikkei 225 Stock Average fell 0.3 percent to 9,674.99. Australia’s S&P/ASX 200 Index rallied 1.4 percent, buoyed by Commonwealth Bank of Australia’s report of A$1.4 billion ($1.3 billion) in first-quarter profit.
U.S. Unemployment
U.S. stock futures were little-changed. The S&P 500 climbed on Nov. 6 after ratings of General Electric Co. and Macy’s Inc. were lifted. The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, a Labor Department report showed.
The MSCI Asia Pacific Index has climbed 65 percent from a more than five-year low on March 9, outpacing gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx.
Olympus lost 3.9 percent to 2,745 yen. Nissan declined 2.6 percent to 639 yen.
The yen rallied to as high as 89.62 versus the dollar on Nov. 6 following the unemployment report. That compared with 90.64 at the close of stock trading in Tokyo that day.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net;
Axa Asia Pacific Holdings Ltd. soared 29 percent after rejecting an unsolicited offer from its French parent Axa SA and Australian asset manager AMP Ltd. Olympus Corp., the world’s biggest maker of endoscopes, slumped 3.9 percent as the company’s first-half operating profit dropped 11 percent, partially due to the strong yen. Nissan Motor Co., which gets about three-quarters of its sales abroad, lost 2.6 percent.
The MSCI Asia Pacific Index advanced 0.2 percent to 116.56 as of 9:26 a.m. in Tokyo, with about four stocks rising for every three that fell. In New York on Nov. 6, the Standard & Poor’s 500 Index climbed 0.3 percent, as a report showing unemployment exceeded 10 percent prompted speculation the Federal Reserve will maintain a loose monetary policy.
“The employment data is positive for the stock market as that means monetary relaxation will continue,” said Tomochika Kitaoka, chief strategist in Tokyo at Mizuho Financial Group Inc. “Doubts will be eliminated that Japanese companies will post higher profits this fiscal year.”
Japan’s Nikkei 225 Stock Average fell 0.3 percent to 9,674.99. Australia’s S&P/ASX 200 Index rallied 1.4 percent, buoyed by Commonwealth Bank of Australia’s report of A$1.4 billion ($1.3 billion) in first-quarter profit.
U.S. Unemployment
U.S. stock futures were little-changed. The S&P 500 climbed on Nov. 6 after ratings of General Electric Co. and Macy’s Inc. were lifted. The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, a Labor Department report showed.
The MSCI Asia Pacific Index has climbed 65 percent from a more than five-year low on March 9, outpacing gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx.
Olympus lost 3.9 percent to 2,745 yen. Nissan declined 2.6 percent to 639 yen.
The yen rallied to as high as 89.62 versus the dollar on Nov. 6 following the unemployment report. That compared with 90.64 at the close of stock trading in Tokyo that day.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net;
Britain and U.S. Clash at G-20 on Tax to Insure Against Crises
ST. ANDREWS, Scotland — The United States and Britain voiced disagreement Saturday over a proposal that would impose a new tax on financial transactions to support future bank rescues.
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Times Topics: Group of 20
Prime Minister Gordon Brown of Britain, leading a meeting here of finance ministers from the Group of 20 rich and developing countries, said such a tax on banks should be considered as a way to take the burden off taxpayers during periods of financial crisis. His comments pre-empted the International Monetary Fund, which is set to present a range of options next spring to ensure financial stability.
But the proposal was met with little enthusiasm by the United States Treasury secretary, Timothy F. Geithner, who told Sky News in an interview that he would not support a tax on everyday financial transactions. Later he seemed to soften his position, saying it would be up to the I.M.F. to present a range of possible measures.
“We want to make sure that we don’t put the taxpayer in a position of having to absorb the costs of a crisis in the future,” Mr. Geithner said after the Sky News interview. “I’m sure the I.M.F. will come up with some proposals.”
The Russian finance minister, Alexei Kudrin, also said he was skeptical of such a tax. Similar fees had been proposed by Germany and France but rejected by Mr. Brown’s government in the past as too difficult to manage. But Mr. Brown is now suggesting “an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global financial transaction levy.”
