News & Financial Advice

Wall Street closed down Monday, the fear of failure to Greece and the doubts about Obama's fiscal agenda led investors to end a rally of a week in New York.

The indices, however, reduced their losses late in the session after a senior Greek officials had to Finance said that Greece was close to an agreement with the "troika" for the payment of the next tranche of aid.

The Dow Jones lost 108.08 points (0.94%) to 11,401.01. The S & P-500 yielded 11.92 points (0.98%) to 1204.09. The Nasdaq Composite Index lost 9.48 points (0.36%) to 2612.83.

The values ​​of energy and finance led the movement.The S & P Energy lost 1.46% in the wake of oil, and that of the Financial 2.74%, following a further sharp fall in European banking.

Investors are disappointed with the overall conclusions of the Ecofin meeting / Eurogroup held at the end of last week in Poland.

"We were not only overbought but we also had 'hoped-on", says Karl Mills (Jurik, Mills & Keifer Investment Partners)."It was hoped that the visit (the U.S. Treasury Secretary Timothy) Geithner in Europe would provide greater clarity but nothing positive has come out and you return to the problems of Europe".

Internally, President Barack Obama proposed Monday a plan to reduce the budget deficit of 3,000 billion over the next ten years, half would come from new tax levied on the richest Americans and corporations.

The Republicans criticize the plan, which raises many doubts about its adoption and implementation.

Values, UBS shares listed on Wall Street has lost 3.11%.The Swiss bank opened an internal investigation into the failure of its risk control system and its leaders are under pressure after a loss of $ 2.3 billion (1.67 billion euros) due to unauthorized transactions of a dishonest trader.

However, Tyco International gained 2.40% after announcing its division into three independent companies listed. Investors welcome this news because each company can take power in their competition to apply for.

The price of oil ended up on an increase of over 2% Monday in New York, a macro-economic indicator with better than expected U.S. reassured investors on the economic health of the United States.

On the Nymex, the contract on October U.S. crude (WTI) finished with a gain of $ 1.90, or 2.23% to 87.27 dollars a barrel.Meanwhile, Brent advanced to 0.44%, or $ 0.49, to 111.85 dollars.

Consumer spending of U.S. households rose 0.8% in July while economists surveyed expected an average spending growth of 0.5%.

Black gold has also benefited from the good performance of major stock exchanges worldwide, because of Hurricane Irene has done less damage than expected in the United States and the decline of the dollar.

The Japanese long-term debt is now rated Aa3. The rating agency sanctions the massive debt of Japan, exacerbated by the earthquake of 11 March, and political instability in the country. The earthquake of March 11 has affected Japan's debt. Here, Higashi-Matsushima area devastated by the disaster.

The rating agency Moody's has lowered a notch to Wednesday's Aa3 rating for long-term debt of Japan, because of the massive debt the country, aggravated by the earthquake of March 11, against a background of instability policy that blocks long-term strategies. This sanction will force the contenders for prime minister to introduce measures of fiscal discipline, analysts welcome.

"The ratings downgrade is driven by large fiscal deficits and the accumulation of Japan's public debt since the global recession of 2009," Moody's said in a statement.And the agency added that "several factors make it difficult for Japan to reduce the proportion of debt vis-à-vis the GDP, thus lowering his score." However, Moody's has no plans for more time to downgrade the archipelago, saying that he has the chance to enjoy the Japanese investors' preference for domestic bonds.

Banks also degraded

The rating agency Moody's said Wednesday it lowered a notch in the middle note of the long-term debt of major Japanese banks, after having degraded earlier note of Japan indebted.In particular, Moody's revised its negative assessment of Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking, due to the downgrade of Japan and subsequent fears that the country has in the future less capacity to support the banking sector in the event of another financial crisis.

The heavier debt burden

Japan is in debt to the tune of about twice its gross domestic product (GDP) and the burden grows each year through the issuance of Treasury bills returned to fill much lower expenses, particularly since the international economic crisis of 2008 – 2009. This is the first time a major rating agency lowers rating of Japan since the disaster of March 11 coupled with a nuclear power plant in Fukushima.However, Moody's had warned in late May of this risk.

The new Aa3 rating assigned to Japan is the fourth best on the scale to 19 notches by Moody's, which means it is still regarded as an issuer of debt of high quality. The rival Moody's, Standard and Poor's and Fitch, which are currently quite similar ruling on Japan, however, warned in April and May that they could also lower the rating of the country soon.

"The earthquake of March has undermined Japan's recovery from the global recession of 2009 and economic growth prospects are low, making it more difficult for the government to achieve the goals of deficit reduction and to launch a major reforming the tax system and social benefits ", explained Moody's.Japan is currently in recession, even if slowly industrial activity tends to recover its previous pace, and if consumer confidence was somewhat restored.

