Daily Market Reviews By Uwcfx

[UWC Neeraj]

23 OCTOBER 2012: APPLE SAVED WALL STREET

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Apple again saved the day on Wall Street. After the US markets had hovered in the red for most of the session, Apple brought new life into Dow and Nasdaq at the last hour before closing yesterday. Apple is going to announce at press conference today its biggest market product move since the debut of the iPad two years ago. Apple is going to launch a smaller, cheaper tablet in competition Amazon and Google. Apple’s clear intention is to protect its market share and make innovative inroads into new markets. Analysts have for the last month claimed that Apple was planning a less expensive version of the iPad to take on cheaper competitive devices.

Apple shares jumped four percent on the news. In Asia shares inched down on caution over the region’s new corporate earnings season. Global shares faltered overnight on weak earnings reports and outlook. The MSCI index of Asia-Pacific shares outside Japan eased 0,1% dragged down by a decline in South Korean stocks. Nikkei was also down. US stocks were in the red for most of the session after Caterpillar slashed down its forecast for 2012, warning that the global economy was slowing quicker than expected.

USD rose to 80,02 yen, the highest level seen since early July, on expectations on announcements on new monetary easing from the Bank of Japan. The Yen has recovered in early Asian trade. USD/JPY is at 79,85. Euro/USD is steady at 1.3050 level on expectations on bailouts to Spain and Greece in coming weeks. The Euro was also strengthened by a statement from a high European Central Bank official reiterating that ECB is committed to do everything to show the Euro is irreversible.

Crude prices fell one dollar during yesterday. Brent is at 109,30 and NYMEX trades at 89. Gold fluctuated heavily during the New York session. It reached 1730 to within minutes fall back to 1718. Gold is again trading up at 1726. Silver rose to 32,40 but has fallen back to 32,25. Copper prices are stronger in morning trade.

Copyright: United World Capital

[UWC Neeraj]

24 OCTOBER 2012: FACEBOOK SURPRISES AND JUMPS 13%

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Facebook surprised markets and delivered much better than expected when presenting third quarterly results yesterday. The number one social network rose 13 percent helped by strong mobile advertising revenues. 14 percent of its advertising revenue comes from mobile ads. This is a clear indication that Facebook starts to figure out how to earn money of smartphone and tablet users. Mobile ad revenues totaled USD 150 million in the third quarter compared with 50 million in second and nothing in the first quarter of the year.

Apple launched its mini iPad during the last session. The cost would be USD 299 considerably more expansive than the competitors, Google and Amazon, but half the price of its iPad. The presentation failed to impress markets, and the share fell 3 percent. It was a new dismal session at the US stock exchanges. Dow Jones fell 1,82 and Nasdaq 0,82 percent. The markets are somewhat stronger in Asia this morning helped by stronger PMI-results from China in September. The HSBC’s bank Flash Manufacturing Purchasing Managers index (PMI) rose to a three month high in October signaling a strengthening recovery.

The PMI results are seen by investors as a token that the bottom in the short term downward cycle might be reached in China. The Shanghai composite is up, and futures for Europe and US are positive helped by better commodity prices. Copper prices are stronger than in one week. The Australian dollar which has been under pressure earlier this week is trading stronger on the better perspectives for commodities and a recovery in China. Weak quarterly company results and uncertainties regarding the upcoming presidential elections have put the stock markets under pressure during the last days and reduced the appetite for risk. This has strengthened the dollar and put the Euro under new pressure. EURO/USD is trading at 1.2987 pulling back from last week’s high on 1.3140, but well above October month’s low at 1.2804. The President of the European Central Bank (ECB), Mario Draghi is meeting the German Bundestag today in an effort to convince skeptical parliamentarians on the importance of monetary easing.

Oil prices fell anew dollar yesterday. Brent crude has recovered to 108,50. Also gold and silver prices are trading higher in Asia after new steep falls yesterday.

Copyright: United World Capital

[UWC Neeraj]

25 OCTOBER 2012: ASIAN SHARES EDGE HIGHER

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian shares edged higher in early Asian trading as signs of recovery in China and the United States eased fears of deteriorating global growth. Market sentiment remained, however, vulnerable when weak corporate earnings continued to undermine investors confidence. The MSCI index for the Asia-Pacific shares were up 0,3 percent. The South Korean Kospi and Australia were also up after a new week session in New York. Both Dow Jones and Nasdaq fell.

Oil prices fell for its seventh consecutive session on Wednesday after US oil storages were reported higher than expected. Brent crude has recovered in morning trade at 108,25. NYMEX, New York crude, is at its lowest level since July trading at USD 85,73 a barrel. Copper, a reliable barometer for commodities added 0,9 % to 788,685 a metric ton. Gold which has a strong technical support level on 1700, rose to 1709 after trading close to 17600 yesterday. Silver seems to stabilize on bottom levels in the range between 31,50 and 32.

