BOJ, Alcoa, JP Morgan,Google, Jobs, Inflation and ECB, Moody’s, Retail sales all in Action: Next Week

 

The Last week ended with Weaker than weak Employment report that sunk expectation. The Chinese data of higher inflation above 6% may further hardened, the tightening Bias of Chinese Central bank towards, some more rate hikes. The Goldman’s report on Financials put more jitters.

As, the Week Begins, Australia is expected to impose Carbon Tax of about $ 23 on Miners. while, Rio Tinto is likely to announce its result this week.

The US Treasury sales on Monday may indicate yields hardening , as first sales post QE 2 and Tuesdays Factory Orders and FOMC Minutes will be watched for the Growth signs and the Dissent in the FOMC. Infosys declares its result on the same day. The Alcoa and Chevron result may cover up the commodity universe. Bank of Japan’s talks shall focus on recovery.

Wednesday, Begins with focus on Chinese data regarding GDP and other economic indicators. This may fix grounds for another rate hike. Smaller results in Indian markets. Will China embark to Currency (Re) Valuation..? But, the US market will focus on retail sales i.e MBA purchase application and Ben Bernanke starts his 2 day semi annual Testimony. Dallas FED’s  Fisher Speaks on the very day. But, the markets will close on the eye on Google and JP Morgan.

Thursday, 14th : India TCS will post results. where market has high expectations. No of non Nifty companies declare results. The Inflation data is expected to carry the Diesel and gas price rises shall be again inflationary. The US market will open with jobless claims, retail sales and Business Inventories. The Bernanke’s Testimony shall rumble on the foreground. The JP Morgan and Google results set the mood.

Friday the 15th : The Indonesian bank is expected to take tough call on Inflation.  The ECB shall declare the ‘ Stress Test’ results of 91 European Banks. Moody’s are expected to call on Bond Ratings in view of Budget Deficit. The Citi Group result will lurk in the weather. The Consumer Price Index, Industrial production followed by consumer sentiment buzz the Markets.

The sudden Infectious rise in yields of Italian Bonds in the late Friday will bear the answers till then

The week ends again on China, whose Trade Balance will be in the Lights as week end special.

Well, all in all  its Joy ride , freak moments and nasty surprises seems to be packed in full. This Week will surely have its foot print for the coming Q.

Wall St Week Ahead: Recipe for a rally? Beat lowered estimates (Reuters)

Wall St Week Ahead: Recipe for a rally? Beat lowered estimates (Reuters)

by Editor - Stock Markets News

NEW YORK (Reuters) – Wall Street heads into earnings season next week playing a typical game: Worrying about results a lot, and then rallying on pleasant surprises.

Analysts have been lowering earnings estimates of late and nervousness about the U.S. economic picture abounds, especially after Friday’s poor June jobs report.

However, profit growth could still be strong in the second quarter — and that could boost stocks. The Standard Poor’s 500 (.SPX) fell 0.4 percent in the second quarter, but rallied in recent days on hopes for economic improvement.

Over the last month, analysts have revised downward their earnings estimates for SP 500 companies, with the mean change in earnings estimates a negative 6.4 percent, according to Thomson Reuters StarMine data.

“I think there’s going to be a lot of anxiety going into it, and I think companies are going to continue what they’ve done for the last few quarters: Put out better-than-expected numbers, and guidance should be OK,” said Scott Billeaudeau, portfolio manager at Fifth Third Asset Management, in Minneapolis.

SP 500 components’ earnings are expected to have increased an average of 7.3 percent in the second quarter from a year ago, down from first-quarter growth of 18.9 percent, Thomson Reuters data showed.

But the number could jump if most companies beat analysts’ forecasts. Early estimates for first-quarter profit growth were at about 13 percent.

“The general economic data is suggesting some softness in the overall economy both globally and in the U.S. … so that drives somewhat more realistic expectations for companies,” said Natalie Trunow, chief investment officer of equities of Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

In the coming week, the Federal Reserve will release minutes of its June 21-22 policy-making meeting. Among the U.S. economic indicators on tap are June retail sales, June inflation readings from the U.S. Producer Price Index and the U.S. Consumer Price Index, industrial production and capacity utilization for June, and the preliminary July reading on consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers.