Political instability weighs on the outlook for recovery

While Japan is preparing to nominate next week's sixth prime minister in five years, Moody's also cited political instability as one of the reasons obèrent decisions for the long term. "Over the past five years, frequent changes in leadership have prevented the government from implementing economic and fiscal strategies that can be effective and sustainable," she said.As a result, the prospects for progressive restoration of fiscal balance are constantly deferred and, despite promises to cut spending, "the annual budget deficit is still as it inevitably leads to an increase in the debt ratio reported the wealth produced. "

This warning shot of Moody's comes as the tenors of the Democratic Party of Japan (DPJ, center left) compete for the succession of the Chief Executive, Naoto Kan, which should leave office early next week. "The downgrade is unfortunate," responded the current Prime Minister of Japan, Naoto Kan. The Minister of Finance candidate to replace Mr Kan, has meanwhile refused to comment directly on the decision of Moody's, but he defended Japanese bonds."I will not shares of a private agency, but the problem without offering treasury bills from Japanese investors show confidence in them remains intact," pleaded Yoshihiko Noda.

Degradation of the note was not very noticeable effect on the yen against the dollar, the ticket remains fairly stable over 76.50 yen. However, it has been dropped from 1.07% the Nikkei index of blue chips on the Tokyo Stock Exchange, due to the significant decline in shares of Japanese banks that Moody's has also block minus ratings. According to brokers, listings of Moody's does not constitute a big surprise to investors and the financial consequences of Tokyo will probably be limited.The decision of the agency will however increase the pressure on the next Japanese government that put its finances through higher taxes, analysts said.

Unemployment rose in June for the second consecutive month in France, the young, the elderly and long-term unemployed being particularly affected, show statistics released Wednesday by the Ministry of Labour and job center.

The number of job applicants in category A (those who carry on any business during the month) in France rose by 33,600 (1.3%) to $ 2,720,400.Over one year the increase was 1.5%.

The number of jobseekers in Class A has reached in June to its highest level since December 2010.

Increases in May and June came after four consecutive months of decline that had been hope for a turnaround.

By adding the persons engaged in small (B and C), the increase in the number of unemployed reached 0.6%, or 25,200 people over a month to $ 4,103,700.On an annual basis, the increase was 4.0%.

"The poor figures in May and June require implementation as soon as possible of all the steps to employment adopted in parliament in early July," said Labour Minister, Xavier Bertrand, in a statement citing the "contract security professional. "

The contract, which must ensure that employees dismissed for economic reasons a level of compensation equal to 98% on net income and a stronger support for a year, will enter into force on 1 September, said Xavier Bertrand.

Martine Aubry, the Socialist candidate in the primary for the 2012 presidential election, said his "anger" vis-à-vis the government, which it is not mobilized to reduce unemployment, particularly by requiring banks to finance small and medium enterprises.

"We really feel it's the least of worries the government," she said on France Inter.

In June, youth, people over 50 years and long-term unemployed were particularly affected.

The number of registered unemployed for over a year in categories A, B or C has increased by 1.0% in France, bringing the increase over one year to 10%.

Depending on age, number of people under 25 registered increased by 1.4% (-4.4% year on year) in group A and 1.2% in categories A, B, C (-1.8% YoY).

The number of over 50 years has meanwhile increased by 2.0% (+13.0% yoy) in Class A and 1.5% (+14.3% yoy) in categories A, B and C.

Another negative sign, the offers collected by employment center were down 4.0% over the month. They remain, however, up 2.8% year on year.

The job satisfaction decreased by 8.9% but still up 3.5% year on year.

The Dutch institution Rabobank said on Wednesday it would cut more than 1,200 jobs in its headquarters to save 219 million euros in the next two years.

UBS and Credit Suisse are also about to announce thousands of layoffs at a time when they face lower volumes in their brokerage operations and higher costs, according to a Swiss newspaper.

Unlike its rivals ABN Amro and ING Group, Rabobank did not seek public assistance during the financial crisis and had not suffered losses during this period by one of the few banks with a credit rating Triple A.

Rabobank, which employs 59.000 people worldwide, said she wanted to improve its profitability in its headquarters in Utrecht has developed a new complex in the center of the university town.

The proposed downsizing of Rabobank is not related to a loss of interest in its products or to economic uncertainty, said Manel Vrijenhoek, spokesman for the bank.

"We have to monitor our effectiveness.On a long term basis and in light of our competitiveness, we work more effectively as possible? This examination is normal, "she said.

A number of "significant" of these reductions will affect IT sector but the bank declined to give details, adding that the issue still needed to be discussed internally with employees of the group.

