Daily Market Reviews by UWCFX

Commercial Content Analysts
81

[B]12 OCTOBER 2012: USA: BY THE SESSION END OPTIMISM DISAPPEARED FROM THE MARKET[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

On Thursday, main American indexes finished trading session with minor change. If at opening of the session moderate optimism concerning positive statistics on a labor market was observed, by the session end the enthusiasm left the stock markets. Indexes of Dow Jones and Nasdaq rolled down in a small minus; upon Nasdaq, in particular, was pressed by decrease in prices of Apple (-2 %). Appeared information that the European politicians can suggest to delay introduction of the toughened requirements to the capital of banks, was disproved later by Othmar Karas.

Yesterday it became known that the number of primary requests for unemployment benefits fell to the minimum level since February, 2008 of 339 thousand that appeared much better than forecasts of economists (370 thousand). The statistics on trading balance was worse than expectations - deficiency extended in August to $44,22 billion, having exceeded forecasts of economists.

Following the results of the trading session the indicator of “blue chips” the index of Dow Jones Industrial Average lost 0,14 % and was closed on a level of 13326,39 points, the index of the wide market S&P 500 increased for 0,02% to level of 1432,84 points, and the index of the hi-tech companies Nasdaq went down for 0,08 % to a level 3049,41 points.

Shares included under of “blue chips” showed mixed dynamics. Better than the market looked Bank of America (+1,41%), JPMorgan (+0,79 %), UnitedHealth Group (+0,96 %), American Express (+0,86 %), with fall over 1 % finished Verizon Communications, AT&T and Walt Disney.

The price for oil futures for Light brand following the results of the trading session on NYMEX raised on 82 cents or 0,9 % to level of $92,07 for barrel. Oil rose in price as a result of retreat of dollar and against improvement of the American data on employment.

The price for futures for gold on COMEX raised for $5,50 or 0,3 % to value of $1770,60 for troy ounce. Gold added in the price owing to dollar weakening of the position in a basket of world currencies.

[I]Copyright: United World Capital[/I]

82

[B]13 NOVEMBER 2012: EURO HITS 2-MONTH LOW ON GREECE[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

The Euro dipped to a two-month low against the dollar. Euro/USD is trading at 1.2680 after Euro zone leaders and the International Monetary Fund, IMF, yesterday failed to agree on a long-term plan to reduce Greece’s debt. This has further delayed the disbursement of immediate aid to Athens. The Greek government is said to be running out of funds during this month. In an effort to secure new emergency funding the Greek parliament last Thursday approved new extensive austerity measures. On Sunday the Greek parliament adopted a strict austerity budget for 2013 seemingly to no avail.

Uncertainty over as well short-term financing and long term debt reduction has made the Euro tumble. After stabilizing inside a corridor between 1.28 and 1.30 for weeks, the Euro seems again in free fall. There is little chance that the Euro zone will desert Greece, but investors are frustrated by the lack of clarity. With no emergency funding in place, Greece plans to sell treasury bills during this week to refinance a 5 billion Euro issue maturing on Friday. The outcome of this auction is in the blue. Concerns on Greece’s ability to refinance would for sure put the Euro under new pressure. The Euro has been constantly falling since it peaked at 1.3140 in mid-October as the euphoria over the European Central Bank scheme to buy government bonds to help support Spain’s debt burden faded.

The European ministers agreed yesterday to grant Greece two more years to reach its budget target, but disagreed over who should shoulder the additional 33 billion Euro cost. Both Germany and Finland have to go back to their parliaments for final approval. The dollar index a measure of the dollar against six major currencies rose to its highest level since early September. Uncertainties on how US lawmakers shall tackle the “fiscal cliff” of spending cuts and higher tax rates may, however, come back and haunt the dollar. With the dollar also under pressure, JPY will again appear as a “safe haven” among currencies. USD/JPY is trading at 79,285.

Oil prices are under new downward pressure. Brent crude is tipping below USD 109 a barrel. New forecasts from IEA, The international Energy agency, IEA, is predicting that the United States would pass Saudi Arabia as an oil exporter by 2015 and become a net exporter of energy by 2020. Precious metals fell back yesterday consolidating heavy gains from last week-lows. Gold is at USD 1725 and Silver trades at 32.40.

[I]Copyright: United World Capital[/I]

83

[B]14 NOVEMBER 2012: HOME DEPOT AND CISCO WINNERS ON FLAT EXCHANGE[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Microsoft, Caterpillar and IBM were the big losers when stocks were sold off late in the session in New York last night. Retailers were the bright spot when Home Depot raised its outlook. Cisco which presented results after the closing bell, rose 6,8 percent after reporting revenues and earnings that beat analysts’ estimates. Home Depot, a home retail supplier, hit share prices levels not seen since April 2000, confirming greater optimism in the housing sector.