The USD dollar was stronger against an index of six major currencies. The Japanese yen is at 79,95 against the USD. The stock markets in Japan have stabilized over the last days after the steep fall in previous weeks. The yen is regarded by many investors as a “safe haven” and tend to increase on uncertainties in the market. The Euro has gained ground both against the yen and the USD, trading close to the 1,30 level against the dollar. The President of the European Central Bank, Mario Draghi, met German parliamentarians yesterday in an effort to convince law makers on the soundness of ECB’s monetary easing.

New numbers from the US housing sector gave further evidence that the sector is picking up. New single family home sales surged in September to the highest levels seen in two and a half years. Weak earnings outlooks and US multinationals missing targets, made investors nervous about a slowing economy. Apple which is the biggest capitalized company in the world is going to present quarterly results today.

Copyright: United World Capital

[UWC Neeraj]

26 OCTOBER 2012: APPLE IPAD SALES DISAPPOINTS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Apple, one of the most valuable public companies in the United States, posted quarterly earnings that fell short of expectations after the close of the US markets yesterday. Earnings a share came in lower than expected and Apple fell 1,4 percent in after hour trading. Equity futures fell on the news Dow Jones and Nasdaq ended up in another uninspiring session on Wall Street. Investors continue to worry about the US economy and a string of weaker than expected company results. 70 % of the companies hitherto reporting have reported lower results than expected.

The negative trend continued in Asia this morning where the major indexes fell. Global concerns on the economic outlook are in the back of investors mind. This together with uncertainties on forthcoming leadership changes in the two biggest economies in the world, US and China, affect the market sentiments negatively. Asian exporters struggle against shrinking global demand for their products. Samsung Electronics, however, is an exception. Samsung reported third quarterly profits for a fourth straight quarter. Profits reached USD 7,4 Billion. Bank of China also reported good results with its biggest quarterly profit in a year. Procter and Gamble was yesterday’s positive exception on the US stock exchanges.

The dollar index and the Japanese yen are down. Bank of Japan has announced aggressive monetary easing which drove the Yen down to 80,05 against the USD. The Euro is also falling. Euro/USD is at 1.2937 after inching towards 1.30 during yesterday’s trade. There are no other big changes in the currency picture.

Oil prices recovered yesterday, but oil is again on defensive in early Asian trade after steep falls over the last ten days. Brent crude is at 107,63. Gold and silver prices, which also recovered yesterday, are again under downward pressure. After staring Asian trade on 1715, gold has fallen ten dollars to 1705. Silver has dipped below USD 32 an ounce. It is expected continued volatility in currency and commodity markets during the last trading day of this week. Stock futures are pointing down.

Copyright: United World Capital

[UWC Neeraj]

29 OCTOBER 2012: ASIAN SHARES EDGE UP ON US GROWTH

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian shares edge higher this morning in signs of stable growth in the United States. The MSCI index of Asia-Pacific shares outside Japan added 0,2 percent after posting its biggest drop in two months last week. Australia and the South Korean Kospi are also up. The Hong Kong and Shanghai indexes ended marginally down. The US markets are closed today due to the storm forecast. New York is expected to be hard hit by Hurricane Sandy and Mayor Bloomberg has ordered evacuation of parts of lower Manhattan.

The US Gross Domestic Product, GDP, rose a mediocre 0,2 in the third quarter to expected 2,0 % for 2012. Housing gave the economy a boost, but business investment is lagging. The growth data point to an economy with little momentum, and leave considerable doubt about its resilience to the so called “fiscal cliff” of tax rises and spending cuts due to take place at the end of the year. With little sign that the growth is poised to accelerate, the US Federal Reserve will have every reason to continue its third round of quantitative easing known as Q3.

Non-residential investment continues to decelerate. There seems to be two reasons for the reversal in capital spending: a weakening in global growth and worries about the fiscal cliff. It is hard to judge which effect is greater. The slowdown in China and other emerging markets which have soaked up US export in recent years probably accounts for a good part of the fall in investment. Investors are also reacting strongly to doubt s about the fiscal environments. Slow steady growth in consumption seems to be the main force supporting growth in the third quarter.

The USD is stronger against the Euro in early trading in Asia at 1.2932. It has though recovered from Friday’s two-week low at 1.2882. The Yen is gaining. USD/JPY trades at 79,72. Big and violent street demonstrations against austerity in Italia, Spain and Greece underline the social and economic explosives caused by the debt crisis in the Euro zone. The dollar index DXY measured against a basket of six major currencies hit a near seven-week high on Friday and is at the same level today. The grim weather forecasts and Hurricane Sandy has stabilized oil prices. Brent crude is trading above 109. Gold and silver are trading slightly higher; 1715 and 32.15.

Copyright: United World Capital

[UWC Neeraj]

30 OCTOBER 2012: USA MARKETS WON'T WORK THE SECOND DAY IN A ROW BECAUSE OF THE HURRICANE "SANDY"

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Boards of USA have cancelled it work in connection with hurricane for the second day in a row for the first time in a century. So, on Tuesday, October 30, in the USA trading will not be held not only in shares and options, but also bonds.

Also it has been reported that on Tuesday will be closed for citizens’ visits buildings of the federal government in Washington, and the staff of not emergency services will have holiday. Thus the personnel of the companies in the Wall Street will be presented at the New York offices in limited structure, the big part will spend the working day far off.

