BSP urged to lower interest rates on special deposit account facility
By Michelle Remo
Philippine Daily Inquirer
The bureau of the Treasury, which manages the national government’s borrowings, has urged the central bank to move against the tide and reduce interest rates.
Lower interest rates paid by the Bangko Sentral ng Pilipinas both for its overnight lending and special deposit account (SDA) facilities were necessary to force banks to lend more to the public rather than park their money in the central bank’s vault, the Treasury said.
The overnight lending and SDA rates are at historic lows of 6 and 4 percent, respectively. Still, the Treasury said there was much room for the BSP to cut rates.
A ranking Treasury official noted that inflation remained way below the official ceiling and that any reduction in interest rates was not expected to cause prices to rise sharply.
“Besides, it would benefit them to cut rates because that would mean they would spend less [on interest on deposits by banks],” Deputy Treasurer Eduardo Mendiola said.
It would also favor the national government if the BSP would reduce interest rates because deposit facilities of the BSP directly competed with the treasury bills and bonds being sold by the national government. The high rates offered by the BSP encourage banks to place more of their funds in the central bank’s deposit facilities instead of investing in government securities.
But Mendiola said that aside from benefiting the national government, lower rates offered by the BSP would encourage banks to lend more to the public.
Funds with the BSP’s SDA facility alone already amounted to more than P900 billion, a record high. Analysts said banks were attracted to deposit funds to the virtually risk-free and relatively high-yield BSP facility.
Latest documents showed that bank lending was so far growing nearly 10 percent this year. Although this was a decent growth, analysts said banks actually had the capacity to lend more.
No lotto winner; prize up P535M
By Tina Santos
Philippine Daily Inquirer
MANILA, Philippines—The wait is still on for the bettor who will win the 6/55 Grand Lotto as no one won the over P495 million jackpot during Wednesday night’s draw.
In a text message, assistant general manager Liza Gabuyo of the Philippine Charity Sweepstakes Office said no one was able to correctly guess the six number combination of 53-09-45-24-50-29.
The prize reached P495,597,376.80, currently the record holder for the biggest lotto jackpot in PCSO history.
The next draw for the 6/55 Grand Lotto is on Saturday night. Gabuyo said the jackpot is expected to reach P535 million.
Most Stocks in U.S. Gain as Target Earnings Offset Tech-Spending Concern
Most U.S. stocks rose, snapping a four-day losing streak in the Standard & Poor’s 500 Index, as earnings at Target Corp. and speculation that Ireland will receive aid offset concern that technology spending is slowing.
Target climbed 3.4 percent as profit jumped 23 percent on credit-card unit growth. McDonald’s Corp. gained 1.2 percent, helping give consumer shares the biggest gain among 10 industries in the S&P 500. NetApp Inc. tumbled 6.5 percent after the maker of storage equipment joined Cisco Systems Inc. in giving a forecast that spurred concern corporations are spending less on computer gear.
The S&P 500 added less than a point to 1,178.59 at 4 p.m. in New York, after earlier rising 0.3 percent. The 30-stock Dow Jones Industrial Average declined 15.62, or 0.1 percent, to 11,007.88. About five stocks advanced for every four that fell on U.S. exchanges, according to Bloomberg data.
Irish Bonds Rise as Lenihan Says Aid Talks to Start Tomorrow; Bunds Climb
Irish bonds rose after Finance Minister Brian Lenihan said potential aid talks for the government’s banks will start tomorrow.
The nation’s debt fell earlier after LCH Clearnet Ltd. raised the deposit clients must pay to trade the nation’s securities for the second time in a week in response to soaring yields. Lenihan said he will hold talks with the European Commission, European Central Bank and International Monetary Fund on the country’s banks. German bonds climbed.
“The margin requirement increase isn’t good for Irish bonds, but it makes an aid deal more likely,” said Charles Diebel, head of market strategy at Lloyds TSB Corporate Bank in London. “It seems pretty inevitable that some kind of deal will be done. It’s just a question of how and what the details are.”
The yield on the 10-year Irish bond fell 14 basis points to 8.32 percent at 4:35 p.m. in London after jumping 31 basis points yesterday. The 5 percent security due October 2020 rose 0.775, or 7.75 euros per 1,000-euro ($1,351) face amount, to 78.14. German 10-year yields fell three basis points to 2.6 percent.
