PRESS DIGEST - Wall Street Journal - May 26
May 26 The following are the top stories in the Wall Street Journal. Reuters has not verified these stories and does not vouch for their accuracy.
* Euro falls vs dollar * Copper, aluminium fundamentals weak * Coming Up: U.S. weekly jobless claims ; 1330 GMT By Silvia Antonioli LONDON, Dec 13 Copper fell on Thursday on worries about a lack of progress in talks to avert the "fiscal cliff" in the United States and after the Federal Reserve tied its monetary policy to unemployment, raising concerns over limits to its economic stimulus. Benchmark copper on the London Metal Exchange fell almost 1 percent to $8,073 a tonne by 1029 GMT, from a last bid of $8,130 at the close on Wednesday. Sharp differences remained between congressional Republicans and the White House in negotiations to avoid the "fiscal cliff" of steep tax hikes and budget cuts. A failure to strike a deal could send the world's second-largest economy back into recession, with negative implications for metals demand. Some investors were also worried by the Fed's decision to link its monetary stimulus to unemployment and inflation numbers, which could limit the length of its intervention. The Fed said it plans to buy $45 billion in longer-term Treasuries each month on top of its $40 billion monthly purchase of mortgage-backed securities as expected, but set unemployment and inflation thresholds for its exit strategy. "The Fed has given some conditions and this has scared the market a bit. But in my opinion the losses in metals have more to do with uncertainty on the fiscal front than with disappointment on monetary easing," T-commodity consultant Gianclaudio Torlizzi said. "After the gains in metal recently some investors are also closing their positions and taking profit, worried that if a fiscal agreement is not found, higher taxes could hit capital gains, too." Copper prices have risen more than seven percent in the last month and the metal is now up by more than six percent on the year. Putting pressure on base metals, the euro fell to a session low against the dollar, with traders reporting euro selling by long-term investors on top of earlier selling by an Asian central bank. A stronger U.S. dollar against the euro makes dollar-priced commodities such as base metals costlier for holders of the euro. In industry news, Aurubis, Europe's biggest copper smelter, posted earnings before taxes (EBT) of 516 million euros in its full 2011/12 fiscal year ending Sept. 30, up from 497 million euros in the previous year. WEAK FUNDAMENTALS Barclays suggested shorting base metals should the rally seen in the last month continue, as fundamentals remain weak especially for aluminium and copper. "Aluminium fundamentals are the weakest for any base metal at present, but price volatility tends to be quite low. Instead, we recommend shorting copper if cash prices rise much above $8,500," it said in a research note. "A large stock overhang in China means its import demand will likely be sharply down on year-ago levels, and following the recent abolition of export taxes on tolled copper, there could be a steady stream of exports early next year, which could turn market sentiment very negative." Aluminium was at $2,124 from $2,138 and battery material lead was at $2,299.75 from $2,322 . Zinc, used to galvanise steel was at $2,075.25 from $2,095 Wednesday's close while tin was at $22,990 from a last bid of $23,135. Stainless steel material nickel was at $17,569 from $17,700. Metal Prices at 1034 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 366.85 -3.80 -1.03 344.75 6.41 LME Alum 2123.50 -14.50 -0.68 2020.00 5.12 LME Cu 8070.00 -33.00 -0.41 7600.00 6.18 LME Lead 2299.25 -22.75 -0.98 2034.00 13.04 LME Nickel 17570.00 -130.00 -0.73 18650.00 -5.79 LME Tin 22950.00 -20.00 -0.09 19200.00 19.53 LME Zinc 2074.75 -20.25 -0.97 1845.00 12.45 SHFE Alu 15320.00 35.00 +0.23 15845.00 -3.31 SHFE Cu* 57570.00 -330.00 -0.57 55360.00 3.99 SHFE Zin 15355.00 -90.00 -0.58 14795.00 3.79 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Adds details on mutual funds and ETFs, analyst quote, table, byline) By Trevor Hunnicutt NEW YORK, May 25 U.S. fund investors offered a skeptical perspective on sky-high equity prices, yanking cash from U.S.-based stock funds for the fourth straight week, Lipper data showed on Thursday. The funds recorded $10.1 billion in withdrawals during the week that ended May 24, the second-largest outflows of the year, offering little support to an equity market that has nonethele
NEW YORK, May 25 A San Francisco investment fund manager pleaded guilty on Thursday to conspiring to defraud investors by fabricating an impressive investing track record, New York federal prosecutors announced.