Wall Street pullback on fiscal worries?

Investors may be tempted to shy away from stocks in the next week or two as the latest version of the fiscal follies plays out in Washington.

"Uncertainty will probably rise ahead of these events, but we think this is likely to be short-lived and probably less severe than some other recent episodes," said a Goldman Sachs research note.

In fact, the current episode could prove to be an empty threat, like the so-called "fiscal cliff," last December. After weeks of dire predictions of big tax hikes and draconian spending cuts if no deal was reached, lawmakers came to a last-minute accord, and the market kicked into high gear for 2013. The S&P 500 is up more than 22 percent year to date on a total return basis, including re-invested dividends.

"While we could get a pullback on worries about the debt ceiling and the continuing resolution, my guess is it will go the same way as the fiscal cliff went - a bunch of sound and fury signifying nothing," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.

"If the market pulls back on (Washington) worries, I think it's a buy," said Saut.

http://www.4-traders.com/news/US-stocks-neednt-fret-about-a-government-shutdown--17284849/?countview=0

China August vehicle sales up 10.3 percent year-on-year - industry group

Vehicle sales in China rose 10.3 percent in August from a year earlier, according to the China Association of Automobile Manufacturers (CAAM), pointing to a recovery in the world's biggest automobile market.

During the first eight months of the year, vehicle sales rose 11.8 percent, putting the industry on track to reach the 7 percent annual growth forecast made by CAAM in January.

U.S. automakers are taking market share from their Japanese rivals, whose sales in China have been hit by a territorial dispute which flared anti-Japanese sentiment last September.

http://www.4-traders.com/HONDA-MOTOR-CO-LTD-6492457/news/China-August-vehicle-sales-up-103-percent-year-on-year-industry-group-17253271/

Multiples Growing Fastest Since Dot-Com Bubble as Rally Ages

Price gains of stocks in the Standard & Poor’s 500 Index (SPX) are outpacing profits by the fastest rate in 14 years as the bull market extends beyond the average length of rallies since Harry S. Truman was president.

Bears say the failure of earnings to keep up with prices signals the bull market is in its last stages, as companies from Caterpillar Inc. and Danaher Corp. (DHR) forecast slower profit growth and the Federal Reserve prepares to reduce stimulus. Optimists point to expanding multiples as proof individual investors are growing confident enough in the economy to return to stocks. History shows the final phases of rallies have provided some of the biggest gains.
http://www.bloomberg.com/news/2013-08-25/multiples-expanding-fastest-since-dot-com-bubble-as-rally-ages.html

Germany’s Second-Quarter Growth Led by Investment Rebound

Germany’s economic growth in the second quarter was driven by consumption and a rebound in investment as a recovery in the 17-nation euro area, its biggest trading partner, bolstered confidence.

Investment in plant and machinery climbed 0.9 percent in the second quarter, the first increase since 2011, today’s report showed. Construction output surged 2.6 percent. Household spending gained 0.5 percent and government consumption was up 0.6 percent. Domestic demand added 0.5 percentage point to growth, while net trade contributed 0.2 percentage point. Exports rose 2.2 percent and imports advanced 2 percent.

Manufacturing growth, record exports, looser bank lending and a housing recovery are raising the odds that the U.S. economy, the world’s largest, will accelerate after GDP rose at a 1.7 percent annualized rate in the second quarter. The Chinese economy, the second-biggest, may be strengthening after a two-quarter slowdown. A gauge of the nation’s factory output this month showed a return to growth after the biggest decline in more than a year.

“Global demand is advancing and if the domestic economies in struggling euro counties stabilize further, we will embark on a stable growth path,” said Alexander Koch, an economist at UniCredit Group in Munich. “We’ve already seen a recovery in German exports, which should continue in the coming months, and domestic consumption isn’t doing too bad either.”

http://www.bloomberg.com/news/2013-08-23/germany-s-second-quarter-growth-led-by-investment-rebound.html

More trouble in store for UK banks

HSBC has already been fined £1.2bn for breaching money-laundering rules and Royal Bank of Scotland and Barclays hit with major penalties for rigging Libor, but over the past two weeks Britain's major banks have warned shareholders of the wide range of investigations they still face that could lead to even more fines.

