Top Economics News

Wall Street ended down about 0.5% Wednesday, interrupting a series of four consecutive sessions of gains, after investors have concluded about the Reserve Chairman fe ; Re public that there will be no immediate further monetary easing.

The Dow Jones Industrial 30 yielded 0.41%, or 53.05 points, to 12,952.07. The S & P-500, wider, lost 6.50 points, or 0.47%, to 1365.68. The Nasdaq Composite fell 19.87 points to his side (-0.67%) to 2,966.89.

At his hearing before the Committee on Financial Services of the House of Representatives, Ben Bernanke noted that there had been improvements in the labor market, although it also said he had to accelerate growth in the United States that will reduce an unemployment rate considered unacceptable.

Recognition of a better employment has, ultimately, been interpreted as not going in the direction of an imminent new bond buyback program, possibility Ben Bernanke himself had not ruled out during the press conference which followed the last monetary policy meeting of the Fed's late January. 

"Market participants felt that Ben Bernanke was slightly less accommodating than before – and I stress the word 'slightly'," said Michael Marrale, managing director at RBC Capital Markets.

The statements of Fed chairman supported the dollar and weighed on commodity-related values, with a sector index down by 1.74%.

The decline of Wall Street has been limited by the publication of an index of purchasing managers in the Chicago area much better than expected in February, its highest since April 2011 . 

The publication of the Fed's Beige Book, which says that the U.S. economy grew at a moderate pace in January and mid February, was also ; a factor of support.

The decline Wednesday is also linked to profit taking after the series of increases in recent days. And, throughout the month, the Dow Jones gained 2.5%, the S & P 500 4.1% and Nasdaq 5.4%.

Analysts also note that the volumes were less expanded in comparison to the average of February.

The rating agency Standard and Poor's downgraded Monday the credit rating of Greece to "SD", a level corresponding to "selective default. Anti-austerity protesters in Parliament in Athens on 7 February 2012.

. The rating agency Standard and Poor's downgraded Monday the credit rating of Greece to "SD", a level corresponding to "selective default", to reflect the restructuring of government debt launched Friday. S & P said in a statement it plans to raise the rating of the country to CCC rating assigned to issuers of poor quality with a real risk of default, when this operation has been fully carried out, probably around mid- in March.

The decision of the U.S. Agency was expected since it had indicated in the past it would raise the note by Greece SD begin as soon as the implementation of the Agreement on Cessation of Athens claims made by private financial institutions. However, "if a sufficient number of bondholders (public) Greek did not accept the exchange offer," wrote S & P said in a statement, "we believe that Greece would present an imminent risk of default characterized payment "to the extent that the release of the rest of the assistance promised to the country by the euro area and the International Monetary Fund is subject to the successful debt restructuring of Athens.

A default is characterized reflected in the note "D" in the notation of S & P. "I take note of the decision" S & P, said the leader of Finance Ministers of the euro zone Jean-Claude Juncker, in a statement released in Luxembourg, adding that he expected a "strong participation "of private creditors in the operation launched Friday.

This exchange transaction should allow Greece to obtain a cancellation of debt of 107 billion euros. Greece aims to give private creditors participating in the operation of shares worth 53.5% less than those they currently hold. A quarter of those titles that creditors will receive bonds from the European Stability (EFSF), presumably with a maximum maturity of two years. The rest will consist of new Greek bonds with maturities ranging from 11 to 30 years, a period much greater than those they replace.

The goal is to push the repayment schedule of Greece on the amounts it still accepts honor, for giving him time to recover. If successful, "we should consider that the incident of the partial failure of Greece belongs to the past," wrote S & P, for which the possible increase of the rating to CCC would then account "the economic growth outlook uncertain of the country "and its" public debt remains strong ", even after restructuring.

Iran has refused to hand over to Greece 500,000 barrels of crude oil as part of retaliatory sanctions of the European Union related to Iran's nuclear program, reports the Sunday 'unofficial news agency Fars.

"Tankers who had surrendered (to Iran) to load 500,000 barrels of Iranian crude to be delivered to a refinery Greek had to leave empty, Iran has refused to make delivery, "wrote Fars without specifying its source.

Iran has stopped selling crude to British and French companies in recent days. Its oil minister warned on February 4 that the Islamic Republic would cut its oil exports to "certain" European countries.

Key values ​​to follow Friday on Wall Street.

* GAP has disappointed expectations Thursday, saying wait for fiscal 2012 earnings per share 1.75 to $ 1.80, while analysts polled by Thomson Reuters I / B / E / S on average had expected $ 1.79.

Gap posted a fourth quarter profit of $ 218 million, or 44 cents a share, against 365 million (60 cents) a year earlier.

In pre-market value fell by 2% to 23.10 dollars.

* AMERICAN INTERNATIONAL GROUP. The insurer reported a profit of $ 19.8 billion in the fourth quarter of 2011, due to an accounting change that allowed him to display a huge windfall.

This change, which raises the price of AIG from 6.5% to 29.81 dollars in pre-market means that the group will not pay tax on billions of dollars in profits in the coming years.

