Bernanke's Put, European PMI/Debts, Anna Hazare

Goldman Sachs has down graded the Growth prospect for US in Q3 and Q4. The head line news shall rumble as week is entered.

 Anna Hazare's Agitation now elapses a week. The Gritty man and his millions of agitators shall be entering into a crucial phase. The Indian government has barricaded itself with ' Standing Committee' and the Equity markets have been silent watcher or has yet react. It is expected that, Congress who has no political leadership, will find the situation intolerable. The deterioration of Anna's health or that of any other activist, may cause ' Ripples' and cause Infectious consequences. The Parliament is likely to Buzz, the mammoth human rally, across the Length and Breadth of the nation. The Government seems to have ignoring the issue and the costs may rise. The Uncertainty may chase the market and business sentiment. 

Recession Crusader 

Bernanke's Put and Jackson Hole : In the FOMC minutes, FED had immensely elaborated the its options and Mr Bernanke exercised, ' PUT '. The occasion shall be an ideal place to respond the 3 Wise man, who voted against the decision, in last Meet. 2) Mr. Bernanke is likely to Explain the Utility of the ' Declaration of Mid 2013' and may be explicit about the Intentions, of accommodative Policies. 

French- German finance Ministers, shall be meeting on the Tuesday to further shape up the Merkel-Sarkozy accord and its efficacy. European Bank and Its Stake holders appear to have been loosing ' patience' and insecure.


The Flash P.M.I. Survey's may add some ' Glucose' in the early part of the week, on Tuesday

US Data : Economic reports in the coming week include new-home sales Monday, durable goods Wednesday, and weekly jobless claims Thursday. A second reading on second quarter GDP is released Friday, as is consumer sentiment for August.


The end of month data may mixed and markets are likely to reach in oversold zone. 


Its anticipated that, the early part of the week shall remain Weak and Week end GDP nos shall be  a threat. 
Expecting a ' Squeeze Rally ' in between as relief rally.  


My Note : I remain preoccupied with world moving around and making me restless and uneasy. My animal sense is smelling a ' tragedy' in India. 

Stable Prospects For Oil And Gas Companies Reflect The Economy And High Oil Prices

Credit quality for the U.S. oil and gas sector is--and should remain--relatively stable for the remainder of 2011 and into 2012, in Standard & Poor's Ratings Services' view. The ongoing gradual improvement in GDP supports oil prices and could aid natural gas, which accounts for 30% of industrial energy demand, though excess supply will continue to set the direction of natural gas prices. Our 2011 and 2012 forecast for West Texas Intermediate (WTI) oil of $97.67 and $103.59 per barrel bodes well for exploration and production (E&P) companies with a focus on oil and oilfield services and drilling contract companies. Despite $100 oil, consumers have not cut back much on driving, which has benefited refineries' gasoline and diesel throughput and kept their utilization rates high.

We believe robust oil prices are sustainable throughout the remainder of the year and into 2012, which benefit any producer focused on oil and natural gas liquids. Healthy oil prices, favorable price hedges, and lease requirements that require drilling to hold acreage are helping oilfield and contract drilling companies achieve very strong ratios. We expect E&P companies to keep their capital expenditures high through 2012, thus helping oilfield service companies and drillers maintain healthy credit ratios and earnings.

Economic Outlook

Our latest base-case economic forecast still assumes a weak recovery in 2011 and 2012. Our base-case outlook for the oil and gas industry reflects that assumption and the following expectations: 

• Real GDP remains moderately positive, with the economy growing 2.4% in 2011 and 2.6% in 2012. However, we can expect to shave off several basis points from our 2.4% estimate for 2011 after the disappointing economic news on July 29. U.S. GDP rose at an annualized rate of just 1.3% in the second quarter, after a downwardly revised 0.4% (originally 1.9%) in the first;
• Oil prices remain at about $100 per barrel, but below levels that would affect how much people drive and therefore, refinery throughput and margins;
• Oilfield services and drilling activity stays robust;
• Healthy capacity utilizations and margins continue for most refiners; and
• Capital market conditions and interest rates remain favorable.

At Standard & Poor's, we publish monthly our economists' scenario of where we think the U.S. economy could be heading. Beyond projecting GDP and inflation, we also include outlooks for other major economic categories. We call this forecast our "baseline scenario," and we use it in all areas of our credit analyses.
However, we realize that financial market participants also want to know how we think the economy could worsen--or improve--from our baseline scenario. Any point-in-time forecast of the economy will be wrong; it is simply a question of how far wrong. As a result, we now project two additional scenarios, one upside and one downside. These scenarios are set approximately at one standard deviation from the base line (roughly the 20th and 80th percentiles of the distribution of possible outcomes). We use the downside case to estimate the credit effect of an economic outlook that is weaker than our expected case.