The difference in yield, or spread, between Irish and German 10-year bonds narrowed 10 basis points to 552 basis points, according to Bloomberg generic prices.
Crude Oil Tumbles to Four-Week Low on Signals China Will Increase Rates
Crude oil declined to a four-week low on speculation that China will raise interest rates, slowing economic growth in the world’s biggest energy-consuming country.
Oil fell 2.3 percent after Chinese Premier Wen Jiabao said the government was drafting measures to counter inflation. Prices also dropped on concern Europe’s debt crisis is worsening as ministers considered a rescue package for Irish banks. Futures rebounded briefly after an Energy Department report showed U.S. crude supplies slid 7.29 million barrels last week.
“Fears about Ireland and China are trumping inventories at the moment,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “Under normal circumstances prices would rally after a 7 million-barrel drop.”
Crude oil for December delivery fell $1.90 to $80.44 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 19. Futures have dropped 9.2 percent from the two-year intraday high of $88.63 a barrel on Nov. 11.
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Thursday, November 18, 2010
Wednesday, November 17, 2010
Morning Brief: 17 November 2010
| Inflation outlook seen giving room for policy flexibility INFLATION RATES will likely remain within official projections for the next two years, giving the central bank room for flexibility in its policy settings, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. told reporters via e-mail yesterday. "Basically, full-year average inflation should be within target. Remember, we don’t look at contemporaneous inflation or even very near-term, but inflation in the medium-term (two years down the road)," his e-mail read. "Our runs show that inflation during the policy horizon will remain manageable, or likely be within target." The central bank forecasts the country’s inflation rate to hit 3.8% this year, within the full-year target of 3.5%-5.5%. For next year and 2012, the BSP has forecast inflation rate to hit 3%, and has set a 3%-5% target. Inflation rate eased to 2.8% in October from the previous month’s 3.5%, bringing the 10-month rate to 4%. "This should give us flexibility to address concerns, including real economic growth and volatilities in the exchange rate," Mr. Tetangco wrote. The Monetary Board will meet tomorrow to review key interest rates, which have remained at lows of 4% and 6% for overnight borrowing and lending, respectively, since July last year. Nine economists polled late last week had said they expect the meeting to keep those levels, noting that inflation remains manageable and that raising rates could exacerbate volatile capital inflows. The same economists said they expect the central bank to start raising rates either in the first or second quarter of next year
THE PHILIPPINES likely posted a balance of payments surplus of $2.7 billion in October, taking the year-to-date surplus above a 2010 forecast that was already revised up sharply only last month, Bangko Sentral ng Pilipinas documents show. The Jan-Oct balance of payments surplus of $9.259 billion, contained in a document submitted to the central bank’s policy-making Monetary Board and seen by Reuters, implied a monthly surplus for October of $2.7 billion, below September’s record $3.062 billion. The year-to-date surplus in September was $6.54 billion. Last month, the central bank more than doubled its forecast for the 2010 balance of payments surplus to $8.2 billion from $3.7 billion. -- Reuters |
U.S. Stocks Drop on Concern About China Growth, Ireland Debt U.S. stocks sank, sending the Standard & Poor’s 500 Index to the biggest slump since August, amid concern that the debt crisis in Ireland and Greece is worsening and that China will act to slow its economy. Freeport-McMoRan Copper & Gold Inc. and Nucor Corp. fell at least 3.5 percent as metals plunged. Travelers Cos. dropped 3.6 percent, leading losses in the Dow Jones Industrial Average as it slipped below 11,000 for the first time in a month, after declines in municipal bonds hurt its investments. Regions Financial Corp. slumped 4.5 percent after three executives overseeing risk and souring assets at the bank quit. The S&P 500 decreased 1.6 percent to 1,178.34 at 4 p.m. in New York. The drop follows a late-day selloff yesterday triggered by growing criticism of the Federal Reserve’s plan to spur growth using a technique called quantitative easing. The Dow fell 178.47 points, or 1.6 percent, to 11,023.50. The MSCI World Index of shares in 24 developed nations slumped for a seventh straight day, the longest losing streak since January. “It will be a choppy ride before we find some footing,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “The market is really trying to get its arms around a few lingering questions -- China, Europe, or whether or not QE2 is going to work or if it’s even necessary.”
