In the Financial world this week, May 25

Financial information for the past week:

 
·          Most major stock markets finished lower again this week on concerns for sovereign debt problems in Europe and the possibility of a default by Greece on its debt repayments
·          The situation was made worse by the resignation of the Head of the International Monetary Fund following his arrest on sex related charges in New York
·          The World Bank reports that emerging economies will grow at an annual rate of 4.7 percent between now and 2025 while advanced economies will grow by 2.3 percent per year
·          Brazil, China, India, Indonesia, Russia and South Korea are expected to account for more than half of global growth over  the next 14 years
·          The Bank forecasts that the US dollar will lose its global position by 2025 as the euro and the Chinese renminbi become established in a new world wide multi currency monetary system
 

  • In the US

·          Claims for first time unemployment fell by 29,000 to 409,000 last week, but are still above the important 400,000 level; the four week moving average increased to 439,000, its highest level since November 2010
·          The Federal Reserve says manufacturing in April fell 0.4 percent from the previous month partly because of a fall in vehicle production as a result of a shortage of parts from Japan
·          Total industrial production is 5 percent up from a year ago boosted by the mining and utility industries
·          Its general Business Conditions Index fell from 21.7 in April to 11.9 in May as the recovery in manufacturing loses momentum, but it is still the economy’s best performing sector
·          The majority of investors now expect the Federal Reserve to start raising interest rates next year at the earliest
·          The number of new homes built in April was 10.6 percent less than the previous month as the housing market continues to struggle
·          Chrysler plans to repay US and Canadian government loans this week, clearing the way for Fiat to increase its ownership
·          GE plans to buy back shares totalling about US$ 12 billion over the next few years; many major companies are planning similar share repurchase schemes

  • The Dow Jones Industrial Index closed lower by 0.7 percent at 12,512; the Standard & Poor’s 500 Index closed down 0.3 percent at 1,333 and the NASDAQ closed down 0.9 percent at 2,803

 

  • In Europe

·          Annual inflation rose from 2.7 percent in March to 2.8 percent in April, the highest level since October 2008 while the trade surplus rose from Euros 2.7 billion to Euros 2.8 billion
·          The Dow Jones Euro Stoxx 600 Index finished down 0.5 percent at 279
·          The euro has been under pressure this week because of uncertainty over Greece’s sovereign debt problems; it closed at US$ 1.4161
·          In Germany, producer price inflation has increased from 6.2 percent to 6.4 percent and the Indicator of Economic Sentiment fell from 7.6 in April to 3.1 in May, significantly below the long term average of 26.5
·          The DAX closed lower by 1.9 percent at 7,266
·          In France, Finance Minister Christine Lagarde is being put forward as a candidate for the position of head of the International Monetary Fund and is gaining support at least within Europe
·          The CAC closed at 3,990, down 0.7 percent
·          The UK Retail Prices Index measure of inflation has fallen from 5.3 percent in March to 5.2 percent though the Consumer Prices Index rose from 4 percent to 4.5 percent in April, its highest level since October 2008
·          Unemployment claims increased by 12,400 in April, the most since January 2010 as government spending cuts and accelerating inflation hurt business confidence
·          The FTSE closed 0.4 percent higher at 5,948 and the Sterling pound strengthened by 0.2 percent to US$ 1.6229
·          Greece has requested an additional US$ 155 billion rescue from the European Union and the International Monetary Fund as its 10 year Bond interest rose to 16.7 percent
 

  • In Asia

·          The MSCI Asia Pacific Index closed lower this week by 1.5 percent at 134
·          The Hong Kong Monetary Authority may ask Banks to increase reserves to limit credit growth and prevent loan defaults, after borrowing surged and mortgage rates increased
·          The Composite Shanghai Index closed at 3,121, down 0.2 percent while the Hang Seng was up 0.1 percent at 23,157
·          In Japan, Gross Domestic Product fell by 0.9 percent in the first three months of the year in part because of the earthquake and the country has fallen back into recession
·          The Bank of Japan has said that the country currently does not need more economic stimulus
·          The Nikkei finished the week at 9,607, down 0.4 percent and there are 81.70 yen to the dollar
·          India’s headline inflation fell to 8.6 percent in April from 9.0 percent in March as food prices show signs of moderating but increases in fuel prices this week could add to inflation in the short term and the Reserve Bank may move again to increase its rates
·          The Sensex closed lower by 1.9 percent at 18,287
·          In Pakistan the Central Bank has kept its interest rate at 14 percent, one of the highest rates in the world, as increases as inflation have eased and next month’s Budget may include tighter fiscal policy to contain prices pressures
 

  • In Mexico

·          Gross Domestic Product increased by 0.5 percent in Quarter 1 from Quarter 4, less than half the previous rate because of a weaker forecast for exports to the United States
·          Analysts do not believe this will endanger their anticipated Gross Domestic Product growth of over 4 percent for 2011 but it will help the Central Bank keep interest rates low to support the economy
·          Retail store sales, including new stores, rose 17.7 percent in April from a year earlier, the largest increase in five years
·          The Bolsa fell on Tuesday to 34,819, a seven month low on weak economic news from the US but recovered to close 0.7 percent higher in the week at 35,298
·          The peso hit 11.62 to the dollar this week as the low US interest rate has led to significant levels of borrowing, much of it to speculate on oil, metals and other commodities. The peso closed at 11.65 to the dollar
 

  • In Latin America

·          The Brazilian Central Bank’s economic activity index increased 0.5 percent in March from February despite moves to reduce growth because of inflationary pressures which the Bank says will peak in August
·          The Bovespa closed at 62,596 down 1.0 percent in the week
·          Argentina has reported a budget surplus of US$ 455 million for April, up 4.8 percent from a year earlier thanks to economic growth of 9 percent per year. The surplus is due to income from social security contributions, income tax, consumer taxes and exports
·          The Merval closed at 3,383 up 0.1 percent
·          Colombia’s trade surplus jumped in March to US$ 481 million, close to five times more than the surplus reported in the same month last year, confirmation of the country’s economic strength
·          The BVC stock market closed at 41.10, down 0.2 percent
 

  • In the commodities markets

·          Crude oil closed higher by 0.5 percent at US$ 100.01 per barrel. It had traded as low as US$ 95.75 a barrel on Wednesday when OPEC reported slowing growth in global oil demand
·          Gold closed higher in the week by 1.0 percent at US$ 1,509 per ounce having hit US$ 1,515 on Friday. China overtook India in the first Quarter of this year to become the largest buyer of gold as rising inflation drives a surge in precious metals investment
·          Silver closed at US$ 35.09 per ounce, up 0.2 percent
·          Copper prices rose this week by 3.5 percent to close at US$ 4.12 per pound
·          Corn is up 11.3 percent at US$ 7.59 per bushel
·          Coffee futures are down by another 3.7 percent at US$ 2.59 per pound
·          Sugar prices finished the week at 22.14 cents per pound, up another 3.2 percent
· Cocoa closed at US$ 2,902 per tonne, down 3.3 percent
 

Information provided to Coldwell Banker Riveras and Coldwell Banker Mexico by deVere Partners & Investments

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