It is necessary to note that the Ministry of Labor of the USA declared the intentions on report publication for October on Wednesday, as it is planned according to the schedule, despite the problems connected with hurricane.

Hurricane can also influence oil prices. Earlier already it was noted that on its way there can be some oil refineries in the general capacity of 1,2 million barrels per day, or 7% of oil refining capacities of the USA. In this regard production on the majority of the enterprises is already closed. Also we will note that because oil refineries reduce the capacities, oil stocks this week should grow that indirectly conducts to decrease in the oil prices in North America and also to growth of spread of Brent-WTI.

Today, this morning oil is decreasing and traded on a level of 109.05 dollars per barrel for a BRENT and 85.33 dollars for LIGHT.

Gold and silver are moving in a positive direction and are traded on levels of 1711.43 and 31.88 accordingly. Euro is a bit stronger then dollar and is traded on 1.2921.

Copyright: United World Capital

[UWC Neeraj]

31 OCTOBER 2012: ASIAN MARKETS ARE RECOVERING

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Today Asian stocks markets except for China are gaining in price. Better than the others looks Japanese Nikkei which has lost yesterday before closing of a trading session about 1%. The bank of Japan expanded yesterday the program of repayment of bonds on 11 trillion yens (to 91 trillion) that practically coincided with expectations, thus was declared that fight against a deflation is a priority task. Accordingly to a regulator estimates, by 2014 inflation in the country should reach level of 0,8%, but the target level is 1%. On this background investors safely can expect further continuous monetary easing policies in Japan. Meanwhile the Japanese yen continues some strengthening after last wave of decrease, and today currency pair USD/JPY already bargains at level 79,6 against 80 on Friday.

Today the trading at the exchanges of USA should renew. The main blow of hurricane “Sandy” is over; the building of the New York stock exchange did not suffer. Investors with big tension expected information on renewal of the auctions - at the end of the week there is coming a lot of an important macroeconomic statistics. In the centre of attention there will be data on a labor market, the last one before the elections in the United States.

In absence of the trading in the USA, the prices for oil following the results of last session showed multidirectional dynamics. The spread in December contracts between the Brent and WTI brands makes at present 23,4 dollars. Volumes naturally appeared essentially below averages. According to Reuters, owing to elements on east coast of the USA, 2/3 of all oil refining enterprises appeared closed. Besides, the stop touched also the largest oil pipeline. Nevertheless, already in the nearest future the situation should be stabilized. Today in the morning we can see Brent traded on 109.20 and Light on a level of 85.99.

One of the world's largest investment companies BlackRock on Tuesday issued the review concerning the market of metals in which expressed opinion on an undervaluation of this type of raw materials. In their opinion, demand from China still remains high, despite decrease in growth rates of economy of Heavenly Empire, and the economic situation in Europe and the USA essentially improved. In this regard, in their opinion, it is possible to expect growth of cost of such goods, as copper, iron ore and others.

We could already observe the result of this statement during Asian trading session; there metal companies were measurably growing this morning.

Copyright: United World Capital

[UWC Neeraj]

01 NOVEMBER 2012: DAYS OFF IN USA DID NOT ADD ENTHUSIASM TO THE MARKETS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Yesterday finally trading in the actions in USA were opened after two compelled days off. The American investors began with purchases; however a positive dynamic was reduced after. Following results of the session on Wednesday the index of Dow Jones decreased for 0,08 %, S&P rose by 0,02 %, Nasdaq - for 0,06 %. Moods of investors could worsen with adverse statistics which has been presented yesterday.

The European markets bargained yesterday in different directions, but before closing amicably went to "a red zone". The index of London stock exchange FTSE 100 fell by 1,15 %, index of the Parisian stock exchange CAC 40 fell by 0,87 % and DAX fell by 0,22 %. Influence on moods of investors was rendered by statistical data on inflation and unemployment in Euro zone. The main attention of investors at the moment is chained nevertheless to the Greek and Spanish questions.

Oil futures this morning bargain in different directions, Brent decreases to 107.38 dollars for barrel, Light grows to 86.81 dollars for barrel.

On the average analysts expects that the volume of stocks of oil in USA increased by 1,5-1,75 million barrels. According to the Reuters agency message, in October oil production by the OPEC countries slightly grew. Proceeding falling of production in Iran and interruption of deliveries from Nigeria were completely compensated with the growth of production in such countries as Iraq, Angola and Libya.

Gold with delivery in December on COMEX went up in price for 0,4 % to level of $1719,10 for troy ounce. At currency trading - dollar weakened against euro and the British pound, but got stronger against yen.

Today in USA will be presented a lot of macroeconomic data, which may affect trading on global exchanges. Will be known forecast of ADP on employment, will be published statistics on the number of initial claims for unemployment benefits. Important will be data on construction spending and auto sales.

