Stocks And Bonds Trade Lower As Major World Currencies Trade Lower As Fed Considers Stimulus And ECB Prepares To Communicate Plans As They Meet On First Thursday Of September 2012

Financial Market Report for Tuesday September 4, 2012

Daily Ticker asks Is More Fed Action Needed to Boost the Economy?  Fed policymakers will review the fiscal situation and the latest economic data when they meet Wednesday and Thursday of this week.

Euro Intelligence in its for fee daily news briefing relates that the proportion of foreign holders of Italian bonds has dropped to 30%. Fabrizio Goria writes in Linkiesta that foreign investors hold only 30% of Italian debt, hitting a record low. Research from Morgan Stanley, published by the Italian online newspaper, reveals a significant drop in foreign confidence in Italian debt obligations, valued €1.648bn. From 38% at the end of 2011 to 30% at the end of August: the foreign debt-holdings are now at €492bn. Foreign banks hold €161bn, meanwhile others financial institution possess €330bn. The ECB’ SMP holdings remain stable to €110bn, 7% of total. Italian banks hold €336bn, MFIs €304bn and others €406bn, 63% of total. And Euro Intelligence relates In an interview with Bild am Sonntag, and FT De, Spanish PM Mariano Rajoy proposed a three step plan to fiscal union with eurobonds, in which member states first realise convergence criteria by 2013-2014, set up a European budget authority by 2015-2016 to control national budgets, and finally introduce eurobonds by 2017-2018.

Open Europe relates Euractiv reports Barroso repeats call for political integration.   European Commission President José Manuel Barroso told EU diplomats yesterday that he believes there is a need for “further political and institutional integration” and a consolidation of “a truly political union” through a change of the EU treaty reports. And Open Europe relates According to WEF and Le Figaro, Finland is highly competitive and Greece is least competitive.  The latest rankings of countries’ competitiveness produced by the World Economic Forum there is a significant disparity between Northern and Southern Europe, with Finland ranking third and Greece ranked 96.

Bespoke Investment Blog reports ISM Manufacturing report for August came in weaker than expected (49.6 vs 50.0 est) for the fourth straight month, and was below 50 for the third straight month.  The last time the ISM Manufacturing report was weaker than expected was from August through December of 2008.

On Tuesday, World Stocks, VT, traded lower, as China Industrials, CHII, Australia’s Westpac Bank, WBK, Australia Small Caps, KROO, Australia, EWA, Sweden, EWD, Japan Small Caps, Japan, EWJ, fell strongly, as Ambrose Evans Pritchard reports Global crisis moves East as China suffers rapid downturn.  China’s industrial output is contracting at the fastest pace since the depths of the global financial crisis, with knock-on effects spreading across the Far East. Also Brazil’s BSBR, EWZ, BRF, fell strongly, taking the BRICS, EEB, lower,  XSD, KOL, SLX, traded strongly lower. FAA led Transports, IYT, lower; and DD, PX, CAT, DE, MMM, UTX, CMI, IR, GDI, DRC, KUB, EMR, ROK, led Industrials, IYJ lower.

The charts of processed food manufacturers HAIN, STKL, BGS, CAG, MKC, SJM, CPB, SNFA, are seen topping out.

One Tuesday, Bonds, BND, traded lower as seen in this ongoing Yahoo Finance Chart of BOND, JNK,  BLV, LQD, as Major World Currencies, DBV, traded lower


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