Oil Boom Spurs New Investment

Surging energy production in North America is prompting billions of dollars of investment next year on pipelines and other infrastructure projects to move oil and gas around the continent.

The U.S. shale-gas revolution, which has revitalized chemicals companies and prompted talk of domestic energy self-sufficiency, is attracting a wave of investment that may revive profits in the steel industry.

Hydraulic fracturing of shale rock formations from Texas to West Virginia has boosted supplies of gas and sent prices plunging by as much as half in the past two years. Gas futures reached a decade low of $1.91 per million British thermal units in April in New York trading.

“The shale revolution is triggering an avalanche of industrial expansion plans,” Barclays’ Pehlivanova and Wang said.

There’s been a reversal of fortune for U.S. chemical producers after years of decline. Shares of LyondellBasell Industries NV have more than doubled since it emerged from bankruptcy in 2010. The company is now among chemical producers planning billions of dollars of plants around theGulf of Mexico to capitalize on cheaper gas. Fertilizer companies including CF Industries Holdings Inc. also are planning to construct gas- fueled plants.

At the same time, there’s no guarantee that steel demand in the U.S. will improve. Domesticsteel-industry capacity utilization is at 74 percent, according to data from the American Iron and Steel Institute. Utilization was 91 percent in August 2008, the month before the bankruptcy of Lehman Brothers Holdings Inc.

http://www.bloomberg.com/news/2012-12-31/shale-gas-revolution-spurs-wave-of-new-u-s-steel-plants-energy.html

Gold advanced, poised for a 12th annual gain

Gold, down 6.2 percent since September and set for the biggest quarterly drop since 2004, may climb to $2,000 next year, the median of 49 estimates in a Bloomberg survey published on Dec. 18 showed. Morgan Stanley said Dec. 6 that bullion will be among next year’s best-performing commodities. Prices may peak in 2013 as the U.S. recovers, Goldman Sachs Group Inc. predicts.

Silver for immediate delivery rose as much as 0.8 percent to $30.25 an ounce and was at $30.13. Prices have gained 8.2 percent this year. Holdings in silver-backed ETPs stood at a record 18,916.92 tons on Dec. 28.

Spot platinum advanced 0.3 percent to $1,526.50 an ounce, taking this year’s gain to 9 percent. Palladium gained 0.5 percent to $701 an ounce, up 7 percent this year.

http://www.bloomberg.com/news/2012-12-31/gold-poised-for-12th-annual-climb-as-u-s-budget-deadline-nears.html

Gold Declines on U.S. Economic Recovery

Gold dropped for the first time in four days as optimism that the U.S. economy is recovering and lawmakers will reach a budget deal damped demand for the metal as a protection of wealth. Platinum and palladium advanced.

It lost 2.3 percent last week, the most since the period to June 22, after data showed that consumer spending, durable-goods orders and industrial output increased in November. A separate report showed the largest economy grew at a 3.1 percent annual rate last quarter, exceeding all projections in a Bloomberg survey.

http://www.bloomberg.com/news/2012-12-26/gold-declines-on-u-s-economic-recovery-budget-deal-optimism.html

U.K. banks under pressure

U.K. banks, under pressure from the Bank of England to increase capital, may do exactly what the central bank doesn’t want them to do: Cut lending.

Britain’s four-biggest banks may need as much as 60 billion pounds in extra capital to meet future loan losses, compensate customers and pay regulatory fines, according to the Bank of England’s Financial Stability Report last month. Central bank Governor Mervyn King is pressing banks to raise capital levels without reducing lending to support an economy struggling to avoid a triple-dip recession.

Lloyds and RBS (RBS) have the most capital to raise because of their higher ownership of “difficult” assets such as commercial real estate in Ireland, Morgan Stanley analysts including Chris Manners wrote in a Dec. 17 note to investors.

Manners estimates the FSA will find banks need 26 billion pounds of capital in its so-called base case, with the shortfall ranging from 11 billion pounds to 93 billion pounds. RBS may need 7.87 billion pounds, Lloyds 6.51 billion pounds, HSBC Holdings Plc (HSBA) 6.39 billion pounds and Barclays 5.55 billion pounds, he wrote.