In many instances the banks are unable to quantify, as yet, the impact of ongoing cases – although RBS provided the most detailed warning of potential future fines by setting aside £385m to cover legal costs associated with unspecified regulatory actions.

http://www.theguardian.com/business/2013/aug/11/trouble-in-store-britains-banks

BoJ to keep monetary policy on hold as economy improves

Since the BOJ's last meeting there have been improvements in the economy, including the first rise in core consumer prices in more than a year, the first increase in summer bonuses in three years and a decline in the jobless rate to a 4-1/2-year low.

The BOJ is widely expected to keep monetary policy steady by maintaining its pledge of increasing base money, or cash and deposits with the central bank, at an annual pace of 60 trillion to 70 trillion yen ($600 billion-$700 billion).

Faced with inconclusive data, some policymakers may reserve judgment on their outlook for the economy until the release next week of April-June gross domestic product and machinery orders, which is a leading indicator of business spending.

http://www.4-traders.com/news/BOJ-to-keep-monetary-policy-on-hold-as-economy-improves--17161644/

Now Is Time to Sell on Surge

Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.

“With credit markets hot and equities strong, this is a better time for selling assets than for buying,” James said on call with media on July 18. “Activity levels seem to be shifting from the U.S., which has been our focus over the last couple of years, to Europe, where there’s more distress, and Asia and emerging markets, where liquidity issues are arising.”

“It’s a difficult environment to find really attractive things when the markets are robust as they are,” Fortress’s Edens said yesterday.

Global stocks have gained 11 percent this year, led by a 20 percent rally in the S&P 500, which rose above 1,700 for the first time yesterday.

http://www.bloomberg.com/news/2013-08-01/fortress-to-blackstone-say-now-is-time-to-sell-on-rally.html

French Automobile Production Fell 21% in First Half

Automobile production in France fell by 21% in the first half of this year as car makers slammed on the brakes to prevent inventories building up due to slumping sales, according to latest industry data released Thursday.

PSA Peugeot Citroen (>> PEUGEOT), which was hit by a weeks-long strike at an assembly plant north of Paris, produced 25% fewer vehicles in the first six months of this year than in the same period of 2012, while local rival Renault SA (>> RENAULT) scaled back its output by 11%, according to data collated by CCFA, the French automobile manufacturers' association.

It was a different story for production outside France, however. Peugeot Citroen's non-French production increased 5.8% in the first six months of this year, while Renault's was up by 5.3%. Both companies are benefiting from dynamic markets away from Europe. 

http://www.4-traders.com/PEUGEOT-4682/news/French-Automobile-Production-Fell-21-in-First-Half-17144488/

Luxury cosmetics demand in Africa

Estee Lauder (>> Estee Lauder Companies Inc) plans to expand its presence in sub-Saharan Africa by rolling out its $1 billion brands, Clinique and MAC, to tap into strong demand for luxury cosmetics among the region's middle class, a company executive said on Wednesday.

"The potential of Africa, we believe, is extremely positive and we wouldn't be entering unless we believe that there was long term sustainable growth," she said.

"Our target consumer is the emerging middle class, the established middle class and that affluent African consumer who's probably extremely well traveled and very brand savvy."

However, the main hurdle to the company's growth in Africa is the lack of retail infrastructure outside South Africa.

"We would probably be going a lot faster if there was the availability of retail space," Fox said. "The concept of department stores doesn't really exist outside of South Africa. I think there are great opportunities for retailers and for mall developers in sub-Saharan Africa. Brands want to be there."

http://www.4-traders.com/ESTEE-LAUDER-COMPANIES-IN-12437/news/Estee-Lauder-eyes-buoyant-cosmetics-demand-in-Africa-17142777/

UK Treasury ahead with tax breaks for fracking firms

Chancellor George Osborne has pledged to make Britain's tax regime the "most generous for shale in the world" as the Treasury pressed ahead with promised tax breaks for fracking firms.

A new tax allowance will see a certain portion of income from each shale gas “pad” — or production site – receive an effective tax rate of 30pc, rather than 62pc.

The tax break is similar to those on offer to oil and gas explorers in technically-challenging and less economic fields in the North Sea, where they have been credited with revitalising interest.

The British Geological Survey said last month there could be 1,300 trillion cubic feet of gas in northern England alone. If just 10pc could be extracted it could meet Britain’s needs for more than four decades.

