Tag Archives: U.S. housing market

U.S. Growth Evident But Consumers & Businesses Still Penny Pinching

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: U.S. Existing Home Sales @ 14.00 GMT

WHAT WE’RE WATCHING TODAY

U.S. Growth Evident But Consumers & Businesses Still Penny Pinching

The American job market is on the way up with an increase in hiring and U.S. manufacturers are growing faster. The economy finally seems to have emerged from its winter slow down and is now on an upbeat path….However, Americans are spending less than they used to, a big hindrance for an economy that relies heavily on consumers to generate growth. The slower pace of consumer spending can be traced to a prolonged period during which businesses have invested below their historical norm. Markets will get another look this week at whether the trends in consumer spending and business investment took a turn for the better in May but economists don’t expect a huge improvement. An update on new homes sales is due and the government is likely to report that the economy shrank even more sharply in the first quarter than previously estimated. Although an improving economy is visible, it still has a long way to go before a five-year-old recovery can be considered in good shape. These days, it’s not as easy for prospective buyers get a home loan as financial companies don’t want to make the same mistake they made before the recession by accepting customers who pose any credit risk. The third and final revision to first-quarter gross domestic product probably won’t bring any cheer the markets either as the government is expected to report that U.S. growth contracted by 2% instead of 1% as previously reported which would be the biggest decline since the tail end of the 2007-2009 recession.

The case for faster U.S. growth in the second quarter of 2014 and beyond rests on the hope that businesses and consumers will spend more although so far this year, companies haven’t toed the line. Business investment as measured by a category known as core capital goods fell in April and it’s only rising at a modest 3.5% rate over the past three months. Durable goods orders for May, released on Wednesday, is unlikely to show a marked shift in business investment either. As for consumers, they did more shopping in the early spring and spending is likely to rise in May, but spending is running at just two-thirds the typical rate this far into an economic recovery. Part of what’s holding them back is a paltry increase in wages even though more companies are hiring and job opening are at a post-recession high. After inflation is taken into account, wages are basically flat over the past year. Yet while Fed officials expect unemployment to fall even faster than they predicted just a few months ago, they haven’t changed their growth forecasts for the next two years. As market watchers know, faster U.S. growth depends on willingness to spend and invest…

Oil Gains On Increasing Iraq Violence

West Texas Intermediate rose for the third day and Brent gained as militants in Iraq seized more territory and President Obama warned that the crisis may spill over into other countries. August futures climbed as much as 0.6 percent in New York. A Chinese manufacturing gauge rose to a seven-month high in June, indicating that the economy of the world’s second-biggest oil user is picking up. WTI for August delivery rose by 62 cents to $107.45 a barrel. The July contract expired at $107.26 on June 20. The volume of all futures traded was about 1 percent above the 100-day average. Front-month prices have increased 8.9 percent this year. Brent for August settlement gained as much as 47 cents, or 0.4 percent, to $115.28 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.96 to WTI, from $7.98 on June 20.

Apple iWatch Due To Begin Production

Taiwan’s Quanta Computer will start mass production of Apple’s first smartwatch in July, as the company attempts to prove it can still compete against rival Samsung Electronics. The watch will be Apple’s first foray into a niche product category that many remain skeptical about, especially as to whether it can drive profits amid cooling growth in tech gadgets. Apple is expected to ship 50 million units within the first year of the product’s release. Mass production will start in July and the commercial launch will come as early as October. The company is accountable for at least 70 percent of final assembly. LG Display Co is said to be the exclusive supplier of the screen for the gadget’s initial batch of production. The iWatch also contains a sensor that monitors the user’s pulse for which Singapore-based imaging and sensor maker Heptagon is on the supplier list for the feature.

That sums up today’s highlights! Keep checking in for all the latest news on the day’s trading events via Facebook, Twitter, Google+ & LinkedIn. We hope you have a profitable day on the markets.

U.S. Data Reveals Interesting Picture Of Homeownership

A recently released report provides in-depth information regarding US household net worth. According to the Federal Reserve Bank, US household net worth grew by $3 trln and now sits at over $80 trln in total. This information purportedly paints a rosy picture for citizens in the US, but what does the data mean? Once a little digging is done, the facts are perhaps less flattering with the jury out on what all the data means. Banc De Binary Founder, Oren Laurent, shares his thoughts on the matter in this very informative article. Read more…

Just A Minute!

