Greece is in need of the bailout funds in order to avoid falling into default
Today’s Reports and Announcements of Significance to the Market
Global Markets
US MARKETS
Greece is in need of the bailout funds in order to avoid falling into default, the continuous delays make investors concerned. Home Depot jumped 3.6%, making it the strongest gainer on the blue-chip index. These reports were greater than what Wall Street had estimated and raised its full-year guidance. The chairman and chief executive officer stated, “Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market.”
The Dow Jones dropped 58.90 points to 12,756.18 while the S&P 500 dipped 5.50 at 1,374.53, The Nasdaq fell 20.37 to 2,883.89.
EUROPEAN MARKETS
As the Euro hits a 2 month low against the USD, European stocks retreat. There are new eurozone concerns because Germany is reporting to have fallen investor confidence and Vodaphone has come out and stated to have suffered sharp losses.
Developments on Tuesday, ended up taking up the spot light, even though Greece had managed to raise funds and avoided its messy default.
In stock market trade, the benchmark FTSE 100 index of top companies dropped 0.89 percent to 5,716.16 points approaching midday in London as investors also reacted to a surge in British inflation. Frankfurt’s DAX 30 slid 1.03 percent to 7,094.88 points and in Paris the CAC 40 shed 1.0 percent to 3,377.30. Madrid lost 0.60 percent and Milan gave up 0.79 percent.
ASIAN MARKETS
On Wednesday Asian shares rose for the most part. After the sell-off bargain hunters moved in, because of the overall concerns with the US fiscal cliff and Greece’s debt crisis. The Euro has hit a two month low against the USD, but on Tuesday it edged back up against the greenback and JPY.
Tokyo was 0.12 percent higher, Hong Kong added 0.20 percent, Sydney gained 0.16 percent, and Seoul eased 0.10 percent.
Things were slow in Shanghai as things concluded with one Communist Party’s Congress and the preparation for the next leaders. There haven’t been indications of what the future economic policies are going to be.
Mumbai was closed for a national holiday.
Global Currency
EURO DOLLAR
As concerns eased over the debt crisis in Greece, with the emergency aid, the euro was able to hold firm against currencies in the Asia. The euro, which fell to a two-month low of $1.2662 briefly on Tuesday, edged up to $1.2708 in Tokyo trade against $1.2703 in New York late Tuesday.
THE STERLING
With UK inflation higher than analysts predicted, the pound had managed to rally against the dollar. The Office for National Statistics has said that the inflationary increase can be directly related to high rise in education costs, most notably the tuition fee hike. The price of food has risen due to record breaking wet weather which is causing a poor crop yield. The retail price index’s measure of inflation growth showed a rise from 2.6 percent to 3.2 percent. Today the BoE will publish its quarterly inflation report. The rising inflation will encourage the expectations that the central bank will not be increasing its program of quantitative easing.
ASIAN CURRENCIES
The European single unit also firmed to 100.95 yen from 100.85 yen in US trade while the dollar was at 79.43 yen compared with 79.38 yen. National Australian Bank (NAB) said that Greece could have a delay on the loans in one go, which is a support factor for the euro, which German Minister Schaeuble seemed to be supportive of.
Metals and Energy
GOLD
GOLD moved up while the euro evened with the U.S. dollar. Platinum extended gains to its peak in the past three weeks. There are prospects that demand could exceed supply this year because of the lack of production coming from South Africa. Not even could the concerns of the upcoming US fiscal cliff could lift the appeal of gold’s safe-haven appeal. There are still concerns about the delays over the Greek debt crisis and its impact on the global economy. Gold has risen $3.75 an ounce to $1,728.64, but was still down from a 3-week peak around $1,738 struck on Friday. Bullion hit a record of about $1,920 in 2011.
CRUDE OIL
CRUDE OIL has fallen in Asia as there are growing concerns about the US fiscal cliff, and Greek debt crisis. The International Energy Agency cut its demand forecasts and OPEC said stockpiles were “very high”. New York’s main contract, light sweet crude for December delivery slid 16 cents to $85.22 a barrel and Brent North Sea crude for delivery in December shed 35 cents to $107.91. The concerns about the US fiscal cliff, the tax hikes and spending cuts, are that the economy could fall into a recession. The concerns became more evident as after the re-election of President Obama.
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