Concerns about the looming “fiscal cliff” kept investor activity subdued as lawmakers returned to Washington after November 6 elections. The markets are grappling with how a divided Congress will deal with a series of mandated tax hikes and spending cuts that will come into effect next year and threaten to take the largest world economy back into recession. Lawmakers were met by news that the US budget deficit continue to raise. The US Treasury said yesterday that October deficit was USD 120 billion larger than economists’ forecasts for a $ 114 million gap and up from $ 98 billion in October 2011. Growth in expenditures far outpaced rising receipts.

Asian shares and the Euro steadied on Wednesday morning, but lacked impetus for a decisive rebound threatened by the “fiscal cliff” and a delay in releasing more aid to debt-stricken Greece. The Euro/USD rebound from 1.260 on Tuesday and trades at 1.2720. USD/JPY stabilized around 79,50. MSCI’s broadest index of Asia Pacific shares outside Japan rose 0,3 percent after falling to a seven-week low in the previous session. Tokyo’s Nikkei edged up 0,1 percent after seven straight days in the red.

[I]Copyright: United World Capital[/I]

84

[B]15 NOVEMBER 2012: OIL PRICES JUMP ON GAZA TENSION[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Oil prices jumped one and half dollar yesterday on increased violence in the Middle East. Brent crude trading at 109,75. The Head of the military arm of the Hamas Palestinian authority in Gaza was killed along with 10 others in Israeli missile strikes. The new unrest in the region which comes on the top of the Syrian conflict and Iranian-Western tensions on Iran’s nuclear program added to selling pressure on Wall Street. Both Nasdaq and Dow Jones fell substantially. Hardest hit was Bank of America, General Electric, Boeing and Caterpillar. Facebook stock jumped 12,6 percent as a share lock-up expires. Facebook has fallen more than 50 % percent since the IPO introduction.

In his first press conference after reelection president Barack Obama outlined a compromise on debt/taxes, a new immigration law and renew focus on climate as his immediate priorities. By pledging to raise taxes on the wealthy, Obama set up a drawn-out fight over the fiscal cliff, budget cuts combined with tax hikes. The deadline for reaching a deal between Republicans and Democrats Congress is set to 31st December. With talks over solving the “fiscal cliff” in early stages, investors are reacting to the uncertainty by shedding positions. This points towards a last minute cliffhanger solution. In the meantime the market is going to get punched every day as experienced on Wall Street yesterday.

Without a deal a series of mandated tax hikes and spending cuts will start to take effect early next year. That could push the US economy into recession. Taxes on capital gains and dividends might rise as party of the negotiations. This shall probably push investors to sell in 2012 to pay lower taxes on their gains. Uncertainty inside the Euro zone with the bail-out tranches for Greece still in the air, add to the downside pressure in the equity markets. With the whole Middle Eastern region in deep problems with the Palestinian – Israeli conflict flaring up again, market sentiments remain subdued. Israel is threatening an invasion of Gaza as a following up of the killings. Egypt has recalled its ambassador from Israel in response.

Xi Jinping was yesterday elected new party chief of the Chinese Communist party and received a strong mandate to deal with problems ranging from corruption to economic uncertainty. Asian stocks fell as investors reacted to drawn-out negotiations the “fiscal cliff”. Japanese equities bucked the trend as a sharp slide in the Yen lifted exporters’ shares. The MSCI index fell 0,9 % as did the indexes in Australia and Hong Kong. Copper is weaker and precious metals stabile. Gold at 1725 and Silver at 32,60.

[I]Copyright: United World Capital[/I]

85

great informative source!

86

[B]16 NOVEMBER 2012: BEAR MOOD DO NOT RECEDE[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

The American indexes once again finished trading session in a red zone. Frankly speaking, we have seen so much negative information yesterday that it was possible to expect even more considerable falling. The main headache for investors still is a fiscal cliff.

Today the president of the United States will meet congressmen, and in common they will try to find a way out of current situation. Might be markets will get an occasion to grow up following the results of a meeting. However yesterday’s fears were not limited only to a general picture in the markets. Right after an election of the president in the United States statistics started to spoil. Yesterday was presented very bad data on a primary requests for an unemployment benefit in the USA. Growth of requests made 78 thousand, even slightly more than 20 thousand were expected, the total number of requests made 439 thousand. It is a lot, and raises a reasonable question that so strongly changed in the employment market literally for few weeks.

Besides macroeconomic data there was a weak reporting from Wal-Mart. Business of the largest retailer, many investors consider, as an advancing indicator. Nevertheless, despite this negative, the American markets lost within only 0,2-0,3%.

The trading in the commodities market is stable; Brent grows to 108.1 dollars for barrel, NYMEX decreases to 85.6 dollars for barrel. A favorable factor for growth of the oil prices is the statistics which came yesterday on the fuel market in the USA: so, stocks of crude oil grew to 1.09 million barrels contrary to expectations in 2 million; reduction of stocks of oil products made 2.54 million barrels - was expected 1 million. Continuing conflict in the Middle East will also support growth of oil prices. According to the information from HAMAS, the Air Force of Israel struck the next series of blows to the Gaza this morning.