Water UK, which is demanding an urgent meeting with shale companies to discuss its fears, warns: “Shale gas fracking could lead to contamination of the water supply with methane gas and harmful chemicals if not carefully planned and carried out.”

It suggests aquifers could be contaminated by fracking, by leaks from wells, or by poor handling of chemicals or waste water on the surface.

The group also warns that “the fracking process requires huge amounts of water, which will inevitably put a strain on supplies in areas around extraction sites”.

http://www.telegraph.co.uk/finance/newsbysector/energy/10189932/George-Osborne-pledges-most-generous-tax-regime-for-shale-gas.html

Israel’s Deepest Well Targets 1.5 Billion Barrels of Oil

Houston’s Noble Energy Inc. (NBL) will probe 6,500 meters (4 miles) below the Mediterranean seabed later this year, targeting as much as 1.5 billion barrels of crude, equal to about 15 years of Israeli demand.

While explorers have found enough natural gas in the past five years to turn Israel into an exporter, a major oil discovery would break new ground. The Middle East’s third-largest economy spends about $10 billion a year importing 98 percent of the oil it uses. Domestic production would increase tax revenue, boost the country’s balance of payments and reduce vulnerability to supply disruptions.

The key to finding Israel’s offshore energy deposits has been technology -- developed in places like the U.S. Gulf of Mexico and Brazil -- to drill in deeper waters and further under the seabed. 

http://www.bloomberg.com/news/2013-07-17/israel-s-deepest-well-targets-1-5-billion-barrels-of-oil.html

EU bans BASF pesticide over bee health fears

The European Union added a pesticide made by German chemical firm BASF to its blacklist of substances suspected of playing a role in declining bee populations.

Member governments banned the use of agricultural insecticide fipronil to treat maize and sunflower seeds, the European Commission said.

The restrictions take effect from December 31 but seeds which have already been treated can be sown until the end of February 2014.

The ban follows similar EU curbs imposed in April on three of the world's most widely used pesticides, known as neonicotinoids, and reflects growing concern in Europe over a recent plunge in the population of honeybees critical to crop pollination and production.

http://www.4-traders.com/BASF-SE-6443227/news/BASF-SE-EU-bans-BASF-pesticide-over-bee-health-fears-17105385/

MORE FOCUS ON EARNINGS

Next week marks the first big week of second-quarter earnings, and it is sure to bring both joy and misery to Wall Street.

Investors will concentrate on market fundamentals after weeks when Federal Reserve policies have dominated the market. If they see companies are still struggling, stocks could take a fall.

"We're in the terminal stages of a Bernanke-driven bubble," said Walter Zimmerman, technical analyst at United-ICAP in Jersey City, New Jersey. 

The S&P's 17.8 percent advance in 2013 is largely attributable to the central bank's accommodative policies. The major indexes made impressive gains in the week: the Dow <.DJI> up 2.1 percent, the S&P <.SPX> 3 percent higher and the Nasdaq <.IXIC> up 3.5 percent. It was the third straight week of gains for all three, and the best week for the S&P and Nasdaq since early January.

"The Fed has been able to prevent a big selloff so far, but eventually the economy will have to catch up to the market or the market will fall back to match the economy," said Scott Armiger, who helps oversee $5.6 billion as portfolio manager at Christiana Trust in Greenville, Delaware.

Next week about 70 S&P 500 companies will report results. If the results indicate that companies' earnings are still weak despite intervention by the world's major central banks, shares could slump.

Companies can appear to look good when they beat a lowered earnings bar, but signs of weakness will hurt a market that is hovering near all-time highs and seeking new catalysts to spur further gains.

http://www.4-traders.com/INTEL-CORPORATION-4829/news/As-earnings-take-over-fundamentals-to-be-tested-17086030/?countview=0

The best and worst Investments of 2013

The first six months of 2013 were a great time to be an electric-car aficionado who owns an oil well. It was a lousy time to be a gold miner and it remained an awful time to be a Spanish banker. That is, at least, if you judge by the performance of financial markets.

The Best U.S. Large-Cap Stock is Tesla Motors, a company with huge ambitions in electric vehicles but no profits until this year. It's up 217 percent through the end of June and rocketed another 12 percent in the first week of July.