BANKS UNDER THE GUN

Financial services companies have seen the biggest downward revisions in earnings estimates in the last 30 days, with banks taking some of the biggest hits, including Goldman Sachs (GS.N) and Morgan Stanley (MS.N).

JPMorgan Chase (JPM.N) will be the first of the big banks to report, with results due on Thursday. Results from top tech player Google (GOOG.O) also are expected Thursday, while aluminum company Alcoa (AA.N) unofficially starts the season with earnings after the bell on Monday.

The SP financial index (.GSPF) dropped 6.3 percent in the second quarter as worries escalated about the impact of the euro-zone debt problems on the global economy. The mean change for earnings estimates in the sector in the last 30 days is a negative 34.4 percent, StarMine data showed.

DISASTERS AND DISAPPOINTMENTS

Analysts have also said the aftermath of Japan’s earthquake, months of extraordinary weather in the United States, and rising food and commodity prices took a toll on companies in the second quarter.

StarMine analysis showed companies, including Platinum Underwriters Holdings (PTP.N), were likely to disappoint with results because of tornado damage claims.

But companies have kept costs in check and that should support stronger results, while also giving a boost to stock prices, he said.

“I think things underneath the macro, global, political noise continue to percolate,” said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs. But “you’re going to see higher-quality companies showing the surprises this quarter (versus) last.”

Based on his own analysis, he expects industrials and utilities to surprise to the upside, especially for companies involved in “machinery, and roads and rails” and for electric utilities.

On the flip side, he sees a high probability for earnings disappointments in health care, consumer staples and materials sectors.

An SP health-care index (.GSPA) led gains in the SP 500 in the first half of the year as the market shifted to defensive shares, with the sector up 14 percent since the start of the year, followed by an SP energy index (.GSPE), up 11 percent.

The health-care sector may be subject to profit-taking once earnings start after its strong run so far this year, according to Tobias Levkovich, Citigroup’s chief U.S. equity strategist, who made the point in a research note.

Some analysts expect total upside surprises to be less than in previous quarters, with the percentage of companies beating expectations likely to fall in the mid-60s percentage range, below the 70-percent range, where it has been.

SP 500 earnings overall could beat estimates by a “modest” 1 percent to 3 percent, Charles Blood, senior market strategist at Brown Brothers Harriman, wrote in a research note.

“Margins typically rise in the second quarter, but our primary concern and one of the biggest investment debates, is, ‘How much room do companies have for further improvement?’” he wrote.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

NOTE : This is ditto republish of the opinion for readers fair view

The Map of Rain fall --25% Short Fall . Most are is deficient in Rain

 

The Hope of good rain is the Bitter Experience India bites every Year.

IMD is expected to Project the Real Picture than hopes

Introductory statement to the press conference 07/07/11

 

Jean-Claude Trichet, President of the ECB,
Vítor Constâncio, Vice-President of the ECB,
Frankfurt am Main, 7 July 2011

Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting.

Based on its regular economic and monetary analyses, the Governing Council decided to increase the key ECB interest rates by 25 basis points, after raising rates by 25 basis points in April 2011 from historically low levels. The further adjustment of the current accommodative monetary policy stance is warranted in the light of upside risks to price stability. The underlying pace of monetary expansion is continuing to gradually recover, while monetary liquidity remains ample with the potential to accommodate price pressures in the euro area. All in all, it is essential that the recent price developments do not give rise to broad-based inflationary pressures over the medium term. Our decision will contribute to keeping inflation expectations in the euro area firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to contribute to economic growth in the euro area. At the same time, interest rates across the entire maturity spectrum remain low. Thus, our monetary policy stance remains accommodative, lending support to economic activity and job creation. As expected, recent economic data indicate some deceleration in the pace of economic growth in the second quarter of 2011. While the underlying momentum of economic growth in the euro area continues to be positive, uncertainty remains elevated. We will continue to monitor very closely all developments with respect to upside risks to price stability.

The provision of liquidity and the allotment modes for refinancing operations will be adjusted when appropriate, taking into account the fact that all the non-standard measures taken during the period of acute financial market tensions are, by construction, temporary in nature.