Precious metals are weak this morning, Silver is losing more than 1% and traded at 32.34, Platinum at 1560.59, Gold is stable at 1712.

[I]Copyright: United World Capital[/I]

87

[B]19 NOVEMBER 2012: ASIA UP AS USD/JPY TRADES AT SEVEN-MONTH LOW[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

USD/JPY fell to a seven-month low against the dollar trading at 81,166 as Asian shares rose, boosted by a more positive tone in US equities last week and on expectations that next month’s Japanese elections will bring a new stimulus friendly government. MSCIs broadest index of Asia-Pacific shares outside Japan rose 0,6 percent, recovering from Friday’s nine-week low. The energy sector outperformed on mounting supply concerns following the development in Gaza with Israeli air strikes and Hamas rocket attacks underpinning oil prices. Brent crude trades at 109,50. NYMEX is at 87,57.

Most markets under-performed last week. There are, however, hopes that US negotiations around the fiscal situation may progress and improve prospect for the stock markets. Japan’s Nikkei surged 2,2 percent Friday and bucked the downtrend in broad Asia. It has extended the gains this morning. Nikkei is 1,3 percent up and trades at a two-month high helped a weaker Yen and expectations that 16th December elections shall bring a new government ready to call for stimulus and a more aggressive easing from the Central Bank of Japan.

Hope that US politicians would find a common ground to steer clear of the “fiscal cliff”, boosted US stocks on Friday. European stocks, however, sank to its lowest level seen since May on US “fiscal cliff” concerns and the euro zone debt crisis. US treasury yields fell to its lowest levels in over two months on Friday as skepticism over the US budget talks drew safe-haven bids. Lawmakers, however, hinted at a possible budget compromise involving budget cuts and tax revenues.

The dollar is still strong after hitting a two month high in early Friday trading against a basket of six major currencies. The drop in Gold helped precious metals. Gold is trading 10 dollar up at 1723. Silver is 32,60 after dipping below 32 on Friday. The Euro rose to 1.2772 on Friday on expectations that the International Monetary Fund, IMF and euro zone finance ministers shall agree on how to make Greece’s debt more manageable. A bundled aid package to avert a Greek default may create a relief rally in the Euro. Euro/USD is at present trading at 1.2762. The short and medium term outlook for the Euro is, however, still bearish.

[I]Copyright: United World Capital[/I]

88

[B]20 NOVEMBER 2012: BUDGET TALK’S OPTIMISM SPURS WALL STREET RALLY[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Stocks rallied for a second consecutive session on Monday after budget talks created optimism that Democrats and Republicans would be able to tackle the fiscal crunch and avoid tipping over the “fiscal cliff”. The optimism spilled over to the Asian markets where the Nikkei share average in Tokyo extended its rise into a fifth day in morning trades. The gains were limited by profit taking and Bank of Japan’s (BOJ) awaited policy decision later in the session. It is expected that BOJ will keep policy unchanged. The Asian-Pacific index, MSCI, rose 0,6 percent.

The dollar was steady against a basket of currencies moving away from the two-month high reached on Friday. Precious metals jumped 3 percent on Monday on the dollar’s retreat. Gold reached 1735 and silver trade up close to a dollar on 33.20. USD/JPY is trading at 81.25. Oil prices have increased substantially on tensions in the Middle East. Brent crude reached its highest price level for weeks trading above USD 111 a barrel. NYMEX, New York crude, is sniffing on the 90 level.

Wall Street stocks climbed almost 2 percent extending a rally started on Friday. The rise reflected investors’ view that US lawmakers will be able to reach a compromise to avert USD 600 billion in tax increases and spending cuts due to start in January. This so called “fiscal cliff” threatens to send the US back into recession.

Prospects that Greece will get a lifeline to stay solvent also helped boost markets. The international rating agency, Moody’s, downgraded France’s government bond rating to A1 and kept a negative outlook on the country’s uncertain fiscal outlook and deteriorating economic prospects. The downgrade put the Euro under pressure. Euro/USD fell from a two week high on 1.2810 on Monday to 1.2777 in early Asian trade. It has regained and trades at present on 1.2796.

The Euro zone finance ministers are expected to give a tentative go-ahead for the disbursement of 44 billion euro in emergency loans to Greece later today. Differences between the finance ministers and the International Monetary Fund (IMF) on how to tackle the Greek crisis, however, remain, and a positive decision shall in no sway be taken for granted.

[I]Copyright: United World Capital[/I]

89

[B]21 NOVEMBER 2012: EURO FALLS ON INCONCLUSIVE GREEK TALKS[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

The Euro/USD is falling 50 points to 1.2757 after Euro finance ministers and the International Monetary Fund (IMF) failed to reach agreement on a Greek bail-out package. While the EU seems to have been willing to extend with two years the deadline for carrying through austerity measures, IMF was sticking to 2020. Without a consensus emergency aid cannot be disbursed to Greece.