Banks may have to cut the price of assets to achieve sales. RBS will probably have to accept a lower offer for 316 branches it has to sell after Santander abandoned a 1.7 billion-pound offer for them, a person with knowledge of the matter said last month.

http://www.bloomberg.com/news/2012-12-21/u-k-banks-seen-sacrificing-lending-to-meet-boe-demand.html

Fish fight

http://www.channel4.com/programmes/hughs-fish-fight

Renault is looking to Africa for growth

Renault is looking to Africa for growth, pushing rugged, no-frills models like the Dacia Logan as its sales decline in Europe faster than any other major carmaker. As part of the expansion, the French manufacturer and its partner Nissan Motor Co. (7201) are ramping up production at a 1 billion-euro ($1.3 billion) plant in the Moroccan port city of Tangier.

The new factory in Algeria will assemble models in the same segment as Renault's Symbol, a sedan based on the Clio compact.

http://www.bloomberg.com/news/2012-12-18/renault-plans-to-build-factory-in-algeria-in-african-growth-push.html

Precious Metals Futures surge

Gold futures ended at their highest level in more than a week after the Federal Reserve announced a new bond-purchasing program that investors and analysts say may fuel inflation.

http://online.wsj.com/article/BT-CO-20121212-711964.html?mod=WSJ_MetalsAndMining_middleHeadlines

Jaguar Land Rover November Sales up 14%

Jaguar Land Rover Thursday said its global sales for November rose 14% from a year earlier to 29,893 vehicles, with demand for its luxury cars rising in most regions.

The U.K.-based company said its China sales surged 43%, while the Asia-Pacific market recorded a 26% rise.

Vehicle sales in the U.K. and the rest of Europe rose 15% and 12%, respectively.

In North America, sales were down 7%, the company said in a statement.

http://www.4-traders.com/TATA-MOTORS-LIMITED-9058835/news/Tata-Motors-Limited-Jaguar-Land-Rover-November-Sales-up-14-Tata-Motors-Shares-Gain-15591406/?countview=0

India car sales November down

Car sales in India fell for the third time in four months in November as rising fuel prices, high borrowing costs and fears of job losses in a slowing economy crimped demand.

The sales decline intensifies worries among car manufacturers that the local market is unlikely to rebound in the current financial year through March.

The drop in November comes after a 23% sales jump in October.

Car sales during the April-November period grew 1.3% to 1.24 million autos. At the same period, sales of SUVs, most of which are diesel-powered, climbed 62% to 357,872 vehicles.

http://on.wsj.com/TWZzl5 

China car sales up

Chinese monthly passenger-vehicle sales rose to the highest in almost two years, beating analyst estimates, as consumer confidence improved with the economy and dealerships increased discounts to reduce stockpiles.
Sales of SUVs jumped 18 percent last month to 189,200 units, maintaining its streak as the fastest-growing segment in the world’s largest auto market. In the first 11 months, SUV sales climbed 26 percent to 1.79 million units, compared with a 7.1 percent gain to 14 million in total passenger-vehicle sales.
China passenger car sales will increase about 10 percent next year, according to Xu Changming, director of information resource development at the State Information Center, part of the nation’s top economic planning body, at a car dealership conference on Nov. 29.

Japanese Rebound

“The winter for Japanese brand cars is over,” Dong Yang, secretary general of the auto association, said at a briefing in Beijing today.

Nissan Motor Co. (7201), which has the biggest market share in China among Japanese automakers, reported a 30 percent drop in November sales to 79,500 units, a narrower decline from October. Honda Motor Co. (7267)’s deliveries slumped 29 percent to 41,205 vehicles, while Toyota Motor Corp. (7203) dropped 22 percent to 63,800 vehicles.

General Motors Co. (GM), the biggest foreign automaker in China, reported a 9.7 percent increase in November sales to 260,018 units, led by its Chevrolet and Buick brands. Ford increased sales 56 percent to 67,505 vehicles last month.