The Worst U.S. Large-Cap Stock is Newmont Mining Corp.go, a gold mining company that plunged 35.5 percent in the first half of the year. The stock fell alongside the price of gold, which was down 26.3 percent as of June 28 and off 23.5 percent as of July 11. Gold was not the Worst Commodity of 2013's first half -- that would be silver, which has dropped 34 percent year-to-date. The Best Commodity this year is oil, up 14 percent through July 11.

Outside the U.S., the Best International Stock* is literally recovering from disaster. Up 149 percent in the first half of the year, the Tokyo Electric Power Company, or Tepco, was the operator of the Fukushima atomic power station destroyed in Japan's 2011 earthquake and tsunami. Now, it wants to restart one of the plants idled after the tragedy.

The Worst International Stock* so far this year is Spanish bank Bankia SA, down 88 percent. Bankia was also the worst international stock of 2012, as it was pummeled by Spain's real estate collapse.

http://www.bloomberg.com/news/2013-07-12/the-best-and-worst-investments-of-2013-so-far-.html

Buyouts in the Italian luxury industry

“There’s going to be a proliferation and an acceleration of buyouts in the luxury industry,” Milton Pedraza, chief executive officer of the Luxury Institute LLC, a New York-based research and consulting firm, said in a phone interview. “They have high profit margins, but they need the capital to open stores all over the world and they need the expertise very often to globalize. The money is out there today and luxury is extremely attractive.”

It’s becoming increasingly difficult for Italian companies to secure financing amid the economic downturn, according to Francois Arpels, managing director of Bryan Garnier’s branded luxury goods practice in Paris. That’s making them more willing to explore deals with larger companies, he said in a phone interview.

After LVMH announced the $2.6 billion transaction, shares of Italian luxury retailers surged, with Ferragamo and Yoox SpA (YOOX) closing at records and Brunello Cucinelli SpA and Tod’s rising as much as 4.5 percent and 2.8 percent. Shoemakers Ferragamo and Tod’s are the most likely next targets, Equita Sim SpA said. Online retailer Yoox and Loro Piana-rival Cucinelli offer sales growth through 2015 of 88 percent and 45 percent, according to data compiled by Bloomberg.

Tod’s and LVMH are already connected. LVMH owns 3.5 percent of the shoemaker.

Gianni Versace SpA has said it expects to decide by October or November if it will sell a minority stake publicly or privately to fund growth.

Yoox, the 1.1-billion euro operator of e-commerce stores for brands such as Armani and Zegna, also could be a potential target, according to Chiara Rotelli of Mediobanca SpA. The retailer could be valued at 31.9 euros a share in a sale, the Milan-based analyst estimated in a July 10 report.

Cucinelli (BC), a maker of $1,820 cashmere sweaters, may lure buyers with its growth opportunities in China and thriving menswear line, Wu said. Cucinelli, with a market value of 1.4 billion euros, is projected to increase revenue to 406 million euros by 2015, according to analysts’ estimates compiled by Bloomberg.

http://www.bloomberg.com/news/2013-07-12/ferragamo-seen-as-target-after-loro-piana-deal-real-m-a.html

Tanzanian growth at 7%

Tanzania's economy is expected to grow by 7% in 2013-14, but vulnerabilities remain, the IMF said.

Real gross domestic product grew by 6.9% in 2012 compared to 6.4% in 2011, the IMF said.

"Growth was driven by transport and communications, financial services, manufacturing and trade; it was supported by improved power supply," the fund said.

Estimates of Tanzania's gas reserves have shot up to 28.7 trillion cubic feet from 10 trillion cubic feet following new discoveries by Statoil ASA(>> Statoil ASA), Ophir Energy PLC (>> Ophir Energy Plc) and BG Group PLC (BG.LN), according to Tanzania's energy and minerals ministry.

Tanzania's risk of debt distress remains low, but the debt-to-GDP ratio has risen steadily over the past few years and fiscal policy will attempt to stabilize the debt ratio at about 45% in 2014-15, the IMF said.

