Published: Wednesday August 26, 2009 MYT 7:21:00 AM
HOUSTON: Oil prices fell more than 3 percent Tuesday after a new report from Washington projected a cumulative US$7 trillion U.S. deficit for the next decade.
Prices initially swung higher, briefly touching $75 per barrel for the first time in 10 months on new signals that consumers are feeling a little better about the economy.
Yet lingering questions about when and how fast any recovery might occur led to some volatile markets Tuesday.
Benchmark crude for October delivery fell $2.32 to settle at $72.02 a barrel in trading on the New York Mercantile Exchange.
"Oil still struggles to follow through decisively with an upside breakout," PFGBest Research analyst Phil Flynn said in a note to clients Tuesday.
"Is oil destined to make new highs, or is it just a matter of time before we see a correction of massive proportions?"
The New York-based Conference Board provided a bit of good news when it said its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July.
Economists surveyed by Thomson Reuters had expected a slight increase to 47.5. Still, the index is well below 90, the minimum level associated with a healthy economy. Anything above 100 signals strong growth.
Energy prices have risen sharply this year mostly on the belief that the economy is getting better and demand will rebound soon.
Still, the rules of supply and demand still apply to current prices and on Wednesday, the government will release its weekly report on how much supply we have.
Last week, a surprise drawdown in crude began a rally that ran through Monday, the fourth-consecutive day in which oil prices moved higher.
Despite optimism about recovery from recession, analysts say energy demand remains in the doldrums and seasonally lower demand for gasoline as the summer holidays end will exacerbate that weakness.
"In my view, oil prices will likely give in to the fundamentals in the coming week," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
"Seasonally, oil demand is lower in autumn, so reduced demand in the shoulder season may put further pressure on oil."
U.S. gasoline prices remain pretty much flat as the peak driving season is coming to an end.
The Energy Department late Monday reported that prices at the pump moved lower for the second straight week.
In other Nymex trading, gasoline for September delivery fell 4.21 cents to settle at $2.007 a gallon and heating oil fell 6.75 cents to settle at $1.8559 a gallon.
Natural gas fell 4.1 cents to settle at $2.882 per 1,000 cubic feet.
In London, Brent crude fell $2.44 to settle at $71.82. - AP
Latest NYSE, NASDAQ and other business news, from AP-Wire
For latest Bursa Malaysia indices, charts and other information click hereNew York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
For Tokyo Stock Exchange click here
ฉ 1995-2009 Star Publications (Malaysia) Bhd (Co No 10894-D)
Wednesday, August 26, 2009
Malaysia GDP shrinks 3.9pc in second quarter
By Adib Zalkapli
KUALA LUMPUR, Aug 26 – Malaysia’s economy shrank 3.9 per cent in the three-month period to June, an improvement from the first quarter when the country’s gross domestic product contracted 6.2 per cent, according to data released by Bank Negara today.
All economic sectors also recorded improvement with construction, services and services registering positive growth.
“Growth in the construction sector strengthened 2.8 per cent as the industry benefitted from the increased implementation of the stimulus package,” said the central bank Governor Tan Sri Zeti Akhtar Aziz.
The construction sector recorded a 1.1 per cent growth in the first quarter.
The mining and manufacturing sectors continue to shrink but both recorded slower decline.
“There are increasing signs that conditions in the global economy are stabilising,” she said.
“In the major advanced economies, the pace of the decline in economic activity is moderating, while conditions in the international financial markets have broadly improved.
“Going forward, the expectation remains that the domestic economy will improve in the second half of the year, to be supported by a recovery in domestic demand following improvements in labour market conditions, as well as business and consumer sentiments,” said Zeti.
She also said that there will be an upward revision of this year’s GDP forecast to be announced during the tabling of the 2010 budget.
In May, the Prime Minister Datuk Seri Najib Razak announced that the economy would contract between 4 and 5 per cent this year, worse than the original forecast of 1 per cent decline.
He had also predicted three consecutive quarters of negative growth, with a slight improvement for the fourth quarter this year.