The inconclusive talks helped destroy the positive investor’s sentiment which has been built up over the last days. The Head of the Federal Reserve, Ben Bernanke also talked US stock markets down when he yesterday stated that the Federal Reserve could do nothing to soften the “fiscal cliff”. Dow Jones fell within minutes more than 100 points upon Bernanke’s statement. He added, however, that 2013 might be a bright year for markets if Congress is able to find a compromise between budget cuts and tax hikes. Both Dow Jones and Nasdaq recovered and ended the session flat.

Hewlett Packard, one of the bedrock companies of Silicon Valley, and for decades seen as synonymous with technical excellence and innovation, stunned markets with an alleged massive accounting scandal at its British software unit, Autonomy. Serious accounting improprieties came to light after a whistle-blower come forward after the ouster of one of the companies top executives. HP shares plunged with 12 percent and reached a 10-year low. The market value of HP has fallen from $ 155 billion in 2000 to $ 20 billion after yesterday’s “massacre”.

Oil prices fell yesterday afternoon on strong rumors on a truce between Israel and Hamas on Gaza. Expectations for a ceasefire, rose, however, when US secretary of State, Hillary Clinton, arrived to Jerusalem last night to seek an end to one week of fighting. Brent crude trades at 110,03. Gold prices also fell yesterday trading at 1723 down from Tuesday’s peak on 1735. Asian stocks fell for the second day in row on the disappointing news of a failed emergency aid pay out to Greece. The Japanese Nikkei-index is up 0,44 % on a weaker Yen. USD/JPY trades at 81,905.

[I]Copyright: United World Capital[/I]

90

[B]22 NOVEMBER 2012: GREEK EXPECTATIONS TAKES EURO HIGHER[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

German Chancellor Angela Merkel breathed new life into the Euro yesterday when she stated that a deal on the Greek emergency package was still within reach when Euro finance ministers meet on Monday. The Euro hit a 6-1/2 month high against the yen which continue to fall on expectations of more forceful monetary easing in Japan. Euro/USD is also stronger trading at 1.2844.

Investors initially dumped the Euro after Euro finance ministers and IMF, International Monetary Fund, failed to reach a compromise on release of emergency aid for Greece Tuesday night. Merkel’s comments turned the downward trend around. Euro last traded up 1 percent at 105,94 yen. The dollar has over the last seven trading sessions gained 3,9 percent against yen. USD/JPY stands at present at 82,38 giving Japanese exporters a welcomed boost. Yen is broadly falling against other currencies including the Australian dollar.

Analysts are expecting the yen to continue weakening into the Japanese elections in the middle of December. Bank of Japan’s (BOJ) firm intention for asset purchases and forceful monetary easing makes it likely that the yen shall remain vulnerable in the near term.

After relatively quiet equity sessions in Western Europe and the US Asian stocks rose Thursday morning after a survey showed that China’s manufacturing sector in November expanded for the first time in 13 months. Along with US factory data it raised optimism that the global growth slowdown is turning. MSCI broadest index of Asia-Pacific shares outside Japan raised 0,8 percent to a one week high.

Market sentiments were also boosted by the truce between Hamas and Israel on Gaza. Brent crude trades above USD 110 a barrel. Precious metals and commodities show a firmer upward trend. Gold stands at 1730 and silver trades at 33,40.

[I]Copyright: United World Capital[/I]

92

[B]23 NOVEMBER 2012: GOOD WEEK FOR ASIAN SHARES AND EURO[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Stock indexes continued to rise Friday morning as Asian shares were on course for a weekly gain of more than 2 percent. The Asia Pacific MSCI rose 0,4 percent and reached the highest level seen in two months after manufacturing surveys from China and the United States raised hopes for an improving global growth outlook. Japan and US were closed due to public holidays and Thanksgiving.

EURO/USD is trading at 1.2887 with the Euro enjoying a one percent lift since last Friday’s close. This in spite of yesterday’s data pointing to the Euro zone sliding into its deepest recession since 2009. The Euro has, however, been helped by optimism that a funding deal for Greece will ultimately be found when euro finance ministers meet in Brussels on Monday.

USD/JPY eased 0,1 percent to 82,39 pulling back from Thursday’s high of 82.84 which is the dollar’s strongest level since early April. The dollar has gained 3,7 percent versus yen over the last two weeks. The yen has been weakened on expectations that the Bank of Japan shall implement more drastic monetary stimulus.

Commodity markets were quiet with oil, copper and precious metals staying course to end the week higher than they started. Brent crude is trading at USD 110, 25 and Gold is flat around 1730. Last day’s markets have been subdued by Thanksgiving and enters a new week once again with major focus on the debt crisis in Europe. While a lot of ink has been spilled on the US fiscal cliff the biggest challenge for the global economy rests with the euro zone.