In the absence of external shocks, the fund envisages a further decline in inflation to 7% by December and to the government's medium-term objective of 5% a year later, the fund said.

http://www.4-traders.com/OPHIR-ENERGY-PLC-8360318/news/IMF-Sees-Tanzania-Growth-at-7-for-2013-2014-But-Vulnerabilities-Remain-17036189/

Fed Seen Reducing Asset Buying by Smaller Amount

Economists cut their estimates for how much the Federal Reserve will reduce the amount of its monthly asset purchases, a Bloomberg survey shows.

Two of the 59 economists surveyed this week expect the pace of purchases to be reduced at the FOMC meetings on June 18-19 or July 30-31. Sixteen say tapering will begin at the Sept. 17-18 meeting, 14 see it happening Oct. 29-30 and 15 forecast the first tapering Dec. 17-18. Twelve see tapering next year or later.

“If jobs growth continues in the 150,000-to-200,000 per month range, that’s probably sufficient to lower the unemployment rateslightly,” said Tom Lam, chief economist at DMG & Partners Securities in Singapore. “Coupled with real GDP growth recovering to 2.5 percent, that would be sufficient for them to consider tapering modestly at the December meeting.”

“When the Fed does start to end QE, it will actually build confidence because it is another sign that the economy is getting better,” Paulsen said.

http://www.bloomberg.com/news/2013-06-06/economists-see-smaller-tapering-in-fed-qe-program-survey-shows.html

Copper Climbs on Higher EU Auto Sales, Grasberg Disruption

Copper prices rose after European auto sales surprised the market with their first increase in 20 months, and as one of the world's largest copper mines remains shut following a fatal accident.

Copper prices advanced on the news as copper electrical wires, heating elements and tubing is widely used in automotive production, and the brighter data are considered a signal of stronger future demand for the industrial metal.

Copper prices are also drawing support from the work suspension following a fatal accident at Freeport McMoRan Copper & Gold Inc.'s (FCX) Grasberg mine in Indonesia. The company halted output at the world's third-largest open pit copper mine to focus on the rescue of 25 workers trapped after an underground tunnel caved in on Tuesday.

Copper is widely used in everyday goods like cell phones, laptops and cars, and demand for these products tends to increase when consumers have more confidence in the economy.

http://www.4-traders.com/FREEPORT-MCMORAN-COPPER-12574/news/Freeport-McMoRan-Copper-Gold-Inc-Copper-Climbs-on-Higher-EU-Auto-Sales-Grasberg-Disruption-16869729/?countview=0

UK car sales boom

Car sales jumped by almost 15% in April compared with the same month last year and are 9% higher in the first four months of 2013. Sales to individuals drove the numbers higher, with private sales up 32% compared with April last year.

Britons have been attracted by bargain deals on new cars, as well as attractive financing packages. Some motorists have also been prompted to buy more fuel efficient cars because of high petrol prices.

The health of the UK car market stands in sharp contrast to Europe, where sales slumped by more than 10% in March. Analysts were particularly concerned by a 17% decline in new car sales in Germany.

http://www.guardian.co.uk/business/2013/may/07/uk-car-sales-boom

China's Falling Inventories Hit Hopes for Economic Rebound

Fresh signs of falling inventories in China's factories are denting hopes that economic growth will rebound in the second quarter.

Data released in early May as well as comments from industry officials suggest companies are not rebuilding their stocks as they expect demand to fall. That indicates the economic juggernaut is unlikely to bounce in the near term, after its gross domestic product growth slowed to 7.7% on year in the first quarter from the preceding quarter's 7.9%.

In the details of China's official Purchasing Managers' Index -- a key gauge of manufacturing activity -- the sub-index indicating stocks of finished goods fell to 47.7 in April from 50.2 the previous month, while the sub-index measuring raw material stocks was at 47.5, unchanged from March. Both are below the 50-point level that separates expansion from contraction.

But while the overall view on the inventory front seems gloomy, there are spots of optimism.
Within the steel sector, Baosteel - which focuses on high-end products where demand is stronger -- said it had bulked up on raw materials. "Demand from autos, the ultra-high voltage grid, energy pipe network, and urban rail will remain strong this year," general manager Ma Guoqiang, told a news briefing on April 26.
An executive with Anhui Conch Cement Co., one of China's largest cement makers, said that restocking is likely in coming months. "The last round of destocking was basically done in April and the downstream demand is expected to rise as the peak season for construction is coming," she said, adding that cement prices were likely to rebound slightly.

http://www.4-traders.com/news/China-s-Falling-Inventories-Hit-Hopes-for-Economic-Rebound--16830421/

Real estate sales Italy plunged 26 percent last year

Real estate sales in Italy plunged 26 percent last year, according to Finance Ministry data. Residential transactions amounted to 88.1 billion euros, Scenari Immobiliari’s research showed.