* Interpublic. The advertising agency has published a quarterly profit above expectations, thanks to emerging markets in a context of recovery of the sector.

EPS for the fourth quarter is 50 cents per share while the market was expecting 39 cents per share. Revenues for the quarter amounted to $ 2.07 billion, or less stable over one year. The turnover abroad rose by 6%.

In 2012, Interpublic expects organic growth of 3%.

In pre-market value gains 4.2% after finishing at 10.91 dollars Thursday.

* CITIGROUP. The bank has raised $ 1.95 billion sale of its stake in Indian company Housing Development Finance Corp, said on Friday, sources familiar with the matter.

In pre-market value gains 1% to 32.95 dollars.

PSA Peugeot Citroën is the star of the Paris stock exchange today. Its title flies by nearly 10%, boosted by the announcement of cooperation projects and a possible alliance with General Motors. A PSA Peugeot Citroën plant in Coventry, UK.

The title of French carmaker PSA Peugeot Citroen flew Wednesday morning at the Paris Bourse, boosted by the prospect of an alliance with General Motors. At 10:10 (9:10 GMT), the value gained 9.80% to 15.80 euros and largely occupied first place in the CAC 40, which lost 0.29%. Analysts at Natixis bank have in turn raised to "buy", against "neutral" before their recommendation on the title, with a price target to 20 euros.

The French manufacturer, sentencing, said review "projects of cooperation and alliances" about which "discussions are ongoing". The site reported Tuesday LaTribune.fr advanced negotiations for a marriage with General Motors. Labour Minister Xavier Bertrand confirmed Wednesday that French was in talks with the U.S.. Florent Couvreur, analyst at CM-CIC Securities, said that PSA is among the largest European manufacturers "most isolated" and that furthermore it is difficult to generate sufficient margins in its core automotive operations. The analyst also puts forward the fact that the company Opel, GM's European subsidiary, "is in the same situation."

Analysts at Bank of America-Merrill Lynch, "the first result of such discussions is the need for both companies to improve their position in Europe where all groups except two (Renault and Volkswagen) have recorded losses in the second half 2011 ". Thus, an alliance with PSA GM "could allow these two groups of strong synergies and economies of scale", such investments and R & D (research and development), for Mr. Slater. This merger would allow PSA to benefit from the GM position in Asia and the U.S. while the U.S. would have the opportunity through the French to build on small models, explains the analyst.

"GM-PSA could be the new Fiat-Chrysler", states Mr. Couvreur, while warning against a number of uncertainties. These include the future participation of the Peugeot family, the reaction of other PSA partners (Ford on diesel engines and Toyota in the "mini cars") and whether the alliance has held a probable reduction in overcapacity Europe. Analysts at the U.S. bank, however, wonder if this alliance fear materialize and warn that PSA longer needs this merger as GM, "given its dependence on Europe and its inability to cut costs fast enough ".

Greece does not return to growth until 2014, after four years of recession that have reduced the gross domestic product (GDP) by 17%, estimated Tuesday officials the European Union.

They added that Greece should cut another 150,000 jobs and reduce labor costs by 15% within three years.

"We believe that Greece will return to growth in 2014," said one of them to the press. "We expect a contraction of 4.5% this year and stagnate in 2013. This corresponds to a contraction of more than 17% over four years."

According to these officials, the Greek minimum wage is still higher than in Spain or Portugal. Labor costs increased by over 30% in Greece over the last decade, an unparalleled growth in the euro area, according to statistics from the European Union .

To reduce debt to 120% of GDP by 2020-in accordance with the agreement reached within the Eurogroup on the night of Monday to Tuesday, against 160% currently, Athens must raise 19 billion with 35 planned privatization from 2012 to 2014.

This amount is well below the anticipated 50 billion euros in the first bailout of 73 billion euros but it is included in the second. 

The year 2014 would be if Greece would record a primary budget surplus of 4.5% of GDP and where she could return to capital markets, officials said officials.

Unemployment will start to decline until 2014 and also its rate will be the order of 17% and 15% in 2015.

Several Directors of Veolia Environnement, whose CEO of EDF Proglio, are preparing to head the group's CEO, Mr. Frérot, reports financial daily Les Echos in its edition Monday.

The former Minister of Ecology Jean-Louis Borloo is among prospective successors, the newspaper said, predicting that a Board of Directors of Veolia Environnement scheduled on February 29 will be crucial.

Contacted by Reuters, a spokeswoman for Veolia declined to comment.

The European Central Bank (ECB) is considering allowing Greek bonds held by central banks in the euro zone to experience discounts similar to those offered by private investors, told Reuters sources within these central banks.

Central banks in the euro area hold some 20 billion euros of Greek securities in their investment portfolios. They are distinct from the 40 billion euros of debt acquired by the ECB as part of its share buyback program launched in May 2010.

The chances of such a discount applied is 50%, said one source, adding that the issue in discussions within the ECB, to be decided before a definitive agreement with the private sector on debt restructuring Greek, whose conclusion is expected by early next week.