KUALA LUMPUR, Aug 26 – Malaysia’s economy shrank 3.9 per cent in the three-month period to June, an improvement from the first quarter when the country’s gross domestic product contracted 6.2 per cent, according to data released by Bank Negara today.
All economic sectors also recorded improvement with construction, services and services registering positive growth.
“Growth in the construction sector strengthened 2.8 per cent as the industry benefitted from the increased implementation of the stimulus package,” said the central bank Governor Tan Sri Zeti Akhtar Aziz.
The construction sector recorded a 1.1 per cent growth in the first quarter.
The mining and manufacturing sectors continue to shrink but both recorded slower decline.
“There are increasing signs that conditions in the global economy are stabilising,” she said.
“In the major advanced economies, the pace of the decline in economic activity is moderating, while conditions in the international financial markets have broadly improved.
“Going forward, the expectation remains that the domestic economy will improve in the second half of the year, to be supported by a recovery in domestic demand following improvements in labour market conditions, as well as business and consumer sentiments,” said Zeti.
She also said that there will be an upward revision of this year’s GDP forecast to be announced during the tabling of the 2010 budget.
In May, the Prime Minister Datuk Seri Najib Razak announced that the economy would contract between 4 and 5 per cent this year, worse than the original forecast of 1 per cent decline.
He had also predicted three consecutive quarters of negative growth, with a slight improvement for the fourth quarter this year.
Sunday, August 23, 2009
World emerging from deep slump but can it last?
By TOM RAUM, Associated Press Writer Tom Raum, Associated Press Writer Sun Aug 23, 12:00 am ET
WASHINGTON – Turnabouts in European and Asian economies, along with recent gains in the U.S., are raising hopes that that the worldwide recession is drawing to a close. That's not to say the coast is clear.
The brightening outlook in Europe and Asia and the improvement in U.S. credit markets and indicators reflect heavy government stimulus spending. Many analysts question whether the top economies can sustain recoveries after stimulus measures and easy-credit policies have run their course — and in the absence of significant new consumer spending, especially among Americans.
"It's not clear that these economies can continue to move forward without stimulus," said Mark Zandi, chief economist for Moody's Economy.com. "And that's in part why stock markets across the globe are nervous."
It will be difficult for other countries to pull out of recession until the U.S., still one quarter of the world economy, starts growing, he said.
After a frightening free-fall across Europe in late 2008, France and Germany, the continent's two largest economies, reported recently that they had grown slightly in the second quarter of 2009. Other major European countries reported they were still struggling, but with generally improved figures over late 2008 and earlier this year.
China, Japan, Hong Kong, Singapore and South Korea have also reported rebounds as government stimulus efforts across the globe have begun to show results.
Russia, among the hardest hit of major economies as oil prices slumped and many foreign investors fled the country, appeared to be stabilizing.
Meanwhile, in the United States, the Federal Reserve said the world's largest economy appeared to be "leveling out" and many economists see a second-half rebound.
It all adds up to an improving picture ahead of an economic summit next month in Pittsburgh of the world's top 20 industrial and developing economies.
It is the third such meeting of all the major economic players, after one convened by former President George W. Bush in November in Washington, and one held earlier this year in London. It is the first to be held recently as economies appear to be improving.
But until American consumers begin spending again, and so long as jobs are still being lost, the durability of any recovery is questionable. Major retailers reported this week that U.S. consumers are continuing to rein in spending on all but basics.
Despite slight recent improvements in many U.S. economic statistics, many consumers haven't seen a change in their lives.
So many jobs have been lost — nearly seven million since the recession began in December 2007 — that the unemployment rate will remain high long after the economy begins to rebound.
Many out-of-work Americans have lost unemployment and severance benefits and are depleting their savings. Others are saving more and spending less, still shaken from the worst economic downturn since the Great Depression.
"This is going to be the mother of all jobless recoveries," said Allen Sinai, chief global economist for Decision Economics, a consulting firm.
Japan, the world's second-largest economy, grew 0.9 percent in the second quarter, or April to June, compared with the prior quarter as export sales picked up after the country's deepest slump since World War II, the Japanese government reported earlier this week. It was the latest major economy to report upbeat second-quarter results.