Supporters of a tax had argued that it would reduce the volatility of markets; opponents said it would be too complex to enact across borders and could create huge imbalances. Mr. Brown said any such tax would have to be applied universally.
“It cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us,” Mr. Brown said at the summit. “There must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards.”
At the meeting at the Scottish golf resort, the last to be hosted by Britain during its turn leading the group, the ministers agreed on a detailed timetable to achieve balanced economic growth and reiterated a pledge not to withdraw any economic stimulus until a recovery was certain.
They also committed to enact limits on bonuses and force banks to hold more cash reserves. But they failed to reach an agreement on how to finance a new climate change deal ahead of a crucial meeting in Copenhagen next month.
The finance ministers agreed that economic and financial conditions had improved but that the recovery was “uneven and remains dependent on policy support,” according to a statement released by the group. The weak condition of the economy was illustrated Friday by new data showing the unemployment rate in the United States rising to 10.2 percent in October, the highest level in 26 years.
The finance ministers also acknowledged that withdrawing stimulus packages required a balancing act to avoid stifling the economic recovery that has just begun.
“If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Mr. Geithner said. “It is too early to start to lean against recovery.”
As part of the group’s global recovery plan, the United States would aim to increase its savings rate and reduce its trade deficit while countries like China and Germany would reduce their dependence on exports. Economic imbalances were widely faulted as helping to bring about the global economic downturn.
Mr. Geithner acknowledged on Saturday that the changes would take time but that “what we are seeing so far has been encouraging.”
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Times Topics: Group of 20
Prime Minister Gordon Brown of Britain, leading a meeting here of finance ministers from the Group of 20 rich and developing countries, said such a tax on banks should be considered as a way to take the burden off taxpayers during periods of financial crisis. His comments pre-empted the International Monetary Fund, which is set to present a range of options next spring to ensure financial stability.
But the proposal was met with little enthusiasm by the United States Treasury secretary, Timothy F. Geithner, who told Sky News in an interview that he would not support a tax on everyday financial transactions. Later he seemed to soften his position, saying it would be up to the I.M.F. to present a range of possible measures.
“We want to make sure that we don’t put the taxpayer in a position of having to absorb the costs of a crisis in the future,” Mr. Geithner said after the Sky News interview. “I’m sure the I.M.F. will come up with some proposals.”
The Russian finance minister, Alexei Kudrin, also said he was skeptical of such a tax. Similar fees had been proposed by Germany and France but rejected by Mr. Brown’s government in the past as too difficult to manage. But Mr. Brown is now suggesting “an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global financial transaction levy.”
Supporters of a tax had argued that it would reduce the volatility of markets; opponents said it would be too complex to enact across borders and could create huge imbalances. Mr. Brown said any such tax would have to be applied universally.
“It cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us,” Mr. Brown said at the summit. “There must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards.”
At the meeting at the Scottish golf resort, the last to be hosted by Britain during its turn leading the group, the ministers agreed on a detailed timetable to achieve balanced economic growth and reiterated a pledge not to withdraw any economic stimulus until a recovery was certain.
They also committed to enact limits on bonuses and force banks to hold more cash reserves. But they failed to reach an agreement on how to finance a new climate change deal ahead of a crucial meeting in Copenhagen next month.
The finance ministers agreed that economic and financial conditions had improved but that the recovery was “uneven and remains dependent on policy support,” according to a statement released by the group. The weak condition of the economy was illustrated Friday by new data showing the unemployment rate in the United States rising to 10.2 percent in October, the highest level in 26 years.
The finance ministers also acknowledged that withdrawing stimulus packages required a balancing act to avoid stifling the economic recovery that has just begun.
“If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Mr. Geithner said. “It is too early to start to lean against recovery.”
As part of the group’s global recovery plan, the United States would aim to increase its savings rate and reduce its trade deficit while countries like China and Germany would reduce their dependence on exports. Economic imbalances were widely faulted as helping to bring about the global economic downturn.
Mr. Geithner acknowledged on Saturday that the changes would take time but that “what we are seeing so far has been encouraging.”
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