Mortgage Insurance

Crude Oil Settles At 3-Month High As Inventories Decline

(RTTNews) - U.S. crude oil settled at a three-month high Wednesday, after a weekly report from the Energy Information Administration showed U.S. crude stockpiles to have declined last week.
Oil prices were also supported by some mixed macroeconomic data from the U.S., notwithstanding a strong dollar.

The U.S. Energy Information Administration in its weekly crude oil report said U.S. commercial crude oil inventories decreased 3.70 million barrels to 366.20 million barrels last week, but above the upper limit of average range for this time of year.
The week before, crude oil inventories decreased by a similar 3.70 million barrels to 369.90 million barrels. Total motor gasoline inventories dropped 2.40 million barrels last week and in the lower half of the average range.

Light Sweet Crude Oil futures for September delivery gained $0.90 or 1 percent to close at $94.33 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices scaled a high of $94.90 a barrel intraday and a low of $92.68.

Yesterday, oil settled higher as investor sentiment improved on some encouraging economic data out of Europe and the U.S., despite being under pressure from a strong dollar.

The euro traded lower against the dollar at $1.2283 on Wednesday, as compared to $1.2322 late Tuesday in North America.
The euro scaled a high of $1.2343 intraday and a low of $1.2264.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.69 on Wednesday, up from from 82.55 in North American trade late Tuesday.
The dollar scaled a high of 82.78 intraday and a low of 82.46.

In economic news, U.S. consumer prices unexpectedly came in unchanged for July, with continued drop in energy prices offset by higher prices for food, shelter and medical care, a Labor Department report showed Wednesday.
The consumer price index for July indicated prices were unchanged for a second consecutive month. Economists expected prices to edge up by about 0.2 percent.

Industrial production in the U.S. rose by slightly more than anticipated in the month of July by 0.6 percent compared to economists' estimates of around 0.5 percent increase, data from the Federal Reserve said Wednesday.
The rise was attributed to increased output in the manufacturing, mining, and utilities sectors.

Conditions for New York manufacturers have unexpectedly deteriorated in August, a report by the Federal Reserve Bank of New York indicated Wednesday.
The New York Fed's general business conditions index dropped to a negative 5.9 in August from a positive 7.4 in July, with a negative reading indicating contraction in regional manufacturing activity.
Economists expected the index to decrease to 7.0. The index of regional manufacturing activity turning negative for the first time in ten months.

(RTTNews) - Homebuilder confidence in the U.S. has unexpectedly continued to improve in August, the National Association of Home Builders report showed on Wednesday, with the confidence index reaching a new five-year high.

The NAHB/Wells Fargo Housing Market Index climbed to 37 in August from 35 in July. Economists expected the index to come in unchanged compared to the previous month. In the U.K., Bank of England policymakers unanimously decided to retain quantitative easing at GBP 375 billion and the interest rate unchanged at 0.50 percent, the minutes of the meeting held on August 1 and 2 showed today.

Data from the Office for National Statistics revealed the number of Britons claiming jobless benefits unexpectedly declined in July.
The claims declined by 5,900 monthly to 1.59 million in July.
Economists expected jobless claims to climb by 6,000. The measure was higher by 35,600 person from a year ago.

Oil prices drop after FOMC and ECB disappoint

 Thursday, August 02, 2012
Oil prices drops today after the results of this week’s policy meetings of the Federal Reserve and the European Central Bank (ECB) failed to meet expectations.
The Federal Reserve refrained from more bond buying and pledging to keep interest rates low beyond 2014, while the ECB left its interest rates unchanged.
However, Fed chairman Ben Bernanke indicated that the central bank could provide additional accommodation if necessary and ECB president Mario Draghi said action would be taken to address what he said was severe malfunctioning of Europe’s debt markets.
Today’s US data provided little support to crude oil futures and other riskier assets.
Initial claims for unemployment benefits rose 8,000 to 365,000 last week, a report from the Department of Labor showed this afternoon, while the Commerce Department said orders for factory goods declined 0.5 percent in June.
Analysts polled by Reuters expected to see a 0.5 percent increase in US factory orders.
Traders are now looking to Friday's key non-farm payrolls data for July.
In the meantime, yesterday’s inventories data was bullish for crude prices with the Department of Energy reporting a massive drawdown of 6.5 million barrels for the week to July 27, while expectations were for a decline of 1.1 million barrels.
On Tuesday, the American Petroleum Institute (API) said America’s crude stocks dropped 11.6 million barrels last week.
US light, sweet crude for September delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), dropped US$1.12 to US$87.79/barrel this afternoon.
September Brent crude fell 18 cents to US$105.78/barrel on the ICE Exchange.
Today’s top risers in the oil and gas sector were:
Argos Resources (LON:ARG), up 9 percent at 16.4 pence at midday
Rockhopper Exploration (LON:RKH), up 6.5 percent at 193.3 pence
Gulf Keystone Petroleum (LON:GKP), up 4.5 percent at 196.75 pence
Borders & Southern Petroleum (LON:BOR), up 3.5 percent at 17.4 pence
Gulfsands Petroleum (LON:GPX), up 3 percent at 113.5 pence
Volga Gas (LON:VGAS), up 2.5 percent at 84 pence
The top fallers were:
Ophir Energy (LON:OPHR), down 10 percent at 523.95 pence at midday
Oilex (LON:OEX), down 5 percent at 5 pence
Lochard Energy (LOPN:LHD), down 4.5 percent at 17.75 pence
Regal Petroleum (LON:RPT), down 4 percent at 13.74 pence

