Business News & Financial News

Standard & Poor's lowered Tuesday its economic growth forecasts for the eurozone to 1.7% this year and 1.5% for 2012 and believes that a relapse into recession can be avoided even if the risks are increasing .

The rating agency expects that the European Central Bank (ECB) is not interest rates before the end of first quarter 2012 and that the Bank of England keeps rate at 0.5% until the second half of 2012 to meet the 1% by the end of next year.

S & P planned to date for euro zone growth of 1.9% in 2011 and 1.8% in 2012.

"We continue to believe that a true 'double dip' ('double dip') will be avoided by maintaining sources of growth, although we recognize that downside risks are significant," writes Jean-Michel Six, an economist for Europe S & P "In particular, we will closely monitor the evolution of consumer demand over the coming quarters."

For its part, the International Monetary Fund next month should lower its growth forecasts, reported Monday the Italian news agency Ansa.For the eurozone, the IMF expects more than 1.9% of GDP growth in 2011 and 1.4% in 2012.

The S & P forecast for Germany is reduced to 2% in 2012 instead of 2.5%, and for France to 1.7% in 2011 and 2012 instead of 2.0% and 1.9% respectively .

The French government has lowered its forecast last week to 1.75% in 2011 as announced in 2012 and 12 billion euros in measures of income and savings to reduce its public deficit in the agreed proportion.

According to S & P, the British economy should grow by 1.3% in 2011 and 1.8% in 2012 (instead of 1.5% and 2.0%) and the Spanish economy by 1.0% in 2012 to instead of 1.5%.

The government announced Wednesday the introduction of a windfall tax on higher income from a battery of measures to ensure deficit reduction despite economic growth less vigorous than expected.

Prime Minister Francois Fillon spoke at a press conference an outstanding contribution of 3% on income tax reference above 500,000 euros.

He also announced a further step to reduce tax loopholes in the 2012 budget, an increase in tobacco taxes (6%) and alcohol and the inclusion of overtime in the calculation of general relief of charges.

The measures announced will yield one billion euros in 2011 and 11 billion in 2012, he said.

UBS plans to eliminate 3,500 positions, including nearly half of its investment banking activities, as part of a plan to cut nearly half its annual costs by the end of 2013.

The bank said last month that it would undertake a restructuring plan when it published the results below expectations.

"The measures announced today will help improve operational efficiency. UBS will continue its vigilance vis-à-vis its costs, while continuing to invest in growth areas," said the Swiss hotel in a statement.

Most Gulf stock markets have closed lower Sunday, both penalized by the lowering by Standard & Poor's rating of the U.S. and the new onset of fever on the forehead of the debt of countries in the euro area.

S & P on Friday denied the United States in their triple A, lowering the rating of sovereign debt to AA +, sowing panic among investors.

Saudi Stock Exchange, the largest in the Arab world, has faltered on Saturday, falling from 5.5% to a low of five months before showing a small increase of 0.08% at the end of Sunday.

In Oman, the main index lost 1.9% to a low of two years, while Bahrain has given up 0.33% and that of Abu Dhabi has dropped 2.5%.

A Kuwait City Stock Exchange fell by 1.6%.In Qatar, it was down 2.5%.

But it was in Tel Aviv that the decline was most pronounced with a fall of 6.99% recorded by the TA-25 index in Israel. The TA-100, wider, has meanwhile shrunk by 7.2%.

He also had to wait nearly an hour to attend the first exchanges in the financial center of Israel, the circuit breaker having switched on while the stock market already lost more than 5% in pre-market.

Israeli investors are concerned that the U.S. debt crisis is out of control and then it is translated by a dive into recession the world's largest economy, said Zach Herzog Psagot Brokerage.

"The Israeli economy will not put a dive of the United States into recession.We are dependent on exports of goods and services, "he told Reuters, noting that exports account for 45% of the GDP of Israel and for two-thirds they go to the United States and Europe.

