Not what you want, but what you need

Orlando, FL 4/25/12 (StreetBeat) -- So the Euro Zone has a problem with debt; you know all about it.

Great efforts have been expended by the countries that use the euro, the broader EU, the ECB, and others, in an attempt to make the trouble go away. Despite it all the problem persists. Try as they might Greece is now the home of the largest sovereign default in history. But Greece is small potatoes when compared to Spain, the current poster child for European debt woes. Almost two years removed from the first rescue plan it is now possible to have a polite discussion about a reduction of the single currency membership list; not something that was acceptable at the onset of the process. Will a country abandon the euro? Maybe not, but possibly so; in any case it is part of the conversation. But if so; who?

The solution to Europe’s debt problem is not clear; if it was then it is likely it would have been found by now. Then again it could depend on who you ask as to whether or not there is a solution in plain sight and whether or not it is just the will to enact it that has been elusive. In a speech delivered late last month, Bundesbank President Jens Weidmann suggested that the time for dithering is over and the time for real decisions on the future path of the Euro Zone has arrived; “The time has come to move from containing the crisis to resolving it. If we have the will to make the right choices, we will be able to rebalance Europe and lay the foundation for a stronger, more stable monetary union.” In order to resolve its deficit problem, says Weidmann, Europe is in need of stricter rules, rigorously applied. Of course Bundesbankers have long believed that monetary union cannot survive without a political union; either members go all in, with union interests above national interests, or the odds of success are greatly reduced. In his speech Weidmann acknowledged that “member states have made it clear that they want to retain their autonomy in fiscal policy,” so therefore, he says, rules must be stiffened in an attempt to make a less than optimum solution effective.

But there is clearly resistance, throughout the continent, periphery to core, on signing up to a vision that has the Bundesbank as its chief architect; the French election results and Dutch budget squabble reinforce the existence of that reluctance. Therefore, it appears the Bundesbank will get even less than their reduced expectations in regards to fiscal rectitude. Right or wrong; pro growth or favoring austerity, it is fair to say that the Bundesbank will not get what it wants. While Weidmann may not yet have developed a nervous tick over the prospects for Euro Zone fiscal sobriety in the long term, there may be a way to measure the likelihood that he will eventually be inflicted with one. The TARGET2 imbalance at the Bundesbank is up to EU615 billion as of the end of March, up more than ninety percent from last year and up EU152 billion in the first three months of 2012. Yeah, we all know this is collateralized and not solely the responsibility of the Bundesbank, even if things go badly for the Zone; there is not yet any official sweat on the brow over the situation. But what will be the mood in Frankfurt if this imbalance hits EU1 trillion? Does the Bundesbank have a TARGET2 stop in mind, while also keeping in mind that collective will to reverse the imbalance is less than Teutonic? Is there a point at which this arcane data point captures the imagination of the German street and forces the hand of Berlin? The key question; is it possible that Germany is the first to bail out of the single currency? Maybe not, but possibly so; it is, in any case a topic that can be brought up in polite conversation and that, in and of itself is important.

You can trade Euro Zone sovereign debt, but aside from Germany, you can’t invest in it. The Financial Times reports that “bankers estimate that EU100 billion has been taken out of French, Italian and Spanish government debt markets in the past two years as many investors have lost faith in the single currency zone.” I would add that not only has there been a divestment of this debt but there is no fresh buying, except from banks that are beholden to their national central banks for their continued existence. For institutional investors, the natural buyers of fixed income such as insurance companies, pension funds or banks, there is nowhere else to turn but the German debt market and the US Treasuries. It is not a matter of fundamentals, such as the spread above or below inflation; it is a matter of what is available to purchase that can pass the mustard of an investment committee review. There is even a hoarding instinct at work. Reliable, well rated collateral is at a premium. This is made all the more acute by the increased use of covered bonds, which prohibit the reuse of the pledged securities, and because of an unintended consequence of the LTRO. While this ECB strategy may have ensured that banks will not run out of liquidity, the collateral that has been pledged to the central bank to secure those funds could mean that banks will run dry on collateral the next time push comes to shove.

The bid in German and US debt that has driven the yields down to, or close to, record lows, is not a matter of chasing what you want, it is just a matter of securing what you need. And until the question of the Euro Zone’s future can be confidently answered, it is hard to imagine the situation changing.

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European Stocks Off Days Lows

Eagle River, WI 10/20/2011 (PennyPayDay) – European stocks are trading off their day's lows on Thursday, with a rise in U.S. stock futures buoying sentiment to some extent after a guideline document presented by German officials suggested that the EFSF would be able to purchase bonds from the secondary market.

Stocks fell sharply early in the session, as splits emerged among European leaders on a plan to beef up the bailout fund to tackle the euro zone debt crisis. European leaders are due to hold a summit this weekend to make significant progress on expanding the EU bailout fund and recapitalizing banks.

Also, the U.S. economy continued to expand in September, although the pace of growth remains "modest" or "slight" in a number of regions, the Federal Reserve's Book survey released yesterday said, denting hopes of a recovery in the global economy. September's existing home sales numbers and data on initial jobless claims slated for release later in the day could offer further clues about the world's largest economy.

The Euro Stoxx 50 index of euro zone blue chippers and the Stoxx Europe 50 index, which includes some major U.K. companies, are declining around half a percent each, while around Europe, the German DAX is moving down 0.4 percent, France's CAC 40 is declining 0.7 percent and the U.K.'s FTSE 100 is losing 0.4 percent. Switzerland's SMI is posting a modest 0.1 percent gain.

In stock-specific action, Deutsche Boerse AG is rising 1.1 percent after the Frankfurt Stock Exchange owner said its profit nearly doubled in the third quarter on a one-time gain as well as on a 20 percent growth in revenues.

EADS is down half a percent on a FT report that Germany plans to slash the number of military aircraft it will buy from the company. Hochtief is declining 1.7 percent despite a broker upgrading its rating on the stock.

Schneider Electric is tumbling 7.4 percent in Paris after the French energy management company said its sales for the third quarter increased 4.6 percent on a current structure and exchange rate basis and organic growth was 7.7 percent. The company also confirmed its 2011 organic top line growth target of 6 to 9 percent, while lowering its EBITA margin outlook.

Shares of Actelion plunged around 12 percent in Zurich after the Swiss biopharmaceutical company reported a decline in third-quarter earnings, hurt by lower product sales mainly of its pulmonary arterial hypertension drug Tracleer. Nestle shares edged down 0.3 percent after the Swiss food giant reported sales of 60.89 billion francs for the 9-month period ended September, slightly shy of some estimates.

In economic releases, retail sales figures in the U.K. were a bit stronger than expected in September, but economists sounded less optimistic if the coming months will see a similar upturn as global economic jitters and tight fiscal policy at home continue to weigh on consumer spending.

The Office for National Statistics said Thursday that sales volume, including automotive fuel, rose 0.6 percent month-on-month, compared to economists' forecast for a flat reading. The previous month's result was revised to a 0.4 percent decline.

Crude prices reversed early declines, while copper prices are down nearly 3 percent on the London Metal Exchange on concerns over slowing economic growth.


The Swiss stock market was slightly lower in mid-day trading Thursday, but major pharmaceutical stocks were providing a measure of support.

The general mood of the market was cautious amid fresh concerns that European leaders will not be able to come to agreement on a plan to for an expanded sovereign debt rescue fund in Brussels on Sunday.

The Swiss Market Index (SMI) rose 0.04 percent to 5,597.61. The Swiss Leader Index (SLI) decreased by 0.24 percent to 853.01 and the broader Swiss Performance Index by 0.19 percent to 5,158.34 meters.

Actelion Pharmaceuticals Ltd. posted third-quarter earnings per share of CHF 0.68, lower than CHF 0.87 per share reported a year ago. Shares were down 4 percent.

However, Roche Holdings and Novartis are getting a boost as defensive plays. Shares of both drug makers were up more than 1 percent.

Food giant Nestlé S.A. reported a 7.3 percent rise in organic sales for the first nine months, and said for the full year, it expects to slightly over-perform against its long-term organic sales growth target of 5 to 6 percent, despite input cost pressures.

Roche had positive study results for the drug candidate ocrelizumab in the treatment of multiple sclerosis.

Banks were lower amid anxiety over the EU summit. Credit Suisse was down 1.8 percent, and UBS lost 0.4 percent.

Richemont and Swatch shares were fractionally lower despite new data showing strong watch exports from Switzerland.

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European Stocks Drift Lower

Eagle River, WI 10/13/2011 (PennyPayDay) – European stocks fell from two-month highs on Thursday, as weak trade data from China dragged down commodities and mining shares and French retailer Carrefour lowered its full-year profits forecast for the second time in three months.

China's trade surplus shrank more than expected in September, as export growth eased to a seven-month low, reflecting slackening global demand and dwindling confidence levels amid the debt crisis in Europe. The year-over-year growth in exports eased to 17.1 percent in September from 24.5 percent in the previous month. The consensus forecast called for a slowdown to 20.8 percent.

