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Markets rise on Greek aid package

July 22nd, 2011 Comments off

22 July 2011 Last updated at 03:43 ET

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The latest Greek bail-out involves a ‘calculated risk’ by European leaders, says the BBC’s Nigel Cassidy

Stock markets have continued to rise following the eurozone’s comprehensive agreement designed to resolve the Greek debt crisis.

UK, French and German markets gained more than 0.5% in early trading, while Japan’s Nikkei closed up 1.2%. The euro also rose further against the dollar.

Eurozone leaders agreed a further 109bn euros ($ 155bn, £96.3bn) aid package.

Private lenders will contribute to the package, which will give Greece decades more to repay its debts.

The latest Greek bailout by the 17 eurozone governments and the International Monetary Fund is part of a comprehensive package to shore up the single currency unveiled on Thursday.

Eurozone leaders hailed the comprehensive agreement.

Dutch Prime Minister Mark Rutte said: “We have sent a clear signal to the markets by showing our determination to stem the crisis and turn the tide in Greece, thereby securing the future of the savings, pensions and jobs of our citizens all over Europe”.

Debt relief

“Start Quote

Doubts will remain as to whether, having won a second bail-out, Greece will remain committed to unpopular austerity measures and privatisations”

End Quote

image of Gavin Hewitt Gavin Hewitt BBC Europe editor

The Institute of International Finance – a global trade body representing big banks and other major lenders – said the planned debt restructuring would target participation by 90% of Greece’s private sector lenders.

French President Nicolas Sarkozy said private lenders will contribute a total of 135bn euros of financing to Greece.

The plan is expected to provide some 50bn euros of debt relief to Greece.

Three of the four options offered to lenders to swap or relend existing debts would extend Greece’s repayment terms by 30 years, while the fourth would do so by 15 years.

They all offer a much lower interest rate than Greece’s current 15%-25% cost of borrowing in financial markets.

Two of the options would also involve “haircuts” – reducing the amount of debt Greece has to repay.

The terms of the deal imply a loss to Greece’s lenders equivalent to 21% of the market value of their debts, said the IIF.

First default

The restructuring is widely expected to be declared by credit rating agencies to be a default by Greece on its debts – something European leaders have been at pains to avert until now.

European Council president Herman Van Rompuy

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Herman Van Rompuy: “This situation was… threatening the stability of the eurozone”

The ECB and France had been particularly opposed to a default, but it was ultimately insisted on by Germany.

German Chancellor Angela Merkel said: “I strongly welcome the voluntary contribution from the banks. I believe that this is the right signal coming at a difficult time”.

Mr Sarkozy played down the significance of the banks’ participation in the aid package.

“If the rating agencies are using the word you just used (default), it is not part of my vocabulary. Greece will pay its debt,” he told reporters.

The deal would make Greece the first ever EU country to default, and could have a number of serious repercussions:

banks would be forced overnight to recognise in their financial accounts billions of euros in losses on Greek debts they own
these losses could in turn leave banks short of capital – making it difficult for them to lend – and could leave the Greek banks insolvent
Greek banks would also be unable to use their government’s debts as security to borrow cash from the ECB
the ECB itself stands to make major losses on Greek debts it has bought or accepted as collateral from the Greek banks
separately, the debt restructuring could also trigger payouts on billions of dollars of credit derivative contracts, used by financial markets to hedge against or speculate on a Greek default

The Greek bail-out package will be used to soften the blow to the Greek banks, with 20bn euros being used to recapitalise them, and 35bn euros to facilitate their continued borrowing from the ECB.

Irish interest rates

The biggest fear of European leaders is that imposing losses on Greece’s lenders could lead to contagion – a sharp increase in the rate at which markets are willing to lend to other eurozone borrowers, in particular Italy and Spain.

Debt to GDP ratios

Greece 142.8%
Italy 119%
Belgium 96.8%
Ireland 96.2%
Portugal 93%
Germany 83.2%
France 81.7%
Spain 60.1%

Source: Eurostat. Government debt expressed as a percentage of economic output.

“We would like to make it clear that Greece requires an exceptional and unique solution,” the eurozone leaders said in a statement following their meeting.

Despite their fears, markets rallied as details of the new bail-out emerged, with the cost of borrowing for all of Europe’s heavily-indebted borrowers falling.

However, the borrowing costs of Portugal and the Republic of Ireland still remain at levels that suggest markets think they too are likely to default in the next five years.