Let me now explain our assessment in greater detail, starting with the economic analysis. In the first quarter of 2011 euro area real GDP posted a strong quarter-on-quarter increase of 0.8%, following the 0.3% increase in the last quarter of 2010. Recent statistical releases and survey-based indicators point towards a continued expansion of economic activity in the euro area in the second quarter of this year, albeit at a slower pace. This moderation reflects the fact that the strong growth in the first quarter was in part due to special factors. The positive underlying momentum of economic activity in the euro area remains in place. Euro area exports should continue to be supported by the ongoing expansion in the world economy. At the same time, taking into account the present level of business confidence in the euro area, private sector domestic demand should contribute to economic growth. However, activity is expected to continue to be dampened somewhat by the process of balance sheet adjustment in various sectors.

In the Governing Council’s assessment, the risks to this economic outlook remain broadly balanced in an environment of elevated uncertainty. On the one hand, favourable business confidence could provide more support to domestic economic activity in the euro area than currently expected and higher foreign demand could also contribute more strongly to growth than expected. On the other hand, downside risks relate to the ongoing tensions in some segments of the financial markets that may potentially spill over to the euro area real economy. Downside risks also relate to further increases in energy prices, protectionist pressures and the possibility of a disorderly correction of global imbalances.

With regard to price developments, euro area annual HICP inflation was 2.7% in June 2011 according to Eurostat’s flash estimate – the same rate as in May. The relatively high inflation rates seen over the past few months largely reflect higher energy and commodity prices. Looking ahead, inflation rates are likely to stay clearly above 2% over the coming months. Upward pressure on inflation, mainly from energy and commodity prices, is also still discernible in the earlier stages of the production process. It remains of paramount importance that the rise in HICP inflation does not translate into second-round effects in price and wage-setting behaviour and lead to broad-based inflationary pressures. Inflation expectations must remain firmly anchored in line with the Governing Council’s aim of maintaining inflation rates below, but close to, 2% over the medium term.

Risks to the medium-term outlook for price developments remain on the upside. They relate, in particular, to higher than assumed increases in energy prices. Furthermore, there is a risk of increases in indirect taxes and administered prices that may be greater than currently assumed, owing to the need for fiscal consolidation in the coming years. Finally, upside risks may stem from stronger than expected domestic price pressures in the context of increasing capacity utilisation in the euro area.

Turning to the monetary analysis, the annual growth rate of M3 increased to 2.4% in May 2011, from 2.0% in April. Looking through the recent volatility in broad money growth owing to special factors, M3 growth has continued to edge up over recent months. The annual growth rate of loans to the private sector continued to strengthen slightly, rising to 2.7% in May after 2.6% in April. Overall, the underlying pace of monetary expansion has continued its gradual recovery. At the same time, monetary liquidity accumulated prior to the period of financial market tensions continues to be ample, with the potential to accommodate price pressures in the euro area.

Looking at M3 components, the annual growth rate of M1 moderated further in May, whereas growth in other short-term deposits increased. These developments reflect in part the gradual increase in the remuneration of short-term time and savings deposits over recent months. At the same time, the steep yield curve implies a dampening impact on overall M3 growth, as it reduces the attractiveness of monetary assets compared with more highly remunerated longer-term instruments outside M3. However, recent information suggests that this impact may be waning.

On the counterpart side, the annual growth of loans to non-financial corporations and to households remained unchanged from April at 0.9% and 3.4% respectively, confirming the pattern of developments in previous months.

The overall size of bank balance sheets has remained broadly unchanged over recent months. It is important that banks continue to expand the provision of credit to the private sector in an environment of increasing demand. To address this challenge, where necessary, it is essential for banks to retain earnings, to turn to the market to strengthen further their capital bases or to take full advantage of government support measures for recapitalisation. In particular, banks that currently have limited access to market financing urgently need to increase their capital and their efficiency.

