Moody’s Warns of Debt Downgrades for UK and France

Asian markets traded mixed on Tuesday. The Nikkei advanced .6% to 9052, as the Bank of Japan announced another $130 billion asset buying plan. The news weakened the yen, which pushed up exporters. Australian shares dropped 1%, weighed down by miners, and the Kospi eased .2%, as steel makers tumbled more than 3%. The Hang Seng ticked up .2% to 20918, while the Shanghai Composite slipped .3% to 2345.

Moody’s downgraded the debt of 6 European countries, and warned it may downgrade the debt of the UK, Austria, and France, all of which have Aaa ratings.

European shares traded slightly lower, unfazed by the rating move. The CAC40 slipped .3%, the DAX declined .2%, and the FTSE eased .1%.

US stocks closed little changed as the Dow rose 4 points to 12878, the Nasdaq traded flat, and the S&P 500 edged down .1%.

Currencies

The Yen tumbled 1.2% to 78.51 falling to a 3-month low, while the Dollar traded modestly higher against other currencies. The Pound and Euro both slid .4%, and the Swiss Franc ticked down .3% to 1.0865. The Australian Dollar lost .3% to 1.0683, and the Canadian Dollar declined .2% to .9990.

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Dollar Climbs 1.2% against the Yen as BOJ Announces More Stimulus

Economic Outlook

US retail sales data was disappointing, rising just .4% last month, as opposed to a forecast of .8%. On the bright side, core retail sales rose .7%, slightly more than the .6% expected. Business inventories and import prices were both inline with estimates.

Wednesday s extremely busy economic calendar will include the Empire state manufacturing survey, industrial production, housing market index, weekly oil inventories, FOMC minutes, credit card default rates, and weekly mortgage applications.

Asian Stocks Rally, US Slides

Equities

Asian markets jumped on Wednesday, as angst over Greece’s debt troubles waned. The Nikkei soared 2.3% to 9260, its highest level in August. In Korea,the Kospi rallied 1.1% to 2052, a 6-month high, as Samsung Electronics and Hynix Memory both surged more than 5%. Hong Kong’s Hang Seng rallied 2.1%, and the Shanghai Composite climbed .9%, encouraged by comments that China will continue to purchase European sovereign debt.



Nikkei Climbs 2.3% to 6-month High

European shares traded mixed. The CAC40 and DAX advanced .4%, while the FTSE slipped .1%. Heineken shares soared 3.7% and BNP Paribas jumped 4.1% after both companies exceeded analyst profit forecasts.

US stocks dropped, as investors shrugged off upbeat economic data. The Dow skidded 97 points to 12781, the Nasdaq dropped .6%, and the S&P 500 fell .5%. The minutes from the last FOMC meeting revealed that some Fed officials believe another round of asset buying will be needed to prop up the economy, spooking investors.

Currencies

The Euro fell .5% to 1.3067, and the Swiss Franc declined .3% to 1.0834. The Pound, Australian Dollar, and Canadian Dollar all closed within .1% of their previous close. The Yen ticked up .1% to 78.35 after Tuesday’s steep drop.

Economic Outlook

The Empire state manufacturing survey jumped to 19.5, blowing past forecasts of 14.7, and a sharp advance from last month’s 13.5 reading. The NAHB housing market index rose to 29, its highest level since 2007, another sign that the real estate market is turning around. Industrial production came in flat, below estimates for a .7% gain.

US Stocks Rally on Upbeat Economic Data

Equities

Asian markets skidded on Thursday, as another delay in Greece’s bailout package unnerved investors. The Kospi slumped 1.4% to 1997 as shipbuilders dropped, and the ASX 200 shed 1.7%, pulled down by disappointing earnings from Westpac, a major bank. The Hang Seng and Shanghai Composite both fell .4%, and the Nikkei edged down .2%.

European markets closed little changed, as an afternoon rally helped erase earlier losses. The FTSE and DAX declined .1%, while the CAC40 gained .1%. Greece reached an agreement with lenders on additional budget cuts for 325 million euro, bringing the resolution of the situation a step closer.