House prices fell 4.6 percent in the last quarter of 2012 from a year earlier. They’ve dropped 12 percent in real terms from the 2008 peak, reaching levels last seen in mid-2004, according to Bloomberg calculations. Values are likely to fall another 5 percent this year, according to the real estate research unit of the Bologna-based Nomisma institute.

Foreign investment in Italian holiday properties is rising as Germans, Britons and Russians take advantage of a market where locals are struggling to purchase even a first home. Residential sales in the country dropped almost 26 percent last year amid a plunge in mortgage lending, almost two years of recession, and uncertainty surrounding a new tax on primary residences.

Second-home sales to buyers from abroad rose 14 percent last year, with non-Italians spending 2.1 billion euros ($2.8 billion), according to research institute Scenari Immobiliari. Germans, the biggest buyers since 2009, accounted for almost 40 percent of the transactions by foreigners, followed by the British at 18 percent and Russians with 13 percent.

http://www.bloomberg.com/news/2013-05-06/germans-splurge-on-italian-homes-locals-can-t-afford.html

Eurozone recession expected to deepen

"Reduced business activity, possible spillovers from the restructuring of the banking sector to professional business services and the hiring freeze in the public sector are expected to push the unemployment rate higher in 2013 and more so in 2014," the commission said in its report, referring to the consequences of a bailout that included a raid on savers' deposits.

The spring forecasts underlined the stark contrasts between eurozone member states, with France becoming decoupled from Germany as the economic centre of the single currency bloc. The commission sees the German economy recovering gradually on the back of improving domestic demand, helped by a "robust labour market and more dynamic wage growth". GDP in France, however, is forecast to stagnate this year amid modest exports.

http://www.guardian.co.uk/business/2013/may/03/eurozone-recession-deeper-unemployment

Apple Inc.’s stock is finally beginning to rally

Goldman Sachs Group, Inc.(NYSE:GS) said their IT hardware group outperformed the S&P 500 this week, led by Apple Inc. (NASDAQ:AAPL), which advanced 9.1 percent. They’ve rated Apple as a buy. In their view, the stock rally is simply a delayed reaction to the company’s $100 billion capital allocation plan. They also believe this week’s $17 billion bond deal made that reaction even more intense.

In addition, they said investors may be reacting to Apple’s adjusted guidance. While initially adjusting guidance usually causes a negative reaction, the idea here is that Apple Inc. (NASDAQ:AAPL) will be less likely to miss expectations. As a result, the risk involved in investing in the stock before the iPhone and iPad refresh may be mitigated.

Another near-term catalyst they see is Apple’s annual Worldwide Developer’s Conference, which is set for June 10 – 14 in San Francisco. The company is expected to unveil some major iOS updates, so that has the potential to renew investors’ outlook on Apple’s innovation abilities.

http://www.valuewalk.com/2013/05/apple-inc-aapl-rated-buy-hewlett-packard-company-hpq-rated-sell/

Hunger for resources to prompt shipping surge

Bulk carriers, tankers, container ships and liquefied natural gas carriers are all expected to see their fleet sizes expand signficantly to meet demand from fast-growing economies.

Greater capacity will be required to feed a tripling in China's thirst for oil, as well as an increasing appetite for coal.

Around 60pc of coal consumption will come from China in 2030 and India's coal consumption will more than double between 2010 and 2030, according to the report.

"The marine world in 2030 will be almost unrecognisable owing to the rise of emerging countries, new consumer classes and resource demand," said the report, which was two years in the making.

Bolstered by demand in the construction sector, India is expected to see the largest growth in steel consumption and although China's appetite for the metal will lessen, it is still expected to be the biggest steel consumer in 2030.

http://www.telegraph.co.uk/finance/newsbysector/transport/9980781/Hunger-for-resources-to-prompt-shipping-surge.html

Goldman Sachs: Short Gold!

Goldman sees gold falling to $1270 by the end of 2014.