Copyright: United World Capital

[UWC Neeraj]

02 NOVEMBER 2012: USA: THE EXCHANGES MISSED THE REAL RALLY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Yesterday the stock market of United States finished trading session with considerable growth of main indexes, maximal for last 7 weeks. The index of economic conditions of ISM in the production sphere in October contrary to expectations increased from 51,5 points to 51,7 points; weekly data on number of primary requests for unemployment benefits showed decrease on 9 thousands to 363 thousands with average forecasts at level of 370 thousands; data of ADP showed employment expansion in October on 158 thousands whereas market average forecasts were 135 thousands; at last, the index of consumer confidence in October reached more than a 4-year maximum on a mark of 72,2 points, though a little didn't hold on to forecasts.

Following results of session the indicator of blue chips Dow Jones Industrial Average raised on 1,04 % to level of 13232,62 points, the S&P500 increased on 1,09 % to a level 1427,59 points, and the index of high-technology industries Nasdaq Composite added 1,44 % and reached a point of 3020,06.

In the raw market December futures for oil of Light brand rose in price for 1 % to level of $87,09 for barrel. At the same time volatility is increasing in trading of futures for oil of the Brent brand. Yesterday's statistics from Ministry for the Power Generating Industry of USA, shown essential reduction of stocks of oil in country which has supported prices of oil. As a result futures for oil of Brent brand continue to bargain around $108 for barrel. Gold with delivery in December on COMEX fell in the price for 0,2 % to level to $1715,50 for troy ounce. At the currency trading dollar got stronger against euro, the British pound and yen.

Today the long-awaited report from a labor market of USA for October will be announced. On forecasts data is expected to be quite different: unemployment rate can exceed previous indicator, but number taken out of agricultural sector can grow - that in turn can promote raised volatility of trading in the first half of session. It is necessary to note that as a whole this statistics is capable to set moods of investors. However reaction to it can appear to be short-term on the threshold of a coming election of the president of USA.

Copyright: United World Capital

[UWC Neeraj]

05 NOVEMBER 2012: ELECTION UNCERTAINTY TEMPERS OPTIMISM

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The USD continues to climb against all currencies prior to a presidential election, too, close to call. The Euro is once again under strong downward pressure with Greece back in focus after what is described as a “disastrous” 2013-budget. Both deficit and debt targets seem to overshoot due to a deeper than forecast Greek recession.

Greek and Euro zone policy makers’ effort to shape a deal to prevent the collapse of the Greece’s rescue packages, hang on the cliff. There remains room for nasty surprises and potentially a failure of the intended bailout. This has brought the possibility for a Greek exit from the Euro zone back on the agenda. Euro/USD is trading at 1.2831. USD is also stronger against JPY trading at 80,42.

Last week saw a string of encouraging data releases from the US culminating in Friday’s robust non-farm payrolls report on 171 000 new jobs created in October. The unemployment rate was up from 7.8 to 7,9 percent indicating a slow, but sustained economic recovery.

Uncertainty ahead of Wednesday’s US presidential election along with worries about the “fiscal cliff” of tax increases and spending cuts facing the United States, limited the feel good factor of investors. With the outcome of the elections hanging on the edge, markets are left concerned whether the newly elected president will have the political capability to deal with the fiscal cliff. Uncertainties related to automatic fiscal tightening may undermine the recent economic rebound. This does not bode well for general risk appetite.

Wall Street’s initial positive reaction to the positive labor figures quickly faded and gold and industrial metal prices sank with the dollar climbing sharply.

Copyright: United World Capital

[UWC Neeraj]

06 NOVEMBER 2012: EURO DROPS TO TWO MONTHS LOW

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Euro continued to fall and reached its lowest level against the USD in two months trading at 1.2787 Tuesday morning. The outlook for the Euro is clouded by uncertainty over the outcome of a Greek parliamentarian vote on further austerity steps needed for Athens to secure international aid. Prior to the vote in the Parliament on Wednesday Prime Minister Antonis Samaras stated that Greece would run out of funds within some few weeks without a quick international bailout injection.

The Greek Parliament shall vote on a package of measures of cost cuts and tax hikes of a total value of 13,5 billion Euros by 2016. Approval of the measures are crucial to unlocking 31,5 billion Euros in aid from the International Monetary Fund, IMF and EU. Release of the bailout funds have been kept on hold for months. The uncertainty surrounding the outcome of the parliamentarian vote, has pushed the euro out of the 1.2800 – 1.3000 trading range held since mid-September. The next immediate technical support level is around 1.2740.

Stocks advanced modestly in New York on Monday in a quiet session the day before the presidential election. President Obama has a slight lead in the last opinion polls, but whatever the outcome the election’s resolution will finally end the uncertainty that has kept the markets stagnant for the past few weeks. Reelection of Obama or a Romney victory could anyhow lead to a relief rally. Nasdaq was the strongest performer yesterday helped by a rally in Apple. Apple’s stocks rose 1,4% after falling 17 percent since its closing high of USD 705 on September 21.

The Australian dollar is steady at USD 1,0369 prior to Australian Reserve Bank’s rate decision later today. A rate cut of 25 basis point to cash rate to 3,0 % is expected. In relation to Japanese yen the USD eased to 80,23 after rallying to a six-month high of 80,68 on Friday.