Mr Sarkozy said on Thursday there will be no imposition of losses on private sector lenders to the Irish Republic or Portugal.

Thursday’s announcement should make life easier for both countries, with the repayment dates of their rescue loans being doubled to 15 years.

It also included a 2% reduction in the Irish Republic’s interest payments, something that the Republic’s Prime Minister, Enda Kenny said would save it a “substantial” 600-800m euros a year.

Investment projects

Among the other changes announced on Thursday were plans to ultimately turn the Eurozone’s bail-out fund into a European equivalent of the IMF.

The EFSF was granted new powers to buy up bonds – necessary for it to carry out the Greek debt restructuring – and to make credit available to countries such as Spain and Italy that are not at immediate risk of insolvency.

EU development funds and loans from the European Investment Bank would be used to finance Greek infrastructure and development projects.

The move responds to criticisms from some economists that the eurozone’s previous approach of insisting that Greece implement deeper and deeper budget cuts was killing the Greek economy, and therefore self-defeating.

European Commission President Jose Manuel Barroso also indicated plans to rein in the power of the credit rating agencies.

“We… endorsed the plan of reducing overreliance on external credit ratings,” he said, adding that policymakers would come forward in the autumn “with further proposals”.

Countries most exposed to Greek debt

BBC News – Business

Categories: Investing Tags: Greek, Markets, Package, Rise

European Stocks Rally as Greek Lawmakers Pass Austerity Package

June 29th, 2011 Comments off

European stocks rallied the most in three months as Greek lawmakers passed a package of austerity measures needed to secure the next tranche of European Union financial aid.
BusinessWeek.com — Finance

Categories: Investing Tags: Austerity, European, Greek, Lawmakers, Package, Pass, Rally, Stocks

U.S. Stocks Advance Amid Optimism on Greece Austerity Package

June 29th, 2011 Comments off

U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third straight day, after Greek austerity measures needed to win European bailout funds passed in that country’s parliament.
BusinessWeek.com — Finance

Categories: Investing Tags: Advance, Amid, Austerity, Greece, Optimism, Package, Stocks, U.S.

Greek Aid Package to Be Decided by End of June, Juncker Says

May 31st, 2011 Comments off

European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the group of euro-area finance ministers.
BusinessWeek.com — Finance

Categories: Investing Tags: Decided, Greek, Juncker, June, Package, Says

Portugal Pressed for Pre-Election Cuts to Win Aid Package

April 8th, 2011 Comments off

Europe’s rich countries pushed Portugal to make deeper-than-planned budget cuts in the heat of an election campaign in exchange for an emergency aid package estimated at 80 billion euros ($ 115 billion).
BusinessWeek.com — Finance

Categories: Investing Tags: Cuts, Package, Portugal, PreElection, Pressed

Ireland Counts on $142 Billion Package to End Bank Crisis

April 1st, 2011 Comments off

As Ireland’s bill to clean up Europe’s worst banking crisis reaches as much as 100 billion euros ($ 142 billion), the country’s authorities are counting on their latest financing plan to be enough.
BusinessWeek.com — Finance

Categories: Investing Tags: $142, Bank, Billion, Counts, crisis, Ireland, Package

Japan Plans Post-Quake Spending Package as Fiscal Risk Rises

March 13th, 2011 Comments off

Japan aims to compile a package to fund the rebuilding effort after its strongest earthquake on record, a step that may worsen the challenge of reining in the world’s biggest public debt.
BusinessWeek.com — Finance

Categories: Investing Tags: Fiscal, Japan, Package, Plans., PostQuake, Rises, Risk, Spending

Economic Stimulus Package

February 7th, 2011 Comments off

Economic Stimulus Package

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Economic Stimulus Package

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Economic Stimulus Package

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Posted: Feb 06, 2009 |Comments: 0
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Daily Market Commentary for February 6, 2009 from Millennium-Traders.Com

Moving higher on the possible passage of the economic stimulus package, major U.S. indices were green across the board. (read more)
http://www.millennium-traders.com/news/newscommentary.aspx

Economic data released today:

Employment Situation:
U.S. January Nonfarm Payrolls fell by 598K compared to consensus of a drop by 525K; U.S. January Unemployment Rate 7.6% compared to consensus of 7.5%; U.S. January Average Hourly Earnings rose .05 to .46; U.S. January Manufacturing Payrolls fell 207K; U.S. January Service-Producing Payrolls fell 279K; U.S. January Overall Workweek no change from 33.3 Hours; U.S. December Payrolls Revised to a drop by 577K from a drop by 524K; U.S. December Unemployment Left Unrevised at 7.2%; U.S. Lost 3.6M Jobs since Recession began with half during last 3 months; U.S. January Employment Loss most since December 1974; U.S. Unemployment Rate Highest since September 1992.