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:

Main Trading Events Of The Day: USD Existing Home Sales @ 15.00 GMT

Earnings Reports: N/A

WHAT WE’RE WATCHING TODAY

U.S. New Home Building Plunges As Existing Home Sales Due To Disappoint

U.S. new home construction - housing starts - recorded their biggest drop in almost three years in January, probably weighed down by harsh weather, but the third month of declines in permits pointed to some underlying weakness in the housing market. The Commerce Department said starts plunged 16% to a seasonally adjusted annual rate of 880,000 units, the lowest level since September. The percentage drop was the largest since February 2011. Starts for December were revised up to a 1.05 million-unit pace from the previously reported 999,000-unit rate. Economists had expected starts to fall to a 950,000-unit rate in January. Freezing temperatures have been blamed for the sharp slowdown in hiring in December and January although there is evidence that the economy was already losing momentum towards the end of the fourth quarter.

Meanwhile, January’s existing home sales are due to be reported today are expected to show a decline of 3.5 percent to 4.7 million. Stocks rallied Thursday and bonds fell, as investors ignored a weak report from the Philadelphia Fed, which showed a plunge in new orders and a surprise contraction in manufacturing activity. Analysts believe that there is a choppy picture in the very short term but housing is basically in good, solid shape from an intermediate point of view, and that with fairly moderate mortgage rates – assuming the economy starts to come back in the spring, a lot of the pent up demand for housing may get stronger as hiring picks up.

China’s Stocks Fall as Yuan Weakens

China’s stocks fell the most in six weeks, while the yuan headed for its biggest weekly slide since 2011 as a manufacturing slowdown fuelled concerns the economic expansion is weakening. Analysts believe the market is worried that the government may tolerate a bigger decline in economic growth amid the restructuring of the economy. The yuan dropped 0.3 percent today to 6.0837 per dollar, extending this week’s loss to 0.8 percent. The currency fell 0.1 percent to 6.089.

In the meantime, as finance ministers and central bank chiefs from the Group of 20 (G20) gather ahead of a weekend meeting in Sydney, the world’s rich nations pushed back against emerging market complaints about the spillover effects of their monetary policies, saying that they had to get their own houses in order and get on with the agenda of lifting global growth. Emerging nations want the U.S. Federal Reserve to calibrate its winding down of stimulus so as to mitigate the impact on their economies. Developed members reply that the troubles in the emerging world are mostly homegrown and domestic interest rates have to be set with domestic recoveries in mind. That was a sentiment very much echoed by the finance ministers of Japan, Britain and Germany. The head of the U.S. Treasury called on China, Japan and Europe to make domestic demand the engine room of growth.

Google Announces Project Tango, A Smartphone That Can Map The World Around It

Google has just announced, under a new initiative called Project Tango, a prototype Android smartphone that can learn and map the world around it. Google says that the phone will learn the dimension of rooms and spaces just by being moved around inside of them. Walking around your bedroom, for example, would help the phone learn the shape of your home. Google hopes that by creating a robust map of the world, the phone could eventually give precise directions to any given point that needs to be reached. The goal of Project Tango is to give mobile devices a human-scale understanding of space and motion. Google has 200 devices that it’s preparing to give out to developers who want to build mapping tools, games, and new algorithms that take advantage of the phone’s sensors, and it expects to send them all out by March 14th. Google stresses that the technology is still in early stages, but it still sees it as on the way to reaching millions of people down the road. Watch out for a major rollout in the future!

That sums up today’s highlights! We hope you have a profitable day on the markets.

Just A Minute!

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary what’s happening in the markets today:

Main Trading Events Of The Day: Several today including USD FOMC Meeting Minutes @ 19.00; USD Building Permits & PPI m/m @ 13.30; GBP Unemployment Rate @ 09.30 GMT

Earnings Reports: N/A

WHAT WE’RE WATCHING TODAY

Dollar Drops To 7-Week Low Per Euro In Advance Of FOMC Meeting

Later today, Wall Street will focus on the minutes from the Federal Reserve’s last big meeting in January where the central bank voted to withdraw more stimulus from the economy. The minutes give investors a better sense of what Fed officials are thinking, though no big surprises are expected. The dollar has fallen to a seven-week low versus the euro in advance of the meeting as investors look for the stance of policy makers on recent economic data. The dollar is being sold especially against the euro according to analysts who remain wary of the downside risks to U.S. data. Investors will be looking for Fed’s view on the economy. The dollar was little changed at $1.3766 per euro at 2:34 p.m. in Tokyo from yesterday, after earlier touching $1.3773, weakest since Jan. 2. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was at 1,016.71 from 1,017.34 yesterday, set for the lowest close since Dec 17.