Among luxury carmakers, Bayerische Motoren Werke AG boosted sales 62 percent to 31,090 units, while Daimler AG’s Mercedes- Benz reported a 6.6 percent drop in deliveries to 16,876 vehicles in China, including Hong Kong.

China economic recovery intact, but weak exports to drag

In the first 11 months, China's exports and imports grew 5.8 percent from a year earlier, running well below a government 2012 target of 10 percent.

China's exports to the European Union fell 18 percent in November from a year earlier, the sixth straight decline. The Organisation for Economic Co-operation and Development cited the euro area crisis in a report last month warning that exports will remain a weak spot for China's economic outlook.

The OECD forecast China's economy would grow by 7.5 percent in 2012 - in line with a government target - before picking up to expand 8.5 percent in 2013.

Despite efforts to rebalance the economy towards domestic consumption, exports generated 31 percent of gross domestic product in 2011, World Bank data shows, and supported an estimated 200 million jobs.

The People's Bank of China, the central bank, cut interest rates in both June and July and has lowered banks' reserve requirement ratio (RRR) by 150 basis points since late 2011, freeing an estimated 1.2 trillion yuan ($193 billion) for lending.

Most analysts believe room for further policy easing is limited as inflation and property prices start to pick up.

Sunday's inflation report showed China's consumer price index rose 2 percent in November from a year ago, slightly less than forecasts for a 2.1 percent gain and up from 1.7 percent in October. Vegetable prices soared 11.3 percent.

Although that leaves consumer inflation well below Beijing's 4 percent target for 2012, the central bank has said rising prices represent the biggest risk long term as China makes a transition from a planned to a market-based economy.

http://reut.rs/WXKlNc

Metal Demand

Raw-material producers posted the biggest advance among the 10 industry groups in the MSCI Asia Pacific Index. Copper futures advanced for a second day on speculation demand from China, the biggest user, will increase as industrial production accelerated.

Rio Tinto Group (RIO), which gets about 31 percent of sales from China, climbed 1.9 percent to A$61.30 in Sydney. BHP Billiton Ltd. the world’s largest mining company, added 0.6 percent to A$34.95.

http://www.bloomberg.com/news/2012-12-10/asian-stocks-rise-to-eight-month-high-on-china-u-s-data.html

"Cliff" worries may drive tax selling

Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

This week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. EST on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

http://www.4-traders.com/APPLE-INC-4849/news/Wall-St-Week-Ahead-Cliff-worries-may-drive-tax-selling-15582615/?countview=0

China November factory output jumps to 8-month high

Growth in China's factory output and retail sales jumped to eight-month highs in November as consumer inflation bounced off 33-month lows in the latest sign that its economy is snapping out of a protracted slump.

http://www.4-traders.com/news/China-November-factory-output-jumps-to-eight-month-high--15583319/?countview=0

BMW Sees Third Consecutive Sales Record

Bayerische Motoren Werke AG (BMW), the biggest maker of luxury cars, said sales will probably reach a third consecutive annual record next year, when the manufacturer will introduce the 4-Series coupe.

The U.S. car market is “continuing to be in good shape,” Ian Robertson, BMW’s head of sales and marketing, said at a presentation of the new model in Munich late yesterday. The U.S. will be the biggest market for the car, which replaces the coupe version of the 3-Series next year, followed by Germany and the U.K., he said.

http://www.bloomberg.com/news/2012-12-06/bmw-sees-third-consecutive-sales-record-on-new-4-series.html

Apple Inc's rank in China

Apple Inc's rank in China's smartphone market, which is set to become the world's largest this year, fell to No.6 in the third quarter as it faces tougher competition from Chinese brands, research firm IDC said on Thursday.

http://reut.rs/Ra2kTW

Cliff fight may knock out December rally

In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.

December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.

But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."

Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.

"And that is what is grabbing the markets."

"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.

