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Markets News Thursday: Japan's export growth slowed in May; Baltic Dry Index dips for 19th straight session; Apple may sell 1m phones today
By Finfacts Team
Jun 24, 2010 - 9:15:36 AM
Japan's export growth slowed for a third straight month in May.
Overseas demand has slackened as post-crisis restocking is tailing off and growth of the key Chinese economy is
moderating. However compared with the same period last year, the data from
Japan’s finance ministry today still
remains good, with the value of
exports in May rising 32.1% from a
year ago, but moderating from the 40.4% in April. On a
month-on-month basis, exports fell 1.2%, compared with 2.3%
growth a month earlier.
Exports to
China,
Japan’s biggest customer, advanced
25.3% from a year ago, down
41.4% in April. Asian exports,
accounting for half of goods shipments, were down to 34.4% from 45.3% last month. The value of exports to the US
expanded 17.7% in May, compared with a
34.5% growth in April. Exports to
the European Union slowed to 17.4% from a 19.9% rise in April.
Fed becomes a touch more cautious: Davy chief economist Rossa
White comments -- "Recent events in the euro area and a
poor run of data have led to a change in the US Fed's outlook.
Compared with its last policy statement at the end of April, it is
more cautious. It is nothing new that the funds rate is set to stay
on hold at a target of 0-0.25% throughout this year. But
expectations for next year were pared: the market sees little
likelihood of the rate breaching 1% in 2011.
There were two obvious changes in the statement. On April
28th, the Federal Reserve Open Market Committee (FOMC) suggested
that "economic activity has continued to strengthen"; now "the
economic recovery is proceeding". A subtle change, but the FOMC is
not as upbeat as before. Crucially, it buys into the tightening in
financial conditions that has been evident in the US over the last
couple of months. Credit and money market spreads have widened,
equities have softened and the exchange rate has appreciated. So
much so that it remarked yesterday that "financial conditions have
become less supportive of economic growth". Last time around, the
call was: "financial conditions remain supportive of economic
growth".
Risk markets probably need a few data points to beat market
expectations. This week has been dominated by poor housing reports
in the US, suggesting that the malaise is deeper than the natural
drop-off as a result of the expiration of the first-time homebuyer
credit. Today sees durable goods orders and jobless claims. Claims
have struggled to dip consistently below 450,000. A move in that
direction would help bolster sentiment. The Fed will be more worried
by the next meeting (on August 10th) if some confidence has not
returned to financial markets."
The change of leadership in
Australia will not greatly impact markets, believes James Shugg, senior
economist at Westpac. He discusses whether the mining tax will have a "make or
break" impact on the domestic economy with CNBC's Anna Edwards, Chloe Cho &
Yousef Gamal El-Din:
Airlines: Dublin Airport passenger numbers suffer significant fall off;
Goodbody's Eamonn Hughes comments -- "Latest passenger numbers for
Dublin Airport (May 2010) as released by the Dublin Airport Authority, show
significant declines when compared with the same period last year. The total
number of passengers travelling through Dublin Airport was almost 1.6m in May,
down 15% yoy. However when we strip out the effect of the volcanic ash, the
underlying decline was actually down 9% yoy. Passenger volumes on continental
European routes decreased by 12% yoy, while UK traffic contracted by 18% yoy.
Domestic traffic numbers saw a fall off of 49% yoy, with the transatlantic
sector witnessing the smallest decline of 8% yoy. On a more positive note,
traffic to Middle East experienced growth of 14% yoy. Overall, almost 6.7m
passengers have passed through Dublin Airport year to date. This is down 18%
yoy, however when the impact of the volcano is removed, the underlying decline
in passenger traffic is 12% so far this year. The above trends mirror those
released by the CAA earlier this week where traffic between UK-Ireland was down
24% yoy, with only the Dublin-London city route experiencing growth (27% yoy)."
The Finance
Minister of Spain, Elena Salgado, said she is not worried about the €24b of debt the country needs to rollover in July. Guillermo De La Dehesa,
president for the Centre for Economic Policy Research and OBCE, considers the
outlook:
Apple: Bloomberg
reports that Apple will probably sell a record 1 million
iPhones today when the new version debuts and people such as
John Whalen line up outside stores to be the first to buy
it.
“It’s like the olden days of waiting in line for
tickets to a rock concert,” said Whalen, 50, publisher
of
Cider Mill Press in Kennebunkport, Maine. “There
isn’t anything I wait in line for other than the technology
releases from Apple.”
Chief Executive Officer Steve Jobs added video calling,
multitasking and a high-definition video camera to the
iPhone 4 and made it faster and thinner. The device will be
available first in the US, U.K., France, Germany and Japan.
Debating whether
Google's new android will make consumers hang-up on Apple's latest iPhone, with
Noah Kravitz, Phonedog.com and Brian Marshall, Gleacher & Co:
US
The Dow Jones
rose 5 points or 0.05% to 10,298 on Wednesday.
The S&P 500 slid
0.30% and the Nasdaq declined 0.33%.
Asia
The MSCI Asia
Pacific Index rose 0.1% Thursday.
The Nikkei has
inched up 0.05%; China's Shanghai Composite closed up 0.02%; Australia's S&P/ASX 200 Index
dropped 0.14% on the day the country got its first female prime minister, and India's Sensex Index
advanced 0.23%.
BHP Billiton Ltd., the world’s No. 1 mining
company, gained 1.3% in Sydney on hopes that the new government will modify the
proposed 40% tax on mining profits.
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
Tuesday, the index fell 2.08%, or 54 points, to 2,547 points in its 18th
consecutive fall to reach its lowest since Oct. 7th last.
On Wednesday, t he
BDIdipped 32 points or 1.3%
to 2515 points, a 19th consecutive drop and the longest losing streak since
April 2009. The index has fallen 40% in June.
It may suggest a Chinese slowdown
or evidence of previous stockpiling.
