Global Market Review

Jul 15 • Market Reviews • 1779 Views • No Comments

U.S. stocks ended mixed for the week, reversing losses on the final day of the week, as rally in JPMorgan Chase & Co. and speculation China shall boost stimulus measures tempered concerns about earnings and the global economy. JPMorgan jumped for the week as Chief Executive Officer Jamie Dimon said that the bank will probably post record earnings for 2012 even after reporting a $4.4 billion trading loss. The S&P 500 gained 0.2 percent to 1,356.78 for the week. The index jumped 1.7 percent on the last day of week after falling for six consecutive days. The Dow added 4.62 points, or less than 0.1 percent, to 12,777.09 during the week.

Concern about earnings and the global economy weighed on stocks during the first four days of the week as investors braced for what is projected to be the first decline in S&P 500 profits in almost three years. The Citigroup Economic Surprise Index for the U.S., which measures how much reports are missing or beating the median estimates in Bloomberg surveys, fell to minus 64.9 on July 10. That signals recent economic data trailed forecasts by the most since August.

Asian stocks fell, with the regional benchmark posting its largest weekly retreat since May, amid concern a slowdown in economies from China and Korea to Australia will hurt corporate profits. Central banks in China, Europe, Taiwan, South Korea and Brazil have cut interest rates in the past fortnight to bolster economies against the impacts of Europe’s debt crisis and the faltering recovery in the U.S.
 

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Japan’s Nikkei Stock Average lost 3.29%, snapping five weeks of gains, as the Bank of Japan altered its stimulus program without adding extra money. The bank expanded its asset purchase fund to 45 trillion yen from 40 trillion yen, while paring a loan program by 5 trillion yen. South Korea’s Kospi Index fell 2.44% as an unexpected interest rate cut from the Bank of Korea failed to alleviate investors’ concern that the central bank can spur growth. Hong Kong’s Hang Seng Index dropped 3.58%, the most since May, and China’s Shanghai Composite Index lost 1.69% as China’s growth slowed for a sixth quarter, putting pressure on Premier Wen Jiabao to boost stimulus to secure a second-half rebound.

European stocks rose for a sixth week as China’s slowest expansion in three years fuelled speculation policy makers will add to stimulus measures and Italy’s borrowing costs fell at an auction. China’s growth slowed for a sixth quarter to the weakest pace since the global financial crisis, putting pressure on Premier Wen Jiabao to boost stimulus to secure a second-half economic rebound. Italian borrowing costs fell at an auction; hours after Moody’s Investors Service downgraded the country’s bond rating by two levels to Baa2 from A3 and reiterated its negative outlook, citing the worsening political and economic situation.

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