US FINANCIAL MARKET
U.S. Stocks Fluctuate on Economic Data, Fed Speculation
- The Standard & Poor’s 500 Index climbed to an all-time high of 1991.59 at the open.
- Purchases of previously owned U.S. homes unexpectedly rose in July to a 10-month high as low borrowing costs and an increase in inventory drew buyers.
- The Conference Board’s index of U.S. leading indicators increased 0.9 % in July, topping forecasts.
- The Markit Economics preliminary August index of U.S. manufacturing jumped to 58, the highest since April 2010, from 55.8 the month before as production, orders and employment picked up.
- Minutes to the central banks’ July meeting released yesterday showed that officials raised the possibility that aggressive stimulus will end sooner than anticipated.
- Fewer Americans than forecast applied for unemployment benefits last week.
- Bets against volatility show traders are conditioned to expect turmoil in the stock market to be brief.
BofA to Pay $16.65 Billion to End U.S. Mortgage Probes
- Bank of America will pay $16.65 billion to end federal and state probes into mortgage bond sales, the harshest penalty yet related to loans that fueled the 2008 financial crisis.
- The agreement cements Bank of America’s status as the firm punished hardest for faulty mortgage practices.
- It eclipses Citigroup’s $7 billion settlement in July and JPMorgan’s $13 billion accord in November.
HP Third-Quarter Sales Top Estimates as PC Revenue Jumps
- HP’s revenue rose 1.3 % to $27.6 billion in the quarter.
- It was the first revenue growth after 11 consecutive quarters of declines.
- Hewlett-Packard’s net income fell 29 % to $985 million compared with $1.39 billion a year earlier.
- The company took a $649 million restructuring charge in the quarter.
Family Dollar rejects Dollar General’s offer on antitrust worries
- Family Dollar Stores rejected Dollar General’s $8.95 billion acquisition offer, citing antitrust concerns, and reaffirmed its support for a buyout offer from Dollar Tree.
- Dollar General had said in its offer that it was prepared to divest up to 700 retail stores to get regulatory approval for the deal, the same %age that Dollar Tree had proposed.
Uber Integrates App with Starbucks, OpenTable to Expand
- OpenTable, Starbucks, TripAdvisor, United Continental and seven other companies are today introducing updated versions of their mobile apps, each with a button to hail an Uber ride.
- The moves are part of Uber’s strategy to become more ubiquitous in the software on people’s smartphones and geographically.
- Google added a button to Google Maps for smartphones in May that redirects users to the Uber app.
US ECONOMY & POLITICS
Fed Officials See Smaller Balance Sheet in the Long Run
- Federal Reserve officials pledged to reduce the size of the central bank’s record balance sheet as they continued to map out a strategy to exit from the most aggressive monetary stimulus in its 100-year history.
- Almost six years of Fed bond buying to support a recovery from the worst recession since the Great Depression has flooded the banking system with $2.71 trillion of excess reserves.
- Currently, the Fed has $4.43 trillion balance sheet.
Jobless Claims in U.S. Declined More Than Forecast Last Week
- Jobless claims fell by 14,000 to 298,000 in the week ended Aug. 16.
- The monthly average of claims, a less volatile measure than the weekly figures, rose to 300,750 last week from 296,000.
- The number of people on jobless benefit rolls declined by 49,000 to 2.5 million in the week ended Aug. 9. It’s at the lowest level since June 2007, before the last recession began.
U.S. existing home sales rise at fastest pace in 10 months
- The National Association of Realtors said existing home sales increased 2.4 % to an annual rate of 5.15 million units.
- That was above analysts’ expectations.
- The number of homes on the market for resale rose to 2.37 million in July, the highest level since August 2012 and 5.8 % more than in July of last year.
- The median sale price was $222,900, 4.9 % higher than in July 2013.
U.S. factory activity expands at fastest pace in over four years in Aug: Markit
- Markit’s preliminary or “flash” U.S. Manufacturing Purchasing Managers Index (PMI) rose to 58 in August, which was its highest since April 2010, from 55.8 in July.
- Economists polled by Reuters expected a reading of 55.7.
- The output subindex jumped to 60.2 from last month’s 59.7.
- Markit’s gauge of employment in the manufacturing sector rose to 54.6 from 51.2, and was at its highest since a matching 54.6 in March 2013.
- Markit’s “flash” reading is based on replies from about 85 % of the U.S. manufacturers surveyed.
- A reading above 50 signals expansion in economic activity.
Africa to Add More Renewables in 2014 than Past 14 Years
- Growing demand for electricity and falling costs for wind and solar power mean more renewable.
- Investment in countries including South Africa, Kenya and Ethiopia is estimated at $5.9 billion this year, and may reach $7.7 billion in 2016.
- Average annual investment from 2006 through 2011 was $1 billion.
- About 3.9 gigawatts of renewable energy, mostly wind and solar, is estimated to be installed in South Africa from 2014 through 2016.
- Over that period, Kenya is expected to add 1.4 gigawatts while Ethiopia will install 570 megawatts of primarily geothermal and wind capacity.
EUROPE & WORLD
China Manufacturing Gauge Drops as Growth Pickup Stalls
- HSBC/Markit’s Flash China Manufacturing PMI fell to 50.3 in August from July’s 18-month high of 51.7, badly missing a Reuters forecast of 51.5 but just above the 50 threshold.
Euro zone business growth slows in August, prices fall: PMI
- The composite PMI in Germany – Russia’s biggest trade partner in the European Union which has already seen exports to the country plunge in the first half of the year – fell to 54.9 from 55.7.
- For France, the euro zone’s second largest economy, the Composite PMI rose from 49.4 to the break-even mark at 50.
- Consumer prices in the euro zone rose just 0.4 % on the year in July, the weakest annual rise since October 2009 at the height of the financial crisis.
Euro steadies at 11-month low as dollar reigns
- The euro rose as high as $1.3277, having slid to an 11 1/2-month low of $1.3243 overnight after investors detected a hawkish turn in policy discussions at the Federal Reserve.
TODAY in HISTORY
- The Mona Lisa was stolen from the Louvre museum in France by an Italian waiter, Vicenzo Perruggia (1911)
- Harry S. Truman announced the end of the Lend-Lease Program (1945)
- Hawaii became the 50th state in the United States (1959)
- Latvia declared its independence from the Soviet Union (1991)
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.
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