"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."

http://www.4-traders.com/TARGET-CORPORATION-12291/news/Cliff-fight-may-knock-out-December-rally-15561283/?countview=0

Cyber Monday sales soar 17% as buyers go mobile

Online spending rose 17 percent on the Monday after Thanksgiving, one of the busiest days of the year for Internet retailers, as tablets and smartphones let customers shop anytime and anywhere.

Consumers spent about $1.46 billion on so-called Cyber Monday, compared with $1.25 billion a year ago, making it the heaviest online spending day in history, research firmComScore Inc. (SCOR) said in a statement today. U.S. retail e-commerce spending reached $16.4 billion in the first 26 days of the holiday season, a 16 percent increase from the same time last year.

The convenience offered by mobile devices, especially tablets, is boosting sales for online retailers such as Amazon.com Inc. (AMZN) and EBay Inc. (EBAY)Consumers are no longer waiting for Black Friday to shop and they’re starting as early as Thursday evening, which will help Internet sales reach $43.4 billion this holiday season, or 10 percent of U.S. retail spending, excluding gas, food and cars, according to ComScore.

http://www.bloomberg.com/news/2012-11-28/online-cyber-monday-sales-soar-17-as-buyers-turn-mobile.html

China's tablet PC market grew 62.5%

China's tablet PC market grew 62.5 percent in the third quarter from the previous year, dominated by Apple Inc's iPad which snared more than two-thirds of sales, an industry report said on Wednesday.

For the quarter, 2.6 million tablet PCs were sold in China, up from 1.6 million a year ago, said technology research firm Analysys International.

Apple had 71.4 percent of the market, down a percentage point from the second quarter, ahead of Lenovo Group with 10.5 percent. Chinese firm Ereneben was third with 3.6 percent, edging out Samsung Electronics on 3.5 percent.

Tablet and smartphone sales in China have soared in recent years as prices drop and users look for cheaper gadgets to allow them access to the Internet. China has the world's largest Internet and mobile markets by number of users.

http://www.reuters.com/article/2012/11/28/us-china-tablet-market-idUSBRE8AR04K20121128

Record Online Holiday Sales Seen as Mobile Drives Growth

US Online retailers are poised for a record $43.4 billion holiday sales season as shoppers increasingly rely on social networks and mobile devices to find and buy merchandise.

Internet sales will grow 17 percent from a year earlier and make up more than 10 percent of U.S. retail spending, excluding gas, food and cars in the last two months of the year, saidAndrew Lipsman, vice president of industry analysis at ComScore Inc. (SCOR) That compares with $29.2 billion spent online during the same period in 2007, when electronic commerce made up 7.4 percent of total spending.

“People are shopping on their mobile devices between 7 p.m. and midnight -- that’s an occasion that just didn’t exist in the past, and now we’re seeing it happening in a big way,” Lipsman said.

EBay Inc. (EBAY) began offering mobile-only deals starting at 5:23 p.m. New York time on Thanksgiving -- the exact moment when it expected diners to push away from their pie plates and start scouring the Web. Four days earlier, Amazon.com Inc. (AMZN) debuted a holiday deal site promising bargains to shoppers who used the company’s mobile app or signed up for alerts on social networks such as Facebook Inc. and Twitter Inc.

http://www.bloomberg.com/news/2012-11-26/record-online-holiday-sales-seen-as-mobile-drives-growth.html

Water shares rise on hopes of agreement with Ofwat on price controls

UK Water shares have bubbled up on hopes an agreement can be reached with the industry regulator over new licence proposals.

Ofwat issued a clarification of its proposals for licence changes and changes to price controls, which analysts said struck a more conciliatory tone than before. An earlier statement from the regulator on the issue hit shares in the sector hard. Now Ofwat has said it recognises the water and sewage sector needs to remain attractive to investors, and it encouraged them to discuss the planned changes further. 