If central banks were willing to take losses on their securities Greek, this would bring to Greece immediately available funds, in addition to 12-15 billion euros in capital gains realized es by the ECB on its debt and that the Greek proposes to reassign indirectly in Athens.

Officials from the euro area are studying how to delay parts of or the entire second level of aid to Greece, if possible until after the election pre views for April, it was learned Wednesday from European sources.

While the new aid package of € 130 billion is now almost ready, the finance ministers of the euro area are still not satisfied with the commitments of the Greek political leaders to implement the agreement, which realizes that Athens provides further budget cuts and introduce many unpopular reforms by 2014.

There are also doubts about the path of debt reduction Greek. It represents about 160% of Greek GDP and the "troika" consisting of the European Commission, the European Central Bank and International Monetary Fund would like to return to 120% of by 2020.

"There are proposals to delay the Greek package or cut into parts, so that immediate fault is avoided, but without commitment on the whole (package)" said one source.

"The options will be discussed (…) There is pressure from several countries to hold things until there is a concrete commitment in Greece, which could not come before the elections, "they added.

A telephone conference of finance ministers of the euro area must take place at 17:00.

Moody's downgraded the outlook of the Aaa rating of France to negative from stable, reflecting the agency said uncertainty surrounding the economy of the euro area and the ambitions of Paris in terms of re production deficits.

The U.S. rating agency also adjusted notes and perspectives of eight other EU countries including the United Kingdom and Italy.

The call to order by Moody's comes a month to the day after the decision by Standard & Poor's reduced the rating by one notch from France, from AAA to AA +, in D action to the deepening debt crisis. 

Moody's maintained its Aaa rating of France, the best possible, but warned that it could be a reduction if the government failed to implement its economic reforms and budget.

The euro and British pound fell against the dollar after advertising.

In a statement released Monday night, the agency notes that the uncertainties related to institutional reforms envisaged in the euro area, coupled with anemic growth prospects in the region, continue to affect the confidence of financial markets.

Moody's also believes that the figures of the French debt continue to deteriorate and that France is among the countries rated Aaa "weaker" in this field. 

The agency also highlighted "significant risks" which the French government will face in achieving its objectives of reducing public deficits.

BAROIN NOTES

"These could be further complicated by the need to help other European countries or its own banking system," reads the document.

The economy minister said Tuesday Baroin "take note" of the decision by Moody's.

"The government is determined to continue its action for growth, competitiveness, including the reform of financing of social protection, employment and reducing die ; ficits public, "the ministry said in a statement. Bercy added that government policy "is part of a framework and methodology of long-term".

The Elysée and Matignon did not react immediately.

The Socialist candidate for president, Francois Hollande, did not want to throw fuel on the fire and has insisted that France was not in the same situation that Greece, in the throes of a violent protest after degradation and austerity plans repeatedly.

"We are not in this situation and those who make this comparison do to scare the French," he said on RMC and BFM-TV. 

Arnaud Montebourg, "third man" of the Socialist primary, responded by criticizing the role of rating agencies: "The rating agencies, everyone understands that they play a toxic role and Moreover perverse ", he said on France Inter. "For me and for many (…) they are charlatans."

For Labour Minister, Xavier Bertrand, zero can not ignore the verdict.

"It also shows very clearly that no candidate will escape the rules of good management in the months and years ahead and it shows very clearly that with the program (…) economic and social Francois Hollande, the account is not (…) and that there would necessarily be a further degradation, "he said on France Inter.

The government has this week at the National Assembly a bill supplementary budget with the key measure, an increase in VAT to finance social protection, is highly contested by the opposition and trade unions. 

ON BOTTOM OF GREEK CRISIS

Beyond French borders, the sovereign debt crisis in the euro area is growing.

The Greek government was asked Monday by its European partners to submit further proof of its commitment to reform despite the adoption, on the eve of an austerity plan rity by a parliament besieged by thousands of protesters.

These provisions are required by the "troika" (International Monetary Fund, European Union and European Central Bank) in exchange for an aid package of € 130 billion found essential before March 20, when an important deadline for the country's debt (14.5 billion euros to repay). 

Moody's had warned Jan. 16 that it was considering the prospect of the note of France and it would update the country scores of the European Union in the first quarter.

Standard & Poor's and Moody's had worried about the drift of French public finances while warning against the risk that the government's economic reforms are undermining growth, pillar which is based precisely on Paris to try to achieve its objectives of consolidation.

In fact, the government postponed last week of 2013 to 2014 the decline in its ratio of debt to gross domestic product due to the participation of France in the European Stability Mechanism (MES ), which must support States in the euro zone in trouble, and growth forecasts reduced from 1 to 0.5% this year. 

Commitments to reduce the public deficit is confirmed, however, to 4.5% of GDP in late 2012 and 3% in 2013.

But the Court of Auditors, which certifies the accounts of the State, estimated that only 10% of the total effort that must be capable of reducing to zero the structural deficit in France – in 2016 from Bercy – had been achieved last year.