Consumer Credit:
U.S. December Consumer Credit Decreased .6 Billion; U.S. November Consumer Credit Revised to a drop by .0 Billion from a drop by .9 Billion; U.S. Consumer Credit Falls Third Straight Month in December. Consumers borrowing in December dropped for a third straight month, pulling support away from the slumping economy. Outstanding consumer credit decreased at a seasonally adjusted annual rate of 3.1% or .6 billion, to .562 Trillion per the Federal Reserve. June 1991through December 1991 was the last time we saw three or more consecutive declines. In November, credit fell .0 Billion and was revised down from a previously estimated decrease of .9 Billion. The .0 Billion drop was the largest decrease since a drop of .8 Billion during April 1992. Consumer credit data excludes home mortgages and other real estate-secured loans as they tend to be frequently revised. Revolving debt dropped by .3 Billion to 3.5 billion or 7.8% in December. Credit in November fell .9 Billion. Non-revolving credit decreased in December by 0.2% or 8 Million to .599 Trillion. Credit in November fell 3.1% or .1 Billion.

At the NYSE closing bell on the New York Stock Exchange, here is how the major world indices and major U.S. stock indices ended the trading session on the world markets as well as the emerging markets including the stock market closing bell price:
DOW (Dow Jones Industrial Average) triple digit gain of 217.52 points to end the trading session at 8,280.59
NYSE (New York Stock Exchange) triple digit gain of 149.27 points to end the trading session at 5,475.28
National Association of Securities Dealers Automated Quotations (NASDAQ) gain of 45.47 points to end the trading session at 1,591.71
S&P 500 (SPX) gain of 22.75 points to end the trading session at 868.60
BEL 20 (BEL20) gain of 9.66 points to end the trading session at 1,916.88
CAC 40 (CAC40) gain of 56.50 points to end the trading session at 3,122.79
FTSE100 (UKX100) gain of 62.94 points to end the trading session at 4,291.87
NIKKEI 225 (NIK/O) triple digit gain of 126.97 points at the end the trading session at 8,076.62

New York Stock Exchange (NYSE) stock market indicators for the trading session today:
Advanced stock prices 2,573, declined stock prices 553, unchanged stock prices 62, stock prices hitting new highs 9 and stock prices hitting new lows 27. NYSE quotes for volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the New York Stock Exchange stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: Owens & Minor Incorporated (NYSE: OMI) stock price shed 2.13 points on the trading session, high on the trading session .59, low on the trading session .05, with a closing stock price at .88; Sketchers USA Incorporated (NYSE: SKX) stock price shed 2.67 points on the trading session, high on the trading session .79, low on the trading session .11, with a closing stock price at .42; Weyerhaeuser Company (NYSE: WY) stock price gained 0.67 points on the trading session, high on the trading session .35, low on the trading session .30, with a closing stock price at .03; Potash Corporation Saskatchewan USA (NYSE: POT) stock price gained 5.28 points on the trading session, high on the trading session .52, low on the trading session .68, with a closing stock price at .20; Mettler Toledo International (NYSE: MTD) stock price shed 6.48 points on the trading session, high on the trading session .88, low on the trading session .61, with a closing stock price at .96; Dick’s Sporting Goods Incorporated (NYSE: DKS) stock price gained 1.89 points on the trading session, high on the trading session .81, low on the trading session .12, with a closing stock price at .15; Aon Corporation (NYSE: AOC) stock price gained 4.17 points on the trading session, high on the trading session .53, low on the trading session .77, with a closing stock price at .62.

National Association of Securities Dealers Automated Quotations (NASDAQ) stock market indicators for the trading session today:
Advanced stock prices 2,048, declined stock prices 712, unchanged stock prices 159, stock prices hitting new highs 7 and stock prices hitting new lows 62. NASDAQ quotes, volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the NASDAQ stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: First Solar Incorporated (NasdaqGS: FSLR) stock price shed 2.19 points on the trading session, high on the trading session 2.72, low on the trading session 5.26, with a closing stock price at 7.60; Baidu Incorporated (NasdaqGS: BIDU) stock price shed 1.59 points on the trading session, high on the trading session 6.60, low on the trading session 0.00, with a closing stock price at 3.70.

