The U.S. stock market offers attractive investment opportunities
Conrad Herrmann, senior vice president, managing director of U.S. growth, and co-fund manager Franklin U.S. Opportunities Fund estimates that the U.S. equity market is gradually improving and displays attractive investment opportunities. He said the U.S. economic data continues to improve and more resilient than expected, whether the growth in Gross Domestic Product revised upwards, ISM indices (non-industrial and industrial) showing solid growth , or the fall in unemployment. The rise in consumer confidence and business also explains this situation.
The team of Franklin U.S. Opportunities Fund, based in San Mateo, California, finds investment opportunities in solid companies, generating cash and long-term growth in the technology sector. These securities include not only Apple but also companies that specialize in data storage, network security and cloud computing. The consumer sector also posted strong growth with companies such as Mastercard that has strong growth potential.
According to Conrad Herrmann: "many U.S. companies have emerged from the crisis stronger and better positioned to compete globally. The level of liquidity in the balance sheet is the highest, over 12% of total assets, a level much more than in 2007. In terms of growth, having a strong balance sheet is a big advantage, since it allows easier access to capital markets and make strategic acquisitions. "
From a macroeconomic perspective, the management team believes that the U.S. housing market has bottomed and should begin to improve in the coming years. "The housing market is critical to the overall growth of the economy since the rotation of housing is linked to many parts of the economy, from construction jobs to the sale of durable goods. " Moreover, Conrad Herrmann believes that Americans are starting to spend more, while continuing to improve their financial situation, with higher savings rates and lower debt levels since the crisis.
"The combination of historically low interest rates and improving the employment situation has helped American consumers increase their savings rate. Inflation also remains low. U.S. consumers are in a better financial situation than they were in 2007 and the confidence of business leaders, consumers and investors increases, which will support the market performance of U.S. equities. "
"As volatility continues, the long-term improvements in the economy should enable a sustainable recovery, which will support further growth of the stock market. U.S. Equity valuations are historically low levels and we believe reflect primarily global risk but very little potential for improvement. We will continue to maintain a diversified portfolio by investing in leading companies across all sectors and market capitalization, finding the best opportunities in quality companies and high growth, especially in mid and large caps that are in their early growth phase, while avoiding the "mega caps to lower growth."
Exchange: rebound shy to mid-session
Stock markets in North America continue their rebound shy Thursday in mid-session, despite the slowdown in exports to China in April and low employment growth that is emerging in the United States.
The markets were mostly down since the beginning of the week.
Around 11:40, Toronto is 0.6%, while New York 0.45%, with the exception of Nasdaq, which has stalled.
The Canadian dollar ekes out a living on the top and bottom of parity with the U.S. dollar. The dollar fell below parity since Tuesday.
In the U.S., initial claims for unemployment insurance fell slightly, to 367,000, against 368,000 the previous week.
Also, the U.S. trade deficit widened by 14.1% in March to U.S. $ 51.8 billion.
China's export growth slowed with a sharp blow in April, with growth of 4.9%. Economists expected an export growth of 8.9%.
Bombardier reported a decline in profits and revenues, particularly because a slowdown in deliveries of commercial aircraft. Net income was U.S. $ 190 million, against U.S. $ 220 million a year ago. The action stumbles of 1.65%, to $ 3.63 in Toronto, while the company holds its annual shareholders meeting.
Cascades upslope and returns to the green, with a net profit of $ 6 million in the first quarter. The title adds 3.3%, or 14 cents, to $ 4.37 in Toronto.
Canadian Tire has seen its net profit jump 21% over the first quarter, which moves the action of 6%, or $ 4.03, to $ 71.45. This is the highest since a year for Canadian Tire.
Dollarama his side recorded a historic high at $ 57.34, up 34 cents, or 0.6%.
Here's the current situation in Toronto and New York to 11:40:
- The S & P / TSX gained 69 points, or 0.6%, to 11,744 points;
- The S & P 500 ahead by 6 points, or 0.45%, to 1361 points;
- The Dow Jones is 55 points, or 0.45%, to 12,891 points;
- The Nasdaq added 2 points, or 0.05%, to 2936 points;
- A barrel of oil rises by U.S. $ 0.31, or 0.3%, to $ 97.12 U.S.;
- The ounce of gold rises to $ 0.80, or 0.05%, a $ 595.20 U.S.;
- The Canadian dollar is 0.13 U.S. cents, or 0.15%, to 99.88 cents U.S..
Stock markets in areas of importance, the U.S. indices set the tone
All major global stock indexes work areas of importance now, and traders closely monitor the reaction course in future sessions to anticipate the direction of the course for the rest of the month and the beginning of the summer.
The U.S. employment shower stock markets
The CAC 40 dipped 1.90% to 3161.97 points after a sharp decline in hiring in the United States that feeds the fears of relapse of the global economy.