In reaction to the Ofwat statement, United Utilities is up 15p at 674p, the biggest riser in a FTSE 100 which has edged around 6 points lower.Severn Trent is 22p better at £15.69 while Pennon has put on 5p to 609p.

http://www.guardian.co.uk/business/marketforceslive/2012/nov/21/united-utilities-severn-trent-pennon-ofwat

EU economies set for weakest quarter since 2009

It seems that the eurozone economy is on course for its weakest quarter since early 2009, as business surveys showed companies battling shrinking order books in November. 

The weak Eurozone PMI outturn for November is a major disappointment in light of the increases in the German and French PMI surveys, and suggest that that the recession on the Eurozone’s periphery is gathering further pace. 

All in all, today’s PMI figures confirm that the Eurozone economy remains firmly stuck in recession. Looking ahead, we still think that ECB’s recent actions and the improvement in the global economy (as signaled by the further pickup in the Chinese PMI) will provide some respite to the Eurozone economy. But with the fiscal squeeze across the region continuing, any return to positive growth next year will likely be slow and gradual – and largely confined to the ‘core’ countries.

http://www.guardian.co.uk/business/2012/nov/22/eurozone-crisis-live-leaders-meet-eu-budget-summit

China manufacturing grows for first time in 13 months

China's manufacturing has expanded for the first time in 13 months in a further sign that the world's second largest economy is recovering from its deepest slump since the 2008 global crisis.

HSBC said on Thursday its monthly Purchasing Managers' Index improved to 50.4 for November – more than 50 indicates expansion. That was a moderate improvement from October's 49.5. It is the first time in 13 months that the reading has been above 50.

The PMI index measures overall manufacturing activity by surveying numerous indicators including orders, employment and actual production.

The Chinese numbers are rare good news for the world economy, which has slowed as Europe's chronic debt crisis worsened and the American economy stagnated.

http://www.guardian.co.uk/business/2012/nov/22/china-manufacturing-grows-again-pmi

US stock market looks cheap

Investors have seen $806 billion erased from the value of American equities since President Barack Obama was re-elected Nov. 6 in the biggest decline since May. The combination of falling stocks and rising profits as the economy recovers has left the S&P 500’s price-earnings ratio below the ending level of eight of the nine bull markets since 1962 and beneath the average of any since Ronald Reagan was in power.

Bears say the 4.8 percent drop in the S&P 500 and valuations show investors are losing confidence that Congress and Obama will reach a budget compromise that would keep the recovery from stalling. Bulls, including the top strategists at six Wall Street firms, say that the declines are another reason to buy and that stock prices from Apple Inc. (AAPL) to Dollar Tree Inc. are bound to improve as earnings increase.

“The stock market looks cheap because people are way too pessimistic about what growth looks like for the next 10 years,” said Brian Jacobsen, who helps oversee $208 billion as chief strategist at Wells Fargo Advantage Funds and predicts the S&P 500 will rise 47 percent to 2,000 in 2014. “You can get big and rapid moves in the market when expectations are so low.”

http://www.bloomberg.com/news/2012-11-18/s-p-500-in-cheapest-bull-market-since-reagan-trade-26-from-peak.html

US GDP Accelerating to 2.9%

US Gross domestic product probably increased at about a 2.9 percent annual rate in July-September, according to economists from Goldman Sachs Group Inc. and Barclays Plc. That would be the fastest quarterly growth this year, beating the Commerce Department’s initial estimate of 2 percent.

Help is coming from a housing recovery, strengthening job market and healthier household finances that are driving gains in consumer confidence and spending. While the damage from Sandy and an anticipated tightening of fiscal policy mean growth will decelerate this quarter and next, the world’s largest economy may emerge on stronger footing in the second half of 2013.

http://www.bloomberg.com/news/2012-11-19/gdp-accelerating-to-2-9-helping-u-s-overcome-sandy-budg.html

Greece continues to weigh on sentiment

Eurozone finance ministers announced that they would grant Greece a two-year extension to get its fiscal house in order, but stopped short of giving the go-ahead on the €31.5bn tranche. Eurogroup Chairman Jean-Claude Juncker boldly stated that Athens's deadline to bring debt down to 120% of gross domestic product by 2020 would be extended to 2022. 

