The International Wrap on Stocks & Markets Sat.27.August.2011

The Science of Selling Yourself Short

UK Investors feel the squeeze!

International Wrap August.27.2011
United States
U.S. stocks fell after worse-than-expected initial jobless claims and selling in German futures.
The S&P 500 advanced as much as 1.1 percent initially after Berkshire Hathaway agreed to buy Bank of America cumulative perpetual preferred stock that pays an annual dividend of 6 percent. At the same time, Nasdaq-100 Index futures erased losses that had been driven by Jobs’s resignation as Apple’s chief executive officer.
However, initial jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. Nobel-prize winning economist Joseph Stiglitz said the
chances of the U.S. economy going back into recession are “very high,” speaking at a conference in Lindau, Germany. The city of Harrisburg, Pennsylvania, said it may miss a US$3.3 million bond payment on Sept. 15.
German equity futures to hedge their investments before France, Italy and Spain extended curbs on short selling. The selling of DAX futures lifted volume to a quarter of the daily average within a 30-minute period. That dragged down the index, pulling equities in the U.S. and throughout Europe lower, and drove Treasuries and the dollar higher. After European markets closed, French, Italian and Spanish stockmarket regulators announced the extension of the shortselling bans introduced this month.
Investors are awaiting a speech by Federal Reserve Chairman Ben S. Bernanke in Jackson Hole, Wyoming, tonight for any indications of whether the central bank will embark on further stimulus.
European stocks declined amid speculation that regulators planned to impose further restrictions on equity markets. Futures on the DAX plunged as much as 4.1 percent as a cascade of trades pushed the volume in the contracts to a
quarter of the daily average between 3:45 p.m. and 4:15 p.m. in Frankfurt. A total of 50,000 contracts exchanged hands in the 30- minute period, according to Bloomberg data. The average volume in the past 30 days was 207,000,
Bloomberg data show. Authorities in France, Spain and Italy all had to decide
whether to extend short-selling bans that would have expired over the next 48 hours. After European markets closed, French, Italian and Spanish stock-market regulators extended bans on short selling introduced this month.
Retail stocks fell 2.3 percent for one of the biggest declines among the 19 industry groups in the Stoxx 600 as Ahold plunged 6.2 percent to 7.83 euros.
Asian stocks rose earlier on strong U.S. durable-goods orders and improving U.S. home prices. Cnooc Ltd. (883), China’s biggest offshore oil explorer,
advanced 3 percent to HK$14.64. The company reported first-half net income increased 51 percent from a year earlier to a record 39.3 billion yuan ($6 billion) as crude prices rose and it increased output to meet demand in the fastestgrowing major economy. Acer Inc. (2353), the world’s fourth-largest computer maker, slumped 7 percent to NT$29.35, heading for its lowest close
since June 2003. The company reported a second-quarter loss that was wider than analyst estimates and told investors that a full- year profit will be “impossible” amid a slowing computer market and a weak global economy.

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  1. dave says:

    dan, have u now dropped mta? U never blog anymore on them? I still think a12 will produce. If u have dumped mta me and many others subscribe to your chargeable annual service. U need to restore faith in mta bud