US stocks rose in New York Wednesday in advance of the Thanksgiving Day holiday week-end and despite grim economic data.
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The Dow Jones Industrial Average, which has risen more than 12% over the last three sessions, rose 37 points or 0.43%, at 8,517. The Nasdaq Composite Index rose 2.45% and the S&P 500 gained 0.7%.
US consumer spending fell 1% in October, the lowest since 2001; saving as a percentage of disposable income rose to 2.4% in October and durable goods orders fell; the four-week new jobless claims average rose to the highest since 1983; sales of new homes were at the lowest in October since 1991- - see report links in box below.
The European Commission today presented what it termed a comprehensive plan to drive Europe's recovery from the current economic crisis.
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The Commission said the Recovery Plan is based on two mutually reinforcing main elements. Firstly, short-term measures to boost demand, save jobs and help restore confidence. Secondly, "smart investment" to yield higher growth and sustainable prosperity in the longer-term.
The Plan calls for a timely, targeted and temporaryfiscal stimulus of around €200 billion or 1.5% of EU GDP, within both national budgets (around €170 billion, 1.2% of GDP) and EU and European Investment Bank budgets (around €30 billion, 0.3% of GDP). Ireland will not take part in the plan.
European Central Bank president Jean-Claude Trichet said today that he was ready to cut interest rates, but refused to comment further.
"We are ready to cut interest rates," Trichet said in Cairo, declining to say when or by how many percentage points.
The ECB lowered its benchmark rate by 0.5% in November to 3.25% and another reduction is expected next week when the ECB Governing Council will meet.
The UK Office for National Statistics said today that in the third quarter of 2008, UK gross domestic product (GDP) in volume terms fell by 0.5% compared with the previous quarter (unrevised from the preliminary estimate). The level of GDP is 0.3%t higher than the same quarter of 2007.
Between quarter two and three of 2008:
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The volume of output in the production industries fell by 1.1%, within which manufacturing fell by 1.3%.
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Construction output growth is estimated to have fallen by 0.7%.
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Output of the service industries decreased by 0.4% .
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In real terms, household expenditure fell by 0.2% and gross fixed capital formation fell by 2.4%.
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GDP at current market prices rose by 0.1%.
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Compensation of employees rose by 0.8%; the gross operating surplus of corporations increased by 0.4%.
In Europe Wednesday, the Dow Jones Stoxx 600 Index rose 0.1%.
11 of the 18 Western European markets fell.
The FTSE was slightly up; the CAC 40 fell1.24% in Paris; Germany's Dax gained 0.35%.
In Dublin, the ISEQ Index gained 0.3%.
BoI gained 13% following an announcement that it has raised €2 billion through the issuance of a public benchmark-sized September 2010 year Government Guaranteed Euro senior unsecured fixed rate bond. This has been issued from Bank of Ireland’s Euro Medium Term Note programme. The bank says this transaction demonstrates Bank of Ireland’s access to term wholesale funding markets throughout the current market turmoil.
The Irish Government banking guarantee, was clearly a key factor.
Boi said the issue received significant oversubscription with a final order book of close to €3.5 billion within 3 hours. It was a highly diversified orderbook across geography and investor type. Investors from 21 countries across Europe and the Middle East participated in the transaction; including 24% from Ireland, 17% from the UK, France 16%, 10% from Germany and Austria, 10% from Benelux, Eastern Europe 8% and 5% placed into Scandinavia and the remaining 10% placed into other institutional buyers. The issue was diversified across investor type with 47% issued to Banks/Bank Treasuries, 26% to Fund Manager, 11% to Central Banks, 6% to Insurance companies with the remaining 10% issued across other institutional buyers. The issue was priced at 65 basis points over mid swaps and will carry Aaa/AAA ratings from Moodys and Standard & Poors, as the note has been issued within the scope of the Irish Government Guarantee.
BoI said that at the its recent interim results announcement for the half year to 30th September 2008, senior management highlighted strong growth in customer deposits of 19% year on year. Bank of Ireland continues to reduce its reliance on wholesale funding, reducing from €85 billion to €78 billion in the period from September 2007 to September 2008. Bank of Ireland issued €5.7 billion in term funding with a maturity greater than one year in 89 individual transactions during the six-month period to 30 September 2008. 79% of the Group’s loan book was funded through customer deposits and wholesale term funding with a maturity greater than one year, as at 30th September 2008. Bank of Ireland has a strong contingent liquidity position and has an eligible collateral pool of €47 billion at 30th September 2008.
Il&P rose on 12.6%.
Europe -benchmarks
Oil
On the New York Mercantile Exchange, oil for January delivery rose to $52.80, up $2.03 from Tuesday's close. In London, Brent crude is trading at $52.66 a barrel up $2.31.
Currencies
The euro is trading at $1.2837 and £0.8431.
The dollar traded at a record low $1.6038 per euro on July 15th.
For live currency updates, check the right-hand column of the Finfacts home page
