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U.S.
stocks rose, after the Standard & Poor’s 500 Index snapped an eight-day rally yesterday, as Federal Reserve Chairman
Ben S. Bernanke said the pace of bond purchases was not on a preset course.
The S& P 500 rose 0.2 percent to 1,680.36 at 9:30 a.m. in New York.
“The market is responding to the fact that the Fed is not going to create an arbitrary definition of when and how the QE program is going to end,” Stephen Wood, the New York-based chief market strategist who helps oversee about $174 billion at Russell Investments, said by phone. “The Fed is going to respond to the data and they want to maintain flexibility in their policies.”
Bernanke said the central bank’s asset purchases “are by no means on a preset course” and could be reduced more quickly or expanded as economic conditions warrant, tempering speculation the Fed was planning to taper its stimulus.
“If the outlook for employment were to become relatively less favorable, if inflation did not appear to be moving back toward 2 percent, or if financial conditions -- which have tightened recently -- were judged to be insufficiently accommodative to allow us to attain our mandated objectives, the current pace of purchases could be maintained for longer,” Bernanke said today in prepared testimony before the House Financial Services Committee.
The S& P 500 snapped an eight-day winning streak yesterday as Fed Bank of Kansas City President Esther George, who has voted against the central bank’s bond-buying program this year, told Fox Business Network that cuts to quantitative easing are appropriate as the U.S. economy gathers momentum.
Market Rally
Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping as much as 149 percent from its March 2009 low. Fed policy makers have been debating the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.
Data today showed U.S. housing starts unexpectedly fell in June to the lowest level in almost a year. Work began on 836,000 houses at an annualized rate last month, the least since August 2012 and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The reading was weaker than projected by any economist in a Bloomberg survey.
Some 21 companies, including EBay Inc. and International Business Machines Corp., are due to release results today. Per-share earnings topped estimates at about 71 percent of S& P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.
Housing Starts in U.S. Unexpectedly Fall to Lowest in a Year
Housing Starts in U.S. Unexpectedly Fall to Lowest in a Year
Starts (NHSPSTOT) of new U.S. homes unexpectedly fell in June to the lowest level in almost a year, indicating a pause in the industry’s progress.
Work began on 836,000 houses at an annualized rate last month, the least since August 2012 and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The reading was weaker than projected by any economist in a Bloomberg survey, and permits for future projects also declined.
The decline was led by a slump in multifamily projects, which can be volatile, and the level of permits remained higher than starts, which may point to a rebound this month. A limited supply of land is also a hurdle for housing, even as near record-low mortgage rates and improving job opportunities draw buyers.
“As construction ramps up, we’re bound to have some hiccups along the way,” said Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. Having called for 915,000 starts, Lebas had the lowest estimate in the Bloomberg Survey. “ I don’t think this one data point is immediately concerning. The housing markets are going to be a driver of economic growth.”
Federal Reserve Chairman Ben S. Bernanke today said the central bank’s $85 billion in month asset purchases geared toward spurring growth “are by no means on a preset course” and could be reduced or expanded as economic conditions warrant.
Bernanke’s View
The 59-year-old Fed chairman also said in prepared testimony before the House Financial Services Committee that if a jump in interest rates were deemed large enough to hurt the recovery, then “the current pace of purchases could be maintained for longer.”
Stock-index futures climbed after Bernanke’s comments. The contract on the Standard & Poor’s 500 Index expiring in September rose 0.3 percent to 1,676.5 at 9:02 a.m. in New York. They yield on the benchmark 10-year Treasury note dropped to 2.49 percent from 2.53 percent late yesterday.
The median estimate of 83 economists surveyed by Bloomberg was for a 960,000 rate. Forecasts ranged from a 915,000 pace to a 1.03 million rate after an initially reported 914,000 annualized rate in May.
Building permits decreased 7.5 percent to a 911,000 annualized rate in June, compared to a median forecast of 1 million.
Single Family
Construction of single-family houses fell 0.8 percent to a 591,000 rate, the fewest since November, from 596,000 the prior month.
Work on multifamily projects such as apartment buildings slumped 26.2 percent to an annualized rate of 245,000, the lest since August 2012.
All four regions had a decrease in starts last month, led by a 12.1 percent drop in the Northeast and a 12 percent decline in the South.
Unusually wet weather may have played a role. Last month marked the 13th wettest June on record for the contiguous U.S., according to the National Oceanic and Atmospheric Administration.