Equity markets experienced a sharp decline in new session. The CAC 40 dipped 1.90% at 3161.97 points. And throughout this week shortened, with the May 1, he loses 3.08%.
The other major stock markets follow the same trend, as affected by the Paris monthly figures of employment in the United States. London has dropped 1.93% 1.99% today and Frankfurt.
In New York, the market also accused the coup. Sitting in the Dow dropped 0.90% and the Nasdaq 1.64%. Very expected, the employment figures in the U.S. markets were disappointed. Job creation has slowed for the third consecutive month in April in the United States. For Alexander Baradez, analyst at Saxo Bank, "the balance of hiring down 25% compared to March reflected a sharp deterioration of the situation on the U.S. labor market and fueling doubts about the strength of the recovery in United States. "
At the same time, euro area, spend one to one flashing red. Activity in the private sector shrank more than expected in April, according to a second estimate of the PMI, which makes fear a recession may be more sustainable than expected. "The sudden deterioration of the situation of Spain recalled earlier this week how much eurozone remains fragile and challenges in the eyes of many observers sustainability strategies austerity implementation across Europe" the analyst believes Saxo Bank. Moreover, the European Central Bank (ECB) disappointed markets last night. While expressing confidence about the prospects for the euro area, the president of the institution, Mario Draghi, has ruled out any new exceptional measure in support of the euro area economy.
The cyclic attacked
Technology stocks and industry, particularly sensitive to economic conditions are again the most affected. Renault has plunged by 4.76% yesterday, the fastest low CAC 40, Technip fell 4.58%, 4.32% of Peugeot and STMicroelectronics of 4.46%. Legrand has announced a turnover superior to expectation, however, has advanced 2.54%, while France Telecom (1.17%) who announced the day before a profit deemed of good quality continued its forward march.
The Paris stock exchange starts decreasing, before stocks in the USA (-0.40%)
The Paris stock exchange was changing down Friday in early trade (-0.40%), the publication of some good results for French companies were not sufficient to offset the caution rule before the U.S. employment figures expected in the the afternoon.
At 9:22 (7:22 GMT), the CAC 40 index lost 12.79 points to 3210.57 points. The day before he had finished almost unchanged (-0.09%).
Placed on the wrong track by the fall of Wall Street yesterday, the Paris market was preparing for one of the most watched indicators each month, namely the unemployment figures and employment in April for the United States whose Publication is expected at 14:30.
"The employment numbers remain the key indicator of the week mixed against statistics in the United States", say the economists Aurel BGC.
"More than ever, the United States need many new jobs to feed the consumption of households and allow a return of confidence", especially after mixed indicators, they said.
Moreover, the markets expect the indicators in the euro zone, with PMI for April in services and retail trade for March, before the Sunday elections in France and Greece.
"The parliamentary elections in Greece is a major challenge for the entire euro area," strategists warn of Credit Mutuel-CIC, warning of danger "if they win and the extreme challenge to the funding program ".
For now, the Paris market was mainly digested a wave of corporate earnings.
BNP Paribas lost 1.12% to 28.77 euros despite a net profit up 9.6% and better than expected.
If Credit Agricole took 0.46% to 3.68 euros, Societe Generale lost 0.38% to 17.20 euros, banking stocks are still vulnerable by the situation in the eurozone.
Other publications were well received, like Lafarge (4.12% to 31.21 euros) which improved operational performance, although this trend is masked by the cost of restructuring companies.
Saint-Gobain gained 1.62% to 32.39 euros, with an increase of its turnover in the first quarter.
Veolia Environnement took 3.93% to 10.84 euros. The group announced a turnover in the first quarter up 4.6% and confirmed the objectives of its strategic plan.
Legrand (2.95% to 26.33 euros) took advantage of sales growth in the first quarter and Alstom (+0.84% at 27.68 euros) was supported by the publication of ambitious goals for the next three years
Air France-KLM lost 0.23% to 3.50 euros after posting a net loss of 368 million euros in the first quarter, stable year on year.
The publication of Steria (3.90% to 15.32 euros) was well received in contrast to that of CAM (-3.48% to 33.19 euros).
Edenred (-2.92% to 23.41 euros) Lowering of suffering from a recommendation to "sell" against "neutral" before by UBS.
Finally, let go EDF 0.31% to 16.26 euros while the group has obtained approval from the Italian stock policeman, Consob, to an improved offer to minority shareholders of Edison.
Interest rates in North America not ready to move
Slowness, indolence and apathy: that the economic program for the next 12 months in North America, according to Benjamin Tal, deputy chief economist of CIBC World Markets.
