A government report showed orders for US durable goods climbed more than forecast in July as a surge in demand for aircraft and cars eclipsed a drop in business equipment purchases. Home prices rose 0.9% in June from the previous month, beating estimates, a separate report showed.
Federal Reserve Chairman Ben Bernanke may disappoint stock investors betting on a commitment to step up stimulus when he meets with world bankers tomorrow. He may have been given little choice, as current data revealed rising consumer prices and a US economy that is still growing.
MARKETS:
Steve Jobs’ decision to step down as Apple’s CEO erased as much as $52 billion from the S&P 500 index, futures trading shows. The September contract on the Index slumped up to 0.6% after Jobs released his statement at in New York yesterday evening. Apple fell 5.1%.
STOCKS in European markets at a one-week high yesterday, with the Dow Jones up 1.29% – boosted by surprisingly positive US durable goods data, as well as hopes that Bernanke will signal more quantitative easing on Friday. But hedge funds opened the biggest short positions on the US S&P 500 index since 2008, data showed, in anticipation of more stock price falls to come if QE3 isn’t implemented.
Asian stocks rose for a second day this week after US reports on durable-goods orders and home prices beat economists’ estimates, easing concern that the world’s biggest economy is slowing and boosting the earnings outlook for exporters.
European shares are set to rise today, mirroring gains on Wall Street and in Asia, on US data and on hopes that US Federal Reserve Chairman Ben Bernanke could signal measures on Friday to support the struggling economy.
CURRENCIES:
The dollar has fallen 6.3% this year as of yesterday, making it the worst performer among the 10 major currencies tracked by Bloomberg Correlation Weighted Currency Indexes, and is down 49% since reaching a record high in 1985. While US Treasury Secretary Tim Geithner wants a strong dollar to lift the pressure on households paying more for imported goods, exporters have benefited as their dollar-priced goods have become much more competitively priced.
ENERGY:
Oil traded near a two-day low in New York as investors looked beyond data showing a decline in US crude stockpiles and bet that faltering economic growth will temper fuel demand.
COMMODITIES:
GOLD slumped 3.8% yesterday as better-than-estimated US economic data boosted the dollar, prompting some investors to sell the metal after its rally to an all-time high. Gold has dropped 9.5% from its record $1,913.50 on August 23rd, although many analysts believe that the price correction may be short-lived as global economic problems have not been resolved. Gold is in the 11th year of a bull market and has gained 22% this year as investors seek to diversify their holdings away from equities and some currencies. The metal is still up 6.3% in August, heading for its second monthly increase.