The Euro Stoxx 50 index of euro zone blue chippers is declining 1.4 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is down 1.1 percent. Elsewhere in Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and the French CAC 40 are down between 0.9 percent and 1.3 percent.

In stock-specific action, MAN SE, the German truckmaker that Volkswagen is seeking to control, is down 0.9 percent, Bayerische Motoren Werke is declining 1.3 percent and Daimler is down nearly 2 percent.

Shares of France's largest retailer Carrefour tumbled 5.5 percent after the company cut its full-year profit target for a second time in a few months, citing tough economic conditions. Shares of Roche Holding fell 3.7 percent after reporting third-quarter sales that missed analysts' estimates.

However, Fraport AG is rising a percent after the airport operator said it had 5.3 million passengers at its Frankfurt Airport home base in September, up more than four percent from a year earlier. Rolls-Royce shares jumped 6.3 percent in London after the engine manufacturer said it is selling its share in the International Aero Engines (IAE) joint venture to Pratt & Whitney.

In economic news, the Bank of England could well decide to increase the size of its current GBP 275 billion quantitative easing programme if the outlook deteriorates further, Deputy Governor Charles Bean said in an interview with the newspaper Guardian. He noted that businesses tend to put investment projects on hold and consumers resort to hold back their spending.

Separately, the European Central Bank said that the provision of liquidity and the allotment modes for refinancing operations will continue to ensure that euro area banks are not constrained on the liquidity side. In a monthly bulletin released Thursday, the central bank said that all the non-standard measures taken during the period of acute financial market tensions are, by construction, temporary in nature.

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European Markets Turn Positive

Eagle River, WI 10/12/2011 (PennyPayDay) – The European markets shrugged off early weakness and are moderate to notably higher in afternoon trading Wednesday, after investors in the region digested news of the Slovak Parliament blocking the expansion of the European Financial Stability Facility, amid hopes of a plan for recapitalizing European financial institutions to be unveiled today. On the economic front, industrial production in the Eurozone increased unexpectedly in August. Asian markets mostly rose and the U.S. index futures are higher.

The Slovak Parliament on Tuesday blocked the expansion of the European Financial Stability Facility, potentially hurting Eurozone's rescue from the lingering debt crisis. The government in Slovakia also failed a confidence test in the Parliament, but still sounded optimistic that the EFSF could be ratified by the end of this week.

Slovakia is the only euro zone member yet to ratify the deal. The bailout fund is crucial to rescue Greece from bankruptcy and to stop the crisis from spreading to other countries.

Meanwhile, the troika of Greece's creditors indicated that the sixth tranche of a bail out fund worth eight billion euros will be disbursed to the troubled nation "most likely, in early November." ECB said the mission has reached staff-level agreement with the Greek authorities on the economic and financial policies needed to bring the government's economic program back on track.

The European Commission president Jose Manuel Barroso suggested yesterday that he would announce proposals to support the region's troubled banks and also measures to strengthen the EFSF.

The Euro Stoxx 50 index of eurozone bluechip stocks is advancing 1.53 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is adding 0.74 percent.

The German DAX is climbing 1.35 percent and the French CAC 40 is gaining 1.37 percent. The UK's FTSE 100 is advancing 0.48 percent and Switzerland's SMI is adding 0.50 percent.

Among the DAX components, Daimler is gaining 4.2 percent, BMW is climbing 2.9 percent and Volkswagen is adding 2.2 percent. Porsche is up 2 percent.

K+S is rising 3.7 percent. Bayer and Basf are adding 2.1 percent and 1.1 percent, respectively.

Deutsche Telekom is adding 1.2 percent. Barclays cut its price target on the stock.

Deutsche Bank is adding 1.6 percent, while Commerzbank is losing 0.5 percent. Societe Generale reduced Commerzbank to "Hold" from "Buy."

Metro is up 0.5 percent. JPMorgan cut its price target on the stock.

Siemens is up about 1 percent, even after Morgan Stanley reduced its price target on the stock to 80 euros from 85 euros.

Kabel Deutschland is falling 0.5 percent. Barclays raised its price target on the stock.

Pharmaceutical distribution company Celesio is adding 2.4 percent after Nomura raised the stock to "Neutral" from "Reduce."

UBS cut its price target on Krones to 38 euros from 47 euros. The stock is flat.

In Paris, Hotel group Accor is climbing 4.7 percent. Tire firm Michelin and speed-train maker Alstom are adding 4.6 percent each.

Saint-Gobain, Lafarge, Bouygues and Vinci are firmly in positive territory.

Renault is climbing 2.8 percent and Peugeot is adding 2 percent.

Societe Generale is climbing 3.9 percent, BNP Paribas is adding 2.1 percent and Credit Agricole is rising 1.4 percent. Natixis is gaining 1.4 percent. Societe Generale raised BNP Paribas to "Buy" from "Hold."

Carrefour is up 1.3 percent. JPMorgan cut the stock to "Neutral" from "Overweight" and reduced its price target to 21.31 euros from 40 euros.

In London, miners Anglo American, BHP Billiton, Rio Tinto, Antofagasta,, Kazakhmys, Vedanta and Xstrata are adding between 1.5 percent and 4.4 percent. Eurasian Natural Resources is climbing 6 percent.

Fresnillo is losing 3.1 percent. The company trimmed its fiscal 2011 silver output forecast as third-quarter production declined. Randgold Resources is adding 4 percent.

Barclays is adding 2.1 percent and Royal Bank of Scotland is climbing 2.3 percent. HSBC is up 1 percent. Lloyds Banking is falling moderately.

BP is adding 2 percent and Royal Dutch Shell is gaining 0.5 percent. Tullow Oil is falling 3.4 percent after reports emerged that Uganda lawmakers voted to delay its sale of some interests in the country to France's Total and China's CNOOC.

Man Group is falling 5.5 percent. The company Tuesday reported a 5.5 percent drop in the net asset value of its AHL diversified fund in the previous week.

BAE Systems said it continues to anticipate underlying earnings per share for the year ending December 31 to be broadly similar to the restated earnings in 2010. However, the company sees some near-term disruption to trading as the US administration again operates federal budgets under a Continuing Resolution. The stock is up marginally.

Burberry is adding 3.2 percent. The fashion house said its total revenue for the first half of the year increased 30 percent at constant exchange rates, with double-digit growth across all regions and all product categories.

WPP Group said its wholly-owned operating company JWT agreed to acquire a majority stake in A4A, a leading full service digital agency in China. The stock is up 1.2 percent.

ASML is adding 2.3 percent in Amsterdam. The chipmaker reported highe rprofit in the third quarter and backed its full-year sales view.

Jeronimo Martin is adding 3.7 percent in Lisbon, reportedly on an analyst upgrade.

In economic news, Germany's wholesale price inflation slowed for a sixth consecutive month in September, the Federal Statistical Office said. The rate of inflation eased to 5.7 percent in September from 6.5 percent in August.

French consumer prices, as measured by the harmonized index of consumer prices, HICP, rose 2.4 percent year-on-year in September, the statistical office INSEE said. Economists expected prices to rise 2.6 percent. Meanwhile, the consumer price index advanced 2.2 percent, slower than the 2.5 percent increase forecast.

U.K. claimant count increased 17,500 in September from August, data from the Office for National Statistics revealed. But the increase was below the 24,000 monthly rise forecast by economists. There were 1.60 million people claiming Jobseeker's Allowance in September. The claimant count rate came in at 5 percent, in line with economists' expectations.

Industrial production in the Eurozone increased unexpectedly in August, data released by Eurostat showed. The seasonally adjusted industrial output increased 1.2 percent on a monthly basis in August, following an upwardly revised 1.1 percent rise in July. Economists expected a 0.8 percent fall.

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Slow Activity Ahead of Slovakia Vote

Eagle River, WI 10/11/2011 (PennyPayDay) – Shares remain in the doldrums ahead of today's vote in Slovakia on sanctioning the country's commitment to a beefed-up version of the European Financial Stability Facility (EFSF).

Slovakia is the only country in the 17-member Eurozone yet to ratify the retooled EFSF, and there is considerable doubt whether the vote will go the government's way today, with the country's largest opposition party pledging to vote against it, after Prime Minister Iveta Radicova turned the motion into a vote of confidence on her government.

Radicova's gambit was seen as an attempt to persuade recalcitrant members of the governing coalition to vote in favour of the motion. Specifically, the liberal Freedom and Solidarity (SaS) party has said it would not vote in favour of the motion because it wants the country, one of the poorest in the Eurozone region, to have a veto over future pay-outs from the bailout fund.

The Euro Stoxx 50 is off 22 points at 2,298, the CAC in Paris is 21 points weaker at 3,140 while the DAX in Frankfurt is down 46 at 5,801.

There is not much corporate news flow to focus on today. Spanish bank Banco Espanol de Credit is in the red, after third quarter profits dived 83% from last year, as it upped provisions for bad debts.