"The Canadian economy is growing slowly, but the composition of growth changed. It is further fueled by business investment, which offset the lower contribution of consumers and government. In this context, it is difficult to imagine in 2012 and 2013 that growth will continue beyond 2% for a sustained period of time, Benjamin Tal analysis.
"The most important issue for Canada will be the negative impact of U.S. tax policy. The role of the U.S. government in the economy of the United States is declining, and will require that consumers and businesses
start spending more to offset this decline. If the government spends more, it is necessary that the private sector to take control of the economy. Must increase business investment and consumers are waking up. "
Higher rates by the Bank of Canada is very unlikely any time soon, according to economist. "The Bank of Canada has suggested that it would increase interest rates later this year. This shows some optimism about the pace of our growth, but will think twice before raising interest rates, and even if it does, this increase will not really be substantial, because the Fed is not ready to raise rates in the U.S. and Canada can not get away too. "
"Anyway, with the Canadian government that spends less and the consumer credit which is experiencing its slowest growth since 1992, we have not enough growth drivers in the country to support any increase in interest rates before long time, "says Benjamin Tal.
Mortgage rates down
This is good news for those looking for property and need a mortgage to finance their property purchase.
According to the credit broker Empruntis.com, fixed rates (excluding insurance) mortgage loans have declined in recent weeks to an average 3.85% over 15 years in March, against 4% in February, and 4.10% over 20 years in March against 4.25% in February.
Interest rates for some purchasers, are broken below the 4%. The best profiles as banks benefit from very attractive rates: "The minimum rates are also down sharply, indicating that banks in this period of conquest spring habitat, are ready to great lengths to attract the best customers, "said Mael Bernier, spokesman online broker.
Disparities between borrowers continue by region: there borrows at different depending on whether one lives in Paris, Nantes, Lyon, Lille and Marseille. In the West, borrowers will receive credit rates the lowest, with a fixed rate without insurance averaged 3.75% over 15 years and 4% over 20 years. In contrast, the Ile de France remains the most expensive region, where banks offer fixed rates to 3.95% without insurance over 15 years and 4.20% over 20 years on average. "The good news is that beyond the scalesshown, we get a lot easier for additional discounts from the beginning of 2012, Berniersaid Mael. However, we can only advise not too soon because the future beyond the May 6 remains uncertain and any prediction one way or another today is risky. "
Explosion of brokering real estate loans where the regulation is in place
In all European countries where development has been a regulation of the credit brokerage market share of players has exploded.
Intermediaries in French Bank Operations and Payment Services (IOB) French do not escape this trend.
The provisions of the Financial Security Act of 2003 were completed in 2012 by decrees and orders setting multiple obligations: registration in single ORIAS, respect for rules of good behavior, provision of pre-contractual information, the need a minimum of 150 hours training.
These laws and regulations for consumer protection are controlled by the Prudential Regulatory Authority (ACP).
The second edition of the Deloitte study "bank-customer relationship" only 33% of French trust the banking system. In terms of home loans to consumers were not misled and plébiscitent the relevance of credit brokerage which saves up to 40 basis points compared to a range of banking.
The market for banking intermediation is changing and growing. On the ground economic reality is consistent with the evolution of the distribution of housing loans to households. Thus 40% of first time buyer consulted an intermediary!
Mortgage: a production – 30% in 2012
After a less gloomy prognosis for the - 20% of the French property market, the famous credit rating agency Standard & Poor's considers this time a drop of -20% to -30% of the production of mortgages compared to 2011 (which was a very good year).
The growth in outstanding credit slow "to about 3.5%" in 2012 - half in 2011 - before stabilizing next year. This setback was due to a reduction in credit supply, but especially to a contraction in demand.
The result of this year's black? Higher bank charges, and criteria for granting housing loans increased. Such as reducing the duration of loans, limited to 20 years. But banks will not close the valve provided as loans. The decline in loans granted thus come more upstream of the fall in demand.
With shots plane on property taxes and grants for home, the borrowing capacity of households coupled with high real estate prices would still leave room for a wait of rigor.
S & P also provides that the fixed rate mortgage loans are expected to grow "from 50 to 100 basis points."
Disappointing statistics on the waterfront real estate
Statistics from the U.S. housing market and succeed are not really encouraging ... The U.S. Commerce Department announced Tuesday that a slowdown in housing starts last month.
They settled on a rate of only 0.65 million units, against 0.7 million and 0.69 million consensus a month before. However, building permits have exceeded expectations by cons, at a rate of 0,750,000, against 0,710,000 of consensus among the economists and 0,720,000 in February.
Yesterday, the National Association of Home Builders also released a poor indicator reflecting the situation of the real estate market for April 2012 ... He declined to 25, against 28 and 28 consensus announced a month earlier. Last month, the indicator of future U.S. housing market had hit its highest since June 2007.