Asian equity futures (NKA) climbed, indicating the regional benchmark may trim its first weekly drop since June, on signs of improvement in the global economy and central-bank pledges to maintain stimulus. Gold extended declines, leading a retreat among precious metals. Futures on the Nikkei 225 (NKY) Stock Average were bid at 14,200 by 8:05 a.m. in the Osaka pre-market, after closing at 14,180 in Chicago and 14,050 in Japan yesterday. Contracts on indexes in Australia and Hong Kong also increased. Standard & Poor’s 500 Index futures were little changed after the gauge gained 1.3 percent to a record in New York. The yen was steady versus the U.S. currency after weakening the most since April yesterday, while the Australian dollar was poised for the biggest decline among major currencies this week. Gold fell a sixth day. Factory output from the U.S. to China and Europe expanded in July, reports yesterday showed, while American jobless claims fell to a five-year low. The data came after the Federal Reserve retained its $85 billion-a-month bond buying program and as European Central Bank President Mario Draghi said interest rates will probably remain low for an extended period. Workers on nonfarm payrolls in the U.S. rose by 185,000 in July, according to a Bloomberg survey of economists before figures today. “The bulls have regained control,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said in an e-mail. “Fears eased about the global economy and reassuring comments from central banks confirmed that the money glut will continue.” Toyota Earnings The MSCI Asia Pacific Index of regional stocks gained 1 percent yesterday. The measure is still poised for a 1.4 percent drop in the week, the first since the five days to June 21, data compiled by Bloomberg show. Companies on the gauge traded at 12.3 times estimated earnings yesterday, down from a valuation of as much as 13.63 in May. Mitsubishi Corp., Toyota Motor Corp., Korea Electric Power Corp., Woori Finance Holdings Co. and Kikkoman Corp. are among more than 40 index members scheduled to report earnings today. Of the 614 companies that have already reported this season, 46 percent have posted higher profits than analysts expected, according to data compiled by Bloomberg. The Nikkei Volatility Index, a gauge of swings in Japanese shares, has retreated 15 percent from a three-week high reached July 29, with the Nikkei 225 headed for a 0.9 percent drop in the week. Hang Seng Futures on Australia’s S&P/ASX 200 Index added 0.8 percent, signaling the nation’s stock gauge will rise for a 10th day today, capping the longest run of gains since the end of January. Hang Seng Index futures climbed 0.7 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index of Chinese stocks in Hong Kong gained 1 percent. The Bloomberg China-US Equity Index of the most-traded Chinese shares in New York climbed 2.3 percent yesterday, closing at the highest level since May 21. China’s non-manufacturing purchasing managers’ index is scheduled to be released tomorrow, after the manufacturing gauge unexpectedly strengthened in July, data yesterday showed. Indonesian economic growth probably slackened to 5.9 percent in the second quarter, according to a survey of economists before figures today. Producer prices data for Australia and the euro region will also be published today. The yen was little changed at 99.51 per dollar, after sinking 1.7 percent yesterday. The yen is set for a 1.3 percent drop versus the greenback this week as all 16 major currencies tracked by Bloomberg weakened. the euro was steady at $1.3207. Aussie Slump Australia’s dollar, known as the Aussie, was little changed at 89.37 U.S. cents, headed for a 3.5 percent slump over the past five days, the worst performance among the 16 major currencies tracked by Bloomberg this week. Central bank Governor Glenn Stevens said that inflation data may suggest there is room for cuts to interest rates. New Zealand’s currency, known as the kiwi, was steady at 79 cents, down 2.3 percent in the week for its first drop since the start of July. Three rounds of bond purchases by the Fed, coupled with improving earnings and economic growth, has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009. Speculation over the Fed’s monthly bond purchases has whipsawed stocks since May, when Chairman Ben S. Bernanke first indicated policy makers could begin reducing the stimulus this year should the job market continue to improve. ETF Allure Investors poured $38.1 billion into exchange-traded funds listed in the U.S. last month, the most since December 2008 and the fourth-highest inflow ever, according to data compiled by Bloomberg since 2000. Almost $30 billion of the deposits went to funds that buy and sell American equities. Among U.S. economic reports yesterday, applications for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week. The Institute for Supply Management’s factory index increased to 55.4, the strongest since June 2011, from 50.9 in the prior month. Readings above 50 indicate expansion. “Central banks throughout the world remain accommodative and you do not want to fight the central banks,” Phil Orlando, New York-based chief equity strategist at Federated Investors, which manages about $380 billion in assets, said yesterday. “All of the data from an economic standpoint is telling us that the economy is continuing to get better, the labor market is improving, and corporate earnings are coming in better than expected. So this market should continue to work higher.” Surging Yields Yields on 30-year U.S. Treasuries jumped to the highest level in two years, gaining 12 basis points, or 0.12 percentage point, to 3.75 percent. The yield difference between two- and 30-year securities reached 342 basis points. A steeper yield curve reflects diminishing demand from investors for longer-maturity bonds on speculation that growth and inflation will accelerate at a faster pace. Benchmark U.S. 10-year yields rose 13 basis points to 2.71 percent. Some 40 companies in the S&P 500 (SPX) were scheduled to report results yesterday. Of the 373 firms in the gauge that have already posted quarterly results, 73 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show. Procter & Gamble Co. rose 1.7 percent yesterday after posting fourth-quarter profit that topped analysts’ estimates. Exxon Mobil Corp. slipped 1.1 percent as the biggest energy company by market value trailed analysts’ profit estimates by the most in more than a decade as returns from its fuel-making business plunged. Euro Zone The Stoxx Europe 600 Index climbed 1.2 percent, advancing for a fourth day to a nine-week high yesterday. Euro-area growth risks remain on the downside, Draghi said, after policy makers left the benchmark interest rate at 0.5 percent, in line with economists’ estimates. The MSCI Emerging Markets Index rose for the first time in seven days, climbing 0.7 percent yesterday. Gold slipped 0.4 percent to $1,304.92 an ounce in early trading, poised to cap the longest stretch of declines since May, data compiled by Bloomberg show. The precious metal has lost 2.1 percent this week, the first weekly drop since the beginning of July. Silver, platinum and palladium retreated 0.2 percent today. Copper futures fell 0.1 percent. West Texas Intermediate crude was steady at $107.83 a barrel, after jumping 2.7 percent yesterday, the most in more than three weeks after the global manufacturing reports. WTI is headed for a 3 percent advance this week, after sliding 3.1 percent in the five days to July 26. To contact the reporters on this story: Emma O’Brien in Wellington at [email protected]; Adam Haigh in Sydney at [email protected] To contact the editor responsible for this story: Emma O’Brien at [email protected]
Posted on: Fri, 02 Aug 2013 10:52:08 +0000
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