The slide in equity markets was confirmed in the U.S. where the indices showed pronounced declines Thursday in the wake of European stock markets and in response to the publication of an indicator credence to the claim of an economy at a standstill .

The New York Stock Exchange ended down 4.31%, the Dow Jones industrial yielding 30 512.76 points to 11,383.68 points.

The S & P-500, wider, lost 60.27 points, or -4.78% to 1200.07 points.

The Nasdaq Composite fell on its side of 136.68 points (-5.08%) to 2556.39 points.

The volatility index, sometimes called fear index, jumped 35.41%.

"There is a major correction," said Joseph Cangemi, managing director of BNY ConvergEx in New York.

The S & P 500 posted its worst performance since a meeting on February 10, 2009.

The discussions in Washington on controlling the fiscal deficit through a reduction in public spending and the publication of unemployment figures are bad to fear a new market into recession the world's largest economy.

The jobless claims in the week to July 30 fell by only 1,000 units compared to the previous week during which they had registered at 401,000 (revised from 398,000).

The remarks by the President of the European Central Bank Jean-Claude Trichet, who believes that the latest data indicate some deceleration in the pace of economic growth, have also produced a negative effect on the markets.

The fears weighing on demand had a negative first groups related to energy and raw materials.The S & P energy and materials that have plunged over 6% each.

The title General Motors sold 4.34% after publishing its results.

The action also AIG tumbled 6.34% as the group publishes its results after the close of Wall Street.

A reverse trend, the giant U.S. food Kraft Foods announced plans to split into two separate companies, while posting better than expected results and raising its forecast for 2011.

All these ads allowed under Kraft to break his fall and yield only 1.5% after jumping nearly 3% earlier in the session.

European shares sink their media one after the other against a backdrop of slowing global growth, the President of the European Central Bank Jean-Claude Trichet who failed Thursday to allay concerns.

Since the beginning of the week, the European equity markets have lost about 290 billion euros of their value, two thirds of the 440 billion vested in the European Financial Stability Fund (EFSF), under the influence of fear of relapse the economy and the persistence of the crisis of sovereign debt in Europe.

"There are two important points in the speech of Jean-Claude Trichet that are quite contradictory: the desire to control inflation, meaning that eventually a new rate hike, and the possible injection of liquidity through repurchase obligations, "said Alexandre Baradez, market analyst at Saxo Bank.

Jean-Claude Trichet at a news conference after the monthly meeting of the Governing Council of the ECB has implicitly confirmed the recovery of market intervention, and stressed that inflation expectations in the euro area were remain firmly anchored.

If the part of speech of Jean-Claude Trichet on redemptions of bonds was expected by the market, allowing the index to delete then some of their losses, the talk about inflation is not necessarily what is more appropriate in the current environment, explains Alexandre Baradez.

"Inflation eats away at the debt and rising interest rates would not be appropriate when the level is already high in Europe.We also see that we do not ask this question in the United States, "said he.

THE CAC 40 COULD FALL TO LOWEST OF 2010

After pressing multiple media techniques, markets could even fall even lower.

"The CAC 40 may now fall to its next support at 3,350 points, and then go towards the lower end of the year 2010 at 3287 points," warned Alexander the Drogoff technical analyst at Aurel-BGC.

Moreover, all this should be done in a climate of increased volatility, analysts warn.

"The volatility of the Eurostoxx 50 is too low and this should be corrected," warns Gastaldy and Valerie, an analyst at Day By Day graphic.

"The implied volatilities have been very quiet in recent months, despite the intense agitation of the equity markets. Intermarket arbitrage operations are clearly under way: between the CDS, bonds and equities, and especially so on the Eurostoxx50, "said she.

As for metals, an ounce of gold hit a new side of his most historic 1677.90 dollars in the wake of the conference of ECB President Jean-Claude Trichet.

