New week would probably passed as well as the previous – with a relatively limited number of corporate news, low liquidity and routine economic indicators. However, this poses its own risks and, as it is a low liquidity market movements can be quite sharp and dangerous. Late summer is typically a period in which investors monitor market movements from the beach – season completed reports, and most institutions have made an important decision for the economies are in summer vacation. It is the stagnation in the corporate sector is the main reason not to expect major turmoil in the market. During this week of U.S. data expected new housing market, which will be published tomorrow and Wednesday. Also on Wednesday are expected news on durable goods orders, and on Thursday are scheduled for initial unemployment data. Exactly they managed to stretch the market last week, pushed him down after a surprising increase in the requests for assistance. Most important news for the U.S. will come on Friday and are associated with preliminary data on gross domestic product for the second quarter. On the same day and is expected speech Federal Reserve Chairman Ben Bernanke.
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The investors spend their money in bonds, are willing to invest money in almost anything you offer them market. In this situation, bankers are willing to undergo a test that claim – through the issuance of bonds maturing in 100 years, says the Wall Street Journal. Bonds with longer period as is considered very exotic, they may be issued only by the most powerful companies in the world – those that can be expected that the next century will be on the market. Hundred bonds were in fashion in the mid 90’s and the beginning of the century, when several companies were able to put such issues. Most of them were released in 1993, 1996 and 1997. This type of instruments are used quite rarely, because the issue should be offered a serious premium over 30-year bonds. The current record low historical interest rates lure companies to issue long-term debt. The reason for this is that companies can borrow cheap loans from banks and do not have to pay higher interest on bond issues. If issued, 100-year bonds will pay principal prior to 2110 – the year in which in all likelihood, today’s investors will be among the living. The main risk in these securities is that interest rates can jump so as to reset the bond face value. In view of market developments over the past decades, so it’s not sounds amazing. That is the reason for the skepticism, which sees the desire to place such term bonds.
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The coalition of businesses, regulators, accountants, stock exchanges and NGOs launched an initiative to revise the standards for international financial reporting in order to prevent a new financial crisis, writes Financial Times. The crisis raises many questions about how to rely on corporate statements. Annual reports and financial statements of banks have been particularly criticized for not having warned investors about the risks that companies take. International Integrated Reporting Committee, using the accumulated discontent as a result of the crisis, wants to make a radical change in financial reporting. The proposed new reporting model will consider not only the company’s financial position, but will also include comments on leadership, corporate policy, payment, and issues related to environmental and social responsibility. Investors focus increasingly on issues such as the impact that could have climate change on the finances of a company. Among participants in the initiative are Nestlé, Aviva, EDF, HSBC, Tata, big four auditing companies PwC, Deloitte, Ernst & Young and KPMG, a number of universities, including Harvard Business School, and influential non-governmental organizations such as Global Reporting Initiative and Accounting for Sustainability Initiative.
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The heads of the International Monetary Fund (IMF) are split on whether the Chinese yuan is undervalued. Thus, the organization transferred the differences between U.S. and China on monetary policy in the Asian country. Some board members say the organization that claims that China’s exchange rate is undervalued, based on “vague forecasts for the current account surplus country, it is clear from the statement distributed after the last meeting of the organization. The Chinese yuan rose is less than the rate against the dollar for the last month, although U.S. push for faster appreciation of yuan. On 19 June the authorities in China announced that they no longer practical policy fixed exchange rate of yuan to the dollar and that will be pursued more flexibility. “Directors welcomed the decision to return to the regime of managed floating exchange rate,” it said in the opinion of the meeting. “This decision will increase the flexibility of the central bank to tighten monetary policy,” said the heads of the IMF. Today, the Chinese yuan was at 6.7792 yuan to the dollar after a period of two years – from July 2008 to June 2010 was held at 6.83 yuan to the dollar. “Many directors maintain that over time a strong yuan will help the transition from investment to exports and private consumption as the main driver of growth, it is clear from the opinion.
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The next global recession can be expected around 2012, said investor Jim Rogers. It may, however, is much more severe since then central banks will be able to pour so much money on the market because of inflation, which will raging, he said, quoted by CNBC. Today, the RBI decided to increase interest rates, thereby joining countries such as Canada, Norway and Australia did the same. The reason for increased interest is the danger of inflation and the rapid economic development. “The world is inflation, while most central banks to deny,” said Rogers and stated that every four to six years in the U.S. has recession. This leads him to believe that the next recession will occur in particular around 2012. “When she came, the world will be in far worse condition, as will already have exhausted all the bullets. Does Bernanke will print more money? No, I will do the trees in the world, “said Rogers. According to Rogers, the fact that the profits of U.S. companies are above expectations does not mean at any cost, that recovery is stronger than expected. “I’m sure part of that relates to expectations, but remember what you compare. Talk about the second quarter of 2009 when we thought that the world ends, “said Rogers.