Market trends on the American Stock Exchange (AMEX) and stock market indicators for the trading session today:
Advanced stock prices 354, declined stock prices 210, unchanged stock prices 80, stock prices hitting new highs 3 and stock prices hitting new lows 7.

Chicago Board of Trade Futures Market for the day, at time of this posting:
E-mini S&P 500 (ES) Mar 09: End of trading session price 868.00; Change for the trading session 27.50
E-mini NASDAQ-100 (NQ) Mar 09: End of trading session price 1,276; Change for the trading session 41.50
E-mini DOW (YM) Mar 09: End of trading session price 8,252; Change for the trading session 258
E-mini S&P MidCap 400 (MF) Mar 09: End of trading session price 531.50; Change for the trading session 23.70
E-mini S&P Small Cap 600 (HS) Mar 09: End of trading session price 8,305; Change for the trading session 210

World Currencies for the Forex Market, for Forex Trading by active Forex Traders, at time of this posting:
Euro 0.7732 to U.S. Dollars 1.2933
Japanese Yen 92.010 to U.S. Dollars 0.0109
British Pound 0.6757 to U.S. Dollars 1.4799
Canadian Dollar 1.2252 to U.S. Dollars 0.8162
Swiss Franc 1.1624 to U.S. Dollars 0.8603

COMMODITY MARKETS:

Energy Sector – Nymex:
Light Crude (March 09) shed .00 on the trading session for a closing price of .17 per barrel ($ US per barrel)
Heating Oil (March 09) shed .01 on the trading session for a closing price of .36 a gallon ($ US per gallon)
Natural Gas (March 09) gained .13 on the trading session for a closing price of .80 per million BTU ($ US per mmbtu.)
Unleaded Gas (March 09) shed .02 on the trading session for a closing price of .25 a gallon ($ US per gallon)

Metals Markets – Comex:
Gold (April 09) gained .10 on the trading session for a closing price of 4.30 ($ US per Troy ounce)
Silver (March 09) gained .41 on the trading session for a closing price of .16 ($ US per Troy ounce)
Platinum (April 09) gained .30 on the trading session for a closing price of ,005.00 ($ US per Troy ounce)
Copper (March 09) gained .13 on the trading session for a closing price of .63 ($ US per pound)

Livestock and Meat Markets – Chicago Mercantile Exchange (cents per lb.):
Lean Hogs (April 09) gained 0.15 on the trading session for a closing price of 60.40
Pork Bellies (March 09) gained 0.15 on the trading session for a closing price of 80.15
Live Cattle (April 09) gained 0.20 on the trading session for a closing price of 86.70
Feeder Cattle (March 09) gained 0.7230 on the trading session for a closing price of 94.35

Other Commodities – Chicago Board of Trade (cents per bushel):
Corn (March 09) gained 6.00 on the trading session for a closing price of 377.25
Soybeans (March 09) gained 21.00 on the trading session for a closing price of 1,001.00

BOND MARKET:

2 year Bond Closing price 99 24/32, change -2/32, Yield 0.99, Yield change 0.02
5 year Bond closing price of 98 31/32, change -10/32, Yield 1.96, Yield change 0.07
10 year Bond closing price 106 13/32, change -20/32, Yield 2.98, Yield change 0.04
30 year Bond closing price 114 10/32, change -29/32, Yield 3.69, Yield change 0.05

At the close of the week, performance results for our Moderators:

Stocks Trading Room:
Jeannie ,351
Barry ,993
Sam ,606
Scott ,740

Futures Trading Room:
JT ,447.50
James 0

Forex Trading Room:
JT ,300

Daily Swing Trades:
Barry ,520

Thanks for reading
Millennium-Traders.Com
http://www.millennium-traders.com

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Markets rise on Greek aid package

“Start Quote

Debt to GDP ratios

European Stocks Rally as Greek Lawmakers Pass Austerity Package

U.S. Stocks Advance Amid Optimism on Greece Austerity Package

Greek Aid Package to Be Decided by End of June, Juncker Says

Portugal Pressed for Pre-Election Cuts to Win Aid Package

Ireland Counts on $142 Billion Package to End Bank Crisis

Japan Plans Post-Quake Spending Package as Fiscal Risk Rises

Economic Stimulus Package

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