[I]Copyright: United World Capital[/I]

93

[B]26 NOVEMBER 2012: EURO RISES ON GREEK HOPES[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

The Euro hit a seven-month high against the yen and held a one-month peak versus dollar when the trading week opened in Asia this morning. The Euro was supported by hopes that Greece will finally secure more emergency loans when EU Finance ministers meet in Brussels today. Euro/USD is trading at 1.2963 after reaching 1.2969 on Friday bringing its weekly gain to 1,75 percent and above the 1.2945 level which it began 2012.

Asian shares inched up on Monday on hopes that Greece can avoid a near term bankruptcy. A regional Spanish vote favoring separatist parties capped gains. The stock futures for US suggest a soft opening while European futures are falling. The Asian Pacific index, MSCI, rose 0,2 percent marking advance for the sixth consecutive day. There is market optimism on the euro area’s ability to reach a deal on Greece, but worries about the vote of Catalonian independence from Spain and its implications for Spain’s austerity measures and bond rates remain high.

Oil, commodities and precious metals saw gains on a weaker dollar last week. Brent crude is trading above USD 111 a barrel in Asia, and gold surpassed the 1750 level on Friday as central banks boost reserves. Both gold and silver fell somewhat back in early Asian trade. Gold dipped below 1750 and silver trades at 34,05. Gold saw its five week high helped by a weaker dollar and investor confidence. Both pension funds. Sovereign wealth funds and private investors have been buying gold along with central banks in Brazil, Russia, Mexico, India, South Korea and Thailand. The buying has also been prompted by devaluation concerns of major currencies.

[I]Copyright: United World Capital[/I]

94

[B]27 NOVEMBER 2012: EURO MINISTERS FINALLY AGREE ON GREEK DEBT[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Euro zone finance ministers and the International Monetary Fund, IMF, finally reached a deal on Monday to reduce Greece’s debt. After 12 hour of negotiations Greece’s international lenders agreed on measures to reduce Greek debt by 40 billion euro, cutting the debt ratio between debt and GDP (gross domestic product) to 124 percent by 2020. Urgently needed loans to keep the bankrupt economy afloat were simultaneously released. In a significant new pledge ministers committed themselves to lower Greece’s debt below 110 percent by 2022. This is so far the most explicit recognition that some loans have to written off from 2016 when Greece is supposed to reach a primary budget surplus.

After two weeks of haggling, markets reacted with relief on the aid package. Stock markets in Asia continued up. The MSCI index for the south Pacific region outside Japan gained 0,6 percent, and the Euro/USD is trading at its highest level in weeks at 1.2985, marginally up from yesterday. Upon the release of the news from Greece, the euro reached 1.3010. Also the Australian dollar is trading at its highest level in two months versus dollar. USD/JPY was falling in early Asian trade, but has recovered at 82,15. Dow Jones was down and Nasdaq marginally up yesterday waiting for the outcome from Brussels.

Oil prices are steady. New York crude (NYMEX) is USD 88 a barrel. Brent crude is 111,04. Commodity prices are up helped by news on big infrastructural programs in China. Gold keeps around 1750 after reaching 1754 on Friday. Silver is slightly up in the morning trade in Asia at 34,20.

The agreement in Brussels has given the market a breathing spell. Investors focus is now likely to shift back to another major concern hanging over the markets, the looming US fiscal crisis. Republicans asked on Monday president Barack Obama to detail long term spending cuts to help solve the countries fiscal crisis. The Republicans are holding firm against any income tax rate increases for the wealthy that Democrats seek. If a compromise deal on the budget drags out, new focus on the “fiscal cliff” would for sure create nervousness and dampened investors risk appetite.

With big funds winding down their positions ahead of the new year-end, many analysts see it unlikely with major changes in the currency markets. The euro which has gained two percent over the last days is not set for major new gains in the short term. Any further rise in the Euro will likely be countered by selling to cap the euro’s upside. USD/JPY has fallen considerably over the last weeks and no major development is expected before the Japanese elections in mid-December and an eventual new government’s likely monetary easing.

[I]Copyright: United World Capital[/I]

95

28 NOVEMBER 2012: FOCUS SHIFT BACK TO “FISCAL CLIFF”

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Budget talks and the “fiscal cliff” is back in focus after leaving the euro finance ministers agreement on Greek debt cuts on the agenda in the very start of the week. The euro’s short won gains against the USD were eaten up during yesterday. Euro/USD is trading at 1.2939 after falling fifty basis points in the afternoon of yesterday. The Japanese Yen strengthens versus dollar. After USD/JPY has traded in the interval between 82.15 to 82,65, yen is this morning below 82 at 81,95. Asian shares ended a seven-day winning streak this morning. The share index for Asia-Pacific stocks, MSCI, fell 0,5 % and commodities eased as lack of progress in talks on US budget threatened to threw the US economy back in recession.

President Barack Obama launched yesterday a public relations push for his bid to raise taxes on wealthy Americans. US lawmakers remained, however deadlocked over dramatic year-end tax increases and spending cuts known as the “fiscal cliff”. Obama met with small business leaders in the White House. They urged Obama to keep the tax cuts for the middle class to increase consumption and job creation. The US tycoon, Warren Buffet, simultaneously, called on the rich to pay more and proposed a minimum tax on 30 % on incomes between USD 1 and 10 million and 35 % on incomes above.