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The Global foreign direct investment (FDI) reached a new nadir in the second half of 2009, then had a modest recovery in the first part of this year, which raised optimism about prospects for FDI out annual survey of global trends in investments of the United Nations Conference on Trade and Development (UNCTAD). Recovery appears to gaining strength as global FDI is expected to surpass 1.2 trillion. dollars in 2010 to reach 1.3 to 1.5 trillion. dollars in 2011 and to near 1.6 to 2 trillion. in 2012, however, these perspectives on foreign direct investment are filled with risks and uncertainties, including that global economic recovery seems fragile at this point. For 2009, the conference reported nearly 40% decline in global FDI. Some major changes in trends in global FDI preceded global crisis and is likely to escalate in the short and medium term, the report provides. The relative importance of developed economies and transition economies as destinations and sources of global FDI is expected to continue to increase. Although FDI inflows to developed economies and economies in transition decreased by 27% in 2009 and outflows of FDI from these two groups of economies have shrugged by 21%, they are still made almost half of the inflows of foreign direct investment in 2009 , and have provided a quarter of global FDI outward.
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After the first half came time charts and different tiers. One of the more interesting is the appreciation of shares in the broader American index S & P 500. Here are ten shares, which best represent the beginning of 2010 so far. The tenth place for Novell Inc. Its shares have increased by 36.9 percent to 5.82 dollars per share. This follows news that the company refused the offer to be sold for 5.75 dollars Elliott per share. In the second quarter of fiscal year Novell has made profit growth of 28 per cent. The ninth position is for KeyCorp., As shares of the bank have increased by 38.6 percent to 7.23 dollars cash. Against the backdrop of turmoil in the financial sector, bank accounts showing a contraction of loss and reduced costs to the provision for possible write-offs. Shares of Smith International, which also risen 38.6 percent to 37.57 dollars in cash, occupy the eighth position in the rankings. Currently the company manages to overcome the negative sentiment towards the energy sector, although declining from 88 percent in profit and 11% decline in revenue is coping well. The seventh position falls on Titanium Metals Corp. Its shares have increased by 40.5 percent to 17.27 dollars in cash. For the last year shares of Titanium Metals have achieved growth of over 100%, which explains the strong results due to the high demand for metals.
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The leaders of the eight most industrialized countries have different views on how to ensure recovery of the world economy. The G-8 in Huntsville, Canada the weekend will probably show the direction of meeting the broader group of G-20 meets on Sunday in Toronto, Canada, shortly after the G-8 completed work. Agency notes that expectations for a breakthrough on economic issues the Summit of the G-8 (Group of Eight most industrialized countries) and D-20 (which includes large emerging countries like China and India) in Canada are weak. According to the Wall Street Journal, however, world leaders have converged positions on whether the economic focus should be on growth or on reducing the deficits and debts. “Among the G-8 consensus on a balance between mid-term tightening of fiscal policy and promoting growth, said on Friday a senior official of the administration of the US President Barack Obama. The G-8 and donor groups have promised to make 2015 a total of 7.3 billion dollars to reduce child mortality and maternal in poor countries, transmit dpa, referring to the Canadian Prime Minister Stephen Harper. The eight most developed industrialized countries are committed to allocate $ 5 billion. The rest of the amount promised by countries like New Zealand and Norway, as well as donor groups such as the Foundation of the Bill and Melinda Gates. U.S. President Barack Obama invited 18 African leaders to come to Washington in August to celebrate the 50th anniversary of independence of their countries forward AFP, citing a senior U.S. delegation to the summit of the G-8. Obama will launch in early August a special event to mark the coming of a half century of independence of these former colonies.
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The leaders of the U.S. Federal Reserve Ben Bernanke and European Central Bank (ECB) Jean-Claude Trichet stressed in separate statements that developing economies are a key factor for global financial stability. According to Bernanke the global economy increasingly dependent on emerging markets to maintain strong domestic demand and economic and financial stability. The improvement of policies and regulatory frameworks in emerging markets has an effect beyond those economies themselves, he said. In a separate statement prepared for a press conference during a meeting of finance ministers and heads of central banks of the G-20 in South Korea at the end of this week, Trichet stated that developing economies have been a source of strength in the world financial crisis. Characteristic aspect of this crisis was that going from industrialized economies. Developing countries were also severely affected, but as a group remained the lifeblood of the global economy, Trichet said in a pre-prepared statement for the press conference. Speaking of Bernanke is also pre-recorded for the event. Bernanke gives an example South Korea, saying the government and the central bank of the country, launched after the Asian financial crisis of the late 90’s of last century, helped South Korea to resist the current crisis.
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70% of companies with revenue of $ 1 billion or more plan to increase spending on initiatives related to climate change in the next two years, according to global study commissioned by Ernst & Young and said. Nearly half of 300 directors of companies surveyed said that their investments related to climate change will vary from 0.5% to over 5% of their revenues by 2012. 82% of respondents indicated that they plan to invest in energy efficiency over the next 12 months, while 92 percent believe that energy costs will be an important factor during this period. The heads of companies commit to taking action, although said that complying with different regulations in different countries will be a challenge. The fact that 70% of company bosses are planning to spend more for programs related to climate change is “one of the amazing discoveries, the study indicates Melanie Steiner of Ernst & Young. Despite regulatory uncertainty on climate change “companies really take action because they see that this is a business issue and opportunity to generate new revenue,” said Steiner. While action to tackle the consequences of climate change in the past been a question in the field of public relations today are able to make money through new services and products, savings through better efficiency and reducing the risk, she adds.
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