Benchmark 10-year yields jumped 31 basis points during the previous two trading days, the most since a back-to-back surge of 33 basis points in January 2009. Boston’s Eric Rosengrensaid he expects the central bank to buy the entire amount in a bid to reduce unemployment. James Bullard of the St. Louis said the Fed would buy less than planned under quantitative easing only after a big improvement in the economy. The central bank bought $5.4 billion of Treasuries. |
Crude Oil Declines to Two-Week Low as European Debt Woes May Curb Demand Crude oil tumbled to a two-week low on speculation Europe’s deepening debt crisis and steps to cool Asia’s economic growth will reduce demand. Oil slid 3 percent as European ministers gathered in Brussels to discuss aid to Ireland’s banks. The Bank of Korea raised interest rates for the second time this year and the China Securities Journal said the Chinese government will take steps to control rising prices. The drop accelerated after U.S. wholesale costs rose less than forecast in October. “There are concerns about what the European debt crisis will mean for the economy and energy demand,” said Chris Barber, a senior analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There are similar concerns about what the Asian steps will mean for demand.” Crude oil for December delivery fell $2.52 to $82.34 a barrel on the New York Mercantile Exchange, the lowest settlement price since Oct. 29. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Monday, November 15, 2010
Morning Brief: 15 November 2010
Gov’t eyeing multilaterals for PPP guarantees
MULTILATERAL institutions will be asked by the government to provide for guarantees that will come with public-private partnership (PPP) projects, officials said.
"We will be tapping guarantee agencies for PPP so that when there is risk, investors can be paid fast and immediately," Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. said in a telephone interview during the weekend.
"Regulatory risk guarantees" will be introduced by the government when it unveils its PPP initiative during a three-day conference that starts this Wednesday at the Marriott Hotel in Pasay City.
Guarantees, said Finance Undersecretary John Philip P. Sevilla, will be given on a "project-to-project basis" as the requisite insurance depends "on the risk that they may encounter."
"We will present the concept during the convention, but the details will be worked out as PPP projects are bid out," Mr. Sevilla said in a separate phone interview.
A "list of possible regulatory risks" will also be presented before the 150-200 investors expected to attend this week’s launch. Mr. Paderanga said prospective guarantors who will also be present "can choose from the list what risk they want to guarantee."
"So let’s say an investor encountered a risk in the project, [the guarantee agency] will pay him, and then afterwards [bill] the government for such insurance. Negotiations now will be between the government and the agency," he explained.
Budget Secretary Florencio B. Abad said the surety was different from sovereign guarantees "where the government will have to pay investors whether an undertaking succeeds or not."
"We actually wanted to move away from that," he said.
It was not clear where funding for the PPP guarantees would be sourced. The House of Representatives has approved a P12.5-billion outlay for the infrastructure initiative under the proposed P1.645-trillion national budget for 2011.
The amount will cover right of way acquisitions and equipment support, among others.
A short list of 10 PPP infrastructure projects worth P127.8 billion is expected to be implemented next year. Officials have said that up to three projects could be auctioned off during the first semester.
The PPP initiative -- which the Aquino administration has made a centerpiece program given its revenue woes and the country’s infrastructure lack -- is expected to cover about 80 projects worth some P740 billion.
Stocks: Will the slide continue?
Stocks closed out their worst week in three months on Friday, but it's a new week on Wall Street and investors are bracing for a slew of economic and corporate news to help set the tone.
With Black Friday less than two weeks away, all eyes will be on the retail sector. The government's monthly retail sales report kicks things off before the opening bell Monday morning, but investors will be more focused on financial results and guidance from major retailers for the period that includes the all-important holiday season.
Discount giants including Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) are due to report earnings, as well as higher-end department stores like Nordstrom (JWN, Fortune 500) and Saks Incorporated (SKS).
"Hearing from the retailers will give us insight as to what's happening in the minds of American consumers, and how much they're willing to spend this holiday season," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group. "We saw a surprise pickup in hiring in the last jobs report, so that should make for happy consumers and happy holidays."
Caughey said investors will also be paying close attention to how retailers are coping with higher cotton prices, which have surged in recent weeks as the dollar weakened.