Japan's return to growth — thanks to a 6.3 percent uptick in exports along with government stimulus measures — marked the end of a yearlong recession.
But the development, along with recent news that other major economies had resumed economic growth or were stabilizing, did not impress investors as global stock markets sank and then zigzagged amid fears by jittery international investors that the recoveries were not sustainable.
In the United States, the gross domestic product contracted at a 1 percent pace in the April-June quarter, after plunging 6.4 percent in the January-March quarter, the worst in 27 years, and fell by 5.4 percent in the fourth quarter of 2008.
The latest statistics suggested the recession is in its final stages, and some economists believe it may have already ended.
Still, economists are mixed on the pace of recovery. Many barriers clearly stand in the way of a quick rebound.
Noting China's fast bounce — it posted more than 6 percent growth in the first half of 2009 — Peter Morici, a business economist at the University of Maryland and a critic of Obama's economic-recovery plans, said: "China has a $400 billion stimulus package, and its economy is firing on all cylinders. President Obama has an $800 billion stimulus but prospects for the U.S. economic recovery are fragile."
Other economists are guardedly optimistic. And Lawrence Summers, the top White House economic adviser, predicts "a substantial return to normalcy" in the coming months.
While acknowledging "we have a long way to go," he notes that most forecasts for GDP growth in the second half of the year are now positive.
"It is reasonable to say that we are in a very different place than we were six months ago; that the sense of free-fall, of vertical decline, has been contained," he told a recent economic forum.
Most economists and analysts seem to agree.
WASHINGTON – Turnabouts in European and Asian economies, along with recent gains in the U.S., are raising hopes that that the worldwide recession is drawing to a close. That's not to say the coast is clear.
The brightening outlook in Europe and Asia and the improvement in U.S. credit markets and indicators reflect heavy government stimulus spending. Many analysts question whether the top economies can sustain recoveries after stimulus measures and easy-credit policies have run their course — and in the absence of significant new consumer spending, especially among Americans.
"It's not clear that these economies can continue to move forward without stimulus," said Mark Zandi, chief economist for Moody's Economy.com. "And that's in part why stock markets across the globe are nervous."
It will be difficult for other countries to pull out of recession until the U.S., still one quarter of the world economy, starts growing, he said.
After a frightening free-fall across Europe in late 2008, France and Germany, the continent's two largest economies, reported recently that they had grown slightly in the second quarter of 2009. Other major European countries reported they were still struggling, but with generally improved figures over late 2008 and earlier this year.
China, Japan, Hong Kong, Singapore and South Korea have also reported rebounds as government stimulus efforts across the globe have begun to show results.
Russia, among the hardest hit of major economies as oil prices slumped and many foreign investors fled the country, appeared to be stabilizing.
Meanwhile, in the United States, the Federal Reserve said the world's largest economy appeared to be "leveling out" and many economists see a second-half rebound.
It all adds up to an improving picture ahead of an economic summit next month in Pittsburgh of the world's top 20 industrial and developing economies.
It is the third such meeting of all the major economic players, after one convened by former President George W. Bush in November in Washington, and one held earlier this year in London. It is the first to be held recently as economies appear to be improving.
But until American consumers begin spending again, and so long as jobs are still being lost, the durability of any recovery is questionable. Major retailers reported this week that U.S. consumers are continuing to rein in spending on all but basics.
Despite slight recent improvements in many U.S. economic statistics, many consumers haven't seen a change in their lives.
So many jobs have been lost — nearly seven million since the recession began in December 2007 — that the unemployment rate will remain high long after the economy begins to rebound.
Many out-of-work Americans have lost unemployment and severance benefits and are depleting their savings. Others are saving more and spending less, still shaken from the worst economic downturn since the Great Depression.
"This is going to be the mother of all jobless recoveries," said Allen Sinai, chief global economist for Decision Economics, a consulting firm.
Japan, the world's second-largest economy, grew 0.9 percent in the second quarter, or April to June, compared with the prior quarter as export sales picked up after the country's deepest slump since World War II, the Japanese government reported earlier this week. It was the latest major economy to report upbeat second-quarter results.