The euro yield 1.42% against the greenback at 1.4139 dollar.Baradez Alexander points out, however the relative strength of the euro against the dollar, which manages to stay in a range between 1.4150 to 1.43 dollar down without crossing the threshold of $ 1.40.

"On the foreign exchange market, we see that there is a seller of wind shelters currencies (dollar and yen) for the benefit of currency risk. This could be a harbinger of a renewed appetite for risky assets and therefore support equity markets, "said he.

Standard Chartered, British bank that makes most of its profits in Asia, reported Wednesday a better than expected taxable income in the first half, benefiting from strong growth in emerging markets.

The hotel, which looks set to record another year of record profits, generated a taxable income of 3.636 billion dollars (2.56 billion euros) in the first six months of the year, against 3.12 billion a year ago and 3.47 billion expected by analysts, according to the Thomson Reuters consensus I / B / E / S.

"Our expenses remain firmly under control (…), Which does not prevent us from start to accelerate investments to support growth in 2012, "said Peter Sands, CEO of Standard Chartered, said in a statement.

"We are a very good momentum and we continue to gain market share on a range of products and in many areas."

In 2010, Standard Chartered, in direct competition with HSBC to attract the best employees in Asia, was weighed down by higher costs higher than revenues.

This year, the bank expects a similar pattern of costs and revenues.

To keep costs under control, many banks have eliminated positions, like HSBC and Credit Suisse, which will eliminate 2,000 jobs and 30,000 respectively.

Standard Chartered has said removing 800 jobs in the first quarter, while providing a net increase of one thousand the number of employees throughout the year.

The bank, whose title listed in London fell by 11% since the beginning of the year, currently has 85,000 employees.

Income from India, its largest market, fell by 39% and Standard Chartered said that the short-term outlook remained difficult in the country, the slowdown will be more rapid and marked initially anticipated.

Elsewhere in the European banking sector, Societe Generale, which has depreciated the value of its debt to the Greek State in the second quarter, has abandoned its goal of Wednesday net profit of six billion euros in 2012, signs of a deterioration of the economic and financial environment.

Bristol-Myers Squibb said Thursday sales exceeded expectations in the second quarter, but the tax increase left the benefit simply in line with forecasts.

The pharmaceutical group raised its profit forecast Thursday for all of 2011 and reaffirmed its forecast for 2013 suggests that the relatively stable for that exercise.

That year, his star anticoagulant, Plavix, will face for the first time in a year to U.S. generic competition.

In exchange, the action is gaining 2.3% to 29.28 dollars in a market up slightly.

Bristol-Myers reported a profit of $ 1.31 billion, or 52 cents per share in the second quarter, up from $ 1.27 billion, or 53 cents a year earlier.

Excluding special items, EPS amounted to 56 cents, one cent more than was expected on average by analysts polled by Thomson Reuters I / B / E / S.

The effective tax rate of the U.S. group rose to 27% in the quarter, against 20.4% a year earlier.

Revenues increased 14% to 5.43 billion, while Wall Street was counting on 5.04 billion dollars.

The group was helped by the weak dollar, strong demand for products including Abilify and Plavix and the launch of its treatment of melanoma Yervoy that appears promising.

Sales of Plavix, marketed in partnership with the French Sanofi rose 15% to $ 1.87 billion. Sales are expected to fall sharply in May when the first generic will appear.

The Paris Bourse could fall to its level of November 2010 Monday after scoring the lowest of the year, the results of stress tests of banks have not dispelled the fears of contagion from the crisis of sovereign debt in euro area.

Around 4:45 p.m., the CAC 40 index fell by 1.73% to 3662.40 points, after falling to 3648.76 points, its lowest level this year, weighed down by banking stocks, which represent nearly 13% of benchmark index of the Paris, and the lack of credibility of resistance testing ("stress tests") awarded by the European financial institutions.

"The market reacts to the lack of credibility of stress tests, which have not sufficiently taken into account the potential impact of sovereign risk, although their results were better than expected in appearance," said Stanislas de Baillencourt manager at Sycamore Asset Management.

