On Monday, the first trading day of 2011, global stocks rallied in response to strong December manufacturing data and the rally continued Tuesday - - see links to manufacturing stories below.
Copper hit a fresh all-time high, while oil in New York surged to as much as $92.58 a barrel in intra-day trading - - its highest level since October 2008.
Goldman Sachs: The US investment bank on Monday issued 2011 upbeat outlooks for the global and US economies.
GS said the world economy can
expect another strong year of growth in 2011,
according to its annual economic forecast. The
United States can expect substantial acceleration in
real GDP growth over the next two years to a 4% pace
An optimistic view on the economy, with Jan Hatzius, Goldman Sachs chief US economist:
The New York Times reported on Monday that Goldman Sachs had reached out to its wealthy private clients, offering them a chance to invest in Facebook, the hot social networking giant that is considering a possible public offering in 2012.
The NYT said on Sunday night, a number of Goldman clients received an email from their Goldman broker, offering them the opportunity to invest in an unnamed “private company that is considering a transaction to raise additional capital.” Another person briefed on the deal said that Goldman clients would have to pony up a minimum of $2m to invest and would be prohibited from selling their shares until 2013.
A Goldman spokesman declined to comment.
Facebook has raised $500m from Goldman Sachs and a Russian investor in a transaction that values the company at $50bn, according to people involved in the transaction. As part of its deal with Facebook, Goldman is expected to raise as much as $1.5bn from investors for Facebook.
New York Times Deal Book blog analysis: Facebook Deal Offers Freedom From Scrutiny
Goldman's high net worth clients to get access to Facebook shares, with Andrew Ross Sorkin, The New York Times:
Irish Equities: Opening Call 2011;
Goodbody's Eamonn Hughes comments
-- "We published our 2011 Investment Strategy and Key Stock Picks note in mid
December, but for those of you who missed our note and as we open our account in
the New Year, here are the themes and key picks again.
Our key picks in the year ahead, on the basis of market capitalisation are; Ryanair, Dragon Oil, Travis Perkins, Aryzta, DCC, Paddy Power and FBD.Ryanair: A 1.5x rise in ROAs to FY13 due to tighter fleet growth, the use of more mainstream airports in the mix and operational trends. Dragon Oil: Undemanding value (EV/boe of $4.30), production growth, and the potential for corporate activity continue to attract. Travis Perkins: Medium-term growth prospects coupled with the self-help of the BSS deal, underpin our mid-cycle valuation of 1390p.
ARYZTA: It has strong growth potential, proven management capability,
combined with a substantial valuation discount to peers. DCC: Valuation is
ignoring the quality of profits and the scope to continue growing in fragmented
markets. Paddy Power: It is in an earnings upgrade cycle, driven by significant
competitive advantage in Australia, which is not reflected in the current share
price. FBD: A strong balance sheet where returns are set to outweigh
write-downs, mark an inflection point in NAV. Also, its historically low
dividend payout ratio offers excellent growth potential." Countries in the Eurozone will have no choice but to cooperate to overcome the debt crisis, Jean-Paul Pierret, strategist at Dexia Securities France, said. "We know now that there is a bill to foot… we know the amount but what we don't know is how each country will be able to pay it," Pierret added:
Countries in the Eurozone will have no choice but to cooperate to overcome the debt crisis, Jean-Paul Pierret, strategist at Dexia Securities France, said. "We know now that there is a bill to foot… we know the amount but what we don't know is how each country will be able to pay it," Pierret added:
This issue is not likely to go away any time soon, but there has also been more encouraging news in the form of improving economic data on both sides of the Atlantic. Sustained international growth is of course vital to Ireland experiencing an export-led recovery. In the US, double-dip concerns started to surface in the summer of 2010, while in Europe, it was thought that Greece’s woes in May would threaten the recovery in the region as a whole.
As it turned out, both these fears were misplaced, with an impressive turnaround in the US data seen in the final few months of the year, while growth continued at an impressive, albeit uneven pace in the euro-area, powered by Germany. The opening economic data of 2011, released yesterday, provided further evidence of this trend. The ISM index of manufacturing activity rose to 57.0 in December, up from 56.6, and is now at a seven-month high.
Two of the most important sub indices - new orders (60.9) and employment (55.7) – are well in expansionary territory. In the euro-area, the manufacturing PMI rose to a similar 57.1 in December, up from 55.3 in November, putting it at an eight-month high. Ireland has numerous challenges to face in the year ahead, issues that I am sure we will be returning to, but it is, nonetheless, encouraging that one part of the jigsaw – growth in international demand – remains in place."
Manufacturing continues to expand: Davy economist, Conall Mac Coille, commented - -"Stock markets rose by more than 1% yesterday following news that the manufacturing sector continued to expand in December in both the US and euro area. In the US, the Institute of Supply management (ISM) manufacturing index was 57 in December, as expected by the market and the highest reading in seven months. The euro zone purchasing managers index (PMI) was slightly stronger than expected at 57.1. Yesterday's releases will be followed today by the release of the UK PMI for manufacturing which is also expected to post a robust reading at 58, well above the 50 no-change level.
Taken together, these reports indicate that manufacturing output gathered momentum through the fourth quarter. Within the US ISM release, the new orders component rose sharply from 56.6 in November to 60.9 to end the year. This suggests that the momentum in manufacturing output in Q4 is likely to continue into Q1.
That said, the employment component of the ISM fell back slightly to 55.7, which although above the 50 no-change level, is likely to deliver only modest growth in factory payrolls. So for now the strength of manufacturing output does not appear to have translated into employment growth sufficiently strong to reduce the high US unemployment rate. And for that reason markets may focus on this week's initial and continuing jobless claims numbers to see if the momentum that the US economy built up towards the end of 2010 is beginning to deliver improving labour market conditions."
On Monday in
New York, the Dow Jones Industrial Average gained 93.24 points, or 0.8%, to
close at 11670.75, a 28-month high. The Standard & Poor's 500-stock index rose
14.23 points, or 1.1%, to end at 1271.87.
The MSCI Asia Pacific Index climbed 0.7% Tuesday to the highest since June 2008.
The Nikkei rose 1.23%; China's Shanghai Composite climbed 1.76%; Australia's S&P/ASX 200 Index dipped 0.23% and India's Sensex added 0.25%.
In Europe, the Dow Jones Stoxx 600 has risen 0.63% in early trading Tuesday.
The ISEQ has added 0.90% in Dublin.
CRH is up 0.65%; Elan has added 6.63%; Aer Lingus has risen 1.85% and BoI has gained 6.67%.
The euro is trading at $1.3334 and at £0.8624.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the
35-session losing streak; In December, the BDI closed the year with a 14th
session drop of 22 points, or 1.2%, to 1,773 points, according to the Baltic
Exchange in London because of a surplus of ships competing for cargo. The
exchange was closed on Monday this week.
The spot price of an oz of gold is trading in New York at $1,415.30, up $0.70 from Monday's close.
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