"Although EU finance ministers agreed to give Greece two additional years until budget and deficit targets have to be met, there has no progress been made what the main sticking point is concerned which is how to raise the extra funds needed resulting from giving Greece more time," said Markus Huber, the head of German HNW trading at ETX Capital.

However International Monetary Fund (IMF) Managing Director Christine Lagarde openly showed her disapproval and said that the two organisations obviously had "different views" on the timetable that the Hellenic Republic needs to complete. 

http://www.lse.co.uk/sharecast-news-article.asp?ArticleCode=20493874&ArticleHeadline=london_open:_stocks_drop_as_greece_given_more_time

India's Industrial Output Shrinks, Trade Gap Widens

India's industrial output unexpectedly shrank in September and its trade deficit expanded to the widest in several years in October, indicating that the worst for the economy isn't over and measures including monetary easing may be needed to revive growth.

Industrial output contracted 0.4% from a year earlier in September, hurt by the poor performance of the manufacturing sector, government data showed Monday. The government also downwardly revised the output reading for August to a 2.3% expansion from 2.7% reported previously.

Monday, the government also said India's trade deficit in October widened sharply, adding to the gloom.

India's trade gap rose to $20.96 billion from $18.08 billion in September as the country's heavy dependence on imports to meet its oil needs pushed up overall imports, while weak demand in the U.S. and Europe led to a decline in exports.

http://on.wsj.com/SPcfKj

Greek concerns hammers stocks

While Greek policy-makers voted in favour of the country's harsh austerity measures on Wednesday night, sentiment has been shaken after reports suggested yesterday that the decision on whether to release the next tranche of the country's bailout won't come next week as expected.

An EU official has said that ministers will not decide on the next €31.5bn of aid until late November as they wait for a final report from the Troika on how Greece is complying with the terms of its bailout.

http://www.lse.co.uk/sharecast-news-article.asp?ArticleCode=20488364&ArticleHeadline=london_midday:_greek_concerns_hammer_stocks_again

China's economy to overtake US in next 4 years

China will overtake the US in the next four years to become the largest economy in the world, says a leading international thinktank.

The Paris-based Organisation for Economic Co-operation and Development (OECD) said China's economy will be larger than the combined economies of the eurozone countries by the end of this year, and will overtake the US by the end of 2016.

Global GDP will grow by 3% a year over the next 50 years, it says, but there will be large variations between countries and regions. By 2025, it says the combined GDP of China and India will be bigger than that of France, Germany, Italy, Japan, UK, US and Canada put together. 

http://www.guardian.co.uk/business/2012/nov/09/china-overtake-us-four-years-oecd

China Industrial Output Accelerates as Inflation Eases

China’s factory output and retail sales exceeded forecasts and inflation unexpectedly cooled to the slowest pace in 33 months, signaling the government is boosting growth without driving a rebound in prices.

Industrial production rose 9.6 percent in October from a year earlier, the National Bureau of Statistics said today in Beijing. That exceeded the 9.4 percent median estimate of analysts surveyed by Bloomberg News. Retail sales growth of 14.5 percent picked up from September’s 14.2 percent. The consumer- price index increased 1.7 percent.

Food prices rose 1.8 percent last month from a year earlier, compared with a 2.5 percent gain in September, according to the statistics bureau. Pork, a Chinese staple, dropped 15.8 percent from a year earlier, subtracting 0.6 percentage point from the CPI, compared with a 38.9 percent rise in October 2011.

Elsewhere in the Asia-Pacific region, the Reserve Bank of Australia reduced its 2013 growth forecast as lower investment and the government’s pledge to deliver a budget surplus restrain the economy. The Bank of Korea kept interest rates unchanged as projected by all economists surveyed by Bloomberg. Malaysia’s exports unexpectedly rose in the first gain in three months in September.

http://www.bloomberg.com/news/2012-11-09/china-oct-consumer-prices-rise-1-7-vs-1-9-economists-.html

Japan's economy seen contracting

Japan's current account surplus fell sharply in September, down 68.7% from a year earlier, while machinery orders also declined, the latest figures showing a weak economy that some economists say is now contracting.

http://online.wsj.com/public/page/news-japan.html

China's Hu promises economic reforms

China will reform to make its currency and interest rates more market-based, boost overseas investments and plough more state funds into industry as part of plans to keep GDP on track to double in size by 2020, President Hu Jintao said on Thursday.