"This also occurs in a context of uncertainty in the United States on the federal budget negotiations," he adds.

Consequently, according to a graphical analysis, the CAC 40 should continue to decline especially since the index is oversold and that it has opened a new "gap continuation" – gap in transactions between sessions marking the continuation of a trend – after that of Monday.

"CROSS OF DEATH"

This dynamic is reinforced by another important signal seller technically called the "cross of death" ("dead cross"), the moving average 50 days of the CAC 40 was indeed dropped below the 200 day Monday.

The benchmark index of the Paris, which lost nearly 12% since its peak in the year struck in early February to nearly 4170 points, could well fall to a level around 3620-30 points, offering major pivots the last two years, analysts say.

"A break of 3700 points at the close result in a test rack or floor 3660 points in November from 2010 to 3610 points," warned Franklin Pichard, director of Barclays Bourse France stating that only a rebound beyond three.790 points would reverse the current downward trend.

While stressing the attractiveness of current valuations (less than 10 times earnings expected for this year), analysts dismiss a scenario similar to that of stock last year (fall through August and very strong rally late in the years) although the meeting Thursday of the Eurogroup of Greece should be decisive in the matter while the contagion is beginning to reach Italy.

"We could still fall by 10-15% on Thursday today if European authorities do not demonstrate their ability to solve the case of Greece, representing only 3.5% of the debt in the euro area, while the Italy is from 20 to 25% of total European debt, "said Christophe Brulé, president of Entheca Finance.

"This issue (sovereign debt) will not be resolved within a week. This is an issue in the medium to long term that will take years to be resolved," warned his side of Stanislas Baillencourt.

In less than twenty years, politicians and executives of public companies have diverted 800 billion yuan. China's central bank calls on the government to be forceful. Of the 800 billion yuan misappropriated in less than twenty years in China, some was carried abroad in the form of cash.

The figures come from the Chinese central bank and even made the front page of China Daily. Since the mid-1990s, 16 000 to 18 000 government officials or state companies have fled abroad or simply disappeared after receiving jars of wine for a total estimated at 800 billion yuan, 87.5 billion euros.

"It is crucial to maintain the support of the population and the existence of the party firmly to punish [the beneficiaries of corruption] and effectively prevent corruption," said the study of the central bank.The Chinese government has stopped taking anti-corruption measures since the start of economic reforms there is more than 30 years, with little success, however, to stem this scourge, which undermines the legitimacy of the Communist Party and feeds the discontent of the population. Chinese President Hu Jintao said on numerous occasions that it was vital for the Party to eliminate the rampant corruption among its officers. China has also ratified in October 2005 the UN Convention against corruption.

False contracts or shell companies

Among the most elaborate forms of diversion include the development of false contracts, the flight abroad of goods belonging to Chinese state-owned companies or the creation, still abroad, through third party companies fictitious receiving funds from pots of wine.Transfers of money outside China from corruption are likely to "undermine the foundations of the authority of the Party," said the study based on data compiled in 2008.

The most senior officials have diverted the largest amounts have fled to developed countries like the United States, Canada or Australia, while those of lower rank have chosen less distant countries such as Russia and Thailand. Hong Kong Special Administrative Region, has often been used by corrupt officials as a gateway to the Commonwealth.

Suitcases full of cash

Others are awarded by African or Latin American, time to obtain documents to settle in a Western country. Some fled, taking the money diverted in the form of cash in their luggage, the study noted.The property prices in residential areas of New York or Los Angeles have such sharply as a result of a large influx of Chinese families to finance dubious origin, the study found.

The Minister of Chinese Railways, Liu Zhijun, who oversaw the ambitious development program of the Chinese railway network, was officially removed from office in late February, accused of having received tens of millions of euros. Another case concerned was ringing in 2006 the leader of the Communist Party in Shanghai, Chen Liangyu, who was convicted of corruption.