Japan's return to growth — thanks to a 6.3 percent uptick in exports along with government stimulus measures — marked the end of a yearlong recession.
But the development, along with recent news that other major economies had resumed economic growth or were stabilizing, did not impress investors as global stock markets sank and then zigzagged amid fears by jittery international investors that the recoveries were not sustainable.
In the United States, the gross domestic product contracted at a 1 percent pace in the April-June quarter, after plunging 6.4 percent in the January-March quarter, the worst in 27 years, and fell by 5.4 percent in the fourth quarter of 2008.
The latest statistics suggested the recession is in its final stages, and some economists believe it may have already ended.
Still, economists are mixed on the pace of recovery. Many barriers clearly stand in the way of a quick rebound.
Noting China's fast bounce — it posted more than 6 percent growth in the first half of 2009 — Peter Morici, a business economist at the University of Maryland and a critic of Obama's economic-recovery plans, said: "China has a $400 billion stimulus package, and its economy is firing on all cylinders. President Obama has an $800 billion stimulus but prospects for the U.S. economic recovery are fragile."
Other economists are guardedly optimistic. And Lawrence Summers, the top White House economic adviser, predicts "a substantial return to normalcy" in the coming months.
While acknowledging "we have a long way to go," he notes that most forecasts for GDP growth in the second half of the year are now positive.
"It is reasonable to say that we are in a very different place than we were six months ago; that the sense of free-fall, of vertical decline, has been contained," he told a recent economic forum.
Most economists and analysts seem to agree.
Wednesday, August 19, 2009
World stocks fall as China market unravels
By JEREMIAH MARQUEZ, AP Business Writer Jeremiah Marquez, Ap Business Writer 52 mins ago
HONG KONG – World stocks lurched lower Wednesday, with Shanghai's index tumbling as much as 5 percent, as this year's powerful rally started to peter out amid concerns the markets were overheating.
Asia's markets were modestly higher through the morning in lethargic trade before getting whacked, with Europe following them down in early trade. Crude oil prices along with Wall Street futures gave back their early gains.
The drop came on the heels of a steep fall in world markets Monday when investors were spooked by weakness in American consumer spending and losses in Shanghai that seemed to augur an end to the five-month rally that's boosted benchmarks over 50 percent.
China again led Asia lower Wednesday.
Ample liquidity combined with hopes stronger Chinese economic growth will spill over to other countries have helped drive many of the region's markets this year. But investors have grown uneasy of late about tighter government monetary policy that could soak up the easy money.
"We've had a very strong run and people are a little unnerved by what's going on in China, so it seems like a good opportunity to take some money off the table," said Adrian Mowat, chief Asian and emerging market equities strategist at JP Morgan in Hong Kong.
The recent selling could be a good buying opportunity, Mowat said. "For the Asian markets outside China to stabilize a bit, we need to see (Chinese shares) stabilize."
As trading got under way in Europe, Britain's FTSE 100 fell 1.1 percent, Germany's DAX lost 1.5 percent and France's CAC-40 swooned 1 percent.
In Asia, Japan's benchmark Nikkei 225 stock average lost 80.96 points, or 0.8 percent, to 10,204.00.
Hong Kong's Hang Seng shed 1.7 percent to 19,954.23.
Elsewhere, South Korea's Kospi fell 0.3 percent, India's Sensex was 1.3 percent lower and Taiwan's index was flat. Australia's benchmark lost 0.2 percent. Indonesia's market, another investor favorite this year, was down 2.7 percent.
In Shanghai, the main index plunged over 5 percent at one point before closing down 125.30 points, or 4.3 percent, to 2,785.58.
The benchmark has lost nearly 20 percent since Aug. 4 on worries about corporate profits, the strength of China's recovery and possible changes in Beijing's easy credit policy that has helped to fuel the bull run in Chinese stocks this year.
"Investors are afraid there are no fundamentals to support the rally," said Cai Xiang, a Sinolink Securities analyst in the western city of Chengdu.