In other corporate news, General Motors could price an initial public offering of 365 million shares late this week, though the exact date has not been disclosed. The company expects to raise about $13 billion selling shares, putting it on course for the third-largest initial public offering in U.S. history.
Monetary and fiscal policy may also take the stage this week, as President Obama returns from the G-20 meeting of global leaders and Congress reconvenes for the start of its lame-duck session. Lawmakers are expected to begin discussing the proposal to cut the deficit by $4 trillion over the next decade as well as the Bush tax cuts, which are set to expire at the end of the year.
Investors will be on the lookout for news relating to Europe's sovereign debt crisis. The same fears that weighed on markets last spring resurfaced last week, this time sparked by Ireland's fiscal instability.
"We'll be watching Europe very closely," said Karl Mills, president and chief investment officer at Jurika Mills & Keifer. "The markets were giving a great amount of importance to the midterm elections and the Fed's new plan, but now the market could face a new bout of sovereign debt concerns."
On the docket
Monday: Economists expect the Commerce Department to report that retail sales rose 0.7% in October, after a 0.6% rise the previous month, according to consensus estimates gathered by Briefing.com. Sales excluding volatile autos are expected to have ticked up 0.3%.
Home improvement giant Lowe's (LOW, Fortune 500) is expected to report earnings of 30 cents per share, up from 24 cents per share a year ago.
The Empire Manufacturing survey is also due before the start of trading. The regional reading on manufacturing is forecast to have slipped to 11.7 in November from 15.73 in October.
The September reading on business inventories, due from the government later in the morning, is likely to show an increase of 0.9%.
After the close, department store Nordstrom (JWN, Fortune 500) will report earnings.
Tuesday: The Producer Price Index, a measure of wholesale inflation, is due out from the Commerce Department before the opening bell. The index is expected to have edged up 0.8% in October after rising 0.4% in September. The so-called core PPI, which strips out volatile food and energy prices, is expected to have risen 0.1% after increasing by the same amount in the previous month.
Government data on industrial production and capacity utilization for October are also due before the market opens.
Wal-Mart Stores (WMT, Fortune 500) reports results before the start of trading. The Dow component is expected to have earned 90 cents per share, up from 84 cents a year ago, according to forecasts from analysts polled by Thomson Reuters.
Abercrombie & Fitch (ANF), Home Depot (HD, Fortune 500) and Saks Incorporated (SKS) are also on tap to post financial results.
After the opening bell, the National Association of Homebuilders is scheduled to release its housing market index for October. The figure is expected to edge down to 15.0 from 16.0 in September.
Wednesday: The Commerce Department releases the Consumer Price Index, a measure of consumer inflation, in the morning. CPI is expected to have increased 0.3% in October after climbing 0.1% the previous month. Core CPI is expected to have inched up 0.1%, after a flat reading in September.
Housing starts are expected to have decreased to a 600,000 annual unit rate in October from a 610,000 unit annual rate in September. Building permits are expected to have risen to a 565,000 annual rate from a 539,000 annual unit rate in September.
Also before the bell, discount retailer Target (TGT, Fortune 500) is forecast to have booked earnings of 68 cents per share, up from 58 cents a year ago.
After the market closes, analysts are looking for Applied Materials (AMAT, Fortune 500) to reports earnings of 31 cents per share, compared to 11 cents a year ago.
Thursday: The Department of Labor releases the weekly jobless claims report in the morning. The number of Americans filing new claims for unemployment last week is forecast to inch higher to 442,000 from 435,000 in the previous week.
Continuing claims -- a measure of Americans who have been receiving benefits for a week or more -- is expected to hold steady at around 4.30 million, the same as in the previous week.
Analysts expect office supply giant Staples earned 40 cents per share last quarter, up slightly from 39 cents a year earlier.
The Philadelphia Fed index, another regional reading on manufacturing, is expected to have improved to 4.5 in November from 1.0 in October.
The index of leading economic indicators is expected to have risen 0.6% in October after rising 0.3% the previous month.
After the close, Dell (DELL, Fortune 500) is expected to post earnings of 32 cents per share, up from 23 cents per share a year earlier.
Friday: There are no market-moving economic or corporate events expected on Friday.
Oil Falls From Two-Year High on Speculation China May Raise Interest Rates
Oil fell the most in more than three weeks on speculation China will raise interest rates, curbing demand growth in the world’s biggest energy-consuming country.