Satellite navigation specialist TomTom is heading north after it announced a deal with the Ford Motor Company to integrate its devices into some of Ford's European models.

Investment analysts at brokers and investment banks have not taken a break from their scribbling, just because markets are becalmed.

Spanish utility company Iberdrola has been downgraded by Goldman Sachs to "neutral".

The US bank has also downgraded German retailer Metro, from "buy" to "neutral", in the wake of yesterday's announcement from Metro's boss, Eckhard Cordes, that he would not seek to have his contract extended when it expires next year.

German bank Baader Bank, however, thinks the market will welcome the decision as "in its view, he promised a lot and did not deliver."

Ophthalmic lenses maker Essilor is off the pace in Paris after Morgan Stanley shifted its stance to "underweight" from "equal weight".

German airline Deutsche Lufthansa gets the downgrade treatment from Bank of America Merrill Lynch, which now rate the stock at "under-perform", having previously rated it a "buy".

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European Markets Extend Gains

Shawshank, VA 10/6/2011 (PennyPayDay) – The European markets rose for the second day amid hopes that regulators would step in to stem the soverign debt crisis from worsening. Asian markets ended firmly in positive territory and the U.S. index futures are higher, ahead of the key jobs report from the U.S.

German Chancellor Angela Merkel said Wednesday in Brussels that the European Union should recapitalize the region's banks in the event of a crisis brought on by exposure to sovereign debt. Private lenders should receive backing "if there is a common view that banks aren't sufficiently capitalized for the current market condition," Merkel said in a joint press conference with European Commission President Jose Manuel Barroso.

The Bank of England unexpectedly decided to raise the size of quantitative easing by GBP 75 billion amid the economy undergoing a fragile recovery. At the end of two-day meeting, the Monetary Policy Committee headed by Governor Mervyn King increased the stock of asset purchases financed by the issuance of central bank reserves to GBP 275 billion from GBP 200 billion. Policy makers also voted to hold the interest rate at 0.50 percent.

The Euro Stoxx 50 index of eurozone bluechip stocks is advancing 1.99 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 1.58 percent. The German DAX is advancing 1.99 percent and the French CAC 40 is gaining 2.49 percent. The UK's FTSE 100 is rising 2.19 percent and Switzerland's SMI is adding 1.56 percent.

Among the DAX components, Insurer Allianz is leading the gainers by adding 5.5 percent. MunichRe is rising 3.1 percent. ThyssenKrupp is climbing 5.4 percent and basf is adding 3.9 percent.

Truckmaker MAN and HeidelbergCement are up 3.8 percent each. Commerzbank is gaining 3.15 percent and Deutsche Bank is adding 2.7 percent. Nomura cut its price target on Commerzbank. Intesa Sanpaolo is climbing 6.9 percent in Frankfurt.

BMW, Volkswagen and Daimler are advancing between 2.7 percent and 1.1 percent. Metro is adding 3.3 percent, although Citigroup cut its price target on the stock.

Lufthansa is losing 0.4 percent. Credit Suisse cut the stock to "Neutral" from "Outperform." Gerresheimer is climbing 6.7 percent. The pharma and healthcare industry supplier reported a higher profit for the third quarter, and raised its full-year 2011 revenue outlook.

Kloeckner is adding 3.6 percent. Nomura cut its price target on the stock. In Paris, Lafarge is climbing 6.9 percent. ArcelorMittal is up 5.3 percent. Peugeot and Renault are advancing 6.2 percent and 5.3 percent, respectively.

BNP Paribas is advancing 6.6 percent, Societe Generale is gaining 5.1 percent and Credit Agricole is rising 4.3 percent. Natixis is surging 12.2 percent.

EADS is adding 2.6 percent. Citigroup cut its price target on the stock. Air France-KLM is up 1.8 percent, although Citigroup cut its price target on the airline.

Eurofins Scientific is surging 10.1 percent after raising its sales and profits guidance for 2011. Atos is adding 7.2 percent on a report that the computer-services company confirmed its goals. In London, Anglo American is up 2.4 percent, BHP Billiton is adding 4 percent and Rio Tinto is gaining 5.3 percent. Antofagasta is surging 8 percent.

ENRC, Kazakhmys, Vedanta and Xstrata are gaining between 4 percent and 8.7 percent. HSBC is up 3.7 percent, Barclays is adding 4 percent, Lloyds Banking is gaining 4.8 percent and Royal Bank of Scotland is rising 4.9 percent. Standard Chartered is adding 6.2 percent.

BP is losing 1.1 percent, while Royal Dutsch Shell is adding about 1 percent. Insurer Prudential is adding 6.1 percent and brewer SABMiller is gaining 8.4 percent.

Shares of recruitment group Hays is surging 7.8 percent, after the company reported a 21 percent growth in net fees for the first quarter, driven primarily by growth in its International businesses.

IMI is climbing 6.2 percent after confirming that present trading remains broadly unchanged since its August update. Ferrexpo is surging 10.8 percent after reporting strong production.

Mouchel Group is plunging 36.5 percent. The company said it was recently informed of an actuarial error that will have an impact on its profits for the fiscal year ended July 31. Also, the company's chief executive Richard Cuthbert tendered his resignation with immediate effect.

Franco-Belgian bank Dexia is plunging 11.2 percent in Brussels.

In economic news, German factory orders declined unexpectedly in August, the Federal Ministry of Economy and Technology said. Factory orders declined 1.4 percent month-on-month, but slower than the 2.6 percent drop seen in July. Economists were expecting orders to remain flat on a monthly comparison.

The European Central Bank is due to release monetary policy statement shortly. Economists expect the central bank to hold the rate steady at 1.50 percent.

Across Asia/Pacific, markets closed firmly in positive territory. Australia's All Ordinaries added 3.50 percent, Hong Kong's Hang Seng climbed 5.67 percent and Japan's Nikkei 225 gained 1.66 percent. The Chinese market was closed.

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Euro Stable Amid Hopes For Bank Firewall

Tomahawk, WI 10/5/2011 (PennyPayDay) – The euro was steady versus major counterparts on Wednesday amid hopes for a plan to recapitalize the European banking system in the event of a wider sovereign debt crisis.

Doubts have been raised about the next installment of aid to debt-ridden Greece, and analysts say that a Greek default could threaten Europe's biggest banks.

In exchange for bailout funds, Greece's neighbors are demanding significant structural reforms including severe budget cuts. Earlier in the week, Athens admitted it is falling short of its austerity targets.

Public services across Greece have been shut down by striking workers in response to the austerity measures. The euro was near $1.3425 versus the dollar, nudging a bit closer to an 8-month low of $1.3344 set earlier this week.

The euro was stuck near GBP 0.8620 versus the sterling. The single currency was also stable at 102 yen, having touched a 10-year low of 100.74 on Monday.

The euro zone's private sector contracted for the first time in two years last month. Markit's Eurozone Services Purchasing Managers' Index fell to 48.8 last month from 51.5 in August, its lowest reading since July 2009. Eurozone retail sales declined in August on weak non-food product sales, data from Eurostat showed Wednesday.

Retail sales were down 0.3 percent month-on-month in August, reversing a 0.2 percent rise in July. The August figure came in line with economists' expectations. The U.K. economy logged weaker than expected growth in the second quarter, raising chances of additional quantitative easing from the central bank in order to underpin the fragile recovery.

The economy grew only 0.1 percent sequentially in the second quarter instead of the initially estimated 0.2 percent growth, data from the Office for National Statistics showed Wednesday. The growth was slower than the 0.4 percent rate it logged in the first quarter.

Employment in the U.S. private sector increased by more than expected in the month of September, according to a report released by payroll processor Automatic Data Processing, Inc. (ADP) on Wednesday, although the pace of job growth remains moderate.

ADP said that private sector employment rose by 91,000 jobs in September following a downwardly revised increase of 89,000 jobs in August. Economists had expected employment to increase by 75,000 jobs compared to the addition of 91,000 jobs originally reported for the previous month.

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European Markets Firmly In Positive Territory

Tomahawk, WI 10/5/2011 (PennyPayDay) – The European markets gained for the first time in four days, as investors cheered reports that policy makers are examining ways to safeguard their banks from the sovereign debt crisis. Asian markets were mixed, while the U.S. index futures are higher.

European commissioner for economic affairs Olli Rehn told the Financial Times on Tuesday that there is a need for concerted, co-ordinated approach in Europe to resolve the debt crisis. "Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty," Rehn told the newspaper.

Meanwhile, Moody's Investors Service downgraded Italy's government bond ratings by three notches to A2 from Aa2, with a negative outlook, citing material increase in long-term funding risks for euro area sovereigns with high levels of public debt.

The Euro Stoxx 50 index of eurozone bluechip stocks is advancing 3.12 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 2.15 percent.

