Morning MoneyBeat Asia: US Stocks Recapture Much of This Week’s Losses

September 11, 2014 Posted by admin


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Market Snap: At the New York close: SP 500 added 0.4% to 1995.69. DJIA added 0.3% at 17068.71. Nasdaq Comp rose 0.75% to 4586.52. Treasury yields rose; 10-year at 2.535%. Nymex crude oil fell 1.2% to $91.67 a barrel. Gold fell 0.3% to $1,243.50/ounce.

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How We Got Here:  U.S. stocks rose, rebounding after two days of losses.

The advance follows a string of shallow declines that knocked the SP 500 from Friday’s record high. The SP 500 is down 0.6% this week and up 8% so far in 2014.

Traders said the market was quiet, with little in the way of economic or corporate news to drive buyers or sellers.

Technology stocks were the best performers, led by Apple Inc. The stock climbed 3.1%, rebounding from losses on Tuesday, when the company unveiled the latest models of its iPhone and a line of watches.

Investors turned their attention to next week’s Federal Reserve meeting, which could shed light on when the central bank plans to raise short-term interest rates. The Fed’s easy-money policies have helped boost U.S. stocks in recent years by dimming the appeal of bonds.

Mohit Bajaj, director of ETF and portfolio trading services at broker WallachBeth Capital, said that he saw investors shifting money from U.S. bond exchange-traded funds into those that hold U.S. stocks.

“People are concerned about interest rates,” Mr. Bajaj said. “When people move out of fixed income, they’re looking to park that money in equities.”

Coming Up: Among the key Asian economic reports due out Thursday are China’s August CPI and PPI data. Inflation in China is expected to remain tame, rising 2.2% on the year, and the producer-price index is seen declining 1.1%. In the Philippines, many economists are forecasting the central bank will raise rates after the economy recorded 6.4% growth on the year in the second quarter. 

What You Missed Overnight

Obama to Say U.S. Will Lead Coalition to Roll Back Islamic State: President Barack Obama was set to propose Wednesday night a significantly expanded military offensive against Islamic State militants at a moment when the nation is deeply concerned about new threats to the country.

U.S. House, Senate Plot Out Votes on Rebel Aid: House and Senate lawmakers laid groundwork for a vote authorizing Obama administration to arm and train pro-Western rebels to combat Islamic State militants, part of a broader menu of policy options President Barack Obama will lay out in a prime-time speech Wednesday evening.

Santander Chair Dies; Daughter to Take Post: Following the death of Emilio Botín from a heart attack, the late chairman’s eldest daughter, Ana Patricia Botín, has been appointed to succeed him.

New Zealand Central Bank Leaves Interest Rates Unchanged: The Reserve Bank of New Zealand kept interest rates on hold Thursday and softened its stance on future increases against a backdrop of tumbling export prices, moderate inflation and a stubbornly high New Zealand dollar.

U.S. Stocks End Higher: U.S. stocks rose on Wednesday, stabilizing after two days of losses for the broad market.

From The Wall Street Journal

Alibaba’s Ma: China Remains Focus: Alibaba founder Jack Ma sought to allay concerns about the company’s structure and expansion strategy, telling investors at an IPO marketing event the Internet giant would focus on China.

Alibaba IPO Will End Enchantment With Yahoo: The prospect of Alibaba’s hotly anticipated IPO has sent Yahoo’s stock soaring. The actual event could quickly bring it back to earth.

Hong Kong Sells Islamic Debt: Hong Kong completed its first sale of Islamic debt, joining a number of other governments rushing to issue similar bonds for the first time as uncertainty mounts over the outlook for global interest rates.

China Scraps Demand for Iron Ore: Scrap metal should satisfy a bigger portion of China’s steel appetite, adding weight to already depressed iron-ore prices.

Recruit Holdings Plans $1.8 Billion IPO: Recruit Holdings, the biggest temporary staffing company in Japan, said Wednesday it plans a $1.8 billion initial public stock offering next month.

Frontier Bonds Wear Parachute Pack: Frontier economies simultaneously accessing IMF bailouts and international bond markets make a jarring combination.

From MoneyBeat

The Analyst Who Warned About Apple Just Downgraded the Stock: The Wall Street analyst who last week recommended that investors sell Apple Inc. ahead of its big product blitz on Tuesday has now downgraded the stock, citing a lack of prominent new profit drivers.

Apple Wipes Shine off GT Advanced: GT Advanced has shed about one-quarter of its market value after it become clear that Apple is not using sapphire screens on its new iPhones. And a later launch of the Apple Watch doesn’t help matters any. Analysts are cutting their targets, and the company may have to as well.

Dollar Store Drama: What Dollar General, Family Dollar Say: The dollar store drama is hitting a crescendo as Dollar General announced Wednesday morning that it is putting its $80 per share bid for Family Dollar to shareholders through a tender offer.

Saudi Arabia’s Mixed Signals May Show It’s Just Not That Into $100 Oil: When Saudi Arabia lowered its oil prices last week, analysts declared that the No. 1 oil producer was more focused on maintaining its share of a well-supplied global market than on keeping prices at $100 a barrel or higher. But this week, the country cut its crude-oil production by about 400,000 barrels a day in August. Analysts disagree about how to interpret the mixed signals.

Dealpolitik — How Delaware Law Fails Family Dollar’s Shareholders: Dollar General Corp.’s hostile bid for Family Dollar Stores Inc. puts on display one of the few black holes of Delaware corporate law. The law allows Dollar Tree Inc. to exploit its first-mover advantage from having signed a merger agreement with Family Dollar, to the detriment of Family Dollar’s shareholders. There is no good policy reason to permit that.

Article source: http://blogs.wsj.com/moneybeat/2014/09/10/morning-moneybeat-asia-4/

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