Spain’s central bank reported on Wednesday that a two-year recession in the euro zone’s fourth-largest economy ended in the third quarter when Spain posted 0.1% growth from the previous quarter, in line with government projections. A return to growth for the currency area’s fourth-largest member is likely to feed hopes that the euro zone’s economy is finally emerging from a three-year crisis that was triggered by doubts about the soundness of its bank, and rising levels of government debt. The turnaround in Spain will add to expectations that the euro zone’s economy grew again in the three months to September, having expanded in the second quarter following 18 months of contraction. A survey of consumers in the currency area released Wednesday pointed to a continued pickup in confidence, which should support spending by households in coming months. The rise in Spanish gross domestic product after more than two years of contraction marks a turning point in the euro-zone crisis and is another sign that the Euro zone is doing the right things to come out of recession. It is however, a long, hard road and that all-familiar saying springs to mind…there’s no gain without pain!
Tag Archives: Market
Suspicious Minds? Dubious Trades Before Jobs Report in Three Charts
Another major economic report, another round of speculation about suspicious trading activity seconds before its release. A number of futures contracts Tuesday morning showed “distinct activity just before 8:30:00,” says Eric Hunsader, founder of Nanex, a Chicago firm that studies and distributes stock-market data. He illustrated the moves in a number of charts on his firm’s website. The September jobs report was released at 8:30 a.m. Eastern Time after being delayed by more than two weeks due to the partial government shutdown. The report showed U.S. employers added just 148,000 jobs last month, a sign the labor market stumbled heading into Washington’s latest round of budget battles. Mr Hunsader is no stranger to pointing out suspicious trading and some critics contend his data doesn’t always tell the full story. Yet, these days, it’s no longer a question of whether some players are getting a faster look at market-moving news, but whether it should be allowed. Government agencies and other producers of widely-watched economic reports are pondering new ways of releasing information with the aim of leveling the playing field. Not for the first time, suspicions are rife…the time has surely come for ‘fair game’.
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- License to Trade
Shutdown brings Stock Market to Standstill- The man with the Midas touch? As lurching gold prices mystify traders is “Goldfinger” lurking out there?
- US Job Growth: September report may be last clean gauge of the job market…
Awaiting the NFP report
Obama Administration Won't Back Down from JPMorgan Criminal Probe
Stocks Finish Strong in the US
All three major indices finished superbly by the end of trading on Friday and had one of the best weeks of the year overall. The Dow, S&P 500 and Nasdaq ascended substantially, will all three seeing increases between 2.1 and 2.8 per cent. Dow and Nasdaq were both nearing record highs on Thursday although there was no major facilitator to cause the soar. It seems that investors are expecting the stocks to reach new highs in the coming weeks and therefore continue to trust in the bull market’s sustainability. Friday’s momentary sell-off was due to worse-than-expected data, but did not impact hugely the largely successful week of strong performance by the three major indexes.
Portugal, Ireland to Avoid Disaster
Portugal and Ireland, two debt-ridden Eurozone economies will likely receive more time to repay their loans after a meeting between euro ministers in Dublin on Friday. The news was welcomed by both countries which have struggled tremendously with ailing recoveries after massive debt-crises. Both countries look to receive an additional seven years to pay back their debts and make a healthy and robust return to the financial markets.
The finance ministers would be wise to discuss the potentially catastrophic consequences of the bloated and bigger-than-expected Cyprus bailout package which could derail the small island nation and even lead to mass exodus. Such worries became more realistic after ti was rumored that Cyprus needs to cough up an additional 6 billion euros to cover the expenses thus increasing the total amount to 23 billion euros. The figure is higher than the size of the whole Cypriot economy.
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Germans Committed to the Euro
A poll released on Tuesday found that an overwhelming majority of Germans oppose a return to the Deutschmark. A whopping 69 per cent of the respondents answered in the affirmative when asked if they would like to stay in the euro, while only 27 per cent favoured exiting the euro and returning to the old Deutschemark. The results indicate that Germany’s euroskeptics have, led by Bernd Shucke, have very little support. Apparently the country’s robust and consistently well-performing economy swayed the Germans that the single currency is a worthy experiment. Most analysts concede that the on-going fiscal crisis shaking the Eurozone caused great worry among Germans, but the common perception in the country confirms the results of the survey: for Germany, the euro’s benefits outweigh its costs.
Portugal Woes Weigh Heavy on the Euro
The euro was trading around $1.30 against the dollar during Monday afternoon trade, anticipating bleak news from any one of the zone’s troubled economies. Following Cyprus and recently Slovenia – Portugal has now appeared as the latest patient in need of potentially instant care. On Friday Portugal’s high court ruled that the country’s plans to introduce pension cuts to its public sector was unlawful thus forcing the country to cough up another 900 million euros – precondition for the bailout – to fund its pending rescue package. Unlike other sick men in Europe such as Cyprus and Spain, Portugal is a student of austerity, an economic philosophy championed and cultivated by northern European countries. However, it seems that spending cuts are not enough to keep the Western European nation afloat.
Et tu, Slovenia?
The markets had just gotten comfortable with the botched Cyprus bailout and the turmoil that followed, when Slovenia emerged as yet another country to potentially require a bailout. If the eurozone’s history is any indication, rumors tend to come true. Now, Slovenia, with successive governments rejecting attempts to privatise the country’s banks, is facing a banking crisis. The small Balkan state needs to recapitalise its banks, but does not have the means to do so. The eurozone leaders are once again faced with a new challenge likely to spur resentment across Europe. Citizens all over the eurozone are growing tired of seeing a constant flow of tax money to countries that have – for a variety of reasons – mismanaged their economies.
Economist Predicts the end of Euro
A world-renowned Belgian economist, Paul de Grauwe told Finnish daily Helsingin Sanomat on Sunday that the eurozone will self-implode within 10 years. De Grauwe said that eurozone decision makers, led by Finland, Germany and Holland, have made a number of serious mistakes in managing the current crisis. These countries have demanded steadfast economic growth from ailing economies while swearing in the name of austerity. De Grauwe said that such demands have been unreasonable because Northern Europeans have applied strict economic policies on their own economies thus preventing southern eurozone members from flourishing. According to De Grauwe, Germany and Finland should not be proud of their budgetary discipline, but instead, should spend and stimulate.
IMF to Give Cyprus €1bn
As part of the €10bn troika rescue package, International Monetary Fund contributes 1 billion euros. IMF president Christine Lagarde told the press that the monetary fund will give Cyprus a three-year loan to assist the country with efforts to restructure the ailing island nation’s sickly banking sector. Lagarde said that “the IMF has reached staff level agreement with the Cypriot authorities on an economic programme that will be supported by the IMF jointly with the European Union and the European Central Bank”. As part of the bailout, Cyprus’s second largest banks, Laiki Bank will be shut while Bank of Cyprus will have to go through serious restructuring.
Dow, S&P hit record highs
The two major US indexes closed on a record high on Tuesday, largely spurred by positive developments in the health care sector. The Dow closed at 14.662 and S&P 500 hit a record high of 1.570. The Dow has experienced a Phoenix-like ascendance from the ashes, but some investors worry that the market rally is simply a sign of the coming storm. Many also speculate that the strongly performing indices are not indicative of a healthy economy and that the two entities operate on a different set of rules. Nevertheless, the US economy has shown signs of improvement, although the recovery has been slower than any previous post-recession recovery.