Overnight in the U.S, stronger-than-expected retail earnings reports and the latest reading on housing sent markets to a higher finish following a bout of heavy selling on Monday.
The Dow rose 82.60, or 0.9 percent, to 9,217.94. The Standard & Poor's 500 index gained 9.94, or 1 percent, to 989.67, while the Nasdaq composite index rose 25.08, or 1.3 percent, to 1,955.92.
In futures trading, Dow futures were down 77 points, or 0.8 percent, at 9,130 and S&P futures lost 9.4, or 1 percent, to 980.20.
Oil prices were unable to hold on their advance in Asia, losing 23 cents to $68.96 a barrel. On Tuesday, the contract gained $2.44 to settle at $69.19.
The dollar fell to 94.32 yen from 94.70 yen, while the euro fell to $1.4102 from $1.4131.
___
AP researcher Bonnie Cao in Beijing contributed to this report.
HONG KONG – World stocks lurched lower Wednesday, with Shanghai's index tumbling as much as 5 percent, as this year's powerful rally started to peter out amid concerns the markets were overheating.
Asia's markets were modestly higher through the morning in lethargic trade before getting whacked, with Europe following them down in early trade. Crude oil prices along with Wall Street futures gave back their early gains.
The drop came on the heels of a steep fall in world markets Monday when investors were spooked by weakness in American consumer spending and losses in Shanghai that seemed to augur an end to the five-month rally that's boosted benchmarks over 50 percent.
China again led Asia lower Wednesday.
Ample liquidity combined with hopes stronger Chinese economic growth will spill over to other countries have helped drive many of the region's markets this year. But investors have grown uneasy of late about tighter government monetary policy that could soak up the easy money.
"We've had a very strong run and people are a little unnerved by what's going on in China, so it seems like a good opportunity to take some money off the table," said Adrian Mowat, chief Asian and emerging market equities strategist at JP Morgan in Hong Kong.
The recent selling could be a good buying opportunity, Mowat said. "For the Asian markets outside China to stabilize a bit, we need to see (Chinese shares) stabilize."
As trading got under way in Europe, Britain's FTSE 100 fell 1.1 percent, Germany's DAX lost 1.5 percent and France's CAC-40 swooned 1 percent.
In Asia, Japan's benchmark Nikkei 225 stock average lost 80.96 points, or 0.8 percent, to 10,204.00.
Hong Kong's Hang Seng shed 1.7 percent to 19,954.23.
Elsewhere, South Korea's Kospi fell 0.3 percent, India's Sensex was 1.3 percent lower and Taiwan's index was flat. Australia's benchmark lost 0.2 percent. Indonesia's market, another investor favorite this year, was down 2.7 percent.
In Shanghai, the main index plunged over 5 percent at one point before closing down 125.30 points, or 4.3 percent, to 2,785.58.
The benchmark has lost nearly 20 percent since Aug. 4 on worries about corporate profits, the strength of China's recovery and possible changes in Beijing's easy credit policy that has helped to fuel the bull run in Chinese stocks this year.
"Investors are afraid there are no fundamentals to support the rally," said Cai Xiang, a Sinolink Securities analyst in the western city of Chengdu.
Overnight in the U.S, stronger-than-expected retail earnings reports and the latest reading on housing sent markets to a higher finish following a bout of heavy selling on Monday.
The Dow rose 82.60, or 0.9 percent, to 9,217.94. The Standard & Poor's 500 index gained 9.94, or 1 percent, to 989.67, while the Nasdaq composite index rose 25.08, or 1.3 percent, to 1,955.92.
In futures trading, Dow futures were down 77 points, or 0.8 percent, at 9,130 and S&P futures lost 9.4, or 1 percent, to 980.20.
Oil prices were unable to hold on their advance in Asia, losing 23 cents to $68.96 a barrel. On Tuesday, the contract gained $2.44 to settle at $69.19.
The dollar fell to 94.32 yen from 94.70 yen, while the euro fell to $1.4102 from $1.4131.
___
AP researcher Bonnie Cao in Beijing contributed to this report.
Subscribe to:
Posts (Atom)
Posts
