European stocks retreat, Daimler, Lloyds Banking Group decline
Tuesday, 11 August 2009
LONDON, Aug. 10 (Bloomberg): European stocks fell after four straight weeks of gains left the Dow Jones Stoxx 600 Index valued at the most expensive relative to earnings in almost six years. Asian shares rose, while US index futures fluctuated.
Daimler AG, the world's second-biggest maker of luxury cars, dropped 4 per cent after Morgan Stanley recommended selling the shares. Lloyds Banking Group Plc decreased 4.7 per cent as the Times newspaper said the U.K. lender may seek to raise as much as 25 billion pounds ($41.7 billion) in a share sale.
The Stoxx 600 retreated 0.8 per cent to 228.94 as of 9:11 a.m. in London. The regional gauge has rallied 45 per cent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The measure is valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
"I don't think any economic recovery yet is written in stone," said Robert Prugue, head of Lazard Asset Management in Sydney, which oversees about $98 billion in assets. "Being a little bit too optimistic without being truly pragmatic about the conditions yet to uncover is perhaps bordering from irrational exuberance to irresponsible exuberance," he told Bloomberg Television.
The MSCI Asia Pacific Index climbed 1 per cent today as Japanese machinery orders increased, spurring speculation the world's second-largest economy is emerging from its recession.
Standard & Poor's 500 Index futures expiring in September dropped 0.1 per cent after four straight weeks of advances pushed the benchmark gauge for US equities above 1,000 for the first time since November.
The US economy may be on the cusp of a recovery and the impact of the nation's stimulus plan should increase this quarter, according to Laura Tyson, an adviser to President Barack Obama.
"We may have hit stability, we may be in the beginning of an upturn" based on the latest economic data, Tyson, a member of the White House's Economic Recovery Advisory Board, said yesterday during an interview in Kuala Lumpur. Nobel Prize- winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.
Still, options traders are increasing bets that the steepest rally in the S&P 500 since the 1930s won't survive September, historically the worst month for US equities. Traders are betting the VIX, a gauge of expected stock swings, will increase 13 per cent in the next five weeks, according to futures prices compiled by Bloomberg.
Mark Mobius said global stocks will drop as much as 30 per cent after advancing from multiyear lows and as companies increase share sales. The so-called correction "can happen anytime, probably this year," Mobius, the executive chairman of Templeton Asset Management Ltd., said in an interview in Kuala Lumpur today. He said he was referring to shares "globally."
Daimler AG, the world's second-biggest maker of luxury cars, dropped 4 per cent after Morgan Stanley recommended selling the shares. Lloyds Banking Group Plc decreased 4.7 per cent as the Times newspaper said the U.K. lender may seek to raise as much as 25 billion pounds ($41.7 billion) in a share sale.
The Stoxx 600 retreated 0.8 per cent to 228.94 as of 9:11 a.m. in London. The regional gauge has rallied 45 per cent since March 9 as companies from GlaxoSmithKline Plc to Goldman Sachs Group Inc. reported better-than-estimated earnings. The measure is valued at 40.1 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.
"I don't think any economic recovery yet is written in stone," said Robert Prugue, head of Lazard Asset Management in Sydney, which oversees about $98 billion in assets. "Being a little bit too optimistic without being truly pragmatic about the conditions yet to uncover is perhaps bordering from irrational exuberance to irresponsible exuberance," he told Bloomberg Television.
The MSCI Asia Pacific Index climbed 1 per cent today as Japanese machinery orders increased, spurring speculation the world's second-largest economy is emerging from its recession.
Standard & Poor's 500 Index futures expiring in September dropped 0.1 per cent after four straight weeks of advances pushed the benchmark gauge for US equities above 1,000 for the first time since November.
The US economy may be on the cusp of a recovery and the impact of the nation's stimulus plan should increase this quarter, according to Laura Tyson, an adviser to President Barack Obama.
"We may have hit stability, we may be in the beginning of an upturn" based on the latest economic data, Tyson, a member of the White House's Economic Recovery Advisory Board, said yesterday during an interview in Kuala Lumpur. Nobel Prize- winning economist Paul Krugman said the deepest slump since the Great Depression may be ending.
Still, options traders are increasing bets that the steepest rally in the S&P 500 since the 1930s won't survive September, historically the worst month for US equities. Traders are betting the VIX, a gauge of expected stock swings, will increase 13 per cent in the next five weeks, according to futures prices compiled by Bloomberg.
Mark Mobius said global stocks will drop as much as 30 per cent after advancing from multiyear lows and as companies increase share sales. The so-called correction "can happen anytime, probably this year," Mobius, the executive chairman of Templeton Asset Management Ltd., said in an interview in Kuala Lumpur today. He said he was referring to shares "globally."