Senate majority leader Harry Reid expressed last night disappointment over modest progress in the budget negotiations. The remarks had US stocks to slide. Dow Jones lost 0,69 percent and Nasdaq 0,30. Statistics could on the other hand report on record high Thanksgiving sales and the highest US-consumer optimism in 5 years. The Shanghai composite Index slid 0,7 % and the Chinese stock markets to its lowest in nearly four years extending earlier losses and closing below 2000 points for the first time since January 2009. The weak Chinese stock market along with increasing doubts over US ability to resolve the fiscal crisis have over the last weeks strengthened demand for sovereign debt. Japanese government bond futures rise to a 9 and half year high.

Digesting the Greek debt deal comments on Twitter dismissed it as another exercise in kicking the can down the road. A degree of kicking is obvious. There is, however a critical element in the new deal which goes further than any step taken so far to get Greece back on its feet. There is an implicit understanding that Greece will undergo some form of official-sector debt restructuring with euro zone countries at some point in the future forgiving a portion of Greece’s debt. This sort of last-ditch measure is usually reserved for impoverished states in Africa and Latin America. German finance minister Wolfgang Schaeuble came close to acknowledging such an eventuality on a later press conference.

Oil prices are down a dollar since yesterday. Brent crude is trading at 110. Gold is also down from 1750 to 1741 breaking the good upward trend seen over the last days. Silver at USD 34 is also down.

Copyright: United World Capital

96

[B]29 NOVEMBER 2012: BIPARTISAN STATEMENTS TURN MARKETS AROUND[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

“The fiscal cliff” seems over the last couple of days to have taken over completely as the dominant theme in the market. Statements on Tuesday from the Democratic Senate leader, Henry Reid, expressing disappointing progress towards a budget compromise with the Republicans had the markets to tumble. Yesterday it was the other way around. When president Obama expressed hope for a deficit deal by Christmas markets made a sharp U-turn. Dow Jones and Nasdaq which had started in red territory, ended 0,83 and 0,81 percent up with Hewlett Packard, Chevron, American Express and Pfizer showing the way as cracks seemed to surface in the Republican front against any tax rises. Stocks rallied when House Speaker and leading Republican, Joe Boehner, stated that a compromise was possible to avoid the “fiscal cliff”.

Whether these remarks reflect the reality of the negotiations is another story. The “fiscal cliff” of budget cuts and tax hikes dominate the discussion and influence a world market driven by psychology. Optimistic statements are immediately given a positive spin regardless of realities. The markets are going to live with these sentiments in the coming weeks and we are most probably going to see volatility and big day-to-day changes in stocks as well as commodities and currencies. Yesterday gold was hardest hit and fell 40 dollar an ounce during the session. It has recovered and trades at present at 1722. Also oil and silver took a hard punch to normalize around USD 110 a barrels for Brent crude and 33,70 for silver.

Euro/USD fell 70 points during one session and saw a low on 1.2875 before climbing back to 1.2955 and the same level as last Friday when the common currency was strengthened by the prospects of a debt deal on Greece in Brussels. By finalizing the deal Monday night the Euro reached 1.3010 to plunge back to yesterday’s low levels. The comments from US policy makers rekindled hopes of avoiding a crash landing on the US budget; and strengthened the Euro.

USD/JPY has also demonstrated great volatility during the last week. It is now trading at 82,14 bouncing back from a week high on 81,68 against the dollar on Wednesday. The dollar has corrected after reaching a 7 ½ month high of 82,84 last week. The yen has been under pressure over the last couple of weeks on speculations about aggressive monetary easing in Japan after the elections in mid-December. It is expected that USD/JPY is going to continue to trade in a range between 81 and 83 till we have seen the outcome of the elections.

Asian shares touched their highest levels in more than three weeks. The MSCI-index for Asia-Pacific jumped 1 percent after ending a seven-day winning streak on Wednesday. Also commodities are up on “optimism” for reaching a compromise on the US-budget. Nikkei in Japan and Australian shares were up as the Shanghai composite index as yesterday saw its lowest level since January 2009.

[I]Copyright: United World Capital[/I]

97

[B]30 NOVEMBER 2012: ASIAN STOCKS AND EURO TRADE STRONGER[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Telecommunications and health stocks were the winners in New York last night as Dow Jones and Nasdaq rose marginally. The Dow Jones industrial average passed the 13 000 mark and seems to end the week in positive territory. Investors were buying on sporadic dips roiled by conflicting comments from Washington about negotiations on a budget compromise to avoid the “fiscal cliff”, fear for a combination of budget cuts and tax hikes. Wall Street reversed early gains and fell after the Speaker of the House, leading Republican John Boehner, dashed hopes that lawmakers were getting closer to a deal. It picked up at greater optimism for a compromise at the end of the session. The extreme volatility in the markets is probably continuing as long with the stalemate in Congress.

