Before 24.. Financial News you can use.
Who: Asian Markets
What: Nikkei +416.83 Hang Seng +108.40 Shanghai +1.34
But Why:Asia markets closed in the green Wednesday morning. Leading the way the Nikkei (Japan), who jumped too a four-year high.A less expensive Yen helped propel export stocks as investors bet on the effects of a cheaper yen: better profits. The Shanghai (China) composite closed flat on lower volume as millions of Chinese get ready for the national week-long New Years celebration holiday next week. The Hang Seng (Hong Kong) added triple digits as the New Chinese leadership wants to narrow the gap between the have’s and the have not’s.
Really those pesky exchange rate places in the airport can cause a market move? Yes, they can. Because the Yen is less expensive than the Dollar right now Japan exporters are ridding high. Essentially it is cheaper to buy something made in Japan than most anywhere in the world. Investors are betting Japan’s corporations profits will rise.
It’s always political..Investors also are banking on Japan’s version of free money( also know as QE). Earlier this week an official with the Bank of Japan, Governer Massaaki Shirakawa, said he would resign in March earlier than end of his five-year term in April. Speculation for the cause of earlier retirement.. Prime Minister Shinzo Abe (Japan’s new sheriff) has put the central bank under relentless pressure to do more to pull the economy out of the doldrums aka. monetary easing. Prime Minster Abe has made it clear that his pick for the Bank of Japan governor will help promote his mission of aggressive monetary easing to help stimulate Japan’s economy. Here’s to things that make you go hmmmmm.
Who: European Markets
What: Stoxx Europe 600 index rose 0.6% to 285.56
Sometime Bad news is really Good News? According to Markit’s January Composite PMI (Purchasing manufacturing Index) the Euro Zone activity shrunk at a rate smaller than it had in the previous 10 months. The Index was helped by a steady increase in growth from Germany. The index also measured the Euro zones services sector which rose to 48.6 in January from 47.2 in December. (Any figure below 50 indicate contraction. Figures over 50 indicate expansion) This gave the markets and investors a reason to dream of the good old days of the past when the Euro zone was thriving.
It’s a small world after all.. Also adding to the dream machine news from the U.S and China show the world’s economic picture is improving. In the US data released in the am stated non-manufacturing sector remained in expansion territory last month while beating forecasts. China economic data, the HSBC China Services Purchasing Managers’ Index, rose to 54.0 in January from 51.7 in December.
But wait.. Lurking in the shadows: The Euro zone debt crisis soap opera. With a political scandal in Spain and a banking scandal in Italy spooked investors to avoid bonds and stocks in Europe’s southern countries. Money moved out of weak country bonds like Spain and Italy into more secure countries like Germany. European Finance ministers are meeting this week. ECB Chief Banker Mario Draghi is still trying to convince the world the Euro zone is making a speed recovery from the depths of financial ruins.
What does this mean? The European markets aren’t buying what the ECB is handing out. I smell nervous investors coming soon.
WHAT: DJIA: +99.22 13979.30 Nasdaq: +40.41 3171.58 S&P:+15.58 1511.29
But Why: US stocks rallied across the board on better than expected economic data, new deals, and increase in profits.
Nothing makes you smile more that economic data… The US service sector expanded in January and on the hou frsingont prices hit a 6 year high.
Show me the money.. Technology stocks led the rally across all 10 sector groups. The largest rally in tech came from Computer Sciences who jumped $3.84 a share after better than expected earnings. Why is this important? It shows companies are investing in their infrastructure aka they are investing in their future.
We have a deal: Those are the four best words in Micheal Dell’s world. After months of speculation Dell’s CEO confirmed he will be taken the tech giant private in a deal worth $24.4 Billion dollars. Financing for the deal came from fund affiliates of Silver Lake Partners, Microsoft and the big guy himself Micheal Dell.
Fraud? ..After four years of investigation the US Justice Department formally announced it will sue S&P for fraud over their mortgage ratings, which some belief contributed to the financial crisis. The Justice Department claims S&P inflated ratings on mortgage investments which in turn made it seem they were less risky and more attractive to investors large and small.
Backstory: S&P or ratings companies rate companies, bonds, or other investment vehicles. This rating acts like a Good Housekeeping seal of approval. The ratings are supposed to tell investors if the investment vehicle is safe or risky helping the investor determine if it is suitable for their investment dollars. S&P is charged with inflating ratings so more companies would ask them to rate future investment vehicles therefore making them more moolah. If your memory is sharp you may be asking: wasn’t S&P one of the first ratings agency to downgrade the US government ratings? Yes you would be correct, causing some on wall street to say paybacks are hell and Karma will eventually catch up to you.