The German DAX is advancing 3.91 percent and the French CAC 40 is gaining 3.00 percent. The UK's FTSE 100 index is advancing 2.24 percent and Switzerland's SMI is rising 1.06 percent.

Among the DAX components, Deutsche Bank is leading the gainers by adding 3.6 percent. Commerzbank is rising 0.11 percent.

Allianz and MunichRe are advancing 3.5 percent and 2.3 percent, respectively. Deutsche Boerse is gaining 2.6 percent. Steel firm ThyssenKrupp is adding 2.2 percent.

Infineon Technologies is adding 2 percent. ING raised the stock to "Buy" from "Hold." SAP is gaining 1.7 percent. UBS cut its price target on the stock.

Volkswagen is advancing 1.9 percent, BMW is adding 1.6 percent and Daimler is moderately up.

HeidelbergCement is declining 1.6 percent after JPMorgan reduced its price target on the shares to 33.10 euros from 56.60 euros.

Rheinmetall is adding 1.6 percent, although Cheuvreux and Citigroup reduced their price targets on the shares.

Vossloh is climbing 4.5 percent, despite Commerzbank reducing its price target.

Evotec is surging about 5 percent. The drug firm said it has entered into a second multi-year, multi-target drug discovery collaboration with Brussels, Belgium-based UCB in the field of immunology.

In Paris, Credit Agricole is leading the gainers by climbing 8.25 percent. BNP Paribas and Societe Generale are advancing 6.5 percent and 5.4 percent, respectively.

Alcatel Lucent is climbing 7.1 percent and Axa is rising 5.5 percent. Cap Gemini is adding about 6.7 percent, while STMicroelectronics is up about 2 percent. Lafarge is surging 5.4 percent and Saint-Gobain is gaining 5.1 percent. Vallourec is rising 5.9 percent. Renault is adding 3.4 percent, while Peugeot is advancing 2.2 percent.

EADS is adding 2.6 percent.

In London, miners Anglo American, Antofagasta, Eurasian Natural Resources, Kazakhmys, Vedanta and Xstrata are notably higher. BHP Billiton, Rio Tinto and Xstrata are rising about 5 percent each.

Lenders HSBC, Barclays, Lloyds Banking and Royal Bank of Scotland are advancing between 1.1 percent and 2.9 percent. BP is gaining 2.7 percent, while Royal Dutch Shell is advancing 2.9 percent. Sainsbury is rising 4.2 percent. The grocery retailer said its total sales and like-for-like sales increased in the second quarter, mainly due to strong general merchandise and clothing performance, amid a tough consumer environment.

Meanwhile, Tesco reported a higher profit for the first half of the year, helped by growth in the U.S., Europe and Asia, despite subdued demand in the UK. Looking ahead, the company said it is "broadly comfortable" with current market consensus forecasts for 2011/12. The stock is up 0.5 percent.

Burberry and GKN are climbing 4.7 percent each. Taylor Wimpey is surging 7 percent and Barratt Developments is climbing 7.8 percent. HSBC reportedly upgraded its view on the U.K. house builders.

Inmarsat is declining 4.6 percent. Retailers Kingfisher, Next and Marks & Spencer are in negative territory. Dexia is adding 8.6 percent in Brussels. Banco Santander is up 1.9 percent in Madrid and BBVA is rising 2.1 percent. Holcim is climbing 5.8 percent in Zurich. Syngenta is gaining 2.6 percent.

On a busy day for economic news, activity in Germany's service sector declined unexpectedly in September, final data from a survey by Markit Economics showed. The seasonally adjusted business activity index for the services sector came in at 49.7 in September, lower than 50.3 reported in the flash estimates and August's reading of 51.1.

French private sector growth eased to its weakest level in 26 months in September. The final composite output index, that measures activity in both manufacturing and services, fell to 50.2 in September from 53.7 in August. The September reading was below the flash estimate of 50.7.

Eurozone retail sales declined in August on weak non-food product sales, data from Eurostat showed. Retail sales were down 0.3 percent month-on-month in August, reversing a 0.2 percent rise in July. The August figure came in line with economists' expectations. Eurozone's composite output index fell slightly more than initially expected in September, Markit Economics said.

U.K.'s economic growth for the second quarter was revised down to 0.1 percent from 0.2 percent sequentially, data from Office for National Statistics said. Meanwhile, activity in U.K's service sector in September grew more than economists expected to 52.9 in September from 51.1 in August, which was the lowest reading in eight months.

In the commodity space, crude for November delivery is adding $2.32 to $77.99 per barrel, while December gold is sliding $1.9 to $1617.9 a troy ounce.

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European Markets Mixed

Shawshank, VA 9/28/2011 (PennyPayDay) – The European markets are mixed in afternoon trading Wednesday, amid a report that pointed to division among Eurozone countries regarding the bailout for Greece. Asian markets were mixed, while the U.S. index futures are higher.

A report in the Financial Times said Eurozone countries are divided over the terms of Greece's second 109 billion euros bailout deal with a number of member countries demanding private creditors to share a bigger writedown on their Greek bond holdings.

As many as seven of the bloc's 17 members are now asking the private creditors to share the burden amid concerns that Athens' funding needs have grown beyond the previous estimates made just two months ago, the report said quoting senior European officials.

German Chancellor Angela Merkel said she is awaiting a report from Troika on the progress made by Greece in cutting its budget deficit, before deciding whether the July 21 deal need to be renegotiated or not, reports said. Citing her interview with the Greek state television NET, reports said this suggested a possible revision to the second bailout package agreed at the July 21 summit.

Meanwhile, Greek Finance Minister Evangelos Venizelos Tuesday promised "superhuman" efforts to meet the deficit targets agreed under the international bailout deal. "We have taken very tough decision and these have huge political and social costs," he said in a press conference ahead of a Parliamentary vote on the highly unpopular property tax.

European Commission has reportedly confirmed that the Troika of international lenders will retun to Greece on Thursday.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.79 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.42 percent.

The German DAX is adding 0.57 percent and the French CAC 40 is rising 0.02 percent. The UK's FTSE 100 is falling 0.13 percent and Switzerland's SMI is advancing 0.45 percent.

Among the DAX components, truckmaker MAN is falling 4.4 percent. Volkswagen is losing 1.6 percent. BMW is flat, while Daimler is moderately higher.

Commerzbank is losing 3 percentand Deutsche Bank is falling 1.8 percent. ThyssenKrupp, HeidelbergCement and Lufthansa are down over 2 percent. MunichRe is down 0.6 percent and Allianz is falling 1.1 percent. Exane raised MunichRe to "Outperform" from "Underperform" and increased its price target on the stock.

K+S is losing 1.5 percent. UBS raised the stock to "Buy" from "Neutral." HSBC cut Demag Cranes to "Underweight" from "Neutral." The stock is down 0.4 percent.

Kloeckner is falling 1.4 percent. JPMorgan cut its price target on the stock. Heidelberger Druckmaschinen is adding 2.5 percent after HSBC raised the stock to "Neutral." Kabel Deutschland is up 0.6 percent. Merrill Lynch increased its price target on the stock.

Krones is falling 3.1 percent. HSBC cut its price target on the stock to 43 euros from 60 euros. Air Liquide is adding 0.2 percent in Paris after JPMorgan raised the stock to "Overweight" from "Neutral."

Loreal is gaining 1.55 percent. Sanofi is adding 1.5 percent. Essilor International, Technip and Danone are notably higher.

Metal fabrication firm Vallourec is declining 4.6 percent. Hotel group Accor is falling 2.9 percent. Lender Societe Generale is retreating 2.9 percent. Credit Agricole and BNP Paribas are moderately lower, while Natixis is adding 0.6 percent.

Renault is falling 2.5 percent and Peugeot is losing 1.3 percent. Goldman Sachs cut Peugeot to "Sell" from "Neutral" and reduced its price target on both stocks.

Axa is falling 1.2 percent. Exane BNP cut its price target on the stock.

In London, Man Group is plunging over 19 percent. The asset manager expects lower profit for its first half of fiscal 2012, reflecting decline in net management fees amid weak investor demand. Icap and Schroeders are falling 3 percent and 2 percent, respectively.

BG Group is adding 3.6 percent, reportedly on a positive broker recommendation. Cairn Energy is falling 2.9 percent. The company announced the abandoning of a well in Greenland. Smiths Group is rising 2.3 percent. The company reported a higher profit for fiscal 2011.

Ashmore Group is adding 2.6 percent. GKN is falling 2.5 percent. Miners Anglo American, Antofagasta, BHP Billiton, Kazhakhmys, Vedanta and Xstrata are in negative territory, while Rio Tinto is flat. Among lenders, HSBC and Barclays are falling 1.5 percent each, while Lloyds Banking and Royal Bank of Scotland are each retreating 1.7 percent.

Clariant is falling 1.6 percent in Zurich. In economic news, Germany's import price inflation slowed more than expected in August, the Federal Statistical Office said. Import price inflation came in at 6.6 percent in August, down from 7.5 percent in July. Economists were expecting the annual rate to ease to 6.7 percent. On a monthly basis, import prices fell 0.7 percent, bigger than the expected drop of 0.3 percent.

