Market Factors to consider this week: Updated at least weekly and as events unfold see Disclaimer at bottom of page

UPDATED September 7, 2010

Week of August 23, 2010 -The Dow Jones Industrial Average broke out of its three-week losing streak, and started the month of September with a solid three-day rally. The Dow added 2.9% last week, and is back in positive territory for the year. The Bulls are also encouraged by the CBOE Market Volatility Index (VIX) closing below its 200-day moving average for the first time since Aug. 10. It's a slow week in the US on both the economic and the earnings fronts with Europe, Asia and Canada being in focus.. European stocks posted the biggest weekly gain since July as reports from the U.S. and China reassured investors that the economic recovery is not faltering and takeover speculation increased. The dry bulk market seems to have regained its poise, with the Baltic Dry Index (BDI) rising once again on Friday (the fourth straight rise), to reach 2,835 points, up by 3.43 percent or 94 points. Most China stocks rose as automakers gained on prospects sales will pick up, countering declines by developers on concern that the government will impose more measures to curb property speculation.

OVERALL OUTLOOK: China, India, Euro, Earnings reports and the US employment/consumer situation continues to decide the fate of the markets. The Baltic Exchange's main sea freight index - BADI, which tracks rates to ship dry commodities, increased nicely this week indicating that global trade is alive and well. The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertilizer is an important indicator of global economic activity and it is bullish. The Euro continued to find support close to the 1.29 area, expect the Euro to continue to have strength. The overall outlook for the S&P is bullish as traders head back to work. Investors need to be cautiously bullish on the equity markets and the Euro. Buy insurance through options strategies or forwards/futures. In a nutshell, There is a lot of money on the sideline and expect it to come into the market in the next two to three weeks.


Calendar - It is a slow week in the US with Europe, Asia and Canada being in focus

Monday - US -The market is closed for the Labor Day holiday, EUR - Sentix Investor Confidence

Tuesday - US - There are no major economic reports scheduled for release, EUR - German Factory Orders m/m

Wednesday - US - Fed's Beige Book for September will be released, EUR - German Trade Balance, French Trade Balance, GBP - Manufacturing Production m/m, CAD - Building Permits m/m, BOC Rate Statement, Overnight Rate, Ivey PMI, CNY - New Loans, M2 Money Supply y/y

Thursday - US - weekly report on new jobless claims, along with the trade balance report from the Commerce Department, Natural Gas Storage, Crude Oil Inventories EUR - ECB Monthly Bulletin,

Friday - US - Wholesale Inventories m/m, EUR - French Industrial Production m/m, GBP - PPI Input m/m, PPI Output m/m, CAD - Employment Change, Unemployment Rate, CNY - Trade Balance


CHINA: - Economic calendar and news from China: China is continuing to slow growth to control their real estate bubble and urban inflation. Expect China to grow at a controlled pace. Manufacturing numbers were strong this week. The Baltic Dry Index has picked up increased activity in the purchase of raw materials such as iron ore. Also, electrical consumption is up.(archive material)

September 7, 2010 - China Stocks Rise to 4-Month High as Material Producers Rally; Banks Drop - China’s stocks rose to the highest in almost four months as speculation the government will curb overcapacity to meet energy efficiency targets fueled a rally for the nation’s biggest metal producers.
Maanshan Iron & Steel Co. jumped by the maximum 10 percent limit after JPMorgan Chase & Co. said steel prices have “further upside” on policies to reduce energy consumption. Yunnan Aluminium Co. rose the most in 11 months. The market’s gains were limited as banks fell after Guosen Securities Co. said regulators plan to impose loan-loss reserves on lenders.

September 7, 2010 - China Industrial Output Slowdown Will Deepen in Second Half, Ministry Says - na’s slowdown in industrial output growth will deepen after the smallest increase in 11 months in July, a government forecast showed today. Production will gain about 10 percent in the second half of 2010 from a year earlier, the Ministry of Industry and Information Technology said at a briefing in Beijing today. That compares with July’s 13.4 percent and the 17.6 percent average for the first half of the year. August data is due next week.

September 7, 2010 - China surges to 5th largest global investor - China bucked international trends in both outbound and inward investment, official figures have revealed. China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008, the Ministry of Commerce said.

September 6, 2010 - China's Stocks Advance as U.S. Jobs, Obama Proposal Bolster Export Outlook - China’s stocks rose to the highest in four months as Macquarie Securities Ltd. and BNP Paribas recommended shares with large capitalizations and improving U.S. economic data bolstered the outlook for Chinese exports. In China, lending rules are being tightened in Beijing, with the discount on interest rates for first-time home buyers being reduced to 15% from 30% according to Capital Vue. So some tightening activity here, but mainland property stocks Poly Real Estate and Vanke were up around 2% each today regardless.