Industry Credit Outlook

E&P producers reap the benefits of high oil prices

Several factors continue to support lofty crude prices: steady growth in the global economy, the loss of approximately 1.6 million barrels per day (1.8% of total daily consumption) of Libyan production, political turmoil in other North African countries and the Middle East, temporary North Sea production outages of approximately 400,000 barrels per day, and uncertainties surrounding Saudi Arabia's ability to ramp up additional capacity. Yet supply-demand fundamentals alone don't explain oil prices. The rise has mirrored the declining value of the U.S. dollar, which we expect to remain weak. High prices have benefited E&P producers' cash flows and, as a result, the companies have sought to acquire acreage in the oil and natural gas liquid rich fields, such as the Eagle Ford Shale and Granite Wash.

In sharp contrast, natural gas prices are still weak. Over the past couple of years, the number of natural gas rigs has largely exhibited inelastic behavior to declining prices, and a balancing of supply and demand remains elusive. Production economics and cash costs have taken a back seat to the ongoing need to drill to satisfy held by production (HBP) leases, joint venture agreements, and because of favorable producer hedges. Moreover, a significant backlog of drilled, but not yet completed, wells will continue to put downward pressure on gas prices.

We believe only a decline in supply could trigger an improvement in natural gas prices. Specifically, natural gas prices could increase when:

• Existing favorable price hedges roll off;
• Forward strip prices remain consistently below $5 per million cubic feet, which we believe to be an uneconomic threshold for a meaningful amount of production;
• Drilling declines meaningfully, possibly sometime in the latter half of 2012, due in part to a reduction in drilling to maintain lease acreage (HBP), particularly in the Haynesville shale; and
• A meaningful number of the drilled, but uncompleted, natural gas wells are completed.

Barring a recession, the confluence of these factors could reestablish the relationship between gas prices and rig count and ultimately lead to a reduction in natural gas inventories, thus increasing prices.

Demand for oilfield services and contract drilling is robust

Higher oil prices also benefit service providers that support oil drilling and production. Moreover, based on preliminary data, E&P capital budgets should be moderately up in 2012, continuing healthy demand for oilfield equipment and services. Land-based drillers, in particular, are benefiting as the drilling boom in liquids-rich shale plays offsets what we believe will be a slow but steady decline in natural gas drilling. With natural gas trading at record discounts relative to oil, we expect drillers to continue shifting to oil or liquids-based drilling (natural gas currently represents approximately 45% of the total rig count).

Offshore drillers face mixed prospects, with nascent signs of increasing demand offset by the specter of newbuild rig deliveries. Although the pace and prospects for tenders remains materially better than in 2010, the impact of scheduled additions to offshore fleets over the next several quarters is a risk in our view. Based on scheduled deliveries, we expect that global jackup and floating rig fleets will increase by approximately 7% and 13%, respectively, by the end of 2012. While we believe the recent trends of increasing dayrates and utilization for jackup rigs will continue over the next couple of years, given E&P companies' spending projections and the moderate nature of planned fleet additions, mid to deepwater floating rigs will likely face greater challenges because of the number of new deliveries coming on line. We expect to see further bifurcation between the segments with newer, higher-specification floating units achieving strong utilization levels and older, lower specification units facing lower utilization and potential declines in dayrates. Permitting activity in the Gulf of Mexico remains slow since the Macondo disaster, and will likely continue slow into 2012. The timing of a sustained recovery in drilling in the Gulf is still uncertain.

Refining and marketing margins should remain solid

A surge in Equities? Like a rocket.. A Bear Squeeze...

                                                       The End Debt Theatrics :          

The Stock Markets have remained subdued, today with both Eyes and Ears towards the D.C.
Untied States, with a great Art of Drama and Political fluttering have sold its, debts to the world, Again.
The Drama of Debt Limit has brought the financial world at Knees, almost begging the government to raise the debt limit. Does US economy has strength, to return the Debts ?
Is it not the world will one day get bored with this Theatrics and Do, What Lenders does to its defaulter ?
Sure. The day will come.
And, Now very soon. When US Debt will have no Buyers.
The splurging King of the world has empty coffers.
The debt limit talk is Humbug Political drama, for collecting more Money, in the Name of USA.
US is already paying back its old Debts, with New Debts and Adding More Debts.


When this Drama ends on Wednesday evening and with end of month, Options market on wrong foot, 
Expect a Huge 'Squeeze'  on Upside.