Oil prices steadied. Brent crude is trading at 108 a barrel caught between uncertainties on the outcome of the US presidential elections and worries about Greece and the euro zone crisis which could delay a global economic recovery and hurt oil demand. Gold (1686) and silver (31.10) have picked up from its lows on Friday.

Copyright: United World Capital

[UWC Neeraj]

07 NOVEMBER 2012: DOLLAR FALLS ON OBAMA VICTORY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Securing victory in important swing states as Ohio, New Hampshire and Florida, President Obama seems to have won a clear majority and reelection in the US Presidential elections. As the results started to come in during the night, stock futures and the dollar fell against a basket of major currencies. Euro/USD which slipped to 1.2760 on Monday is up to 1.2860 in morning trade in Asia. Gold jumped 40 dollar to 1725 and benchmark treasuries rose. Also oil prices are up. NYMEX at 888 and Brent crude trading at 110,80. Asian shares rose on Obama’s reelection. The result means an end to the uncertainty which have ridden the markets for last weeks, and signals no dramatic shift in US economic policy.

Obama’s victory is in line with market’s expectations. A close race was, however, expected. The general view is that a second Democratic term under Obama would favor bonds. It is perceived that Obama favors bonds and low interest rates. The Republican challenger, Mitt Romney, is generally seen as more business friendly. As a former business executive he is seen as more supportive for equities. As results came in, US futures fell while Asian shares rose amid relief that there was a clear-cut result. The South East Asian Pacific Index, MSCI, was up 0,4 %.

The general signal coming from world markets is that the election outcome is in line with expectations. The temporary fall in the USD suggests that any precautionary positioning in USD has been premature. The Australian AXJO index rose 0,5 percent supported by overnight rise in commodities that boosted mining stocks. The Australian dollar hit a five-week high at 1.0461. Euro/USD touched a session high on 1.2876 being safely backed in the corridor between 1.28 and 1.30 which we have seen over the last five – six weeks. Analysts see Obama’s victory as a continuation of monetary quantitative easing. Active use of the printing press would put pressure on the dollar and boost bonds.

The big domestic challenge for Obama is seen to be cooperation with a Republican dominated Congress in how avert the looming “fiscal cliff” where USD 600 billion worth of spending cuts and tax increases risk pushing the economy into deep recession. Any sharp downturn in the world’s largest economy would raise concerns about demand for industrial metals. The markets first reaction has been to send commodities, oil and precious metals higher.

In Greece parliament later today is going to vote on a package of 13,5 billion Euro of spending cuts and tax hikes. These austerity measures are crucial to unlocking 31,5 billion euro in aid from global lenders to keep the debt-ridden country afloat. A negative vote is going to put the Euro under new pressure.

Copyright: United World Capital

[UWC Neeraj]

08 NOVEMBER 2012: WALL STREET SINKS ON FISCAL CLIFF FEARS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Dow Jones industrial lost more than 300 points in a sell-off on Wednesday one day after the reelection of president Obama. The major stock indexes were down over 2 percent in the wake of the US presidential elections as investors focus shifted to the looming “fiscal cliff” and the troubles with the Euro zone. The American indexes closed at their lowest levels since early August. The stock exchanges in Europe had experienced similar steep falls earlier on Wednesday with the debt crisis and new austerity measures in Greece back on the top of the agenda. Asian stocks also tumbled as US fiscal cliff looms.

Financial stocks and energy shares, two sectors that could face increased regulation after Barack Obama’s re-election, were hardest hit. Oil prices which started the day on a positive note fell 4 percent. Brent crude is trading at 107.80 and New York crude is back below USD 85 a barrel. After the elections considered as a major source of market uncertainty are finished, focus has turned to the “fiscal cliff”. Investors worry that if Democrats and Republicans are not able to agree on spending cuts and tax increases amounting to USD 600 billion, the overall economy will seriously suffer and derail the economic recovery.

The fall in the stock markets yesterday were spurred by comments from the President of the European Central Bank, Mario Draghi, stressing that also Germany started to feel the impact of the financial crisis. A corresponding report from the European Commission concluded that there barely would be any growth in the Euro zone next year. The reports dashed any hopes for short term improvement. Some analysts, however, saw the slide in stocks as a buying opportunity arguing that Europe’s troubles already were priced into markets. The Euro which made a strong rebound in the morning yesterday by bouncing back into the last weeks trading range between 1.28 and 1.30 versus dollar plunged hundred points and continues down in early Asian trade at 1.2750. Japanese yen is strengthened against the green back at 79,85. Precious metals have fluctuated heavily during the start of the week. After recovering from the low 1680 last week, Gold jumped to 1725 after the outcome of the elections, fell down to 1708 and is now trading at 1715.

In Athens Greek police fired teargas and water cannon at protesters hurling petrol bombs outside parliament in one of the biggest rallies in months against new austerity measures necessary to release bail-out funding from the International Monetary Fund, EU and the European Central Bank. Parliament approved the austerity measures by a razor thin margin in a heated debate into Thursday morning. The measures will make it easier to hire and fire workers. The junior ruling partner, the Democratic left, abstained, but New Democracy, the part of Prime Minister Antonis Samaras, and its Socialist Pasok allies were able to muster 153 out of 300 votes. 150 were necessary to secure the approval of spending cuts, tax hikes and weakening of labor’s rights.

