Golden Fibonacci

Sept. 30 (Bloomberg) — Japanese manufacturers increased production for a sixth month in August, capping the longest stretch of gains in 12 years, as emergency spending by governments worldwide rekindled global trade.

Factory output rose 1.8 percent last month after climbing 2.1 percent in July, the Trade Ministry said today in Tokyo. Economists surveyed by Bloomberg forecast a 1.8 percent gain.

Output has rebounded since a record collapse in the first quarter of the year left half the nation’s factory capacity sitting idle. The gains in production since March have yet to generate employment, trigger capital investment or return companies like Toyota Motor Corp. to profit.

“We’re not going to fall back into recession, but these production increases don’t bring us back to where we started,” said Yoshiki Shinke, senior economist at Dai-Ichi Life Research Institute in Tokyo. “You’ve still got a lot of excess capacity.” Ream more »

Sept. 29 (Bloomberg) — Home values in 20 U.S. cities climbed in July by the most in almost four years, helping stem the record plunge in household wealth that’s depressed spending.

The S&P/Case-Shiller home-price index rose 1.2 percent in July from the prior month, the biggest gain since October 2005, the group said today in New York. Another report showed consumer confidence unexpectedly fell in September, while holding above the record low reached earlier this year.

Home values are rebounding as low borrowing costs and government tax credits lift home sales. Combined with rising stock prices, the gains will begin to restore the $13 trillion plunge in net worth caused by the worst financial crisis since the Great Depression, a process that economists such as Brian Bethune say will take years to complete.

Home prices are “a major, major turning point for the economy,” said Bethune, chief financial economist at IHS Global Insight in Lexington, Massachusetts. “We are eating away at the problem of household balance sheets.” Ream more »

Sept. 29 (Bloomberg) — Japanese stocks rose after the main equity indexes had their biggest two-day drop in six months.

Mizuho Financial Group Inc., Japan’s second-biggest publicly traded bank, added 2.3 percent after losing 6.5 percent in the past two days. Toyota Motor Corp., which gets 31 percent of its revenue in North America, advanced 1.4 percent even as the dollar remained weaker than 90 yen.

“The drops in equities over the past two days are overdone,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. In Japan, “an earnings recovery in the second half is becoming less likely because of the yen’s appreciation. I can’t stop myself getting nervous when looking at the FX market.” FX refers to foreign exchange.

The Nikkei 225 Stock Average added 0.8 percent to 10,087.61 as of 9:04 a.m. in Tokyo. The broader Topix index rose 0.5 percent to 907.63. The gauges lost 5 percent in the past two days, the most since March 31, on concern the dollar’s depreciation will eat into companies’ profits.

Japan’s consumer prices excluding fresh food fell at a record 2.4 percent in August from a year earlier, the statistics bureau said before markets opened. That matched the median estimate of economists surveyed by Bloomberg News. Ream more »

Sept. 28 (Bloomberg) — The yen rose to the highest level in eight months versus the dollar on prospects Japanese exporters are repatriating profits before the fiscal first half ends this week.

Japan’s currency also advanced against all of its 16 major counterparts on speculation the nation’s government won’t intervene to stem the currency’s gain. The Australian dollar fell to its weakest level in eight months versus the New Zealand currency on speculation the smaller South Pacific nation’s central bank will raise rates from a record low.

“Japanese firms are continuing to bring home profits,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The government’s stance on a strong yen is careless, as it doesn’t benefit the nation’s export- driven economic structure.”

The yen climbed to 88.99 per dollar as of 9:24 a.m. in Tokyo from 89.64 in New York on Sept. 25. It earlier touched 88.24, the strongest level since Jan. 23. The currency rose to 130.66 per euro from 131.70, after earlier rising to 129.83, the highest since July 14. The dollar traded at $1.4690 per euro from $1.4689. Ream more »

By Rita Nazareth

Sept. 24 (Bloomberg) — U.S. stocks fell for a second day as sales of existing homes unexpectedly slumped and the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. Oil tumbled to a one-month low as the dollar strengthened, while Treasuries rose.