The Central Bank Action is now on frozen and Quarterly Results are ' better than expected' sure to add, fill up for an Upside Trigger.


Please, Do Not Go short on US Market and Loose Money.

The Better strategy, if so ever, I am wrong will be to Jump the Gun, When the Shot is Fired...

Inter-National Data Summary: US, Europe, Asia-Pacific

U.S.

• Housing starts jumped 14.6% over May to an annualized 629,000 units in June, the highest level since January. Housing starts are up 16.7% over last June. The reading was much stronger than the consensus expectation of 575,000, though after May starts were downwardly revised to 549,000 (previously 560,000 units). Multifamily starts surged 31.8% over May to 170,000 units. Single-family starts were up 9.4% to 453,000 units. Building permits, a leading indicator for future construction activity, were up 2.5% to 624,000 in June.
• U.S. existing home sales fell for the third straight month by 0.8% month over month to an annualized 4.77 million units in June, weaker than consensus expectations of an increase to 4.9 million. The 7.0% month-over-month drop in condo/co-op sales to 530,000 units largely explains the overall decline. Single-family sales were flat for the month. Condo/co-op sales are down 18% year over year while single family home sales are down 7.4% year over year. The months' supply of unsold homes rose to 9.5 from 9.1 in May and is still above the six-month historic average. The sales price jumped to $184,300 from $169,300 in May and is up 0.8% over last June.
• The S&P/Experian consumer credit default rates decreased in June to 2.14% from 2.23% in May and 3.44% a year ago. All loan types saw declines.
• Industrial production edged up 0.2% month over month in June, which is the first rise seen in two months, offsetting the 0.1% decline in May (previous 0.1% gain). Auto production remained weak again, down 2.0% in June after dropping 1.5% the month before because of continued Japan-related weakness. Manufacturing capacity utilization remained at its May level of 74.4%, and it is still less than the 80-point benchmark rate.
• Consumer prices (CPI) fell by 0.2% month over month in June, which was a larger drop than the 0.1% decline that the consensus expected, after a 0.2% month-over-month increase was seen in May. Core CPI, excluding food and fuel, was up 0.3% over May, the same rate as in May, though stronger than the 0.2% increase that the consensus expected. On a year-over-year basis, overall CPI is up 3.7%. Core CPI is up 1.6% over last year and is still within the Fed's implicit 1% to 2% comfort zone. Energy prices fell 4.4% month over month but are up 20.1% over last June.
• The New York Fed Empire State index climbed four points to a disappointing negative 3.8 reading in July, partially offsetting the near 20-point drop to negative 7.8 in June, and still less than zero, indicating contraction, for a second time. New orders edged down to negative 5.6 after plummeting to less than zero (negative 3.6) in June. The employment index dropped again in July to 1.1 from its 14-point plunge to 10.2 the month before. The price readings also weakened.
• The initial jobless claims fell 22,000 to 405,000 in the week ended July 9 from an upwardly revised 427,000 the week before (was 418,000). Continuing claims climbed 15,000 to 3.727 million for the week ended July 2, though after the week before was upwardly revised to 3.712 million (previously 3.681 million).
• The U.S. Treasury budget deficit was $43.1 billion in June and narrower than the $68.4 billion deficit seen in June 2010 and the consensus expectation of $65.5 billion. Receipts edged down 0.6% over last June to $249.7 billion, Outlays fell 8.4% year over year to $292.7 billion. The deficit now stands at $970.5 billion for the first nine months of the fiscal year, narrower than the $1.004 trillion deficit for the same period in fiscal year 2010.
• Oil prices increased to $100 per barrel on (Thursday- midday) from $97.37 per barrel the previous week on rising speculation that debt problems on both sides of the Atlantic would be resolved soon and signs that crude stocks and Natural Gas are shrinking in U.S. The Energy Information Administration (EIA) inventory data showed a 3.7 million-barrel fall in crude stocks, which was larger than the 1.5 million-barrel drop that markets expected. Total product demand was up 1.6% year over year.
• U.S. bond yields edged down two basis points (bps) to 2.93% on Wednesday (midday), after a disappointing existing home sales report increased worries that the recovery is losing steam. Mortgage rates slipped marginally to 4.54%. Mortgage applications increased to 15.5% during the week ended July 15 following a drop of 5.1% the previous week. The refi index increased by 23.1% from a 6.2% drop the previous week. The purchase index decreased by 0.1% this week, following a decline of 2.6% the previous week.
• The dollar weakened against most trading partners this week as signs of progress on a U.S. budget deal prompted a rise in risk tolerance. The euro rose to $1.422/€ on Wednesday (midday) from $1.404/€. The yen rose to ¥78.77/$ from ¥79.31/$.
• LEI rose by 0.03% Month over Month ( see the separate post giving the Details, Dow trading @12735 and Nasdaq@ 2838, S&P 500 @1345   
• In The Anvil :
  •  S&P/Case-Shiller Home Price Index (July 26; negative 4.2). Consumer confidence (July 26; 57.0). New home sales (July 26; 0.31 million). Durable orders (July 27; 0.5). Beige Book for FOMC Meeting (July 27). Initial claims (July 28). Advance second-quarter GDP (July 29; 1.7%). Employment cost index (July 29; 0.6). Chicago ISM (July 29; 60.0). Consumer sentiment (July 29; 64.0).