Futures slipped 3.3 percent after Chinese stocks tumbled on a report yesterday that showed consumer prices climbed 4.4 percent from a year earlier, the fastest pace since 2008. China’s central bank may increase rates within weeks, according to a Bloomberg News survey.
“Anything that provides evidence of a slowing Chinese economy is likely to be reflected in oil-demand estimates,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “It would also tend to moderate bullish views for where oil prices will be in 2011.”
Crude oil for December delivery fell $2.93 to settle at $84.88 a barrel on the New York Mercantile Exchange. Futures, dropped 2.3 percent this week, leaving them up 10 percent from a year ago.
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
MULTILATERAL institutions will be asked by the government to provide for guarantees that will come with public-private partnership (PPP) projects, officials said.
"We will be tapping guarantee agencies for PPP so that when there is risk, investors can be paid fast and immediately," Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr. said in a telephone interview during the weekend.
"Regulatory risk guarantees" will be introduced by the government when it unveils its PPP initiative during a three-day conference that starts this Wednesday at the Marriott Hotel in Pasay City.
Guarantees, said Finance Undersecretary John Philip P. Sevilla, will be given on a "project-to-project basis" as the requisite insurance depends "on the risk that they may encounter."
"We will present the concept during the convention, but the details will be worked out as PPP projects are bid out," Mr. Sevilla said in a separate phone interview.
A "list of possible regulatory risks" will also be presented before the 150-200 investors expected to attend this week’s launch. Mr. Paderanga said prospective guarantors who will also be present "can choose from the list what risk they want to guarantee."
"So let’s say an investor encountered a risk in the project, [the guarantee agency] will pay him, and then afterwards [bill] the government for such insurance. Negotiations now will be between the government and the agency," he explained.
Budget Secretary Florencio B. Abad said the surety was different from sovereign guarantees "where the government will have to pay investors whether an undertaking succeeds or not."
"We actually wanted to move away from that," he said.
It was not clear where funding for the PPP guarantees would be sourced. The House of Representatives has approved a P12.5-billion outlay for the infrastructure initiative under the proposed P1.645-trillion national budget for 2011.
The amount will cover right of way acquisitions and equipment support, among others.
A short list of 10 PPP infrastructure projects worth P127.8 billion is expected to be implemented next year. Officials have said that up to three projects could be auctioned off during the first semester.
The PPP initiative -- which the Aquino administration has made a centerpiece program given its revenue woes and the country’s infrastructure lack -- is expected to cover about 80 projects worth some P740 billion.
Stocks: Will the slide continue?
Stocks closed out their worst week in three months on Friday, but it's a new week on Wall Street and investors are bracing for a slew of economic and corporate news to help set the tone.
With Black Friday less than two weeks away, all eyes will be on the retail sector. The government's monthly retail sales report kicks things off before the opening bell Monday morning, but investors will be more focused on financial results and guidance from major retailers for the period that includes the all-important holiday season.
Discount giants including Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) are due to report earnings, as well as higher-end department stores like Nordstrom (JWN, Fortune 500) and Saks Incorporated (SKS).
"Hearing from the retailers will give us insight as to what's happening in the minds of American consumers, and how much they're willing to spend this holiday season," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group. "We saw a surprise pickup in hiring in the last jobs report, so that should make for happy consumers and happy holidays."
Caughey said investors will also be paying close attention to how retailers are coping with higher cotton prices, which have surged in recent weeks as the dollar weakened.
In other corporate news, General Motors could price an initial public offering of 365 million shares late this week, though the exact date has not been disclosed. The company expects to raise about $13 billion selling shares, putting it on course for the third-largest initial public offering in U.S. history.
Monetary and fiscal policy may also take the stage this week, as President Obama returns from the G-20 meeting of global leaders and Congress reconvenes for the start of its lame-duck session. Lawmakers are expected to begin discussing the proposal to cut the deficit by $4 trillion over the next decade as well as the Bush tax cuts, which are set to expire at the end of the year.
Investors will be on the lookout for news relating to Europe's sovereign debt crisis. The same fears that weighed on markets last spring resurfaced last week, this time sparked by Ireland's fiscal instability.
