China’s central bank said over the weekend it will lower the reserve requirement ratio (RRR) that banks must hold as reserves to 20.5 percent from 21 percent, effective Friday. This 50 basis points (bp) reduction will free up tens of billions of dollars for loans at a time when the growth rate is expected to drop from last quarter’s 8.9 percent to closer to 8 percent. This is the second rate cut in two months.
Chinese real construction companies, and global commodity stocks, especially base metals like copper and aluminium, should benefit from this move. Investors hoping for more lending in the real estate sector pushed up Chinese property shares and banks. Hong Kong-listed China Resources Land Ltd. rose 1 percent and China Overseas Land & Investment Ltd. added 1.3 percent. China Construction Bank Corp. added 1.1 percent.
World stock markets were also positive on hope that Greece will clinch the aid to avoid bankruptcy. Whether Greece can actually implement and deliver an auterity plan is not a consideration for now! Continue reading China reduces Reserve Requirement Ratio by 50bp→
History: The Dow Jones Industrial Average (DJIA) is the world’s most well-known stock market index, and it represents the global equity market mood and global economic conditions. It started on May 26, 1896 comprising 12 stocks. The Dow Jones Industrial Average was created by Dow Jones & Company co-founder and Wall Street Journal editor Charles Dow. The index was created to measure the performance of the industrial sector of the American stock market. Dow first created the Dow Jones Transportation Average & then after created the Dow Jones Industrial Average. The Dow Jones Industrial Average consists of 30 stocks. The price-weighted average of the 30 stocks determines the index value.
The index is currently a scaled average & not the actual average of the prices of its component stocks. To compensate for the effects of stock splits and other adjustments,—the sum of the component prices is divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, to generate the value of the index. Since the divisor is currently less than one, the value of the index is higher than the sum of the component prices. Continue reading Dow Jones Industrial Average (DJIA)→
Residential real estate prices in USA dropped more than forecast in the year ended October, showing a broad-based decline that indicates the U.S. housing market continues to be weighed down by foreclosures. The S&P/Case-Shiller index of property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September, the New York-based group said today. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease.
The real-estate market in USA is bracing for another wave of foreclosures that may keep pressure on home prices, indicating any housing recovery will take time to develop. Nonetheless, rising builder confidence, a pickup in construction and fewer unsold new properties for sale are among signs the industry that triggered the last recession is steadying.
“It’s a picture of a market that’s trying to get back to equilibrium,” Karl Case, co-creator of the index, said today in an interview on Bloomberg Radio. “Different things are happening in different markets. It’s very segmented. You’ve got these huge inventories that we’ve never really had before.” Continue reading USA Home Prices in 20 Cities Decrease More Than Forecast→
Residential real estate prices in USA dropped more than forecast in the year ended October, showing a broad-based decline that indicates the U.S. housing market continues to be weighed down by foreclosures. The S&P/Case-Shiller index of property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September, the New York-based group said today. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease.