Hot Economic News Releases

Newly appointed head of the IMF, Christine Lagarde Nicolas Sarkozy will meet Saturday to prepare for the G20 summit in Cannes. Christine Lagarde REUTERS / Benoit Tessier (FRANCE – Tags: POLITICS)

Nicolas Sarkozy Saturday at noon will receive the Executive Director of the IMF Christine Lagarde to talk about it with "the preparation of the Cannes summit of the G20 and the situation in the euro area," the Elysee Palace said Friday.

The head of the French state will fly the next day to Berlin for talks with German Chancellor Angela Merkel poour attempt to speed up the rescue plan of the single currency.

Leaders from the eurozone continue intensive negotiations for a recapitalization of banks in the EU to address the risks of contagion from the debt crisis.

Germany has given the green light last week in the expansion of the European Financial Stability Fund (EFSF), which is waiting for the ratification of Slovakia.

Gross domestic product (GDP) grew by U.S. a little more than expected in the second quarter, helped by consumer spending and export growth than initially estimated, according to figures released Thursday by the Commerce Department.

The final figure for growth in the U.S. economy was revised upward for the second quarter, up 1.3% of gross domestic product.

So a return to the first estimate, which was revised down to 1.0% in late August.Analysts had expected a growth rate of GDP revised up to 1.2%.

Final sales increased 1.6% against 1.2% in the first estimate and consumer spending were revised to 0.4% to 0.7%.

The PCE price index rose 3.3% over the quarter (revised from 3.2%). Economists surveyed expected an indicator to 3.2%.

The index "core", followed closely by the Fed, rose 2.3%, its largest increase since the second quarter of 2008.The previous estimate was 2.2%.

The figures released also show an increase in corporate profits after tax of 4.3% in the second quarter, the largest increase of this statistic in a year. The increase was only 0.1% in the first quarter.

Political tensions in the United States and the impact of the debt crisis in Europe have eroded confidence and fears of a return of U.S. recession.

The cautious optimism of economists now expects a further contraction of GDP will be avoided.Production companies continue to grow because, although at a slower pace since the beginning of the recovery.

In detail, the revised figures show, in fact more of a slower growing economy as a future recession.

Export growth is better than initially estimated at 3.6% instead of 3.1%. That of imports, however, is lower at 1.4% against 1.9%.

The trade deficit is less, and trade has contributed to GDP by 0.24 percentage point.

The European Union will set up a system of tougher sanctions against countries that allow spinning deficits. View of the European Parliament.

The European Union will significantly tighten its budgetary discipline to learn from the debt crisis, following a vote Wednesday the European Parliament which provides for sanctions easier to take than in the past against states that allow spinning their deficits. This vote will allow the entry into force of a device to strengthen the European Stability Pact, discussed for nearly a year and already agreed by member states of the European Union.

In the future, financial sanctions will fall faster and easier, in the form of cash deposit in blocked accounts can be converted into fines against countries deemed to be lax. This mechanism is intended as the consideration for the implementation of the Financial Assistance Fund for countries in trouble in the euro area.Reform – called "6 Pack" because it's actually six pieces of legislation-was originally proposed by the European Commission to draw lessons from the debt crisis in Greece.

Reform had become necessary as the Stability Pact, as it was originally designed has proved largely ineffective as too little deterrent. Governments have spent their time in ten years around it. The reform will allow the Commission to seek remedies and even punish states that move away from deficit criteria (3% of GDP) and debt (60% of GDP) by claiming that the State would make the ignore the deposit of a sum equivalent to 0.2% of GDP. The six pieces of legislation received the support of conservatives and liberals.

The left has denounced reform too focused on rigor and not enough on the recovery.The reform "is good news for the EU", welcomed the President of the European Parliament Jerzy Buzek after the vote. "Reform is an austerity pact that is based on cuts and penalties. It leaves no flexibility to EU states for spending smart, targeted investments," he regretted the contrary, the socialist Stephen Hughes .

European officials plan to establish a flow of funds for a mutual fund (SPV, special purpose vehicle) that would issue bonds and buy the European sovereign debt, CNBC reported Monday, quoting a European financial responsibility.

The American chain adds that the fund would be created by the European Investment Bank (EIB) and the obligations could also serve as collateral for the European Central Bank (ECB).

"Our feeling is that the project to leverage the EFSF (European Financial Stability Fund) is well underway," said CNBC, adding that it was perhaps not the only project under discussion to address the crisis of debt sovereign in the euro area.

Wall Street has increased its earnings this announcement and the Dow and the S & P 500 ended in gains well in excess of 2%.

No one was immediately available to the EIB.

Another European official, who participates in discussions to find ways to resolve the crisis, found that information "bizarre".

"Frankly, what evokes the EIB is just weird, it's not at all what we are talking," said the official told Reuters.

"We are discussing with the EIB to increase its capacity but only for loans for projects," he added, referring to bonds to finance major infrastructure projects of the European Union.

Despite the criticism that accommodate its proposal, the new director of the IMF persists and signs in an interview with a German weekly. IMF Executive Director Christine Lagarde at a news conference in Washington July 6, 2011

Executive Director of the International Monetary Fund, Christine Lagarde, repeated in an interview published Monday in Germany criticized the application of a European bank recapitalization.

"We think in general it is necessary to recapitalize European banks so that they are strong enough to withstand the risks associated with the debt crisis and low growth," she told the weekly Der Spiegel.

"It is necessary to prevent contagion" problems, she said.

Ms. Lagarde was prompted indignant reactions in Europe already calling a few days ago to strengthen urgently the equity of European banks.

The boss of the IMF, when it was French Finance Minister has criticized Germany's dependence on exports and inadequate intake, also called Berlin in this interview to "stimulate domestic demand, it would be good for the German economy and neighboring countries. "

Lagarde finally claims that "the whole idea (behind the introduction of fiscal rules of thumb) is good," but felt that the inclusion in the constitution limits of public debt "must be understood as a signal to financial markets. "

Germany and France have called on countries in the euro area to adopt such rules of thumb, and Spain responded to the call, although this initiative has been criticized by the President of the European Union Herman Van Rompuy.

Wall Street ended the week up on a weekly, after four consecutive weeks of decline, enjoying a renewed hope born of the intervention of Ben Bernanke in Jackson Hole, Wyoming.

Equity markets were initially retreated after the speech of the President of the Federal Reserve, it has not announced specific measures to strengthen the U.S. economy.

But investors finally judging that the U.S. central bank left the door open for further support measures, the values ​​are rising again.

"He did not offer the market a signal from a 'EQ3', but has not ruled out either," said Kevin Caron, Stifel Nicolaus analyst in New Jersey, about a possible new round of quantitative easing.

The Dow Jones finished with a gain of 1.21% or 134.72 points to 11,284.54 while the S & P 500 closed up 1.51% or 17.53 points, to 1176, 80.

The Nasdaq was awarded for its 2.49% (60.22 points) to 2479.85.

For the week, the three indices gaining 4.3%, 4.7% and 5.9%.

The CBOE volatility index, known as "fear gauge", fell 10.2% after several days of uncertainty about the contents of the intervention of Ben Bernanke.

Technology stocks have had a particularly strong session.Cisco Systems gained 1.59% to 15.32 dollars, Microsoft has made 2.77% to 25.25 dollars, and Intel has awarded 1.8% to 19.77 dollars.

The sector index of information technology has gained 2.3%.

"The market is a broad rally, and as the technology has particularly suffered in the last sales phase, we see them now at the top of the rise," said Gary Wedbush, head of trading in the regional investment bank Wedbush Morgan in Los Angeles.

The jeweler Tiffany jumped 9.35% to 69.01 dollars after raising its full-year and good second quarter results.

Trading activity could be affected next week by Hurricane Irene along the East Coast of the United States.

The exchange operator NYSE Euronext said the New York Stock Exchange plans to open normally next week, but a final decision would be taken until Saturday or Sunday, because of the risk of flooding during Hurricane .

The leaders of the euro area defined by teleconference last week three main options to involve private creditors at the new rescue plan for Greece, according to a document prepared July 16 and that Reuters was able to obtain.

The first option would be based on a redemption of Greek debt and credit enhancement ("credit enhancement") to the private sector, but it would likely defect selective or comprehensive in the country.

The second, which could be based on a French rolling solutions (rollover) of the debt does not include credit enhancement and does not repurchase debt.

It would lead a selective default, the document warns.

The third, which would be less likely to trigger a selective default, provides for the taxation of the financial sector, and also offers lower rates and longer maturities on EFSF funds (European Fund for financial stability).

This solution does however cause Probal no default.

The Brazilian government withdrew its support for the controversial merger between a subsidiary of Carrefour in Brazil and distributor Grupo Pao de Acucar (GPA), casting serious doubt on the chances of success of the operation.

The project announced in late June and immediately triggered the wrath of Casino, the largest shareholder in GPA, was to be financed by a public institution, the Brazilian National Bank for Development (BNDES), a kind of Brazilian Caisse des Depots.

Apparently surprised by the vehement opposition of the Casino, who spoke of a project "expropriation" and the opinion of Brazilian President Rousseff has decided not to support the project, officials said a government source Brazil.

"The way the agreement was handled was disappointing (…) and the government decided to withdraw its support to the financing" of BNDES, said a senior official who requested anonymity.The government, he added, however, might reconsider their position if the terms were changed.

A spokesman for the government for its part, declined comment.

This policy reversal in Brazil, which occurs after an intense lobbying campaign conducted by the CEO of Casino, Jean-Charles Naouri, is a major setback for Carrefour.

LITTLE CHANCE OF SUCCESS

The project, which would create a heavy weight distribution in Brazil with a turnover exceeding 30 billion euros, would allow Carrefour to expand its presence in a country strategic growth, while after three profit warnings, the battle group to address its performance in France and Europe.

Asked Tuesday morning, Carrefour, which has conditioned its consent to the green light from the council of the BNDES, refused to comment on.

In the entourage of the group, there was, however, that the latest developments in Brazil did not constitute an official position of the BNDES.

"The project was presented to Carrefour through a set whose support of the Brazilian government and competition authorities (…) It is unclear how the parties could find an alternative arrangement that takes the blow," said an analyst who wished to remain anonymous.

The chances of success of the merger are now "on the order of 10%," he added.

At the Paris Bourse, Carrefour was the title down sharply in late morning, the image of the entire market, a decline of 3.3% to 21.80 euros, while limiting its back to Casino 1.7% to 62.27 euros.

While the case has taken a political turn in Brazil and the government support has weakened over the day, Abilio Diniz, the wealthy and influential businessman at the initiative of the project, provided in a press interview, he had an alternative financing in case of withdrawal of BNDES.

Strong growth, Brazil is a strategic market for the two French groups.Carrefour second market after France with 12.3% of total group sales, it accounts for about one third of 11.12 billion euros in sales of Casino International.

"Carrefour's management really expecting that the deal is done and that the expected synergies allow it to significantly improve profitability in Brazil," said RBS analyst Justin Scarborough.

The war for control of the distributor broke out June 28 with a scheme of merger between Carrefour and GPA, already partnered with Casino pursuing a long-standing strategy of conquest in Latin America.

Abilio Diniz and Casino to hold the parity holding company of GPA (Wilkes) and Casino has, pursuant to a shareholders' agreement signed ten years ago, an option to take control from June 2012.

Casino currently holds directly and indirectly, 43% of the capital and 67% of the voting rights of GPA, while qu'Abilio Diniz holds 21% and 33% respectively.

After two years of contacts, at the initiative of Abilio Diniz, discussions are set out in June with Carrefour before reaching the scheme of amalgamation of GPA and Carrefour Brazil.

According to several sources, the Brazilian businessman had long been eager to be associated with a capital of Casino, an option that would not have received the favor of Jean-Charles Naouri.

French industrial production rose 2.0% in May after two months of decline due mainly to the impact of the earthquake and tsunami in Japan, a rebound well above expectations reassuring when the confidence of heads of business declines.

Manufacturing output, which is to say, but including non-energy food, rose 1.5%, state statistics released Monday by INSEE.

Twenty economists surveyed by Reuters on average expected a 0.5% increase in industrial production, and their estimates ranged from -0.2% to 1.0%.

The decline in industrial production in April, initially amounted to 0.3%, was revised to -0.5% and the increase in manufacturing output to 0.1% against 0.2% last month announced .In March, industrial production fell by 0.8% as manufacturing.

This decrease was notably driven by disruptions in the supply chain of some sectors caused by the disaster of March 11 in Japan and their impact on nuclear power plant in Fukushima.

Disturbances that seem to gradually fade away: in the car, particularly affected, the production increased by 2.5% in May after falling 4.6% in March and 2.6% in April.

The detailed statistics in May also showed a rebound of 2.3% of the production of electrical, electronic and computer, and 1.4% in other industries, which include textiles and leather (1.3%) , chemicals (+0.3%) or plastics (+2.2%).

POSITIVE CONTRIBUTION TO THE 2ND QUARTER

Energy production has amplified this trend, increasing by 5.7% in May while she was down 4.3% in April, with rising temperatures.

French industry and follows the same trajectory as the German: the other side of the Rhine, the business sector grew by 1.2% in May after falling 0.8% in April, a bounce him also significantly greater than anticipated.

The Minister of Economy, Baroin, welcomed the figure of French industry, saying in a statement that it "testifies to the strength of economic recovery in France."He reiterated in the wake growth forecast of 2% of the government for all of 2011.

The improvement which has benefited the industry in May, however, could be short-lived if we are to believe the latest surveys of business leaders.

PMI purchasing managers in the industry has declined in June to return to its lowest level since August 2009 and the business climate indicator for the Bank of France declined by four points.

The contribution of industry to growth in the second quarter should still be positive.

"The carry-over of industrial production for the second quarter was 0.4% a quarter over quarter in May," said Frédérique Cerisier, economist at BNP Paribas in a research note."In manufacturing, the achievements reached 0.8% after 3.3% in the first quarter."

Parallel to the industrial sector, construction activity fell 1.0% in May after rising 1.3% the previous month. It was up 3.3% on the quarter compared to the previous three months.

The U.S. economy has created very few jobs in June and the unemployment rate has increased, showering the hopes of those who think see it confirmed the economic recovery of the United States.

Last month, 18,000 non-agricultural jobs were created, according to official statistics released Friday by the Labor Department. Economists on average had forecast 90,000 jobs created.

The labor market has experienced growth in June, the slowest since September 2010, when 29,000 jobs disappeared.

"This indicates that the sluggish economy continues.Revenue growth is marginal and there is no evidence so dynamic, "said Pierre Ellis, an analyst at Decision Economics in New York.

The news has a bitter taste for the markets after Thursday's hope born of good numbers of private sector employment and jobless.

These figures are from their publication had a significant impact on the markets, especially in the course of the euro.

Futures contracts on U.S. indices fell sharply, and over Treasuries rose.

A 9.2%, while analysts expected a rate unchanged from one month to the other 9.1%, unemployment reached its highest level since 9.4% in December 2010.

RUDE COUP FOR OBAMA

The Labor Department also revised down figures for April and May, which now show 44,000 fewer jobs created than originally announced.

The only private sector created 57,000 jobs in June, and contributes to the overall monthly increase since the public has in turn eliminated 39,000 jobs.

Economic activity in the first six months of the year was tempered by higher raw material prices and supply chain disruptions caused by the earthquake of March 11 in Japan.

These numbers are a harsh blow to the government of Barack Obama, who tries to revive the economy to reduce unemployment, which affects 14.1 million Americans.

Just to absorb new entrants into the labor market would require between 125,000 and 150,000 jobs created per month.

And it is difficult to expect the Federal Reserve to lend a cup since it was completed last week its second program of quantitative easing, which has passed through the purchase of $ 600 billion of bonds.

The working week fell to 34.3 hours on average, against 34.4 hours.Employers reluctant to work more in view of the uncertainty surrounding the recovery.

The average hourly wage fell by a penny, a sign that wage inflation is not a real problem.