The Ohio Valley and East Coast were much wetter than normal. Eighteen states -- from Georgia to Maine, registered rain totals that ranked among their 10 wettest. New Jersey and Delaware had their wettest Junes on record. At the same time, the West had below-average precipitation.
Gaining Confidence
The drop in activity last month came even as builders gained confidence. The National Association of Home Builders/Wells Fargo sentiment index climbed to 57 in July, the highest in seven years, from a revised 51 a month earlier, the Washington-based group reported yesterday. The gauge has climbed 13 points in the latest two months, the biggest back-to-back advance since January-February 1992.
AV Homes Inc (AVHI). is seeing “increased demand driven by recovery in the household formation, employment, and record affordability,” chief executive officer Roger A. Cregg said in a June 19 teleconference.
“We are seeing a more robust recovery in the primary residential segment of the housing market,” he said.
The market remains shy of the heights reached at the peak of the housing boom. Builders began work on 780,000 homes in 2012, a 28 percent increase from the prior year and the third-straight annual advance. Starts peaked at 2.1 million in 2005, which was a three-decade high.
Borrowing costs remain attractive even with the recent jump. The average rate for a 30-year fixed mortgage climbed to 4.51 percent, the highest level in two years, in the second week of July, McLean, Virginia-based Freddie Mac (NMCMFUS) said in a statement. The rate reached a record low of 3.31 percent in November.
The recent increase may also spur people to enter the market to lock in rates while they’re still low.
To contact the reporter on this story: Jeanna Smialek in Washington lwoellert@bloomberg.net.
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net.
US Fed’s Bernanke reiterates rates to stay low after end of QE3
Analysis from Capital Economics
US Fed Chairman Ben Bernanke used the text published ahead of his semi-annual testimony at the House at 10.00 EST today to emphasise that tapering QE3 won’t be immediately followed by hikes in interest rates. This is not a new development - it was also stressed in the press conference immediately after June’s policy meeting and in the minutes of that meeting. But by saying it again, Bernanke is ensuring that the message is being received loud and clear. Indeed, he stated that the Fed intends to “maintain a high degree of monetary accommodation for a considerable time” after QE3 ends.
Given that he reiterated the Fed expects to slow the pace of its asset purchases “later this year” (most likely September) and end them completely “around midyear” next year (probably June), we don’t expect rates will be raised until the first half of 2015. What’s more, policy will remain loose while “the economic recovery strengthens” and, once they begin, “increases in the target for the federal funds rate...are likely to be gradual”. We don’t think this forward guidance could be much clearer. It’s interesting that Bernanke did not draw attention to the contrast between the stronger news on employment and weaker news on GDP growth, which could be important as tapering is “by no means on a preset course”. But as the Fed still expects growth to accelerate, this is unlikely to alter the tapering timetable much. Finally, it will be interesting to see if the Q& A during the actual testimony includes any more tapering tidbits.
That's COO Ong's job now! Must ask her!!! My job is to shake leg!!!!
LoveToInvest ( Date: 17-Jul-2013 20:11) Posted:
Can charm green Huat kueh to Ben?
Peter_Pan ( Date: 17-Jul-2013 18:59) Posted:
50/50
English "charmed" is good.
Hokkien "charmed" is bad |
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Can charm green Huat kueh to Ben?
Peter_Pan ( Date: 17-Jul-2013 18:59) Posted:
50/50
English "charmed" is good.
Hokkien "charmed" is bad.
jomini ( Date: 17-Jul-2013 16:40) Posted:
| boss...i'm serious. u got inside info |
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50/50
English "charmed" is good.
Hokkien "charmed" is bad.
jomini ( Date: 17-Jul-2013 16:40) Posted:
boss...i'm serious. u got inside info?
jomini ( Date: 17-Jul-2013 16:09) Posted:
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y Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets climbed on Wednesday, ahead of U.S. Federal Reserve Chairman Ben Bernanke’s semiannual testimony, with investors looking for hints on when the central bank will start tapering its bond purchases.
The Stoxx Europe 600 index XX:SXXP -0.17% added 0.2% to 295.90, after losing 0.7% on Tuesday.
The next 24: Watching for Bernanke
Yahoo and CSX are active after hours on their earnings reports. Overseas investors await Ben Bernanke's appearance before U.S. lawmakers. Earnings season remains in full swing with BofA and Abbott reporting.
Shares of BHP Billiton PLC UK:BLT +1.77% BHP +2.83% AU:BHP +2.27% picked up 2% after the mining giant said iron-ore production hit a record high in its past financial year.