Hu also restated a commitment to targets that would double household incomes nationwide in a decade, in a speech prepared for delivery at the opening of China's Communist Party Congress. Hu is due to step down as party chief during the congress.

"We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market," Hu's speech said.

"We should develop a multi-level capital market, take steady steps to make interest rates and the renminbi exchange rate more market-based and promote the renminbi's convertibility under the capital account in due course," it added.

Hu's restatement of existing pledges gave no specific timeline for their delivery, nor any fresh indications of size of the spending plans or the source of funding for them.

http://reut.rs/XlPZNM

China's interest in luxury

Demand for Jaguar Land Rover (JLR) cars in China remains strong after the UK manufacturer posted a 58% increase in second-quarter sales in the world's largest car market.

China's interest in luxury British brands has been the subject of investor disquiet in recent months, with shares in retailers Mulberry and Burberry bearing the brunt, but Asian appetite for JLR products – from the Range Rover Evoque to the Jaguar XJ – appears undimmed. The Indian-owned car maker, which employs 24,000 people in the UK, said it sold 17,152 vehicles in the three months to September. Across the group, JLR sold 84,749 cars, up 29% on the same period last year as pre-tax profits doubled to £431m.

The performance of the likes of JLR and BMW, which saw the German car maker announce a 40% increase in quarterly Chinese sales this week, contrasts starkly with European mass-market producers. France's Peugeot Citroën is being rescued by the French state, while Ford has announced plans to shut three European plants, including two in the UK, and General Motors is expected to shut its Bochum site in Germany.

http://www.guardian.co.uk/business/2012/nov/07/jaguar-land-rover-china-sales-surge

UK expected to grow by just 0.9% next year

Although the UK is expected to grow by just 0.9% next year, Brussels believes it will expand more quickly than any of the major economies of the eurozone. The commission has pencilled in growth of 0.8% for Germany, 0.4% for France, a contraction of 0.5% for Italy and a retrenchment of 1.4% for Spain. In all cases the predictions are for output to be weaker than expected by national governments, leading to budget deficit reduction targets being missed.

http://www.guardian.co.uk/world/2012/nov/07/eurozone-growth-next-year-ec

Investors fear an impasse in Congress

Stock markets reacted nervously to President Barack Obama's victory Wednesday as the focus in Wall Street and Washington shifted from electoral politics to the the fight over the so-called "fiscal cliff".

All the major US markets fell before lunch with the Dow Jones Industrial Average down over 314 points (2.38%) by noon. Investors fear an impasse in Congress as politicians spar over a political solution to the expiration of Bush-era tax cuts and the automatic imposition of draconian spending cuts set to begin at the year end.

Greenhaus compared the situation to the political fight over raising the debt ceiling in 2011. While a compromise was eventually reached the fight led to an historic downgrade in US debt and triggered panic around the world.

http://www.guardian.co.uk/business/2012/nov/07/wall-street-fiscal-cliff-obama

Fiscal cliff issue

Stock futures fell about half a percent after Obama edged out Republican Mitt Romney while bond futures rose. While the result ended uncertainty about regulation and monetary policy, some remained on edge about taxes and overall economic health.

"There will be an immediate shift to government gridlock and the fiscal cliff issue, and that will be a headwind for stocks," said Michael Yoshikami, chief executive officer and founder of Destination Wealth Management in Walnut Creek, California.