The French economy stagnated in the second quarter as initially estimated, final data from the statistical office Insee showed. The Gross Domestic Product remained flat on a sequential basis in the second quarter, following prior quarter's 0.9 percent growth.

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Eurozone Euphoria Continues

Shawshank, VA 9/27/2011 (PennyPayDay) – In a triumph of hope over experience, investors are snapping up shares on expectations that European leaders will come up with a solution to the Eurozone debt crisis that will simultaneously please the markets and their respective electorates.

US broadcaster CNBC said this morning that it has had confirmation from European officials that they are working on a plan to shore up European bank stability by using the European Financial Stability Fund to capitalise a special purpose vehicle (SPV) that would be created by the European Investment Bank.
The SPV would issue bonds and then use the funds from the bond sales to purchase the debt of distressed European states; the bonds could also then be used as collateral for borrowing from the European Central Bank.

As was the case yesterday, financial stocks are the ones to own today. French lenders BNP Paribas, Societe Generale and Credit Agricole plus investment bank Natixis lead Paris higher while German banks Deutsche Bank and Commerzbankcarry the flag for Frankfurt, along with insurer Allianz.

The Paris CAC is 109 points firmer at 2,968 while the DAX in Frankfurt is 214 points higher at 5,560.

German car maker Daimler is putting the pedal to the metal after it was upgraded to "outperform" from "neutral" by Credit Suisse. The Swiss bank likes Daimler's €8bn cash pile and the scope the German luxury car maker has to squeeze employment costs.

Elsewhere in the German automobile sector, Volkswagen has been given regulatory clearance to go ahead with its takeover of lorry maker MAN SE.

Power equipment maker Alstom is humming along after Morgan Stanley issued a positive broker note. The broker has an "overweight" rating for Alstom. In other broker action, Sanford C. Bernstein has upgraded wind turbine makerVestas to "market perform" from "underperform".

Swiss drugs leviathan Novartis is another celebrating receiving regulatory approval. The Japanese authorities have given the thumbs up for the marketing of two drugs in Japan: multiple sclerosis treatment Gilenya and cryopyrin-associated periodic syndrome (a group of rare inherited auto-inflammatory conditions) treatment Illaris.

The group has also had a result with its Seebri drug, as tests showed it improved the functioning of the lungs for smokers. Based on these findings, Novartis intends to seek regulatory approval for the drug to be released in Europe.

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European Market Reports

Shawshank, VA 9/26/2011 (PennyPayDay) – European investors are buying into the story that a revamp of the European Financial Stability Fund (EFSF) is on its way any day now, though not everyone is convinced.

Huw Pil, at Goldman Sachs, reckons the markets might be getting ahead of themselves, and doubts that the announcement of a €3tn (£2.6tn) plan to save the euro by recapitalising banks, giving more firepower to a bailout fund and allowing Greece to default on its debts, is imminent.

The schedule of further measures announced by the G-20 on Friday envisaged a less immediate response, possibly to be announced at the Cannes G-20 summit in six weeks' time, Pil notes.

Furthermore, the scope for EFSF enlargement is likely to be constrained by political considerations and the recent ruling of the German Constitutional Court while there are also concerns about whether the European Central Bank could lend to the EFSF directly.

David Beers, the head of ratings agency Standard & Poor's (S&P) sovereign rating group, has suggested in an interview with the Reuters news agency that a deeper fiscal union between members of the Eurozone could increase borrowing costs for 'core' European countries.

"If governments are unable to focus on the long-standing impediments to growth, then austerity alone is not going to give you growth," Beers said, citing the case of Italy.

There are also rumours that investors will be expected to take a further hit on their exposure to Greek national debt.

In July the investors, who are mostly made up of banks, agreed to take a 21% write down - a "haircut" in City parlance - on their Greek debt, but the new plan could see this rise to 50%.

Beers alluded to this, saying S&P believes European policy makers are also finally realising that Greece's debt restructuring will take place with significant haircuts.

The news does not seem to be unduly the shareholders of banks, with lenders BNP Paribas, Credit Agricole and Societe Generale plus investment bank Natixis four of the top five blue-chip risers in Paris, though all trail in the wake of insurer AXA, which is glad to see a recovery in its European equity portfolios. In Germany, Deutsche Bank and Commerzbank are also bowling along happily, but they too see their strong gains outdone by an insurer, this time Allianz.

Meanwhile, Mohamed El- Erian, the Chief Executive of Pacific Investment Management Co (PIMCO), which has the biggest bond fund in the world, has stuck his oar in, predicting a slow-down in growth of the global economy, with Europe going ex-growth.

El-Erian predicted Europe's economy would contract by between 1% to 2% with the US simply flat-lining.

His view was backed up by a measurement of German business confidence from the Ifo institute, which fell to is lowest level in 15 months, though the September index level of 107.5, down from 108.7 in August, was above the 106.5 expected by economists.

On the corporate front, the big news over the week-end was that UBS Chief Executive Oswald Grübel has fallen on his sword over the rogue trading incident that saw the bank swallow billions of dollars of unauthorised trading losses.

In the statement announcing Grübel's resignation, UBS's Chairman Kaspar Villiger said: "The board regrets Oswald Grübel's decision. Oswald Grübel feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity.”

Sergio Ermotti, currently in charge of UBS's European operations is take over the Chief Executive position on an interim basis.

Elsewhere in a busy banking sector, there are reports that Franco-Belgian investment bank Dexia is hoping to offload another €20bn of toxic loans, which would bring the total amount dumped to a nice round €100bn since the financial crisis took hold in the latter part of the previous decade.

French business daily Les Echos, citing an unnamed source at the bank, said the company might take a 10% loss on the loans, such is its desire to get the bad assets off its books.

Meanwhile, Bank of France governor Christian Noyer stated in an interview with Le Journal du Dimanche that French banks do not need to be recapitalised but could seek support from a public entity should it be necessary.

On speculation that the government planned to inject €10bn to €15bn in French entities, Noyer said, "there is no plan, and we don't need one."

Away from torrid banking sector, steel distributor Kloeckner is looking brittle after its chief executive reportedly grumbled that the usual post-summer pick-up in business had yet to materialise.

Elsewhere in Germany, drugs leviathan Bayer is wanted after its prostate cancer drug Alpharadin came up trumps in a Phase III study, with those patients who used it showing a significant increase in survival levels.

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Europe Trying to Get Ahead of Crisis

Northern, WI 9/23/2011 (PennyPayDay) – European policymakers showed signs they were preparing new steps to cope with the region's debt crisis even as talk of a possible Greek default gained pace on Friday.

World stock markets, which had plunged to a 14-month low on fears the euro zone crisis was not under control, rallied after European Central Bank officials said they would use their firepower to help the banking system through the crisis.

Finance ministers and central bankers from around the world, in Washington for semi-annual policy discussions, have turned up the heat on Europe to do more to prevent Greece's debt crisis from infecting the world economy.

"They have six weeks to resolve this crisis," said British finance minister George Osborne. Euro zone leaders needed to have the situation under control by the time leaders of the Group of 20 economies meet in France in November, he said.

Pressure is growing on European governments for a recapitalization of the region's vulnerable banks -- perhaps to strengthen them in preparation for a Greek default.

Policymakers in Europe also seemed to be warming to the idea of giving more firepower to their bailout fund.

"Europe is running against time," Brazilian Financial Minister Guido Mantega said. "I hope Europe does not wait for the first countries to break before putting new instruments in place because then the bill will be higher."

The head of the International Monetary Fund, Christine Lagarde, said Europe and the grim economic outlook in the United States required a new collective effort or "we run the risk of losing the battle for growth."

PUZZLE PIECES

As European policymakers try to piece together a bolder strategy for stemming the debt crisis, the ECB provided some relief to investors, as three officials said banks could be primed with one-year liquidity to help shore them up.

"During the time of the (2007-2009) financial crisis, one of the instruments we had was ... one-year tenders. I think it might be advisable to think about reintroducing this approach," ECB board member Ewald Nowotny said.

The IMF, which has been pressing aggressively for a recapitalization of Europe's banks, reckons the debt crisis has increased their risk exposure by 300 billion euros.

In a sign Europe was coming to terms with the idea of a recapitalization, France's top market regulator said 15 to 20 banks needed extra capital, although no French ones "at this stage.

The prospect of a Greek default appeared to grow when Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one way the heavily indebted euro zone nation's cash crunch could be resolved.

Officials played down the reports and Venizelos described them in a statement as an unhelpful distraction from the central task of sticking to Greece's EU/IMF bailout program.

ECB governing council member Klaas Knot told a Dutch daily a Greek default could no longer be ruled out, the first ECB policymaker to speak openly of the prospect.