Copyright: United World Capital

[UWC Neeraj]

09 NOVEMBER 2012: GLOBAL MARKETS DOWN ON NEW UNCERTAINTIES

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Stocks fell in Europe, the United States and in morning trade in Asia and could be in line for more weakness as worries about Washington’s ability to find a timely solution to the “fiscal cliff” continue to dominate investor thinking. Along with new fears on how the Euro zone shall tackle its debt problems, global markets are set for a dumpy ride for the end of the year. As stock markets fall the Euro is under renewed pressure and trades at a two-month low. In spite of the Greek Parliament’s approval of new austerity measures yesterday, Greek bail-out funds are kept on hold. The German Minister of Finance stated that the approval of the austerity package was not enough to keep Greece in the Euro.

McDonald’s shares fell 2 percent after the world’ largest hamburger chain reported its first monthly drop in global sales since 2003. Another heavy weight, Apple, fell 3,6 % and is down 20 percent from its all-time high of USD 705 a share in September. The leading chips supplier, Qualcomm, was the exception gaining 4,4 percent on an otherwise dark session. Investors worry that if no deal is reached in Congress over some 600 billion in spending cuts and tax increases, the slow recovery seen will be reversed. A comprehensive agreement to avoid the “fiscal cliff” still seems possible. A more likely scenario is for political leaders to find a temporary fix to buy time until the new Congress and Obama are sworn in early next year. The prospect of haggling over the budget has deepened investors’ uncertainty and tends to explain market’s reactions over the last days.

The Euro was furtherly undermined after the European Central Bank, ECB, as expected kept rates on hold yesterday. The President of ECB, Mario Draghi, sounded downbeat on the euro zone economy and stated that he was ready to start new purchases of bond. Faced with overwhelming problems European leaders once again seem to be mostly occupied by buying time. This creates downside risks for the Euro which is likely for a new test of bottom levels between 1.20 and 1.25 seen some months ago. The announcement of European bond buying and expectations for continued monetary easing in Obama’s second term has strengthened gold which has jumped more than 50 dollars since the beginning of the week, trading at 1735.

Oil prices have stabilized and copper is up. Brent crude is at 107,58. China presented lower than expected inflation figures and other data that indicates a slow turn around in Chinese economy. The Chinese Communist party congress is simultaneously electing a new leadership, securing a smooth transition to a younger generation of leaders who will be faced with corruption, economic and political reforms as their major challenges.

Copyright: United World Capital

[UWC Neeraj]

12 NOVEMBER 2012: FEAR OF “FISCAL CLIFF” DOMINATES MARKETS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

By demanding higher taxes for the rich as a condition for any budget agreement with the Republicans, President Barack Obama, has opened the fiscal battle that is going to dominate the first months of his second term. Strengthened by the elections Obama has invited Republican leaders to a first round of high-stakes negotiations to prevent the fiscal cliff – a mix of $ 600 billion in spending cuts and tax rises that will go into effect next year unless a deal is reached by 31st December. In spite of some more optimistic signals markets seem to have built in prospects for a no-deal. Combined with technical analysis the development points towards a substantial correction in shares and the security markets in the coming months.

Talks to prevent that scenario, which could tip the US into recession and have disastrous effects on the global economy, were put on ice during the election campaign. Sticking to his principle stand that individuals like himself with an annual income of more than $ 500 000, must take their fair share Obama has kept the door open for details in a compromise package that can open for new ideas. A senior Republican Senator voiced Sunday support for the idea that increased tax revenues from wealthier Americans ought to be a part of a compromise to avoid falling over the “fiscal cliff”.

Global markets are watching Washington’s steps with increased worries. The Asian markets continued to fall in to-day’s morning trade in spite of a smooth Chinese leadership transition and better industrial production, investment figures and retail sales coming out of China for October. The Chinese authorities also seem to have inflation under better control, and the GDP for 2012 seems to end around the predicted 7,6 percent. A shrinkage in the Japanese in last quarter with 0,9 % also weighed in on investor’s sentiment in Asia. The contraction suggested faltering global demand and weaker consumer spending, and might push the world’s third largest economy into mild recession.

The Greek parliament which last Thursday approved new austerity measures, adopted yesterday night a new tough budget for 2013. European Finance ministers are meeting in Brussels to-day to discuss unfreezing of lending to Greece. There is no agreement within the Euro zone on how to make the debt sustainable. It seems, however, that Athens will be given two more years to cut its debt. Greece’s adoption of a new budget has for now stopped the free fall of the Euro. Euro/USD is trading 0,2 % up at 1.2730. USD is gaining against JPY at 79,485, but is weaker towards Australian dollar, the New Zealand KIWI, Swedish and Norwegian krones. Oil prices have stabilized with Brent trading above 109. Gold and silver, the big winners last week, continue slightly up with Gold at 1735 and Silver 32,62.