“We see risks to current prices as skewed to the downside as we move through 2013,” Goldman analysts Damien Courvalin and Jeffrey Currie told clients. “In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.

The bank cut its three-month view on gold to $1,530 an ounce from $1,615. It also dropped its six-month forecast to $1,490 from $1,600 and its 12-month gold outlook to $1,390 from $1,550.

Gold is often considered a refuge from economic uncertainty and a means of safeguarding wealth. It’s also viewed as an inflation hedge. Considering the Fed has been buying $85 billion a month in Treasurys and mortgage-backed securities in an effort to spur the economy, one would think the precious metal would do well in this type of environment.

http://blogs.wsj.com/marketbeat/2013/04/10/goldman-sachs-short-gold/

Yen triggers a gold rush

The weak yen has triggered a gold rush, literally, among Japanese households, reflecting how bold new economic policies are shaking up long-entrenched deflationary attitudes, freeing up dormant assets, and sparking new economic activity.

While gold prices have softened globally, the declining value of the yen against the dollar makes the precious metal worth a lot more in Japan. Japanese families are now scrambling to dig out gold objects from closets and jewelry boxes, and selling it to metals dealers, converting their passive assets into cash that some say they plan to put to work on everything from vacations to children's allowances.

Long lines have formed this week outside jewelers from Tokyo to Osaka, with the price of gold in Japan jumping 4.8% this week as the dollar came close to hitting ¥100, up from about ¥80 late last year.

http://online.wsj.com/article/SB10001424127887323820304578412283865306950.html?mod=WSJEUROPE_hpp_MIDDLEThirdNews

UN report sees 6pc economic growth for E Africa

Economic growth in East Africa, including Kenya, is expected to remain among the fastest in Africa this year aided by natural resource discoveries, improved agricultural performance, and economic diversification, a new report showed.

The United Nations Economic Commission for Africa (Uneca) said the region is expected to realise a six per cent growth this year compared to 5.6 per cent in 2012—the second highest for the continent this year.

http://www.businessdailyafrica.com/UN-report-sees-6pc-economic-growth-for-E-Africa-/-/539546/1736618/-/ct3jvv/-/index.html

Optimistic investors display levels of bullishness

A string of positive economic news from the US in recent weeks suggests that the world's largest economy is charting a path to growth.

Hedge funds and other major speculators are putting their money on global economic recovery and rising prices for commodities, such as oil and cattle, amid growing signs that the US is on the road to recovery.

Markets have also stayed calm amid turmoil in Europe as investors greeted an eleventh-hour bail-out struck between the island and an EU-IMF troika of lenders, which averted the island's financial collapse and a possible eurozone exit.

http://www.telegraph.co.uk/finance/economics/9964880/Investors-peg-hopes-on-global-economic-recovery.html

Temporary relief for Cyprus, eyes now on Italy

The Cypriot financial crisis is solved for now, but attention will now turn to the euro zone's other flashpoints, says Olivetree Securities' Simon Maughan. Italy is next on the list.

SHOWS:

1. SIMON MAUGHAN, GLOBAL FINANCIAL STRATEGIST AT OLIVETREE SECURITIES, SAYING:

'Cyprus has received temporary relief and how temporary that proves to be will depend on a couple of things - first of all, how effective capital controls are in keeping money within Cyprus; and secondly, whether the Cypriot economy can actually function with capital controls. But for now, it's happy days and bank shares are on the way up. 
(QUESTION: If there is a risk of contagion to the European banking system, where is next in the firing line?)
Well Cyprus of course, although there's a temporary resolution there, solves nothing for the rest of Europe. The biggest problem is there's an absence of growth, there's ongoing austerity and there's no real prospect of growth picking up. The immediate attention now focused to Italy which is still functioning or not functioning depending on how you want to look at it without a government and whether we can get any kind of answers there. But we still have a very large amount of private credit to GDP in a number of European nations significantly more so than in the US. And that kind of issue is nowhere near resolved. 
(QUESTION: Moody's this morning issued a note on the French banking system, kept them on negative watch and said big risk from recession and banks' reliance on wholesale funding. How big a problem is France and when will it be a problem for us?)
Well France is the mother lode of all problems for the EU because even if there are ways and means in place to provide liquidity to Spain and Italy and that is highly doubtful, there is absolutely no way that the EU would be able to deal with the French banking system. But the dominos are lined up and they're named in pretty reasonable and well-known order. Spain, Italy and then France. So we've probably got to deal with another crisis in Spain and another pre-crisis in Italy before we deal with the big problem which is France.'


