Stocks up

Stocks up

"Stocks up. European stocks rose and the euro stayed under pressure on Tuesday as investors weighed the debt turmoil in the euro zone against an improved U.S. economic picture that looks set to deliver upbeat corporate results.

European shares gained from the start on Tuesday, led by mining stocks after forecast-beating results from U.S. aluminum producer Alcoa (AA.N) improved the outlook for commodities.

"A good start to the earnings season; it shows the demand outlook is not so bad and we could get more positive surprises," Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, said.

The key FTSEurofirst 300 .FTEU3 index was up 1.3 percent at 1,021.47 points, while the STOXX Europe 600 euro zone banking index .SX7P gained around 2.0 percent.

Nervous currency markets remained focused on the outlook for the euro zone economy, upcoming government debt sales and how the region's banks will raise much needed capital to repair their balance sheets.

The euro rose slightly to trade around $1.2792, holding firmly above the 16-month lows of $1.2666 hit on Monday, due mainly to traders buying back the currency to square their positions after recent heavy selling.

The Bank of France focused attention on the ailing euro zone economy by reporting growth had stalled at zero in the fourth quarter of 2011 in the region's second-biggest economy.

But separate data showed French industrial production rose 1.1 percent in November, bucking expectations for no growth as output from refineries rose from weak levels of a year ago during strikes.

"There's short-covering and a bit of risk appetite with positive equity markets overnight," said Niels Christensen, currency strategist at Nordea in Copenhagen.

"But we have the debt auctions, the ECB meeting on Thursday and it's still a weak and vulnerable euro..., with no sign of a quick solution to the debt problems in the euro zone," he said.

The worries about the health of the region's banks saw commercial lenders' overnight deposits held at the European Central Bank hit another record high of 482 billion euros.

The banks are awash with cash after taking an unprecedented 489 billion euros in the ECB's first-ever three-year liquidity operation late last month, but they are still uncertain about what to do with the money in the longer term.

French banks were also likely to be in the spotlight after an internal memo obtained by Reuters on Monday showed Societe Generale (SOGN.PA) is forecasting a sharp drop in investment bank revenue in 2012, weighed by higher funding costs and efforts to slash its balance sheet.

Earlier, data showed China's exports and imports grew at their slowest pace in more than two years in December. The figures fuelled expectations of more policy action from Beijing to support the world's second biggest economy, and most Asian markets gained on Tuesday.

Wall Street ended slightly higher on Monday in a light-volume session as investors stayed cautious ahead of the earnings season that kicked off with Alcoa.

Tuesday's focus in euro zone debt markets will mainly be on Austria's auction of 1.3 billion euros of 10-year bonds which should give an indication of how worried investors are about the country's exposure to neighboring Hungary, which is locked in a dispute with the IMF over international aid.

Bund futures were slightly lower in midmorning trade.

Elsewhere, British retailers finished 2011 with the best sales growth in months as hefty discounting lured in shoppers, while weak business a year earlier flattered the figures, the British Retail Consortium said on Tuesday.

It added that it expected another tough year."

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Stocks primed for more volatility

Stocks primed for more volatility

"Investors will grapple with more turbulence surrounding Europe's deepening debt problems next week and the prospect of another round of dismal data on the faltering U.S. economy.

More volatility is almost guaranteed after the top German official at the European Central bank quit and rumors circulated throughout global markets that Greece will default this weekend. Greece later called the rumor market speculation designed to hurt the euro.

Recent market trading patterns and options activity also suggest August's roller-coaster ride will keep apace throughout September.

Juergen Stark's sudden resignation from the ECB on Friday came after a conflict over the bank's policy of buying government bonds to combat the euro zone's debt crisis, raising questions about a program that has been a key market stabilizer in recent months.

"You can tie our stock market directly to European banks -- the problem they have is sovereign debt exposure," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

In a light week for earnings with only electronics retailer Best Buy Co Inc and diversified manufacturer Pall Corp among S&P 500 companies set to report, investors will eye a batch of data for any clues the economy has regained its footing. Economic readings over the past two months have left little reason for optimism.

But the euro zone, where a two-year sovereign debt crisis has unsettled investors worldwide, will be the real focus. (...)"

in Reuters

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Homelessness Arrives to Middle Class

Homelessness Arrives to Middle Class

Homelessness could spread to middle class, Crisis study warns

"The economic downturn and the government's deep cuts to welfare will drive up homelessness over the next few years, raising the spectre of middle class people living on the streets, a major study warns.

The report by the homelessness charity Crisis, seen by the Guardian, says there is a direct link between the downturn and rising homelessness as cuts to services and draconian changes to benefits shred the traditional welfare safety net.

In the 120-page study, co-authored by academics at the University of York and Heriot-Watt University, Crisis highlights figures released over the summer that show councils have reported 44,160 people accepted as homeless and placed in social housing, an increase of 10% on the previous year and the first increase in almost a decade.

Last year another 189,000 people were also placed in temporary accommodation – such as small hotels and B&Bs – to prevent them from becoming homeless, an increase of 14% on the previous year.

Crisis says that with no sign of economic recovery in sight, there are already signs that homelessness is returning to British streets. In London, rough sleeping, the most visible form of homelessness, rose by 8% last year. Strikingly, more than half of the capital's 3,600 rough sleepers are now not British citizens: most are migrants from eastern Europe who cannot find work and, unable to get benefits or return home, are left to fend for themselves on the streets.

The charity says the evidence is that the current recession has seen the poor suffer the most, but other parts of society may be in jeopardy if the government's radical welfare agenda is acted on as the economy stutters. (...)"

in The Guardian

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