"It is one of the scenarios," Dutch daily Het Financieele Dagblad quoted him as saying. "All efforts are aimed at preventing this, but I am now less certain in excluding a bankruptcy than I was a few months ago."

MARKET HOPES

Hopes the ECB would take further steps to ease the debt crisis helped European shares stage a late rally, although U.S. stocks were mixed in afternoon trade.

Late on Thursday, G20 finance ministers and central bankers said they would "take all necessary actions to preserve the stability of the banking system and financial markets as required," a statement that failed to placate investors.

The G2O statement, issued after talks in Washington, said the 17-nation euro zone would implement actions to "maximize" the impact of the region's bailout fund by mid-October.

G20 participants did not say how the 440 billion-euro European Financial Stability Facility might be altered although French Finance Minister Francois Baroin used the word "leverage' in comments to reporters.

The United States has previously proposed that Europe could leverage up the EFSF to give it more firepower to protect the euro zone and its banks.

The IMF's Lagarde said it might be wise for the ECB to continue buying government bonds even after Europe's bailout fund is given the power to do so.

Politicians in northern Europe, especially in Germany, have opposed dedicating more money to offset what they see as the profligacy of countries such as Greece. Tensions have also flared within the ECB over its role in buying bonds of struggling euro zone states.

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European Markets Plunge On Fed Economic Outlook

Shawshank, VA 9/22/2011 (PennyPayDay) – The European markets are firmly in negative territory in afternoon trading Thursday, as markets across the globe reacted in panic to the comments from the U.S. Federal Reserve that raised concerns about the recovery of the world's largest economy. Asian markets plunged and U.S. index futures are lower. Carmakers, mining stocks and banks are notably lower.

As expected, the Fed, at the end of its two-day meeting, Wednesday announced the replacing of short-term securities in its bond portfolio with longer-term securities. "This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," the Fed said.

However, the central bank also noted that economic growth remains slow and warned that there are significant downside risks to the economic outlook.

Additionally, Moody's Investors Service downgraded long-term ratings of U.S. lenders Bank of America and Wells Fargo, while reducing the short-term ratings of Citigroup Inc., due to a decrease in the probability that the U.S. government would support the lenders, if needed.

Meanwhile, Greece has announced a fresh package of austerity measures for securing further bailout funds to weather its debt crisis that threatens the Eurozone country with default. Cutting high pensions by 20 percent in the public-sector and placing 30,000 civil servants in a "labor reserve" on road to redundancy were among the tough measures agreed at a marathon Cabinet meeting chaired by Prime Minister George Papandreou late on Wednesday.

The Euro Stoxx 50 index of eurozone bluechip stocks is retreating 4.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 4.03 percent. The German DAX is retreating 4.34 percent and the French CAC 40 is declining 5.08 percent. The UK's FTSE 100 is falling 4.91 percent and Switzerland's SMI is contracting 2.93 percent.

Among the DAX components, BMW, Daimler and Volkswagen are declining between 6.8 percent and 6.2 percent. MAN is retreating 3.7 percent. Deutsche Bank is dropping 4.6 percent and Commerzbank is losing 4.4 percent.

Industrial conglomerate Siemens is falling 3.8 percent. Lufthansa is falling 4.3 percent. Barclays reduced its price target on the stock. Beirsdorf is down 1.4 percent after Morgan Stanley cut its price target on the stock.
ElringKlinger is dropping 4.6 percent. HSBC lowered its price target on the stock to 26 euros from 30 euros.

SolarWorld is dropping 2.4 percent. The stock's price target was reduced at Commerzbank. Fraport is declining 2.5 percent. Nomura raised its price target on the stock.

In Paris, Societe Generale is leading the decliners by retreating 8.4 percent as reports said the lender is planning to sell Newedge Group and the SGSS securities services unit. Natixis is falling 7.3 percent, Credit Agricole is declining 5.1 percent and BNP Paribas is contracting 4.4 percent. Macquarie cut Credit Agricole to "Underperfrom" from "Outperform" and reduced its price target on the stock.

Michelin is declining about 5 percent after UBS reduced its price target on the stock. Peugeot and Renault are declining 5 percent and 4.6 percent, respectively.

In London, miners fell after results of a survey by Markit Economics showed that China's manufacturing sector contracted for a third month running in September, with both production and new orders declining during the month. The flash HSBC manufacturing purchasing managers' index fell to 49.4 in September from 49.9 in August.

Anglo American, Antofagasta, BHP Billiton, Kazhakhmys, Rio Tinto, Vedanta and Xstrata are falling between 6 percent and 9.3 percent.

Lenders HSBC, Barclays, Lloyds Banking and Royal Bank of Scotland are falling from 3.6 percent to 6.9 percent. BP is dropping 5.35 percent and Royal Dutsch Shell is sliding 4 percent. Retailers are notably lower.

GlaxoSmithKline is down 1.5 percent. Goldman Sachs raised the stock to "Neutral" from "Sell" and increased the price target to 1330 pence from 1130 pence. United Utilities is losing 2.1 percent. The company said its first-half revenues increased from last year on regulated price increase and that the current trading is in line with expectations.

TUI Travel is falling 4.3 percent. The travel operator said it is on track to meet its full-year expectations. The company said its winter bookings are satisfactory overall and booked load factors are in line with its expectations.

Legal & General is down 3.8 percent. The insurer announced that its CEO Tim Breedon intends to retire at the end of 2012. easyJet today lifted its fiscal year pre-tax profit outlook and announced a special dividend. The stock is adding 7.1 percent.

Logitech is plunging 12.1 percent in Zurich after the mouse and keyboard maker once again lowered its revenue and operating income guidance for 2012. Nestle is down 1.7 percent. JPMorgan raised its rating on the stock to "Overweight" from "Neutral" and increased its price taregt on the stock.

Syngenta is falling 5.1 percent. Citigroup cut the agricultural chemicals firm to "Hold" from "Buy" and reduced its price target. Volvo is falling 4.8 percent in Stockholm. The automaker announced new financial targets for the Group beginning next year that would focus on benchmarking its operations with competitors.

Hennes & Mauritz is falling 3.2 percent. UBS raised the stock to "Neutral" from "Sell." Intesa Sanpaolo is losing 2.3 percent in Milan after Standard & Poor's cut its credit ratings for the lender.

In economic news, the German private sector growth continued to slow in September, Markit Economics said. The flash composite output index came in at 50.8, compared to 51.3 in August, the lowest since July 2009.

Meanwhile, France's private sector output growth slowed marginally in September. The flash composite output index dropped to 50.7 from 53.7 in August, again lowest level since July 2009.

Eurozone industrial new orders were down 2.1 percent month-on-month in July, data from Eurostat revealed. Economists were expecting orders to fall 1.2 percent, the same rate of fall as seen in June.

In the commodity space, crude for November delivery is sliding $3.85 to $82.07 per barrel and December gold is losing $56.3 to $1751.8 a troy ounce.

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Wednesday European Market Reports

Northern, WI 9/21/2011 (PennyPayDay) – The European markets are mostly retreating in afternoon trading Wednesday, as investors stayed on the sidelines ahead of the Federal Reserve Open Market Committee announcement, despite optimism that Greece will secure its next tranche of financing to avert a default. Asian markets mostly rose, and U.S. index futures are higher.

The Fed, at the end of its 2-day meeting today, is expected to announce some measures to infuse investor confidence, including shifting investment into long-term bonds to bring down long-term rates.

The Greek Finance Ministry has reportedly said that the conference call with the inspectors of the austerity deal has been "satisfactory" so far. A call between the country and the international lenders - the European Union, the International Monetary Fund and the European Central Bank - is in progress to reach an agreement over the next bailout tranche for the debt-ridden country. The heads of the Troika are expected to visit Greece early next week.

The Euro Stoxx 50 index of eurozone bluechip stocks is losing 1.22 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.91 percent.

The German DAX is losing 1.40 percent and the French CAC 40 is losing 1.19 percent. The UK's FTSE 100 is dropping 0.72 percent and Switzerland's SMI is gaining 0.14 percent.

Among the DAX components, Lufthansa is falling 4.3 percent, as the stock reportedly received a broker downgrade.

K+S is losing 3 percent. Basf and Bayer are moderatelylower.

Volkswagen and Daimler are notably lower. BMW is losing 0.88 percent.

Deutsche Bank is falling 0.5 percent, while Commerzbank is rising 0.1 percent. Citigroup cut its price taregt on Deutsche Bank.

Department stores operator Metro is climbing 2.4 percent.

SAP is advancing 1.3 percent after rival Oracle issued an upbeat outlook.

ThyssenKrupp is falling 0.55 percent. Societe Generale raised the stock to "Buy" from "Hold," but reduced the price target.

Chemical firm Lanxess is adding 1.35 percent. The company confirmed its earnings forecast for 2011, citing ongoing strong demand for synthetic rubbers. The firm expects a boost in demand for high-performance rubbers due to the European Union tire labeling legislation that comes into effect in 2012.