The French proposal to restructure the Greek debt includes two options for bond holders in the period between July 2011 and June 2014, according to a draft of which Reuters has read Tuesday, while Germany has indicated its support for this proposal.

French President Nicolas Sarkozy on Monday announced the outlines of a plan for private sector participation in solving the crisis in Greece, an assembly which is currently used as a basis for discussions in Europe to avoid a default of Greece.

A first choice provides funding to 30 years for Greece.In this case, participants would invest in new Greek government bonds at least 70% of the principal they would have received in repayment of their securities maturing.

The new titles have a duration of 30 years and includes coverage via a specialized structure (SPV) "with bonds as collateral to zero coupon purchased from one or more states, supranational institutions and European agencies, AAA."

The second option provided by the plan participants invest a minimum of 90% – a rate of 100% is desired – the amount they would receive in new obligations of the Greek state with a maturity of five years and with a 5.5% interest, it is written on the document, dated June 24

The draft specifies that if the plan can be endorsed, the rating agencies will ensure that will not return to a default for bonds issued by the Greek state, present or future.

"It is necessary that any proposed solution is flexible to allow maximum participation of investors. For this reason, it is preferable to offer multiple options to creditors, who have different needs and constraints," says the document.

The French plan is now considered by banks in the euro area and by insurers.German banks have expressed interest, but the rating agencies have chosen to reserve their opinion pending more details.

Representatives from the German Ministry of Finance will discuss the French proposal on Thursday with German banking officials, said the Deputy Finance Minister Joerg Asmussen German. He stressed that the French proposal was a good basis for discussions.

The Dutch Ministry of Finance estimated that the French plan was "very complex" and that the Netherlands would be studying it closely before making comments.

Christine Lagarde Thursday expressed confidence in the resilience of the French banking system after the placement of the notes under supervision of three French banks by Moody's.

"I am confident in the strength of the French banking system," said French Minister of Economy at a conference in Paris.

The exposure of French banks in Greece for several months worried financial markets. Moody's placed Wednesday BNP Paribas, Credit Agricole and Societe Generale under review with negative implications.

At the Paris Stock Exchange, Societe Generale was down 3.56% to 37.39, BNP -2.28% (50.13 euros). The Franco-Belgian bank Dexia drops nearly 8%.

Ahold reported Tuesday in the first quarter 2011-2012 results slightly above expectations thanks to better than expected performance in the United States.

The Dutch retailer, which generates 60% of its sales in the U.S. market, however, said that the economic environment would remain difficult for the United States.

Ahold has reached about 16 weeks to April 24, a net profit of 291 million euros, operating profit of 444 million and a turnover of 9.3 billion euros over the first three months of the year.

Analysts polled by Reuters had expected 285 million respectively, 418 million and 9.15 billion euros.

Ahold said that its profitability in the Netherlands had been affected by the fact that the group was not reflected in the price of its products in stores all of the increased costs caused by soaring commodity prices .

General Motors Wednesday reported a 1% drop in sales of cars in the U.S. in May, while specifying that deliveries to individuals were up 9% over the period.

The first U.S. manufacturer said it had passed 221,192 vehicles last month, against 223,822 a year ago.

Car sales in the United States are considered a leading indicator of consumer demand for a given month.

Economists polled by Reuters estimate the U.S. car market, in annualized 12.6 million units in May, representing an increase of 8.6% compared to May 2010.

GM estimated its share for the automobile market in May to between 12 and 12.1 million, adding that he expected to remain below 13 million over the next two months.

For all of 2011, the manufacturer has however confirmed its forecast of a market of between 13 and 13.5 million units.

Action of the Franco-Belgian Dexia Financial Services has been suspended from trading on Friday morning while meets its board of directors, announced the Belgian financial markets.

In a statement, the regulator said that trading will remain suspended until Dexia publishes "relevant information", a term traditionally used when a group about to release sensitive information in the next few hours.

Dexia, which escaped bankruptcy in the fall of 2008 thanks to the bailout carried out by the Belgian, French and Luxembourg, was forced last year by the European authorities to divest some of its activities in exchange for aid received during the crisis.

Dexia declined to comment on the reasons for the suspension of trading.

The Franco-Belgian bank said last week to be in constant dialogue with the Commission and stated that it would seize all opportunities presenting themselves to it to speed up transfers.

Dexia has a particular yield-Deniz Emeklilik, its Turkish subsidiary of insurance.According to press reports, five candidates are still in contention, with French AXA and CNP Assurances.

The Belgian insurer Ethias looking for his side to divest 5.04% stake in Dexia, but he said this month the Belgian newspaper De Tijd it has no plans to put on the market.

Dexia shares was suspended while she was 3.24% at 2.514 euro, lost 3.3% since the beginning of the year after dropping 38.9% in 2010.