To sum up, based on its regular economic and monetary analyses, the Governing Council decided to increase the key ECB interest rates by 25 basis points, after raising rates by 25 basis points in April 2011 from historically low levels. The further adjustment of the current accommodative monetary policy stance is warranted in the light of upside risks to price stability. A cross-check of the outcome of the economic analysis with that of the monetary analysis indicates that the underlying pace of monetary expansion is continuing to gradually recover, while monetary liquidity remains ample with the potential to accommodate price pressures in the euro area. All in all, it is essential that the recent price developments do not give rise to broad-based inflationary pressures over the medium term. Our decision will contribute to keeping inflation expectations in the euro area firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to contribute to economic growth in the euro area. At the same time, interest rates across the entire maturity spectrum remain low. Thus, our monetary policy stance remains accommodative, lending support to economic activity and job creation. As expected, recent economic data indicate some deceleration in the pace of economic growth in the second quarter of 2011. While the underlying momentum of economic growth in the euro area continues to be positive, uncertainty remains elevated. We will continue to monitor very closely all developments with respect to upside risks to price stability.

Turning to fiscal policies, the current environment is very demanding and requires decisive action. Euro area countries must, as a minimum, comply with their fiscal consolidation commitments for 2011 and beyond, as foreseen under the respective excessive deficit procedures. Adequate and more frontloaded adjustment should ensure that structural fiscal consolidation targets are met, in line with the ECOFIN Council recommendations, and any better than expected economic and fiscal developments should be exploited to achieve faster deficit reduction. The announcement of fully specified consolidation measures for 2012 and beyond is essential to convince the general public and financial market participants that the corrective policies will be sustained and that public debt developments will be put on a sustainable path.

At the same time, it remains essential that substantial and comprehensive structural reforms are urgently implemented in the euro area to strengthen competitiveness, flexibility and longer-term growth potential. This is particularly relevant for countries with high fiscal and external deficits or with past losses in competitiveness. We welcome the introduction of the European Semester, including the recent submission of countries’ National Reform Programmes that incorporate commitments made under the Euro Plus Pact. We also support the European Council conclusions calling for more ambitious and well-defined reforms that should be frontloaded in order to foster competitiveness. In addition, the removal of labour market rigidities would strongly support the adjustment process. Measures which enhance wage flexibility, such as the elimination of automatic wage indexation, would help to accomplish the necessary adjustment.

We are now at your disposal for questions.

European Central Bank
Directorate Communications
Press and Information Division
Kaiserstrasse 29, D-60311 Frankfurt am Main

The Divergent US data: Consumer confidence, Const. Spending Falls & ISM Manufacturing Index rises.

 

1 )  Intraday Economic News: Consumer Sentiment Falls To 71.5 In June :

The Reuters/University of Michigan Consumer Sentiment Index edged down to 71.5 in June from its preliminary 71.8 reading and the 74.3 print seen in May. This was slightly weaker than the consensus expectation of 72. The expectations component explained all of the weakness; it dropped by almost four points, to 64.8, in June from its May reading of 81.9 and the preliminary 79.6 figure. The reading was not too far from expectations, and will likely get sidelined by news from the manufacturing and construction sectors.

2)   Intraday Economic News: U.S. Construction Spending Falls 0.6% In May

U.S. construction spending fell 0.6% in May versus April. This was much weaker than the 0.3% drop we had expected (the consensus expectation was for a flat reading). Moreover, the month before was downwardly revised to a 0.6% drop (previously up 0.4%), as was the March figure (downwardly revised to a 0.2% drop from a 0.1% gain previously reported). On a year-over-year basis, total construction was down 7.1% in May.
Residential construction fell 2.1% month over month in May, after a 2.8% gain in April, and remains down 6.9% from last May. Total nonresidential construction spending edged up 0.1% month over month in May, as a 1.2% gain in private nonresidential construction spending offset the 0.8% decline in public nonresidential spending. Total nonresidential spending is still down 7.2% from last year. Public construction spending fell 0.8% month over month in May and is down 9.3% from the level of last year. Although this disappointing data isn't too shocking, it may take some of the steam out of today's market rally, given the still-dragging housing sector and the bad weather conditions earlier this year.

 

3 )  Intraday Economic News: ISM Manufacturing Index Climbs Almost Two Points, To 55.3, In June.

The Institute for Supply Management (ISM) reading climbed to 55.3 in June, after falling almost seven points, to 53.5, in May. The reading was stronger than the consensus expectation of 52.2 but wasn't too much of a surprise after the Chicago Purchasing Managers' Index/ISM report surprised on the upside yesterday. The employment subcomponent edged up to 59.9 from 58.2, and new orders edged up 0.6 points, to 51.6, after plunging almost 11 points, to 51, in May. The better-than-expected report adds credence to the notion that the supply constraints from Japan's earthquake and tsunami are starting to ease, which will likely add support to the rally today.