Crude oil prices

Difference between Money Markets and Capital Markets

The Money markets are used for the raising of short term finance, sometimes for loans that are expected to be paid back as early as overnight. Whereas the Capital markets are used for the raising of long term finance, such as the purchase of shares, or for loans that are not expected to be fully paid back for at least a year.
Funds borrowed from the money markets are typically used for general operating expenses, to cover brief periods of illiquidity.
For example a company may have inbound payments from customers that have not yet cleared, but may wish to immediately pay out cash for its payroll.
When a company borrows from the primary capital markets, often the purpose is to invest in additional physical capital goods, which will be used to help increase its income.
It can take many months or years before the investment generate sufficient return to pay back its cost, and hence the finance is long term.
Together, money markets and capital markets form the financial markets as the term is narrowly understood.

Capital Market Trends

Capital market trends can be sub-divided into primary, secondary (short-term), and secular (long-term) trends.
Technical analysis assumes the fact that movements of market prices follow a particular trend.
A they are periods when buyers consistently outnumber sellers; in other words, the bulls outnumber bears.

Classification of Capital Market Trends:
Primary Trends:
They include bull markets and bear markets.
The bull market is a situation where investors buy in order to increase capital gains in the future.
In a bear market, on the other hand, the investors anticipate losses and therefore they are obliged to sell.
Price fluctuation is an important tendency of an open market.
The Gross Domestic Product (GDP) and stock prices are on the rise during a bull market.
A bear market exhibits negative trends; it can also be a prelude to recession.

Secondary Trends:
They refer to price changes within a primary trend. These price changes are not permanent.
A temporary decrease in price during a bull market is a correction.
During correction, the price drop is normally 10% to 20%.
The same percentage increase is experienced during the time of a bear market rally.
This refers to a transient increase in price during the time of a bull market.

Secular Trends:
They are long-term trends.
They usually remain for a period of 5 - 25 years.
Many primary trends sequentially arranged result in a secular market trend. In such case, the bull markets are bigger and a bear market does not erase the gains of the previous bull market.
In secular bear markets, the duration of a bull market is smaller.

Debt Capital Market

Debt Capital Market is a market for trading debt securities where business enterprises (companies) and governments can raise long-term funds. This includes private placement as well as organized markets and exchanges.

debt capital market trades in such financial instruments which pays interest. There are the bonds and several loans which act as the prime financial instrument of this market. Because of this interest factor, the debt capital market is also known as fixed income market.

Debt capital market and equity market jointly makes the capital market. These markets are used by the governments and several companies for raising funds for long and short term. The trade in these markets is done through several financial instruments. Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties.

Debt capital is funds supplied by lenders that are part of a firm's capital structure.
Debt capital usually refers to long-term capital, specifically bonds, rather than short-term loans to be paid off within one year. If the short-term debt is continually rolled over, however, it can be considered relatively permanent and thus debt capital.

Debt capital has advantages and disadvantages over equity, the other component of a company's capital structure. The regular interest payments for debt capital represent a cost of doing business and, unlike dividends, are tax deductible. Debt capital also enables the firm to expand its profits indefinitely, provided it can make a greater return on the debt capital than the costs of servicing it. However, unlike dividends, interest payments to bondholders must be met on time and in full. Furthermore, as debt becomes a greater part of the firm's capital structure, a downturn in business threatens the company's survival, as the costs of servicing debt capital mount. Financial analysts thus spend much effort trying to determine the best proportion of debt capital in a company's capital structure.

Bonds are of several types like the government bonds, the municipal bonds, corporate bonds and many more. By investing in these bonds, the investors actually provide loan to the respective organization or to the government. These loans are provided for some fixed interest rate which the company or the organization provides to the investor at regular intervals.

The modern concept of venture capital should be grateful to General Doriot because he was the person who founded the American Research and Development Fund. This was done to provide financial assistance to the activities of developing new technologies in the US universities. At the same time, the commercial use and financial benefits from such technologies were also considered seriously. With the commercial success of the concept of venture capital, big players entered the venture capital market of United States of America. The giant companies like Xerox and General Electric played a major role in expanding the venture capital market.

The entry of these companies in this market encouraged with separate divisions to deal in the market encouraged many others. Because of these situations, the venture capital market was expanded beyond the territories of US and within a short period, it gained ground globally.