Semiconductor-equipment maker ASML Holding NV ASML +0.94% rose 1% afterraising its full-year sales outlook.
Shares of French cosmetics group L’Oréal SA FR:OR -3.46% gave up 2.8% after the firm reported a slowdown in market growth in the first half of the year.
More broadly, Fed head Ben Bernankewas in the spotlight ahead testifying before lawmakers at 3 p.m., or 10 a.m. Eastern Time. In a new approach to these appearances, his prepared remarks will come out at 8:30 a.m. Eastern.
Since the chairman in late May started talking about the prospect of tapering the central bank’s asset purchases, markets have been closely scrutinizing hints of when a reduction may set in.
Getty Images“Our guess is that he will try to pull off the trick of continuing to prepare the groundwork for tapering, but try to give bond markets something to help them fight off the pressure of higher yields,” analysts at Deutsche Bank said in a note.
U.S. stock futures pointed to a mixed open on Wall Street.
Back in Europe, the U.K.’s FTSE 100 index UK:UKX -0.23% posted one of the biggest country-specific gains, buoyed by miners after BHP’s production update. The index traded 0.5% higher at 6,590.69.
Shares of Rio Tinto PLC UK:RIO +0.85% RIO +3.93% AU:RIO +1.13% climbed 1.7% and Anglo American PLC UK:AAL +1.21% added 0.5%.
Shares of Unilever PLC UK:ULVR -2.39% UL -0.49% lost 1.4% in London after Credit Suisse cut the consumer-goods firm to underperform from neutral.
France’s CAC 40 index FR:PX1 -0.20% put on 0.4% to 3,865.27 and Germany’s DAX 30 index DX:DAX -0.24% traded 0.3% higher at 8,221.47.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
boss...i'm serious. u got inside info?
jomini ( Date: 17-Jul-2013 16:09) Posted:
how u know?
Peter_Pan ( Date: 17-Jul-2013 15:29) Posted:
| The markets will be charmed by Handsome Ben. |
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how u know?
Peter_Pan ( Date: 17-Jul-2013 15:29) Posted:
| The markets will be charmed by Handsome Ben. |
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The markets will be charmed by Handsome Ben.
Ben giving his semi-annual monetary policy report tonight?
Prediction:
Ben: Stimulus will be reduced in the future when there is more positive news abt US economy when unemployment rate reduces to the 6.5% level. But 7.5% also is a sign of recovering economy so stimulus will be reduced in the future.
Markets: When is the future? Sept? 2014?
ya. everyone waiting for big ben to talk.
speculators chilling.
investors hoping he spoils the mood so they can buy cheap
Peter_Pan ( Date: 17-Jul-2013 14:48) Posted:
| My broker told me not much people buying and selling. |
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My broker told me not much people buying and selling.
SHOCKing news
Taiwan colonel under arrested and investigation on ARMY boy die under very rare cruel DIC
http://www.youtube.com/watch?v=vwzTCXXRqfo
10 hardest working countries ....
- Mexico
- Chile
- Korea
- Estonia
- Russian Federation
- Poland
- United States
- Hungary
- Japan
- Slovak Republic
Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting economic growth last quarter may have been less than the government initially estimated.
Advice given in morning. Profited from We hld and innopac. Hope you guys follow my call
Ben has been trying very hard to "Take Money from Paul and pay Peter" and keep the market going.
LoveToInvest ( Date: 17-Jul-2013 10:34) Posted:
I am neutral to that coz they have been purchasing bond since decades ..it's a matters of more or less...
Octavia ( Date: 17-Jul-2013 09:30) Posted:
Bernake is expected to keep to his recent statements about prolonging the bond purchases for the foreseeable future despite Kansas Fed President Esther George remarks that cuts to the quantitative easing program are appropriate as the economy is picking up steam.
The STI is expected to reverse course after its recent run-up, weighed by weaker-than-expected Jun non-oil domestic exports aand overbought technical indicators. Suupport is seen at 3,200 with overhead resistance at 3,260. |
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I am neutral to that coz they have been purchasing bond since decades ..it's a matters of more or less...
Octavia ( Date: 17-Jul-2013 09:30) Posted:
Bernake is expected to keep to his recent statements about prolonging the bond purchases for the foreseeable future despite Kansas Fed President Esther George remarks that cuts to the quantitative easing program are appropriate as the economy is picking up steam.
The STI is expected to reverse course after its recent run-up, weighed by weaker-than-expected Jun non-oil domestic exports aand overbought technical indicators. Suupport is seen at 3,200 with overhead resistance at 3,260. |
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