                                                                            Europe :

• Italy's lower house of parliament approved a EUR48 billion austerity package on July 15, 2011, in record time to calm the increasing contagion fears spreading from the Greek debt crisis. The mix of spending cuts and tax measures is aimed at ensuring the government reaches its target of balancing the budget by 2014.
• The minutes of the July 6 - 7 meeting of the Bank of England's Monetary Policy Committee (MPC) revealed a more dovish tone, indicating that any rises in interest rates are being put off into the future.
• Germany's ZEW index of economic sentiment slipped for the fifth consecutive month to negative 15.1 in July, its lowest level since January 2009, from negative 9.0 in June. Europe's government debt crisis weighed on optimism despite the continuing strength of the German economy.
• Russian industrial production increased by 5.7% year over year in June. The manufacturing sector, which grew 7.1% year over year during the period, led the growth.
• The eurozone trade deficit declined to EUR0.6 billion from EUR2.5 billion in April. Exports grew 1.5% month over month in May, faster than April's rise of 0.2%. Meanwhile, import growth slowed to 0.2% from 0.8%.
• The eurozone inflation rate remained steady at 2.7% in June but continues to remain at more than the target that the European Central Bank set.
• European Data update is being done separately. Greece Talks are being viewed ... European Markets Closed +ve  cac 3816.25, Dax 7290.14  , FTSE: 5899.89
•  Flash PMI's from Markit tomorrow and 
  •  EMU industrial orders (July 22). Germany Ifo expectations (July 22). France production outlook (July 22). Italy retail sales (July 22). Germany retail sales (July 25). Germany consumer confidence (July 26). U.K. GDP (July 26). Hometrack house prices (July 26). Germany import price index (July 27). CPI (July 27). Switzerland leading indicator (July 27). U.K. total orders (July 27). Germany unemployment rate (July 28). EMU, U.K. consumer confidence (July 28). U.K. nationwide house prices (July 29). France consumer spending (July 29). PPI (July 29). Spain, EMU CPI (July 29). U.K. consumer credit (July 29). France, Germany, EMU PMI manufacturing (Aug. 1). EMU unemployment rate (Aug. 1). EMU PPI (Aug. 2). France, Germany, EMU PMI services (Aug. 3). EMU PMI composite (Aug. 3). Retail sales (Aug. 3).

                                                                  Japan And Other Asia-Pacific

• South Korea's central bank left its key interest rate unchanged at 3.25% in its policy meeting held on July 13 because of rising uncertainty on the global economic recovery, including the eurozone debt crisis.
• New Zealand's economy rose by 0.8% quarter over quarter in the March quarter, stronger than the 0.5% quarter-over-quarter growth in the last quarter of 2010 and consensus expectations of just 0.4% quarter over quarter, owing to the February Christchurch earthquake. The increase was the fastest quarterly expansion since the December 2009 quarter.
• Singapore's economy contracted 7.8% quarter over quarter in the second quarter, after a 27.2% jump in the first quarter. On a year-over-year basis, the pace of economic growth slowed to a mere 0.4% in the second quarter. The manufacturing sector, where output contracted by 5.5% year over year after a 16.4% year-over-year jump in the previous quarter, led the deceleration.
• New Zealand consumer prices (CPI) rose 1% during the second quarter, increasing year-over-year inflation to 5.3%. The reading was much stronger than the consensus forecast of an increase of just 0.7% quarter over quarter and 5.1% year over year.
• India's wholesale price index (WPI) rose by 9.4% year over year in June 2011, up from 9.06% in May.
• Coming releases:  Retail sales (July 27). Trade balance (July 27). CPI (July 28). Unemployment rate (July 28). Personal income (July 28). PCE (July 28). Industrial production (July 28). Shipments (July 28). PMI (July 28). Housing starts (July 29). Auto sales (Aug. 1). Trade balance (Aug. 4). Leading index (Aug. 5). Current account (Aug. 7). Consumer confidence (Aug. 9).