SMA Solar is declining 3.9 percent. HSBC cut its rating on the stock to "Underweight" from "Neutral" and reduced its price target. Morgan Stanley also lowered its price target on the stock.

SolarWorld is adding 1.9 percent, although Merrill Lynch reduced its price target for the stock.

Aixtron is down 0.9 percent. Morgan Stanley cut its price target on the stock.

In Paris, BNP Paribas, is retreating 5.3 percent. Credit Agricole and Societe Generale are losing 3.2 percent and 2.4 percent, respectively.

Peugeot is falling 3.8 percent and Renault is losing 2.1 percent.

ArcelorMittal is retreating 1.4 percent. The stock's price target was reduced at Societe Generale.

Loreal is falling 0.3 percent. HSBC raised the stock to "Neutral" from "Underweight," but reduced its price target.

EDF is gaining 1.7 percent and Cap Gemini is advancing 1.4 percent.

In London, miner Antofagasta is losing 3.3 percent, BHP Billiton is down 1.1 percent and Rio Tinto is losing 1.5 percent.

In banking stocks, Barclays is adding 1.2 percent, Lloyds Banking is surging 5.2 percent and Royal Bank of Scotland is rising 2.1 percent. However, HSBC is losing 0.9 percent.

BP is falling 1.2 percent and Royal Dutsch Shell is losing 0.9 percent.

Imperial Tobacco said the overall financial performance and position of the Group for the year remains in line with the Board's expectations and that it expects revenue to increase, driven by growth in Eastern Europe and emerging markets. The stock is adding 1.15 percent.

SABMiller is down 0.4 percent. The brewer agreed to buy Australian beer maker Foster's Group Ltd. for A$5.10 per share, valuing Foster's equity at about A$9.9 billion.

Insurer Aviva is down 2.8 percent. Glencore is losing 3.4 percent and Inmarsat is retreating 3.3 percent.

Burberry is gaining 1.7 percent.

Inditex is up 0.6 percent in Madrid. The textile company reported a 14 percent rise in profit for the first half of the year.

Mobistar is falling 1.7 percent in Brussels, reportedly after a broker downgrade.

UBS is up 1.1 percent and Credit Suisse is adding 3.1 percent in Zurich.

In economic news, minutes of the Bank of England monetary policy committee's September 8 meeting showed that the policymakers voted unanimously to hold the benchmark interest rate steady at 0.5 percent. All the members, except Adam Posen, voted in favor of maintaining the size of the stock of asset purchases financed by the issuance of central bank reserves at 200 billion pounds.

Across Asia/Pacific, most major markets ended higher. Australia's All Ordinaries rose 0.70 percent, China's Shanghai Composite Index climbed 2.66 percent and Japan's Nikkei 225 added 0.23 percent. However, Hong Kong's Hang Seng lost 1 percent.

In the U.S., futures point to a higher open on Wall Street. In the previous session, after showing a notable move to the upside over the course of morning trading, the major averages pulled back sharply going into the close, eventually ending the session mixed. While the Dow edged up 0.1 percent, the Nasdaq fell 0.9 percent and the S&P 500 slipped 0.2 percent.

In the commodity space, crude for November delivery is dropping $0.58 to $86.34 per barrel, while December gold is adding $0.7 to $1809.8 a troy ounce.

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European Market Reports

Northern, WI 9/20/2011 (PennyPayDay) – Untitled Document European investors are experiencing a switchback ride, with early losses turned into healthy gains at the end of the morning session as optimism grew that Greece will stave off a default on its sovereign debt.

Markets shrugged off a downgrade of Italian sovereign debt by ratings agency Standard & Poor's (S&P), suggesting that the decision was already largely priced in to stock prices, even if the timing of the decision caught some on the hop.

The agency said the cut, from A+ to A - five levels above junk status - was prompted by Italy's poor economic growth and a “fragile governing coalition”.

"We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve," S&P said.

S&P has maintained its outlook as negative, a stance it has taken since May.

As for Greece, the country's Finance Minister, Evangelos Venizelos, described discussions with European officials on the subject of Greece receiving the next slug of bail-out money as "productive".

Another call is expected to take place today, after technical discussions, and an announcement is likely on Wednesday, according to reports in the US financial press.

The MIB index in Milan is 154 points higher at 14,240, while in Paris the CAC is up 32 points at 2,972.

In Germany the DAX is up 115 points at 5,531 as German Chancellor Angela Merkel moves to keep her party's coalition junior partner, the FDP, on board after the FDP received a pasting over the week-end in a Berlin election.

The FDP has broken ranks with Merkel's Christian Democrat (CDU) party over the Eurozone crisis, becoming increasingly critical of Germany's role as the cash dispenser for Europe's more profligate nations.

"We will continue our work as a government and I don’t think it’s become more difficult,” Merkel told reporters in Berlin yesterday, responding to questions about the health of the coalition government.

There was some discomfiting news on the economic front for Germans, as the economic climate index for Germany fell to -43.3 in September from -37.6 in August.The market consensus was looking for a reading of -43.9. It is the seventh consecutive decline for this important leading indicator, which is now far from its historic average of 25.6.

In France, BNP Paribas is down, even as the French lender's chairman, Michel Perebeau, moved to assure markets of the strength of the company's capital base.

Speaking in a radio interview Perebeau said the bank has "no need at the moment for any recapitalisation."

French banks are in focus after newspaper reports claimed that German engineering giant Siemens withdrew around €0.5bn of funds from a large French bank two weeks ago and parked them with the European Central Bank (ECB).

The German industrial group withdrew the money partly because of concerns about the future financial health of the unnamed French bank and partly to benefit from higher interest rates paid by the ECB.

News agency reports, meanwhile, suggest that the Bank of China (BoC) has suspended foreign exchange swaps with European banks, with some speculation that the BoC reached its limit on trading credit lines while others claim the halt was in reaction to last night's debt downgrade for Italy.

Lender Societe Generale was the biggest faller in the morning session in Paris, while sector peer Credit Agricoleedged lower after a firm start.

Swiss cement maker Holcim is firmer after unveiling its new chief executive officer, Bernard Fontana, who has been poached from steel maker Aperam.

German business software developer SAP is wanted after US District Judge Phyllis Hamilton appeared to take the German company's side in its legal bust-up with US rival Oracle.

In a recent court case, SAP was ordered to pay $1.3bn to Oracle in a copyright infringement case, but SAP got the award reduced to $272m on appeal. Now, Oracle is contemplating appealing against the damages reduction, but Judge Hamilton said that there should be a new trial for damages if Oracle rejects her decision.

Sticking in court circles, German utility companies E.ON and RWE are both on the up after a Hamburg court suspended a levy on taxes that use nuclear fuel.

Parcel delivery firm TNT Express has been downgraded by Credit Suisse to "under-perform" from "neutral".

Networking equipment firm Alcatel-Lucent is on the up after a 'buy' note from UBS. The Swiss bank said second-half 2011 guidance appears "reasonable" for Europe as well as North America.

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Euro Slides Versus Dollar, Greece Warned To Shrink

Oxford, MS 9/19/2011 (PennyPayDay) – The euro was under renewed pressure versus the dollar on Monday, giving back most of last week's gains amid concerns that Greece will inevitably default on its sovereign debt obligations.

After stepping up with billions to backstop Greek debt earlier this year, European leaders have grown frustrated with the slow pace of structural reforms and budget cuts in Athens.

A meeting of Euro zone finance ministers in Poland on Friday and Saturday produced little support for Greece. Unless Greece takes more drastic measures, it may not receive its next payment from a bailout fund set up earlier this year, the EcoFin ministers warned.

Greek PM George Papandreaou is set to hold discussions with euro zone officials and the International Monetary Fund to break the impasse.

Construction output in the euro area increased from last year in July, after falling in the previous month, latest data released by Eurostat showed Monday.

Stocks tumbled in global markets this morning, giving the safe haven dollar an added boost.

The euro slipped to $1.3640 versus the dollar, edging near a 7-month low of $1.3494 set September 11. The Federal Reserve as it makes its latest interest rate decision on Wednesday.

Most economists rule out a wider QE III announcement, but anticipate the Fed will buy longer-dated Treasury bonds in an effort to drive down interest rates.

Fiscal deficit reduction proposals will be unveiled by President Obama later today. The plans for saving over $3 trillion over the next decade are likely to include measures to raise taxes on the rich.

The euro was stuck near GBP 0.87 versus the sterling, and was virtually unchanged at CHF 1.2060 versus Swiss franc.

The single currency slipped to a weekly low of Y104.50 versus the yen, near a 10-year low of Y103.88 set earlier this month.

Construction production increased 1.2 percent year-on-year in July, recovering from a revised 11.5 percent decrease recorded in June.

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European Markets Extend Gains

Chicago, IL 9/16/2011 (PennyPayDay) – The European markets are extending the previous session's gains in afternoon trading Friday, as a meeting of European finance officials to discuss the sovereign crisis is underway in Wroclaw, Poland. Asian markets ended higher, while U.S. index futures are lower.