EURO: The Euro fx seems to have found support and may be poised for an uptick. (archive material)

September 7, 2010 - European Stocks Fall as Banks, Basic-Resources Shares Decline - European stocks retreated from a four-week high, led by declines in financial shares, on lingering concern that the sovereign-debt crisis will hold back the global recovery. U.S. index futures and Asian shares fell.

September 7, 2010 - German Factory Orders Unexpectedly Declined in July on Exports - German factory orders unexpectedly fell in July as demand in the euro region weakened, indicating the recovery in Europe’s largest economy is losing momentum. Orders, adjusted for seasonal swings and inflation, declined 2.2 percent from June, when they surged a revised 3.6 percent, the Economy Ministry in Berlin said today. That’s the biggest drop since February 2009.

September 6, 2010 - Stocks Rise to Four-Week High, Bonds Rebound, Metals Up - Global stocks rose to a four-week high and industrial metals rallied amid growing optimism about the prospects for economic growth. European bonds rebounded from three days of losses.

September 6, 2010 - Most European Stocks Rise, Lifting Stoxx 600 to Four-Week High - European stocks gained, extending a four-week high for the Stoxx Europe 600 Index, as a report on U.K. manufacturing eased concern that the economic recovery is faltering. Asian shares climbed. see “Rest of the world” for UK Mfg link.


US UNEMPLOYMENT & ECONOMY: The US economy showed some strength this week with payrolls on Friday. The follow through this week will be important.(archive material

September 7, 2010 - Stocks, Irish Bonds Drop, Gold, Yen Rally on Europe Concern - Stocks slid, while Greek, Portuguese and Irish bonds tumbled, gold rose to a record and the yen surged to a 15-year high versus the dollar on concern Europe’s debt crisis will worsen. U.S. and German bonds rallied.

September 7, 2010 - U.S. Stock Futures Decline; Bank of America, Citigroup, Alcoa Shares Drop - U.S. stock-index futures retreated, indicating that the benchmark Standard & Poor’s 500 Index may end its longest winning streak since July. Bank of America Corp. fell in German trading and Citigroup Inc. dropped in composite European trading amid concern European bank stress tests understate sovereign debt holdings. Alcoa Inc. and Exxon Mobil Corp. declined with commodity prices.

September 5, 2010 - Stocks Rise as Treasuries, Dollar Retreat on Jobs Report - Stocks rallied, extending the first weekly gain in a month for the Standard & Poor’s 500 Index, while Treasuries and the dollar fell as better-than-estimated growth in private payrolls bolstered optimism the economy will avoid relapsing into a recession.


INDIA: India has joined China as an engine of growth for the Global economy. Expect to read more articles relating to India as a significant driver of global trade. Over 50% of India’s population is under 26 years old.(archive material)

September 7, 2010 - Tata Steel Leads Gain in India's Sensitive Index to Highest in 2 1/2 Years - India’s benchmark stock index extended gains for a second day from the highest level in more than 2 1/2 years amid expectations domestic companies will benefit from spending aimed at bolstering the U.S. economy.

September 7, 2010 - India Raises Steel Sales Forecast as Automobile Demand Surges - India’s steel ministry raised its forecast for steel consumption on increased demand from carmakers and construction companies in Asia’s second-fastest growing major economy Steel consumption may increase 10 percent in the year ending March 31, G.K. Basak, executive secretary with the joint plant committee at the steel ministry, said in a phone interview today. The ministry had previously forecast a 9 percent increase in sales. Steel sales rose 9.7 percent in the five months through August.

September 6, 2010 - Direct tax collections up 14% in Apr-Aug - Direct tax collections shot up by 13.91 per cent to Rs 1,00,112 crore in the first five months of the 2010-11 financial year till August, the finance ministry said on Monday.

September 6, 2010 - Sensex Index Climbs to 2 1/2-Year High on GDP Outlook; Hindalco Advances - India’s benchmark stock index rose to its highest in 2 1/2 years after better-than-estimated growth in U.S. employment and manufacturing eased concern the global economy will falter, boosting the outlook for domestic companies.


THE REST OF THE WORLD - Inflation is something to watch in the rest of the world as imbalance are brought into line with the world economy.(archive material)

September 5, 2010 - Manufacturing in U.K. Grew at Record Pace in Third Quarter - U.K. factory production grew at a record pace in the third quarter on surging export demand, the Engineering Employers Federation said. The number of manufacturers saying sales rose in the three months through September exceeded those reporting declines by 33 percent, compared with 30 percent in the second quarter, the EEF and accountancy firm BDO Stoy Hayward LLP said in a quarterly survey released today in London. That’s the highest since the report began in 1995. A gauge of exports also rose to a record.