Stock markets in Europe ended in positive territory yesterday on initial compromise optimism from both President Obama and the House Speaker Wednesday night. The exchanges in Asia started the trading day on a positive note. Asian shares rose to a nine-month peak Friday morning. Japan’s industrial output rose unexpectedly 1,8 percent in October, up for the first time in four months. This along with a new announced stimulus package from the Japanese government helped Nikkei win 0,8%. Also the Shanghai and Taiwan bourses produced healthy gains. The mining giant Rio Tinto is up 3 percent upon presenting savings and restructuring measures worth USD 5 billion.

Japanese yen is losing on the stimulus plans after gaining against the dollar earlier in the week. USD/JPY is trading at 82,45 well inside the newly established 81 – 83 corridor. Euro/USD is again stronger at 1.2999 up 50 points from yesterday’s start. The euro reached 1.3015 on Thursday, the highest level seen since 31st October. The euro is helped by the bail-out package for Greece. It is expected that a skeptical German parliament will approve the support for Greece in a vote today. This will probably give the euro a new temporary boost.

The US government said yesterday that third-quarter gross domestic product expanded at a 2,7 percent annual rate, the fastest pace since late 2011. Export growth help offset weakest consumer spending and the first drop in business investment in more than a year. Brent crude is trading at USD 110, 49 a barrel marginally up from Thursday. US crude futures, NYMEX, is falling 0,4 percent. Increased tensions and escalating violence in Syria and Egypt are stoking permanent fear of oil supply disruptions. Gold has gained back 20 dollars from yesterday’s steep fall and trades at 1727. Silver is at USD 34,20 an ounce, the same level as seen at the peak earlier in the week.

[I]Copyright: United World Capital[/I]

98

[B]03 DECEMBER 2012: EURO AND ASIA RISE ON CHINESE MANUFACTURING[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Euro/USD rose to 1.3048 and Asian stocks jumped to a nine-month high on further signs of a stabilizing Chinese economy boosted investor’s risk appetite. China’s vast manufacturing sector quickened in November for the first time in 13 months. HSBC bank’s Purchasing Managers’ Survey, PMI, rose to 50,5. A further evidence that the Chinese economy is picking up after quarters of slowing growth. China’s official PMI was even higher at 50,6. An official PMI for the non-manufacturing sector reached 55,6 led by construction services.

The upbeat Chinese manufacturing data helped the Euro reach a six-week high against the dollar. The Euro was also strengthened by Angela Merkel’s careful remarks that Germany, in a medium, longer term perspective, might consider to write off Greek’s debt if the country succeeds in getting its house in order.

The rhetoric on the “fiscal cliff” increased during the weekend when Democrats and Republicans went on the air to trade accusations on whom are mostly to blame for the budget stalemate. This also helped the euro. In spite that there still seem to be a huge distance to cross before any budget deal sight is in sight, markets nevertheless seem to have discounted a compromise. All asset classes posted gains in November with higher appetite for securities. Security markets except the Shanghai composite rose.

The Japanese Nikkei continues to rise on a lower yen and expectations for monetary easing after the parliamentarian elections in mid-December. The dollar steadied at 82,40 yen not far from the 82,84 yen touched on November 22. Speculators have over the last weeks boosted a short yen position which was at its highest since May 2007.

US, NYMEX crude and Brent futures are inching up at 89,16 and 111,57 respectively. Copper gained 0,3 percent to USD 8018 a metric ton. Gold is slightly up to 1719 on a weaker dollar. The DXY dollar index against a basket of major currencies are down 0,2 percent.

[I]Copyright: United World Capital[/I]

99

[B]04 DECEMBER 2012: WALL STREET FALLS ON WEAK DATA[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

Manufacturing activity in the United States surprisingly contracted in November, dropping to its lowest level in three years. The fiscal cliff remains, however, investors’ primary focus. The political haggling over how to deal with large automatic spending cuts and tax hikes scheduled to kick in at the beginning of the new year, threatens to threw the US economy into new recession. Both Dow Jones and Nasdaq fell back after three straight winning days for the US indexes. The S&P index which composes an average of US stocks, are in spite of yesterday’s weakness still up 12, 1 percent in 2012, making stocks one of the assets classes winners.

Asian bourses and the Japanese Nikkei edged down in early Tuesday trading when the weak US data triggered profit-taking on exporters. The US economy is key to the fortunes of Japanese exporters which rely heavily on consumption in the world biggest economy. Asian markets got a boost over the weekend when the Chinese economy demonstrated healthy manufacturing data and strong signals for a rebound. Yesterday’s gains were eaten by a new cold shower from the US. The Japanese yen which recently has fallen against the USD, fluctuated heavily yesterday. After USD/JPY had traded at its lowest levels in weeks, JPY recovered strongly on the weak US manufacturing data. It is now trading at 82,10.