Alcoa Inc.,General Electric Co. and Caterpillar Inc. dropped at least 2.4 percent after the National Association of Realtors said purchases declined 2.7 percent last month. D.R. Horton Inc. fell 4.2 percent to lead declines in homebuilders. Bank of America Corp. and Citigroup Inc. retreated after the Fed said it will shrink emergency programs that auction loans to commercial banks and Treasuries to bond dealers.

“The housing data disappointed and investors will be looking for signs that the Fed will pull back a bit on the stimulus,” said Mark Bronzo, a money manager at Security Global Investors, which oversees $21 billion in Irvington, New York. “The stock market is tired and we may see a sell-off going to the end of the quarter.” Ream more »

Sept. 24 (Bloomberg) — The euro fell from a one-year high versus the U.S. dollar amid speculation that global policy makers will discuss the rapid appreciation of the 16-nation currency at the forthcoming meeting of Group of 20 leaders.

The euro weakened after Reuters cited a French government official as saying France is concerned about the increasing strength of the euro and intends to press fellow G-20 members to set a timeframe for a discussion on exchange rates. New Zealand’s dollar traded near a 13-month high against the U.S. currency as Asian shares climbed, boosting demand for higher- yielding assets.

“The market is becoming sensitive to comments from monetary authorities as the G-20 meeting approaches,” said Kosei Fujita, a foreign-currency dealer in Tokyo at SBI Liquidity Markets Co., a unit of financier SBI Holdings Inc. “As comments from French government officials added to concerns, people are inclined to close long positions on the euro.” A long position is a bet that an asset will rise. Ream more »

By Rita Nazareth

Sept. 16 (Bloomberg) — U.S. stocks climbed, extending a global advance that sent the MSCI World Index to the highest level in almost a year. Commodities gained amid speculation the economy has returned to growth.

Crude oil topped $72 a barrel, and natural gas soared 13 percent. Gold rose to a record close as the dollar slid to its weakest against the euro in almost a year. Treasury two-year notes fell the most in three weeks.

Shares of General Electric Co. jumped 6.3 percent and Alcoa Inc. climbed 3.4 percent after a Federal Reserve report showed industrial production increased more than forecast. New York Times Co. and Gannett Co. surged more than 10 percent after a market-research firm said some media companies may benefit from more spending on advertising.

“Investors have been embracing risk as they feel more comfortable about the global economy,” said John Carey, a Boston-based money manager at Pioneer Investments, which oversees more than $200 billion worldwide. “There seems to be a better sentiment regarding big companies, such as GE, that were under such a cloud during the peak of the credit crisis.” Ream more »

Sept. 15 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said the worst U.S. recession since the 1930s has probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate.

“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time,” Bernanke said today at the Brookings Institution in Washington, responding to questions after a speech.

The remarks are Bernanke’s most explicit statement that the contraction that began in December 2007 is over. They echoed comments yesterday by San Francisco Fed President Janet Yellen and followed a report today showing retail sales rose last month by the most in three years, adding to evidence of a recovery.

“Unemployment will be slow to come down” if growth turns out to be “moderate” and not much more than the economy’s underlying potential, Bernanke said. Ream more »

By Masaki Kondo

Sept. 15 (Bloomberg) — Asian stocks rose, helping the MSCI Asia Pacific Index rebound from its biggest drop in a month, as the weaker yen boosted Japanese exporters.

Canon Inc., which gets 28 percent of its sales from the Americas, climbed 3.2 percent in Tokyo. Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, added 1.4 percent after Credit Suisse Group AG upgraded the stock. Rio Tinto Group, the world’s No. 3 mining company, rose 1.7 percent in Sydney after agreeing to sell a stake in the cable division of its Alcan Engineered Products business.

The MSCI Asia Pacific Index gained 0.3 percent to 116.16 as of 10 a.m. in Tokyo. The gauge declined 1.7 percent yesterday, the most in a month, on concern a six-month rally had overvalued prospects for company earnings.

“There will be a rebound from yesterday’s drop,” said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co. in Tokyo. “Investors are concerned the market will enter a decline. They’ll likely focus on news for specific stocks.” Ream more »

Sept. 14 (Bloomberg) — Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”

Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”

A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis. Ream more »