September 5, 2010 - Asia Stocks Post Weekly Gain on Japan Stimulus Plan, Manufacturing Growth - Asian stocks rose, lifting the MSCI Asia Pacific Index to its biggest weekly increase in three, as Japan said it’s ready to act to rein in the yen and reports showed growth in Chinese and U.S. manufacturing.

September 5, 2010 - Israel Shares Lead Mideast Gains on Gas Find, U.S. Data; Qatar Advances - Israel shares rose to the highest since May, leading a rally in the Middle East, after growth in U.S. private employment boosted optimism that the world’s biggest economy will avoid a recession. Qatari shares advanced.


INFLATION/DEFLATION - Look out for inflation in the grains -historically it is inflations best leading indicator. Currently, Inflation seems to be supply although demand in China is picking up. The weakness in crude oil will dampen any short term tendencies toward an overall global inflation. Expect inflation to be flat with patches of volatility(archive material)

September 7, 2010 - Crude Oil Falls for a Second Day on Speculation U.S. Fuel Demand Will Drop - Oil declined to a three-day low as falling equity markets reinforced doubts about the global economic recovery while the end of the U.S. summer peak consumption season signaled lower demand from refiners.

September 3, 2010 - Wheat Rises on Russian Export Ban, Mozambique Riots - Wheat rose in Chicago after Russia, the world’s third-largest grower, extended a ban on grain exports into next year, raising the prospect of higher food prices that already have sparked riots in Mozambique.


BALTIC DRY INDEX(BDI) & GLOBAL TRADE: September 5, 2010 - The Dutch Labour Statistics, Container ship utilization and the Baltic Dry Index confirm that global trade is picking up and perhaps even strong. a positive sign for the global economy and markets. China’s increased activity is positive for the global economy.(archive material)

September 8, 2010 - Baltic index rises, ore outlook lifts sentiment - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose on Tuesday as hopes of firmer iron ore enquiry in the coming months boosted sentiment The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, rose 1.28 percent, or 37 points, to 2,918 points in a seventh straight session of gains.

September 7, 2010 - Dry bulk market all set to reach 3,500 points in the coming days - The dry bulk market is looking well after the crash it experienced during the whole of June and up until the middle of July. According to John Pachoulis, the President of the Hellenic Shipbrokers Association, the so called “China factor” was the main mobilizing force of the market. In an interview with Hellenic Shipping News Worldwide, Mr. Pachoulis estimates that the market could very well reach 3,500 points during the following weeks, with the possibility of reaching 4,000 points by the end of the year, should Chinese steel mills keep their buying spree.

September 6, 2010 - MACRO: The dollar continues to lose steam. The euro has broken above $1.29, gold is holding above $1,250 and the Baltic Dry Index has firmed. The dry bulk market has been supported by stronger iron ore purchases from Chinese steel mills. Some brokers are throwing out a BDI boom by the end of the year even, with such things as a 5,500 BDI target (vs. 2,876 right now) -The business Insider

September 5, 2010- Dry bulk market gains 6.05% on week, boosted by Capesize vessels - The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a high, as a result of increased iron ore buying from Chinese steel mills. The industry’s benchmark, the Baltic Dry Index, has now reached 2876 points, flirting with the 3,000 point mark once again.


OVERALL OUTLOOK: China, India, Euro, Earnings reports and the US employment/consumer situation continues to decide the fate of the markets. The Baltic Exchange's main sea freight index - BADI, which tracks rates to ship dry commodities, increased nicely this week indicating that global trade is alive and well. The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertilizer is an important indicator of global economic activity and it is bullish. The Euro continued to find support close to the 1.29 area, expect the Euro to continue to have strength. The overall outlook for the S&P is bullish as traders head back to work. Investors need to be cautiously bullish on the equity markets and the Euro. Buy insurance through options strategies or forwards/futures. In a nutshell, There is a lot of money on the sideline and expect it to come into the market in the next two to three weeks.


Disclaimer

The contents of this presentation contain statements that may constitute “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements may include financial and other projections, as well as statements regarding future economic events, or the assumptions underlying any of the foregoing. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied in any forward-looking statements and accordingly, should not be read as guarantees of future performance or results.

Actual results, performance or achievement could differ materially from those expressed in, or implied by, any forward-looking statements made and, accordingly, viewers should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and it is not possible for anyone to predict all of such factors and to assess in advance the impact of each such factor on any of the financial or commodity markets.

This is not investment advice and you need to review this information with your tax, legal and financial advisors before acting upon this information.