The European Central Bank on Thursday said it has decided in co-ordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year.

According to ECB President Jean-Claude Trichet, the three-month US dollar liquidity-providing operations is a sign of close co-operation at the global level and of the "unity in purpose." In a speech at Wroclaw, Trichet stressed on the need for strict implementation of the planned measures. "A lot remains to be done. No complacency should be tolerated in any field," he said.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 1.34 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 1.27 percent.

The German DAX is adding 1.42 percent and the French CAC 40 is gaining 0.64 percent. The UK's FTSE 100 is rising 0.74 percent and Switzerland's SMI is advancing 0.65 percent.

Among the DAX components, Deutsche Bank is gaining 3.3 percent and Commerzbank is rising 1.7 percent.

RWE and EON are advancing 2.6 percent each. JPMorgan raised E.ON to "Overweight" from "Neutral."

Allianz is gaining 2.15 percent. Cheuvreux cut its price target on the stock.

SAP is losing 0.4 percent and Adidas is down 0.55 percent. Those making moderate losses include Siemens, Linde and Bayer.

Ouside the main index, Stroeer is up 1 percent. Goldman Sachs lowered its price target on the stock.

Sky Deutscheland is gaining 1.2 percent, despite the stock's price target being reduced at Goldman Sachs.

Aixtron is falling about 2 percent. JPMorgan and Deutsche Bank reduced their price targets on the stock.

Axel Springer is falling 1.8 percent. Goldman Sachs cut its price target on the stock to 30 euros from 36.86 euros.

ProSiebenSat.1 Media is adding 1.2 percent, although several analysts cut their price targets on the stock.

Research in Motion is falling over 20 percent after reporting unimpressive results. ARM Holdings is losing 1.5 percent in London on the news.

Manz is falling 1.8 percent. The company reached a mutual agreement with its COO Volker Renz to sever his contract with effect from September 30 owing to differences of opinion regarding the future strategic orientation of the company and how that should be implemented.

In Paris, Publicis Groupe is climbing 3.6 percent. Retailer Carrefour is adding 2.4 percent.

Electric utility EDF is advancing 3.4 percent. Veolia Environnement and Suez Environnement are adding 2 percent and 1.5 percent, respectively.

Barring BNP Paribas, which is losing 1.7 percent, lenders are in positive territory, led by Societe Generale, which is gaining 2.5 percent.

Peugeot and Renault are gaining 2.4 percent and 1.4 percent, respectively. Air France-KLM is adding 1.5 percent. The company's board has approved an order of 110 long-haul aircraft from Boeing Co. (BA) and Airbus SAS. EADS, the parent of Airbus, is falling 1 percent.

Hermes International is falling 7.6 percent. The company's founding family won a court ruling, which allows it to establish a holding company to guard against takeovers.

In London, mining stocks Anglo American and Antofagasta are adding over 1 percent each, while BHP Billiton is gaining 2 percent and Rio Tinto is climbing 2.4 percent.

Among lenders, Barclays is surging 5.6 percent, Lloyds is adding 3.1 percent and Royal Bank of Scotland is gaining 3.9 percent.

Marks & Spencer and Kingfisher are notably higher. ITV is surging 4.6 percent reportedly on an analyst upgrade. Essar Energy is adding 3.4 percent, Inmarsat is climbing 5.8 percent and Peason is adding 2.5 percent.

IPSO Ventures is falling 8.3 percent. Buccolam, a product developed by the firm, was granted European Commission approval to treat prolonged, acute, convulsive seizures in infants, children, and adolescents aged 3 months to less than 18 years.

UBS is up 3 percent in Zurich. JPMorgan cut its price taregt on the stock In Stockholm, Hennes & Mauritz AB is flat, after the company reportedly received a broker downgrade. Wolford is up 5 percent in Vienna after reporting a narrower loss for the first quarter.

In a day of light economic news, Eurostat said the euro area trade surplus increased to 4.3 billion euros in July from 0.1 billion euros in June. The consensus forecast called for a surplus of 2 billion euros.

In the commodity space, crude for October delivery is sliding $0.20 to $89.20 per barrel, while December gold is gaining $7.7 to $1789.1 a troy ounce.

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European Markets Rise On Greece Support

Shawshank, VA 9/15/2011 (PennyPayDay) – The European markets are moderate to notably higher in afternoon trading Thursday, after optimism returned to investors in the region that Greece will not be let go out of the euro zone. Asian markets mostly rose and U.S. index futures are higher.

French PM Nicolas Sarkozy and German Chancellor Angela Merkel said in a joint statement Wednesday that they are convinced that debt-ridden Greece will remain in the euro zone, easing fears of an imminent Greek debt default.

Greece has agreed to follow through with its promise to dramatically cut government spending and raise revenues with an unpopular property tax.

Meanwhile, the European Commission left the 2011 growth forecast for euro area unchanged, while slightly reducing the outlook for the third and fourth quarters. In the interim forecast, the executive arm of the European Union said it continues to see 1.6 percent expansion in the single currency bloc this year, unchanged from the May projection.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 2.49 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is advancing 1.65 percent.

The German DAX is climbing 2.31 percent and the French CAC 40 is adding 2.59 percent. The UK's FTSE 100 is adding 1.82 percent and Switzerland's SMI is gaining 0.48 percent.

Among the DAX components, Deutsche bank and Commerzbank are advancing 2.4 percent and 0.4 percent, respectively. Daimler and Volkswagen are notably higher.

Siemens is up 1.1 percent. Citigroup named Siemens the "Most preferred stock" for the next three months. ArcelorMittal is adding 5.7 percent after Citigroup Inc. reportedly raised the stock to "Buy" from "Hold." Lufthansa is adding 1.5 percent. Barclays cut its price target on the stock.

Fresenius is up 0.1 pecent. Citigroup initiated coverage of the stock with a "Buy" rating ad a price target of 86 euros. Chipmaker Aixtron is plunging over 19 percent after cutting its sales forecast for the year. Citigroup cut its pride target on the stock. Investment firm Deutsche Beteiligungs is up nearly 0.9 percent, although HSBC reduced its price target on the stock.

In Paris, BNP Paribas is surging 4.6 percent. Credit Agricole is advancing 2.3 percent and Natixis is gaining 1.3 percent. Societe Generale is modestly down, after Nomura reduced its rating on the stock to "Reduce" from "Buy" and loweerd the price target.

Cap Gemini is up 4.1 percent. STMicroelectronics is rising 3.1 percent. Renault is gaining 3.7 percent and Peugeot is adding 3.1 percent.

In London, Rio Tinto, BHP Billiton, Anglo American and Antofagasta are advancing between 1.6 percent and 3.2 percent.

Barclays is adding 3.7 percent, Lloyds Banking is gaining 3.5 percent and Royal Bank of Scotland is climbing 3.7 percent. HSBC is advancing 2.1 percent.

Kingfisher is surging 5.1 percent. The retailer said profit in the first six months of the year improved from last year, despite challenging economic conditions, and that it would create over 1,200 new jobs across the UK this year as it expands its B&Q and Screwfix operations. Next and Burberry also saw significant gains.

BP is adding 3.2 percent. Royal Dutch Shell is gaining 1.6 percent.

Associated British Foods is adding 3.3 percent reporetdly on a broker upgrade.

Kesa Electricals is adding 4.2 percent. The company said total group revenue for the first quarter fell by 9.9 per cent on a like-for-like basis, reflecting weakening market conditions and strong World Cup comparatives of the last year.

UBS is plunging over 8 percent. The Swiss banking giant said it may report a loss for the third quarter, as it discovered a loss due to unauthorized trading by a trader in its Investment Bank.

Hennes & Mauritz AB is gaining 6.1 percent in Stockholm. The apparel retailer reported strong growth in total sales in August and the third quarter, reflecting increased number of stores in operation.

Volvo is adding 3.4 percent. The automaker reported a 35 percent year-over-year increase in total deliveries from its truck operations in August, mainly driven by strength in medium and heavy duty vehicle deliveries.

In economic news, retail sales in the U.K. declined in August, but less than expected by economists, according to data released by the Office for National Statistics. Sales, including automotive fuel, fell 0.2 percent month-on-month in August, better than forecasts for a 0.3 percent decline.

Eurozone annual inflation held steady at 2.5 percent in August, in line with flash estimate, final data published by the Eurostat showed. Meanwhile, employment in the euro area increased a seasonally adjusted 0.3 percent sequentially in the second quarter, faster than the 0.1 percent growth seen in the first quarter.

In Germany, employment in manufacturing units with 50 or more employees increased 3.3 percent annually to 5.1 million in July, preliminary data released by statistical office Destatis revealed.

The Swiss National Bank said it would enforce the minimum exchange rate of Swiss franc at 1.20 per euro, as decided on September 6, with the 'utmost determination'. Also, the bank said it is prepared to purchase foreign currency in unlimited quantities.

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