http://www.4-traders.com/news/Temporary-relief-for-Cyprus-eyes-now-on-Italy-Analyst--16580155/

Apple Seen Raising Dividend More Than 50% to $16 Billion

Apple will probably lift its quarterly dividend 56 percent to $4.14 a share, for an annual payout of $15.7 billion, according to the average estimate from six analysts. The resulting yield of 3.7 percent would be higher than 86 percent of the companies in the Standard & Poor’s 500 Index paying dividends. Apple could fund a payout with existing cash flow without using profit from overseas, which can be subject to extra taxes, said Gene Munster, an analyst at Piper Jaffray Cos.

Chief Executive Officer Tim Cook, who a year ago this month reinstated a dividend and announced a $10 billion buyback, faces mounting pressure to take bolder steps to pay out more of Apple’s $137.1 billion in cash and investments. Investors including David Einhorn’s Greenlight Capital Inc. are pushing formore money as growth slows and competition from rivals such as Samsung Electronics Co. (005930) intensifies.

“The accumulation of cash has become excessive,” Brian White, an analyst at New York-based Topeka Capital Markets Inc., said in an interview. He rates the shares a buy, with an $888 price target. “It doesn’t matter which bearish scenario you forecast, they’re never going to need this much cash.”

http://www.bloomberg.com/news/2013-03-18/apple-seen-raising-dividend-more-than-50-to-16-billion.html

China steel sector facing closures, big miners to suffer

China's bloated steel sector is facing a wave of closures in the next few years, with slowing demand and decades of "blind" expansion finally about to catch up with the industry, a senior executive and parliamentary delegate said.

Zhang Wuzong, the chairman of the privately-owned Shandong Shiheng Special Steel Group and a forty-year veteran of the industry, told Reuters in an interview that China's problems would also scupper the huge expansion plans of suppliers like Rio Tinto (>> Rio Tinto Limited) (>> Rio Tinto plc) and BHP Billiton (>> BHP Billiton Limited) (>> BHP Billiton plc), which have bet their future on sustained demand growth in China.

No steel firm will be immune, with the future of even state-owned firms like the loss-making Angang Group <ASISG.UL> (>> Angang Steel Company Limited) at risk, he added.

"The Chinese market is now oversupplied," he said. "The government knows it and we know it. 'Survival of the fittest' is the only way to solve the problems."

"It will take time but I believe a lot of the backward private enterprises will be closed. I also believe there will be some state-owned enterprises that will be eliminated too, including some of the big ones. This is a certainty."

China has at least 900 million tonnes of crude steel production capacity, far higher than its official total output of 716 million tonnes in 2012. Profits in the sector fell 98 percent last year with many firms making losses.

http://www.4-traders.com/RIO-TINTO-LIMITED-6492854/news/Bloated-China-steel-sector-facing-closures-big-miners-to-suffer-16514419/

Drastic monetary easing Japan

The promise of “drastic monetary easing” from Haruhiko Kuroda, expected to be confirmed in the top role at the Bank of Japan (BOJ) within weeks, raised concerns over the impact on trade.

Mr Kuroda said he would set no limits on the amount of money the Bank pumps into the economy, warning its current policies were not enough to lift inflation to the 2pc target.

Japan, the world’s third-largest economy, has been struggling with deflation for nearly two decades, with falling prices encouraging consumers to delay purchases in the hope of paying less later – entrenching the downwards economic spiral.

http://www.telegraph.co.uk/finance/economics/9907896/Japan-pledge-for-bold-action-sparks-currency-war-fears.html

Australia Expands at Fastest Pace Since 2007

Australia’s economy expanded in 2012 at the fastest pace in five years as resource investment and exports outweighed subdued manufacturing and construction.

Gross domestic product grew 3.6 percent last year, the best performance since a 4.7 percent expansion in 2007, data from the Australian Bureau of Statistics compiled by Bloomberg showed.

http://www.bloomberg.com/news/2013-03-06/australia-s-economy-expanded-0-6-last-quarter-led-by-exports.html