Home Construction Figure Likely To Be Down While PPI Gets A Re-Vamp

The housing market is regarded as one of the pegs supporting stronger U.S. growth in 2014. Figures released later are likely to show that new construction got off to a slow start in January. Economists predict construction on new homes dropped last month to an annual rate of 945,000, seasonally adjusted, from a preliminary 999,000 in December. The harsh weather conditions continue to gets lots of blame, but higher mortgage rates and home prices have also dampened demand. Some analysts also blame high student debt for holding back first-time home buyers. As recently as November, builders had broken ground on new homes at the fastest pace in six years. The rate of construction could pick back up again, however, as the weather warms and if the economy continues to improve.

Also today, the U.S. Labor Department will unveil a producer price index that has undergone its first dramatic makeover since 1978. The new PPI will include the wholesale cost of goods, as usual, and add services, construction, government and exports for the very first time. Services such as retail, finance, education and health care now represent a much bigger slice of the economy than goods-producing industries. As a result, the new formula will capture prices changes of three-fourths of all U.S. goods and services produced. The changeover is meant to make the PPI more relevant and act as an early warning signal for when the pace of consumer inflation is about to shift. However, the wholesale price report for January is unlikely to show much difference. The old PPI index found that wholesale inflation rose 1.2% in the one-year period from December 2012 to December 2013. The new PPI shows a 1.1% increase.

Is An iCar On Its Way?

Reports of a meeting between heads at Apple and electric car manufacturer Tesla Motors are sparking excitement in the tech industry and fuelling rumours that a potential ‘iCar’ is on its way. Although Apple is unlikely to be buying Tesla, a collaboration may well be in the pipeline with suggestions being made regarding the inclusion of an entertainment system in the car. A potential collaboration between the two firms could inject a much-needed burst of innovative spark back into the tech giant, which many complain has been lacking in recent times. Talk of Apple entering the auto market is not new. Last month Apple’s ‘iOS in the Car’ software was leaked, unveiling software specifically designed to link the iPhone to a car dashboard, according to media reports. The software would provide hands-free access to navigation, phone functions, messages and music through touch and voice control. The manufacturer’s Model S vehicle already features a large, tablet-like display, which is used to browse the web, and to navigate entertainment and sat-nav facilities, suggesting the potential some form of collaboration. According to reports, one of Apple’s key competitors Google has also been using its Android operating system to develop partnerships with Honda, Hyundai and Vauxhall. Shares in Tesla Motors, surged 3 percent on Tuesday following rumours of the acquisition and ahead of fourth-quarter and 2013 results to be released Wednesday. Meanwhile, Apple stock climbed 1.3 percent to a high of $551 before falling back to $545.99 by the end of the trading day.

That sums up today’s highlights! We hope you have a profitable day on the markets.

Deutsche Bank Profit Plummets 94%

Legal expenses amounting to 1,2 billion euros ($1.65 billion) and a fall in debt trading has cost Deutsche Bank AB, Europe’s largest investment bank by revenue, 94 percent of its third-quarter profit.

In the three months ending with September, the bank’s net income plunged to 41 million euros from 747 million earlier this year, the Frankfurt-based bank announced on its website today. That amount falls very short of the average forecast of 430 million euro by analysts.

The firm has allegedly had a role in rigging lending rates and its co-Chief Executive Officers Anshu Jain and Juergen Fitschen are having to deal with legal probes over the matter and with lawsuits relating to the U.S. housing market. Deutsche bank is alone, however, in seeing a slowdown in fixed-income trading as investors are holding back until the Federal Reserve announced its renewed stimulus-cutting plan in face of a stubbornly weakening U.S. economy.

Deutsche Bank dropped as much as 3.3 percent in Frankfurt trading. The shares fell 2.7 percent to 34.95 euros at 9:11 a.m., valuing the company at 35.7 billion euros. The stock rose 6.4 percent this year compared with a 16 percent increase in other European Banks.

Jain and Fitschen the bank’s provisions for legal costs to 4.1 billion euros in the three months through September, according to the statement.

After the release of the firms’earnings, Chief Financial Officer Stefan Krause said in a conference with analysts that the bank is trying to put litigation behind it.

50 of the banks’s employees are currently under investigation to determine whether trader tried to rig benchmark interest rates. More than a dozen lenders around the world have to answer to regulators, with fines resulting from the issue thus fat amounting to $2.6 billions.

Deutsche Bank has said that its own internal probe indicates no wrongdoing by current or former management board members.

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