Category: Countries & Regions

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Tesco’s UK sales slide as consumers cut non-essential spending | Business | guardian.co.uk

Apologies. I messed up the links at the bottom of the Trading Diary newsletter. For the correct link click here. Correct links are also available on the Trading Diary web page and under Recent Posts in the right margin of this page.

Tesco has reported its weakest six-monthly UK sales figures for 20 years as higher food and fuel costs contributed to stark decline in spending on non-essentials such as gadgets, CDs and games in its stores.

UK like-for-likes, excluding petrol and VAT, declined 0.5% in the six months to 27 August, with underlying sales down 0.9% in the final three months of the period.

via Tesco’s UK sales slide as consumers cut non-essential spending | Business | guardian.co.uk.

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Oil touches new 2011 low – Business – CBC News

The price of oil, Canada’s biggest commodity export, reached a new 2011 low Tuesday.

November oil slipped as much as $74.95 US a barrel, its lowest since September of 2010. It recovered somewhat, but still closed down $1.94 at $75.67 on the New York Mercantile Exchange, its third straight day of losses.

Crude rose to three-year highs this year, but the reasons often cited for that increase — fears of growing Middle East tensions, rising Chinese demand, bullish views from investment banks and expectations of an aggressive U.S. stimulus plan — have diminished.

Other market watchers have suggested the price gained solely because of rampant speculation on the commodities markets.

via Oil touches new 2011 low – Business – CBC News.

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How did Europe’s bank stress tests give Dexia a clean bill of health? | Business | guardian.co.uk

It may seem like a lifetime away, but it is only in July that the European Banking Authority published the result of “stress tests” on 90 banks across 21 countries in the EU, covering around 65% of the banking industry.

Eight failed. Sixteen were border line with core tier one capital ratios – a key measure of financial strength – of between 5% and 6%.

So presumably, Dexia, the Franco-Belgian bank on which markets are currently fixated, was in one of the danger-zone categories?

Well no. Its statement issued on the day proclaimed “no need for Dexia to raise additional capital”.

…….The tests have proved to be meaningless even quicker than they were in 2010 when Ireland’s banks were given a clean bill of health, only to be bailed out four months later. In July, 2011 the EBA had been reckoning that the capital shortfall of the banks that failed was just €2.5bn. Now the markets reckon that the hole is more like €300bn.

via How did Europe’s bank stress tests give Dexia a clean bill of health? | Business | guardian.co.uk.

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The Sceptical Inflationist | Steve Saville | Safehaven.com

The reason we are in the inflation camp is that the case for more inflation in the US doesn’t depend on private-sector credit expansion; it depends on the ability and willingness of the Fed to monetise sufficient debt to keep the total supply of money growing. A consistent theme in our commentaries over the past 10 years has been that the Fed could and would keep the inflation going after the private sector became saturated with debt.

Up until 2008 there was very little in the way of empirical evidence to support the view that the Fed COULD inflate in the face of a private sector credit contraction, but that’s no longer the situation. Thanks to what happened during 2008-2009, we can now be certain that the Fed has the ability to counteract the effects on the money supply of widespread private sector de-leveraging. The only question left open to debate is: will the Fed CHOOSE to do whatever it takes to keep the inflation going in the future?

via The Sceptical Inflationist | Steve Saville | Safehaven.com.

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Is the SP 500 on the Verge of a Rally? | JW Jones | Safehaven.com

After the nasty downside probe today, there are layers of buy stops above current price levels. If price worked high enough, the stops would be triggered and an all out rally could play out. Anything coming out of the Eurozone that appears to be either stimulative or that appears to push an ultimatum out on the time spectrum will be viewed as positive.

Often news and price action play out together at key support/resistance levels and it would make sense that some form of announcement will be made when the S&P 500 price is sitting right at a long term support level.

via Is the SP 500 on the Verge of a Rally? | JW Jones | Safehaven.com.

That would be a bear market rally rather than a reversal.

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Bernanke criticises China over currency – FT.com

The chairman of the US Federal Reserve has accused China of damaging prospects for a global economic recovery through its deliberate intervention in the currency market to hold down the value of the renminbi.

…..“Right now, our concern is that the Chinese currency policy is blocking what might be a more normal recovery process in the global economy,” he said. “It is to some extent hurting the recovery”.

via Bernanke criticises China over currency – FT.com.

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Europe Races to Stem Debt Crisis Amid Rescue Plan for Dexia – WSJ.com

Euro-zone governments suffered a blow Tuesday in their efforts to contain a deepening sovereign debt crisis as one of the Continent’s biggest banks, dogged by fears about its exposure to Greek and Italian debt, was on the verge of a government-backed breakup. Bank executives and government officials zeroed in on a drastic plan to break up Dexia SA, a Belgian-French bank that is one of Europe’s 20 largest in assets.

via Europe Races to Stem Debt Crisis Amid Rescue Plan for Dexia – WSJ.com.

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Bull versus bear is dead – macrobusiness.com.au

As the S&P500 rocketed into the close this morning on yet another European bailout rumour, it occurred to me just how broken the equity market is right now. We are trapped in bear market dynamics of grinding sell-offs punctuated by explosive short-covering rallies with no end in sight.

….. Days like today are not some romantic struggle between bulls and bears, they are a reminder that in periods of structural risk that volatility reigns. Anyone that tells you otherwise is a fool or trying to sell you something.

via Bull versus bear is dead – macrobusiness.com.au | macrobusiness.com.au.

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Australia: August retail sales up 0.6%

Westpac reported Australian retail sales posted another strong month with nominal sales up 0.6%mth in Aug following a similar gain in July. Through the year sales growth rose from a low of 1.4%yr in Jun to 2.1%yr in August, suggesting a modest 0.6%yr gain in per capital spending.

Talking to a mobile phone salesman yesterday, however, he said that state-wide they had a very quiet September. One has to be careful of seeking out evidence that supports your market view, but it occurred to me that mobile phone sales may be a good barometer of consumer sentiment.

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The Ugly World Of Auto Sales | ZeroHedge

While the media giddily reported the September new vehicle sales numbers, beneath the surface, there was little to be giddy about. At 1,053,722 units, sales were down 2% from an already lousy August, but up 10% from an even lousier September 2010.

….But September benefited from a traumatic August: Consumer confidence was hit by the absurd debt-ceiling negotiations in Congress; stock markets worldwide plummeted; and upheavals in the Eurozone made it into the daily news. Then during the last week of August, hurricane Irene wreaked havoc on the East Coast. Sales in the affected areas came to a halt.

via The Ugly World Of Auto Sales | ZeroHedge.

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