Copyright: United World Capital

[UWC Neeraj]

13 NOVEMBER 2012: EURO HITS 2-MONTH LOW ON GREECE

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Euro dipped to a two-month low against the dollar. Euro/USD is trading at 1.2680 after Euro zone leaders and the International Monetary Fund, IMF, yesterday failed to agree on a long-term plan to reduce Greece’s debt. This has further delayed the disbursement of immediate aid to Athens. The Greek government is said to be running out of funds during this month. In an effort to secure new emergency funding the Greek parliament last Thursday approved new extensive austerity measures. On Sunday the Greek parliament adopted a strict austerity budget for 2013 seemingly to no avail.

Uncertainty over as well short-term financing and long term debt reduction has made the Euro tumble. After stabilizing inside a corridor between 1.28 and 1.30 for weeks, the Euro seems again in free fall. There is little chance that the Euro zone will desert Greece, but investors are frustrated by the lack of clarity. With no emergency funding in place, Greece plans to sell treasury bills during this week to refinance a 5 billion Euro issue maturing on Friday. The outcome of this auction is in the blue. Concerns on Greece’s ability to refinance would for sure put the Euro under new pressure. The Euro has been constantly falling since it peaked at 1.3140 in mid-October as the euphoria over the European Central Bank scheme to buy government bonds to help support Spain’s debt burden faded.

The European ministers agreed yesterday to grant Greece two more years to reach its budget target, but disagreed over who should shoulder the additional 33 billion Euro cost. Both Germany and Finland have to go back to their parliaments for final approval. The dollar index a measure of the dollar against six major currencies rose to its highest level since early September. Uncertainties on how US lawmakers shall tackle the “fiscal cliff” of spending cuts and higher tax rates may, however, come back and haunt the dollar. With the dollar also under pressure, JPY will again appear as a “safe haven” among currencies. USD/JPY is trading at 79,285.

Oil prices are under new downward pressure. Brent crude is tipping below USD 109 a barrel. New forecasts from IEA, The international Energy agency, IEA, is predicting that the United States would pass Saudi Arabia as an oil exporter by 2015 and become a net exporter of energy by 2020. Precious metals fell back yesterday consolidating heavy gains from last week-lows. Gold is at USD 1725 and Silver trades at 32.40.

Copyright: United World Capital

[UWC Neeraj]

14 NOVEMBER 2012: HOME DEPOT AND CISCO WINNERS ON FLAT EXCHANGE

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Microsoft, Caterpillar and IBM were the big losers when stocks were sold off late in the session in New York last night. Retailers were the bright spot when Home Depot raised its outlook. Cisco which presented results after the closing bell, rose 6,8 percent after reporting revenues and earnings that beat analysts’ estimates. Home Depot, a home retail supplier, hit share prices levels not seen since April 2000, confirming greater optimism in the housing sector.

Concerns about the looming “fiscal cliff” kept investor activity subdued as lawmakers returned to Washington after November 6 elections. The markets are grappling with how a divided Congress will deal with a series of mandated tax hikes and spending cuts that will come into effect next year and threaten to take the largest world economy back into recession. Lawmakers were met by news that the US budget deficit continue to raise. The US Treasury said yesterday that October deficit was USD 120 billion larger than economists’ forecasts for a $ 114 million gap and up from $ 98 billion in October 2011. Growth in expenditures far outpaced rising receipts.

Asian shares and the Euro steadied on Wednesday morning, but lacked impetus for a decisive rebound threatened by the “fiscal cliff” and a delay in releasing more aid to debt-stricken Greece. The Euro/USD rebound from 1.260 on Tuesday and trades at 1.2720. USD/JPY stabilized around 79,50. MSCI’s broadest index of Asia Pacific shares outside Japan rose 0,3 percent after falling to a seven-week low in the previous session. Tokyo’s Nikkei edged up 0,1 percent after seven straight days in the red.

Copyright: United World Capital

[UWC Neeraj]

15 NOVEMBER 2012: OIL PRICES JUMP ON GAZA TENSION

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Oil prices jumped one and half dollar yesterday on increased violence in the Middle East. Brent crude trading at 109,75. The Head of the military arm of the Hamas Palestinian authority in Gaza was killed along with 10 others in Israeli missile strikes. The new unrest in the region which comes on the top of the Syrian conflict and Iranian-Western tensions on Iran’s nuclear program added to selling pressure on Wall Street. Both Nasdaq and Dow Jones fell substantially. Hardest hit was Bank of America, General Electric, Boeing and Caterpillar. Facebook stock jumped 12,6 percent as a share lock-up expires. Facebook has fallen more than 50 % percent since the IPO introduction.

In his first press conference after reelection president Barack Obama outlined a compromise on debt/taxes, a new immigration law and renew focus on climate as his immediate priorities. By pledging to raise taxes on the wealthy, Obama set up a drawn-out fight over the fiscal cliff, budget cuts combined with tax hikes. The deadline for reaching a deal between Republicans and Democrats Congress is set to 31st December. With talks over solving the “fiscal cliff” in early stages, investors are reacting to the uncertainty by shedding positions. This points towards a last minute cliffhanger solution. In the meantime the market is going to get punched every day as experienced on Wall Street yesterday.

