Copper and crude oil prices fell sharply in the morning trading in New York. Canada lowered its rate for the second time this year and indicated that the economy may just avoid a recession. Exports from Germany and China are weak and China recorded its weakest quarterly economic growth rate.
11:10AM New York – Weak world economic outlook drag copper and oil prices lower. U.S. stocks struggle in the morning on mixed earnings.
In the early morning trading earnings dominated trading sentiment. Commodities and crude oil prices fell. Markets in Asia closed higher and in Europe gained on the optimistic outlook for the second stimulus package in the U.S.
Base metal and crude oil prices fell sharply on weaker global economic outlook. Economic growth rate in China has steadily declined this year from 10.6% in the first quarter to 10.2% in the second quarter and 9% in the third quarter. Export from Germany and Canada are likely to fall in the current quarter.
Copper fell dropped below $2.00 a pound level before trading above the critical mark as crude oil prices fell near $72 a barrel.
American Express (AXP: chart) surged $1.32 to $reported 24% decline in earnings, lower than expected fall.
Coach Inc, (COH: chart) rose 14% to $21.16 after the maker of leather goods reported first fiscal quarter profit decline of 5.8% and indicated second quarter profit of 77 cents and for the full year net income of $2.25 a share.
Caterpillar Inc, (CAT: chart) dropped 3% after the earth moving machinery maker reported third quarter profit decline of 6.4% to $868 million or $1.39 a share from $927 million or $1.40 a share. Sales in the quarter rose 13% to $13 billion.
The Bank of Canada lowered its key lending rate by 25 basis points to 2.25% for overnight lending. Weak global economic environment and falling prices of crude oil and commodities dragged has clouded the outlook for Canada.
The central bank also lowered its economic growth outlook to 0.6% in this year from 1% and for the next year to 0.6% from 2.3% estimate in July.
The second decline in interest rate in the month after the bank lowered its overnight rate by 50 basis points on October 8 as global economies slow down, credit conditions tighten and commodities prices have fallen sharply.
The central bank has lowered interest rate by 225 basis points since December of last year.
Asian Markets Review
The Nikkei 225 Index in Tokyo closed higher 300.66 or 3.34% to 9,306.25, Hang Seng index in Hong Kong decreased 281.84 or 1.84% closed to 15,041.17. CSI 300 index in China lower 15.33 or 0.81% closed to 1,881.41. ASX 200 index in Australia increased 160.20 or 3.87% to close 4,302.50. The KL Composite index in Malaysia higher 8.65 or 0.95% closed to 918.16.
The Kospi Index in South Korea decreased 11.53 or 0.95% to close at 1,196.10. SET index in Thailand closed higher 1.84 or 0.39% to 478.79, and JSE Index in Indonesia increased 13.21 or 0.93% to 1,440.15. The Sensex index in India increased 460.30 or 4.50% closed to 10,683.39.
Europe Markets Review
In London FTSE 100 Index traded higher 41.30 or 0.96% to 4,323.97, in Paris CAC 40 Index increased 80.48 or 2.33% to 3,528.99 and in Frankfurt DAX index traded higher 25.17 or 0.52% to 4,860.18. In Zurich trading SMI increased 5.76 or 0.09% to 6,222.22.
