24/08/2009 12:16
Stocks in Europe and Asia advanced, pushing the MSCI World Index higher for a fifth day, as higher commodity prices boosted the earnings outlook for metal producers. U.S. index futures rose.
BHP Billiton Ltd. and Rio Tinto Group gained as copper rallied in London and Shanghai. Sulzer AG climbed 1.4 percent after the Swiss maker of textile machines reported profit that beat analysts’ estimates. WPP Plc increased 4.6 percent as Deutsche Bank AG recommended the shares before the world’s largest advertising company reports earnings this week.
The MSCI World added 0.6 percent as of 9:40 a.m. in London for the longest stretch of gains in four weeks. The measure has rebounded 58 percent since March 9 to a 10-month high after companies reported better-than-expected earnings and the German and French economies unexpectedly expanded last quarter.
“People are relieved that we are no longer talking about the ‘D-word’ of depression and rather that we are now coming out of recession,” said Rupert Armitage, head of equities at Shore Capital Group Plc in London, which has about $2.3 billion in assets under management. “Ultimately it’s about confidence and investors now are feeling much better than they did 9-to-12 months ago.”
Federal Reserve Chairman Ben S. Bernanke said at a meeting in Jackson Hole, Wyoming last week that the global economy is “beginning to emerge” from a recession after aggressive action by central banks and governments.
European, Asian Shares
Europe’s Dow Jones Stoxx 600 Index added 0.7 percent today and the MSCI Asia Pacific Index jumped 2.5 percent. Standard & Poor’s 500 Index futures expiring in September gained 0.4 percent, indicating the benchmark gauge for U.S. equities may extend last week’s increase that sent the measure to the highest level since October.
Governments around the world have pledged about $2 trillion in stimulus measures amid the worst worldwide recession since the Great Depression. Bernanke and other global policy makers have cautioned that the recovery is likely to be muted, indicating they would not soon remove all the stimulus injected into the financial system.
Nouriel Roubini, the New York University professor who predicted the financial crisis, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus. Still, the global economy will bottom out in the second half of 2009, Roubini wrote in a Financial Times commentary today.
Mining Companies
BHP Billiton, the world’s largest mining company, gained 3 percent to 1,638.5 pence, while Rio Tinto, the third-biggest, jumped 4.6 percent to 2,507 pence. Copper rose as much as 2.3 percent on the London Metal Exchange amid speculation the demand outlook for industrial metals is improving.
Commodity companies, the most-expensive stocks in the S&P 500, are turning into relative bargains. While investors are paying an average 33.1 times earnings this year for copper, plastic and seed producers, the premium drops to 17.7 based on 2010 analyst estimates that call for profits to almost double, data compiled by Bloomberg show. The decline in the price- earnings ratio is the steepest for any group in the S&P 500 and would leave the companies 23 percent less expensive than their historical average of 23.2 times.
Sulzer gained 1.4 percent to 82.15 Swiss francs after reporting first-half net income of 155.6 million francs ($146 million). Analysts in a Bloomberg survey had predicted 128 million francs.
WPP Jumps
WPP advanced 4.6 percent to 527.5 pence after Deutsche Bank upgraded the advertising company to “buy” from “hold” and increased its share-price estimate by 31 percent to 610 pence.
Amlin Plc rallied 3.5 percent to 367.6 pence after the biggest insurer in the Lloyd’s of London market posted a 54 percent increase in first-half net income to 167 million pounds ($275 million) as gross written premiums increased and investment returns doubled. Pretax profit rose 29 percent to 177.1 million pounds, beating the 133.5 million-pound median estimate of six analysts surveyed by Bloomberg.
Swiss Life Holding AG rallied 4.7 percent to 122.7 francs after Sonntagszeitung reported the nation’s largest life insurer may this week announce cost cut measures of 200 million to 300 million francs.
BHP Billiton Ltd. and Rio Tinto Group gained as copper rallied in London and Shanghai. Sulzer AG climbed 1.4 percent after the Swiss maker of textile machines reported profit that beat analysts’ estimates. WPP Plc increased 4.6 percent as Deutsche Bank AG recommended the shares before the world’s largest advertising company reports earnings this week.
The MSCI World added 0.6 percent as of 9:40 a.m. in London for the longest stretch of gains in four weeks. The measure has rebounded 58 percent since March 9 to a 10-month high after companies reported better-than-expected earnings and the German and French economies unexpectedly expanded last quarter.
“People are relieved that we are no longer talking about the ‘D-word’ of depression and rather that we are now coming out of recession,” said Rupert Armitage, head of equities at Shore Capital Group Plc in London, which has about $2.3 billion in assets under management. “Ultimately it’s about confidence and investors now are feeling much better than they did 9-to-12 months ago.”
Federal Reserve Chairman Ben S. Bernanke said at a meeting in Jackson Hole, Wyoming last week that the global economy is “beginning to emerge” from a recession after aggressive action by central banks and governments.
European, Asian Shares
Europe’s Dow Jones Stoxx 600 Index added 0.7 percent today and the MSCI Asia Pacific Index jumped 2.5 percent. Standard & Poor’s 500 Index futures expiring in September gained 0.4 percent, indicating the benchmark gauge for U.S. equities may extend last week’s increase that sent the measure to the highest level since October.
Governments around the world have pledged about $2 trillion in stimulus measures amid the worst worldwide recession since the Great Depression. Bernanke and other global policy makers have cautioned that the recovery is likely to be muted, indicating they would not soon remove all the stimulus injected into the financial system.
Nouriel Roubini, the New York University professor who predicted the financial crisis, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus. Still, the global economy will bottom out in the second half of 2009, Roubini wrote in a Financial Times commentary today.
Mining Companies
BHP Billiton, the world’s largest mining company, gained 3 percent to 1,638.5 pence, while Rio Tinto, the third-biggest, jumped 4.6 percent to 2,507 pence. Copper rose as much as 2.3 percent on the London Metal Exchange amid speculation the demand outlook for industrial metals is improving.
Commodity companies, the most-expensive stocks in the S&P 500, are turning into relative bargains. While investors are paying an average 33.1 times earnings this year for copper, plastic and seed producers, the premium drops to 17.7 based on 2010 analyst estimates that call for profits to almost double, data compiled by Bloomberg show. The decline in the price- earnings ratio is the steepest for any group in the S&P 500 and would leave the companies 23 percent less expensive than their historical average of 23.2 times.
Sulzer gained 1.4 percent to 82.15 Swiss francs after reporting first-half net income of 155.6 million francs ($146 million). Analysts in a Bloomberg survey had predicted 128 million francs.
WPP Jumps
WPP advanced 4.6 percent to 527.5 pence after Deutsche Bank upgraded the advertising company to “buy” from “hold” and increased its share-price estimate by 31 percent to 610 pence.
Amlin Plc rallied 3.5 percent to 367.6 pence after the biggest insurer in the Lloyd’s of London market posted a 54 percent increase in first-half net income to 167 million pounds ($275 million) as gross written premiums increased and investment returns doubled. Pretax profit rose 29 percent to 177.1 million pounds, beating the 133.5 million-pound median estimate of six analysts surveyed by Bloomberg.
Swiss Life Holding AG rallied 4.7 percent to 122.7 francs after Sonntagszeitung reported the nation’s largest life insurer may this week announce cost cut measures of 200 million to 300 million francs.
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