The markets are sideways waiting for Quarterly Results, On the backdrop of US Debt ceiling debate. The warnings about US debts have been shrugged off and not reflect in or priced in.

The European Dream verses by Father Jean-Claude Trichet , Brussels

Completing Economic and Monetary Union

Speech by Jean-Claude Trichet, President of the ECB,
at the Gala Dinner of the State of the European Union conference
“Revitalising the European Dream: A Corporate View”,
Brussels, 28 June 2011

Ladies and gentlemen,

Thank you for inviting me to this conference. The theme to which it is dedicated is especially relevant today, when we have to draw all the lessons from the worst financial crisis since World War II.

These days, “Europe” and the benefits it brings have come to be taken for granted. Thanks to the success of European integration, the threat of war has become a memory of the past for many Europeans, in particular the younger generation.

This makes it all the more urgent to develop a renewed vision of the kind of Europe we want and indeed need – a vision that is easily understood and shared amongst EU citizens.

Each generation needs to affirm its commitment to Europe.

As Pierre Werner once observed, “it is necessary that even those born well after the 1950s and 1960s realise that the European Union has not come about by chance, but that it is based on the fundamental necessities of life amongst the peoples of Europe” [1].

Thankfully, these “fundamental necessities of life” – especially in the economic sphere – still seem to be felt and understood by the people in Europe. When asked, in the Eurobarometer surveys, which issues the European institutions should focus on in the coming years, Europeans believe that priority should be given to economic and monetary policy (37% in the EU and 41% in the euro area).

More than three out of four Europeans (78%) agree that measures to reduce the public deficit and debt in their country cannot be delayed.

More than three quarters of respondents (77%) consider that stronger coordination of economic and financial policies, as well as closer supervision of financial institutions would be effective in combating the crisis. The idea of initiating reforms to benefit future generations attracts equally strong support.

Revitalising Europe

Revitalising Europe means bringing the reality of today’s Europe, of its institutions and policies, closer to these wishes and concerns of the EU citizens.

Fidelity Mutual Fund : Use Visa card to Invest to add benefits

In what may give a fillip to online investing in mutual fund schemes, Fidelity Fund Management Pvt. Ltd has made the exercise a wee bit simpler. The company has allowed investors to use their VISA debit cards to buy funds from its website.

As of now, 27 banks with VISA debit cards are on the company’s list. The new facility will be in addition to the existing Internet banking facility, which the company offers to customers of about 39 banks in India.

Fidelity is the first mutual fund company to allow transactions with a debit card. However, all fund houses do allow Internet banking for buying funds online. With the Securities and Exchange Board of India recently indicating that it may introduce incentives for mutual fund distributors, it may make sense for you, the customer, to invest online that does not need an agent interface. And the ease of using a debit card may encourage investors to do so and increase online buying penetration. “Though I don’t have official confirmation, online buying of funds is still in low single digits,” says Rajan Krishnan, chief executive officer, Baroda Pioneer Asset Management Co. Ltd.

Fidelity is of the view that the initiative will help increase its reach beyond metros to tier II and tier III cities, where banks have a larger presence than any distribution network. Said Ashu Suyash, country head and managing director, Fidelity, “It helps expand the reach of online investing to over 100 million Visa debit card holders, many of whom are in locations beyond the top 10 cities. The debit card and Internet banking facilities together give our customers the option to choose from around 45 banks.”

At present the company manages assets under management of over Rs9,100 crore (as on 31 May) and has at least one million customers.

How to invest through debit card

If you wish to invest in Fidelity’s scheme using your debit card, visit the company’s website and register your login. You will get a list of schemes to choose from. Before placing your order to buy units, you will need to provide details of your VISA debit card, including the card number, expiry date of the card, CVV number and the Verified by Visa (VBV) password. Except VBV, all other details are mentioned on the card. In case you do not know your VBV password, you can generate it in a few minutes by going through an authentication process set up by your bank.

Online investing is cheaper, helps save time and enables you to invest anytime, anywhere.

This is reported on Live Mint.com by abhishek.a