With Republicans retaining control of the U.S. House of Representatives, some investors feared compromise on fiscal reform would remain hard to come by, which could keep markets under pressure.

http://www.4-traders.com/NASDAQ-OMX-GROUP-INC-10173/news/NASDAQ-OMX-Group-Inc-Projected-Obama-win-has-markets-staring-at-fiscal-cliff-15474060/?countview=0

UK retail sales triple dip recession

Britons shied away from spending on big-ticket and luxury items in October, leading to the weakest sales growth in almost a year, according to the British Retail Consortium (BRC). Meanwhile, expansion in the UK's services sector – which accounts for three-quarters of UK GDP – slowed to a crawl as new business failed to make up for projects completed during the month.

Chancellor George Osborne had seized on news last month that the economy emerged from double-dip recession, growing by 1% in the third quarter of 2012, as evidence that his policies had put Britain "on the right track". But early signs for the fourth quarter now suggest the economy could shrink again, raising the prospect of a triple-dip recession.

http://www.guardian.co.uk/business/2012/nov/06/retail-sales-triple-dip-recession

Creaking Russia

Corruption is one of the biggest problems in Russia for ordinary citizens, businessmen and foreign investors. The country has slid to 143rd place out of 182 on Transparency International's Corruption Perceptions Index, tied with Nigeria.

On the lips of many educated Muscovites today is the word "zastoy" (stagnation) - an epithet which came to define the lackluster latter years of Soviet leader Leonid Brezhnev in the 1970s and early 1980s, but is now increasingly used of Putin.

Despite years of government promises, Russia has yet to build a modern pensions saving system, improve regulation to create a viable financial market trading centre to compete with Dubai or invest in its crumbling infrastructure.

Already weighed down by the cost of hefty public sector pay rises ahead of this year's presidential election, the Russian government's latest budget envisages spending $620 billion by 2020 re-equipping the country's military, while cutting spending on infrastructure and education.

These priorities have upset business leaders, who are desperate for improvements to the creaking road network.

And despite repeated Putin's pledges to cut the economy's dependence on oil and gas exports, the oil price required by the Kremlin to make its budget sums add up has more than doubled over the pasts five years to $110.

At a time when Russian oil production is falling and large-scale investment is badly needed to open up new fields, the Kremlin is instead spending $55 billion in cash and shares to acquire control of a major oil company from the private sector.

http://reut.rs/VGlKMo

U.S. ELECTIONS NEXT FOCUS

Positive economic news could affect the outcome of the November 6 elections while easing pressure for more monetary easing, pushing up Treasury yields and lifting the dollar.

"Market impact from the U.S. jobs data may in the end be offset by the outcome of the presidential election," said Daiwa's Yamamoto.

A rise in equities in the wake of a solid jobs report may be countered if President Barack Obama wins, as his re-election will be perceived as negative for equities, while weakness in stocks due to a soft data could be recovered if Republican Mitt Romney wins, as markets see him as stock-friendly, Yamamoto said.

"Asian economic indicators are consistent with a risk-on strategy, but we remain risk selective," said Morgan Stanley in a research note.

"The outcome of the U.S. presidential election is a close call, leaving markets concerned about whether the newly elected president will have the political capability to deal with the fiscal cliff," undermining the recent economic rebound, it said.

After the U.S. election, Congress must deal with a "fiscal cliff" - up to $600 billion in expiring tax cuts and spending reductions that are set to kick in next year - which threatens to hurt the U.S. economy.

http://reut.rs/X4A6v7

China’s Industrial Profits Rise

Chinese industrial companies’ profits rose in September for the first time in six months, adding to signs economic growth is picking up following a seven- quarter slowdown.

Net income rose 7.8 percent from a year earlier to 464.3 billion yuan ($74.3 billion), the National Bureau of Statistics said today in Beijing. That compared with a 6.2 percent decline in August, the year’s largest drop.

Today’s report followed data showing industrial production and retail sales accelerated in September and a manufacturing gauge rose in October. Chinese Premier Wen Jiabao said the economy will keep showing “positive changes,” according to a report last week by the official Xinhua News Agency.

http://www.bloomberg.com/news/2012-10-27/china-s-industrial-profits-rise-for-first-time-in-six-months.html