"We'll be watching Europe very closely," said Karl Mills, president and chief investment officer at Jurika Mills & Keifer. "The markets were giving a great amount of importance to the midterm elections and the Fed's new plan, but now the market could face a new bout of sovereign debt concerns."
On the docket
Monday: Economists expect the Commerce Department to report that retail sales rose 0.7% in October, after a 0.6% rise the previous month, according to consensus estimates gathered by Briefing.com. Sales excluding volatile autos are expected to have ticked up 0.3%.
Home improvement giant Lowe's (LOW, Fortune 500) is expected to report earnings of 30 cents per share, up from 24 cents per share a year ago.
The Empire Manufacturing survey is also due before the start of trading. The regional reading on manufacturing is forecast to have slipped to 11.7 in November from 15.73 in October.
The September reading on business inventories, due from the government later in the morning, is likely to show an increase of 0.9%.
After the close, department store Nordstrom (JWN, Fortune 500) will report earnings.
Tuesday: The Producer Price Index, a measure of wholesale inflation, is due out from the Commerce Department before the opening bell. The index is expected to have edged up 0.8% in October after rising 0.4% in September. The so-called core PPI, which strips out volatile food and energy prices, is expected to have risen 0.1% after increasing by the same amount in the previous month.
Government data on industrial production and capacity utilization for October are also due before the market opens.
Wal-Mart Stores (WMT, Fortune 500) reports results before the start of trading. The Dow component is expected to have earned 90 cents per share, up from 84 cents a year ago, according to forecasts from analysts polled by Thomson Reuters.
Abercrombie & Fitch (ANF), Home Depot (HD, Fortune 500) and Saks Incorporated (SKS) are also on tap to post financial results.
After the opening bell, the National Association of Homebuilders is scheduled to release its housing market index for October. The figure is expected to edge down to 15.0 from 16.0 in September.
Wednesday: The Commerce Department releases the Consumer Price Index, a measure of consumer inflation, in the morning. CPI is expected to have increased 0.3% in October after climbing 0.1% the previous month. Core CPI is expected to have inched up 0.1%, after a flat reading in September.
Housing starts are expected to have decreased to a 600,000 annual unit rate in October from a 610,000 unit annual rate in September. Building permits are expected to have risen to a 565,000 annual rate from a 539,000 annual unit rate in September.
Also before the bell, discount retailer Target (TGT, Fortune 500) is forecast to have booked earnings of 68 cents per share, up from 58 cents a year ago.
After the market closes, analysts are looking for Applied Materials (AMAT, Fortune 500) to reports earnings of 31 cents per share, compared to 11 cents a year ago.
Thursday: The Department of Labor releases the weekly jobless claims report in the morning. The number of Americans filing new claims for unemployment last week is forecast to inch higher to 442,000 from 435,000 in the previous week.
Continuing claims -- a measure of Americans who have been receiving benefits for a week or more -- is expected to hold steady at around 4.30 million, the same as in the previous week.
Analysts expect office supply giant Staples earned 40 cents per share last quarter, up slightly from 39 cents a year earlier.
The Philadelphia Fed index, another regional reading on manufacturing, is expected to have improved to 4.5 in November from 1.0 in October.
The index of leading economic indicators is expected to have risen 0.6% in October after rising 0.3% the previous month.
After the close, Dell (DELL, Fortune 500) is expected to post earnings of 32 cents per share, up from 23 cents per share a year earlier.
Friday: There are no market-moving economic or corporate events expected on Friday.
Oil Falls From Two-Year High on Speculation China May Raise Interest Rates
Oil fell the most in more than three weeks on speculation China will raise interest rates, curbing demand growth in the world’s biggest energy-consuming country.
Futures slipped 3.3 percent after Chinese stocks tumbled on a report yesterday that showed consumer prices climbed 4.4 percent from a year earlier, the fastest pace since 2008. China’s central bank may increase rates within weeks, according to a Bloomberg News survey.
“Anything that provides evidence of a slowing Chinese economy is likely to be reflected in oil-demand estimates,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “It would also tend to moderate bullish views for where oil prices will be in 2011.”
Crude oil for December delivery fell $2.93 to settle at $84.88 a barrel on the New York Mercantile Exchange. Futures, dropped 2.3 percent this week, leaving them up 10 percent from a year ago.
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
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