The Euro/USD is still strong. It rose to 1.3076 during yesterday’s trading, the highest level seen since October 22. The Euro dropped against yen after rising to a seven-month high on 107,67 on Monday. A Greek bond buyback scheme at 65 – 70 % reduction of nominal value has attracted interest and also strengthened the common currency. There are small changes in other currency pairs. Australian dollar is stabile against yen and USD, and the Scandinavian currencies are demonstrating strength both against USD and Euro. EURO/USD is trading at 1.3054 at present.

Oil prices are down. Brent crude has tipped down a dollar to 110,54. Precious metals are also trading lower. After recovering from end of last week’s steep fall from 1750-level to 1707, gold traded at 1721 yesterday. This morning gold has dropped down to 1703, a fall of 15 dollar an ounce.

[I]Copyright: United World Capital[/I]

100

[B]05 DECEMBER 2012: OBAMA STAYS FIRM ON TAXES FOR RICH[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

President Barack Obama held his ground on the “fiscal cliff” Tuesday. In an interview with Bloomberg Television Obama stressed that no budget compromise was possible without the wealthiest Americans paying their fair share of common expenses. With less than a month left to confront budget cuts and tax increases that will take effect from January 1st unless Congress acts, Republicans seem increasingly in disarray over how far to go to compromise with Obama’s demands. In the interview Obama took a conciliatory tone, but excluded any further tax burdens on an embattled middle class.

The insecurity over whether total budget cuts and tax hikes amounting to USD 300 billion would be implemented in some few weeks’ time, has severely affected markets. Wall Street finished slightly lower in a quiet session with thin trading volumes. Hewlett Packard recovering from last week’s onslaught when its share prices dropped 15 % in one day, was together with Intel who announced a buy-back of own shares, the winners.

Asian shares rose Wednesday led by surging Chinese equities. The MSCI index for Asia-Pacific shares outside Japan were up 0,6 percent. Shanghai shares surged 3 percent to reclaim the 2000 point level. Hong Kong shares jumped 1,3 percent. Nikkei also inched up on a statement from Bank of Japan confirming willingness for more aggressive monetary easing. USD/JPY which during yesterday’s trading strengthened substantially and reached 81,75, fell back in morning trade to 82,25 supporting exporters.

Better than expected terms for Greek bonds buy-back plan raised optimism that Athens will secure much needed emergency aid to avert a default. The news took the euro/USD above 1.32 levels for the first time in months. The Euro was also helped by Obama’s statements that weakened the dollar and increased risk sentiments. Gold saw a new set-back and fell to 1685. It has recovered to 1701 in morning trade. Oil prices have as well recovered from yesterday’s lows. Brent crude is up 0,2 % trading above USD 110 a barrel.

[I]Copyright: United World Capital[/I]

101

[B]06 DECEMBER 2012: NOKIA CAUSES FALL IN APPLE[/B]

[I]DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments[/I]

US stocks ended mostly higher on Wednesday. Dow Jones gained 0,64 percent and is again trading above 13 000. Nasdaq ended in red after the largest US company by market capitalization, Apple, swallowed its biggest fall In share prices in four years. Apple fell 6 percent and is down more than 20 percent from an all-time high reached in late September. Market participants cited a host of reasons for the drop; the company is losing share in the tablet market and NOKIA joining ranks with China’s biggest smart phone maker will give Apple a tough fight on the Chinese market.

Banking shares went higher led by Citigroup which jumped 6,3 % on a 10 000 employees or 4 % cut in its workforce. Cyclical shares closely tied to economic growth, also rallied on optimism on progress on a solution to avoid the fiscal cliff. Obama met with business chief executives in Washington and stressed readiness for a compromise if Republicans acknowledged the need to raise taxes on the wealthiest Americans. If the Republicans demonstrate such willingness, a budget deal can be reached within a week. The Republican is under strong pressure not at least from their own constituencies and; cracks in the ranks and possible “defectors” are likely to appear.

In England the Finance minister, George Osborne presented a new austerity budget to the House of Commons admitting that to have fallen short to obtain former set targets set. The budget proposal is most probably going to raise a new heated debate on whether austerity measures as practiced in England, Greece and other Western European countries are the right medicine to fight sovereign debt, trade and budget deficits. “Osborne has no more tricks to play”, commented one of the biggest British dailies.

Obama’s “fiscal cliff” comments created optimism in Asia where shares rose to a 16-month high. The Japanese Nikkei climbed 0,8 percent helped by a weaker yen. USD/JPY trades at 82,45. Euro/USD eased to 1.3054 after reaching a seven-week high of USD 1.3127 Wednesday. A disappointing Spanish bond auction reminded investors of the fragile fiscal health both of Spain and inside the euro zone and prompted a sell-off in the single currency. The markets are today waiting for the European Central Bank’s policy decision and US labor market report tomorrow.

Oil prices have fallen over the last 24 hours. Brent crude is one dollar down and trades below USD 109 a barrel. Gold is under downward pressure and tested the lows for the week at USD 1685 an ounce yesterday.

[I]Copyright: United World Capital[/I]