US stocks rallied thanks to upbeat economic data, led by tech shares. The Nasdaq jumped 1.5%, the Dow climbed 123 points to 12904, and the S&P 500 advanced 1.1% to 1358.



Dow Rallies 123 Points

GM shares soared 9% after reporting record profits, even though the figure fell shy of expectations. Groupon shares jumped 4.1% after announcing plans for a new VIP subscription service.

Currencies

The US Dollar skidded on Thursday, as market participants shifted in to “risk on” mode. The Pound climbed .7% to 1.5802, the while the Euro, Swiss Franc, and Australian Dollar all advanced .6%. The Canadian Dollar rose .3% to .9970. Bucking the uptrend, the Yen dropped .7% to 78.91, extending its recent declines.

Economic Outlook

Thursday’s busy economic calendar was full of positive economic news. Weekly jobless claims unexpectedly fell by 13K to 348K. Analysts had expected a slight increase to 364K from last week’s 361K. Housing starts also surprised analysts, climbing to 700K, from last month’s annualized rate of 690K. Building permits rose to 680K, inline with estimates, and PPI jumped to .4% from last month’s .1% increase. Finally the Philly Fed manufacturing index blew past estimates, jumping to 10.2 from last month’s 7.3 reading.

Stocks Trade Higher on Greek Hopes, Economic Data

Equities

Thursday’s rally on Wall Street gave Asian markets a boost on Friday. The Nikkei jumped 1.6% to 9384, the ASX 200 added .3%, and the Kospi gained 1.3%, as Samsung Electronics advanced 3.6% to a record closing high. In greater China, the Hang Seng rallied 1% to 21692, while the Shanghai Composite closed flat.

Expectations for an imminent Greek bailout lifted European markets. The DAX and CAC40 climbed 1.4%, and the FTSE edged up .3%. Shares in Lafarge, the world’s largest cement maker, soared 8.3% after the company announced it would cut costs to offset losses tied to Greece.

US stocks traded mixed in light trading, as traders prepared for the long weekend. The Dow added 46 points to 12950, the S&P 500 rose .2%, and the Nasdaq declined .3%.



Dow Rapidly Approaching 13000 Level

In the biotech world, Vivus shares surged 7.3% o hopes the FDA would approve its diet pill, while Gilead Sciences tumbled 14.3% after announcing disappointing news concerning its experimental Hepatitis C drug.

Currencies

The Yen continued to drop, shedding .8% to 79.57. The Pound rose .2% to 1.5831, and the Euro inched up .1% to 1.3148, while the Swiss Franc and Canadian Dollar traded flat. The Australian Dollar declined .4% to 1.0712.

Economic Outlook

Leading indicators rose to a 3.5 year high of 94.1, up .4%, posting its 4th straight monthly gain. CPI data showed prices rose .2%, slightly less than expected.

China Eases Reserve Requirements, Stocks Rally

Equities

China announced a new stimulus plan to cut bank reserve requirements, pushing up most markets in the region, although much of the initial gains did not last. The Nikkei advanced 1.1% to 9427, and the ASX 200 rallied 1.4%, as miners jumped, encouraged by the Chinese announcement. China’s Shanghai Composite rose as much as 1.3%, but closed up a mere .2%, and the Hang Seng declined .3%, as energy shares sold off. Korea’s Kospi inched up .1%, sliding back from a 6-month high.

European markets rallied, with the DAX leading the advance, climbing 1.5% to 6948. The CAC40 gained 1% to 3473, and the FTSE rose .7% to 5945. JPMorgan said the DAX is its preferred European index, contributing to outsized gains for the German benchmark.



DAX Climbs 1.5% Thanks to Nod by JPMorgan

US stock and bond markets were closed for Presidents Day.

Currencies

The Dollar declined, as expectations for a successful Greek bailout encouraged risk taking. The Euro advanced .7% to 1.3241, and the Swiss Franc push up .8% to 1.0967. The Australian Dollar rose .4% to 1.0752, and the Canadian Dollar gained .3%% to .9938. The Yen closed flat after touching a 6-month low of 79.70.

Economic Outlook

Tuesday’s sole report will be the Chicago Fed’s national activity index.