Without a deal a series of mandated tax hikes and spending cuts will start to take effect early next year. That could push the US economy into recession. Taxes on capital gains and dividends might rise as party of the negotiations. This shall probably push investors to sell in 2012 to pay lower taxes on their gains. Uncertainty inside the Euro zone with the bail-out tranches for Greece still in the air, add to the downside pressure in the equity markets. With the whole Middle Eastern region in deep problems with the Palestinian – Israeli conflict flaring up again, market sentiments remain subdued. Israel is threatening an invasion of Gaza as a following up of the killings. Egypt has recalled its ambassador from Israel in response.

Xi Jinping was yesterday elected new party chief of the Chinese Communist party and received a strong mandate to deal with problems ranging from corruption to economic uncertainty. Asian stocks fell as investors reacted to drawn-out negotiations the “fiscal cliff”. Japanese equities bucked the trend as a sharp slide in the Yen lifted exporters’ shares. The MSCI index fell 0,9 % as did the indexes in Australia and Hong Kong. Copper is weaker and precious metals stabile. Gold at 1725 and Silver at 32,60.

Copyright: United World Capital

[UWC Neeraj]

16 NOVEMBER 2012: BEAR MOOD DO NOT RECEDE

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The American indexes once again finished trading session in a red zone. Frankly speaking, we have seen so much negative information yesterday that it was possible to expect even more considerable falling. The main headache for investors still is a fiscal cliff.

Today the president of the United States will meet congressmen, and in common they will try to find a way out of current situation. Might be markets will get an occasion to grow up following the results of a meeting. However yesterday’s fears were not limited only to a general picture in the markets. Right after an election of the president in the United States statistics started to spoil. Yesterday was presented very bad data on a primary requests for an unemployment benefit in the USA. Growth of requests made 78 thousand, even slightly more than 20 thousand were expected, the total number of requests made 439 thousand. It is a lot, and raises a reasonable question that so strongly changed in the employment market literally for few weeks.

Besides macroeconomic data there was a weak reporting from Wal-Mart. Business of the largest retailer, many investors consider, as an advancing indicator. Nevertheless, despite this negative, the American markets lost within only 0,2-0,3%.

The trading in the commodities market is stable; Brent grows to 108.1 dollars for barrel, NYMEX decreases to 85.6 dollars for barrel. A favorable factor for growth of the oil prices is the statistics which came yesterday on the fuel market in the USA: so, stocks of crude oil grew to 1.09 million barrels contrary to expectations in 2 million; reduction of stocks of oil products made 2.54 million barrels - was expected 1 million. Continuing conflict in the Middle East will also support growth of oil prices. According to the information from HAMAS, the Air Force of Israel struck the next series of blows to the Gaza this morning.

Precious metals are weak this morning, Silver is losing more than 1% and traded at 32.34, Platinum at 1560.59, Gold is stable at 1712.

Copyright: United World Capital

[UWC Neeraj]

19 NOVEMBER 2012: ASIA UP AS USD/JPY TRADES AT SEVEN-MONTH LOW

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

USD/JPY fell to a seven-month low against the dollar trading at 81,166 as Asian shares rose, boosted by a more positive tone in US equities last week and on expectations that next month’s Japanese elections will bring a new stimulus friendly government. MSCIs broadest index of Asia-Pacific shares outside Japan rose 0,6 percent, recovering from Friday’s nine-week low. The energy sector outperformed on mounting supply concerns following the development in Gaza with Israeli air strikes and Hamas rocket attacks underpinning oil prices. Brent crude trades at 109,50. NYMEX is at 87,57.

Most markets under-performed last week. There are, however, hopes that US negotiations around the fiscal situation may progress and improve prospect for the stock markets. Japan’s Nikkei surged 2,2 percent Friday and bucked the downtrend in broad Asia. It has extended the gains this morning. Nikkei is 1,3 percent up and trades at a two-month high helped a weaker Yen and expectations that 16th December elections shall bring a new government ready to call for stimulus and a more aggressive easing from the Central Bank of Japan.

Hope that US politicians would find a common ground to steer clear of the “fiscal cliff”, boosted US stocks on Friday. European stocks, however, sank to its lowest level seen since May on US “fiscal cliff” concerns and the euro zone debt crisis. US treasury yields fell to its lowest levels in over two months on Friday as skepticism over the US budget talks drew safe-haven bids. Lawmakers, however, hinted at a possible budget compromise involving budget cuts and tax revenues.

The dollar is still strong after hitting a two month high in early Friday trading against a basket of six major currencies. The drop in Gold helped precious metals. Gold is trading 10 dollar up at 1723. Silver is 32,60 after dipping below 32 on Friday. The Euro rose to 1.2772 on Friday on expectations that the International Monetary Fund, IMF and euro zone finance ministers shall agree on how to make Greece’s debt more manageable. A bundled aid package to avert a Greek default may create a relief rally in the Euro. Euro/USD is at present trading at 1.2762. The short and medium term outlook for the Euro is, however, still bearish.

Copyright: United World Capital