With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Crude Soars 5%; Ford and CAW Begin Talks; China Offering 6 Billion Yuan Sale; IBM Reiterates 2009 Earnings; Australia's Business Confidence Elevates Asian Stocks; France Telecom and Deutsch Telekom Planning U.K. JV; Mobius Warns About Brazil Stock Sale;
Oil prices rallied more than 5% yesterday (Tuesday), as futures rose to $71.48 a barrel on the New York Mercantile Exchange. The surge was driven by a weakening U.S. dollar and comes just a day before the next scheduled meeting of the Organization of Petroleum Exporting Countries (OPEC). Analysts expect the oil cartel to leave its production quota unchanged.
Ford Motor Co. (NYSE: F) and the Canadian Auto Workers (CAW) union yesterday (Tuesday) began cost-cutting talks. The CAW said that the key to reaching a new agreement would be Ford committing to its current manufacturing presence in Canada, Reuters reported. "If Ford Motor Company is serious about reaching a new agreement with our union, it must commit to maintaining, and hopefully expanding, its Canadian production footprint," Ken Lewenza, the CAW's president, said in a statement. Ford employs about 7,000 hourly workers in Canada.
Hoping to elevate its currency to "international status," China's Ministry of Finance said it plans to offer $879 million (6 billion yuan) in government bonds to individuals and institutions in Hong Kong beginning Sept. 28. "The move will help expand yuan investment channels outside China and promote cross-border yuan settlement," Shi Lei, a Beijing-based analyst at Bank of China Ltd., told Bloomberg News. "It's an important step in the long-term mission of making the yuan fully convertible."
International Business Machines Corp. (NYSE: IBM) reiterated its 2009 earnings projections yesterday (Tuesday), saying it expects to earn "at least" $9.70 a share this year. It also said it is well ahead of its plan to earn $10 to $11 per share in 2010, Reuters reported.
Australia's business confidence yesterday (Tuesday) jumped in August to its highest level in nearly six years, elevating Asian stocks and increasing the likelihood its central bank will raise borrowing costs from its half-century low of 3.0%, Bloomberg reported. The National Australia Bank Ltd.'s (OTC ADR: NABZY) business sentiment index rose 8 points to 18 in August. The figure above zero shows the number of optimists outnumbering pessimists.
France Telecom SA (NYSE ADR: FTE) and Deutsche Telekom AG (NYSE ADR: DT) have launched exclusive talks to merge their British mobile units into a joint venture, Reuters reported. If an agreement is reached, the JV would make for the largest mobile provider in the U.K. market. The companies plan to reach an agreement by the end of October.
Famed emerging market investor Mark Mobius said many Brazilian companies are going to sell "low quality" stock after the country's Bovespa index's 51% rally so far this year. "The new share sales that are coming out in Brazil are of relatively low quality and priced far above fair value," Mobius, who oversees about $25 billion as Templeton Asset Management Ltd.'s executive chairman, wrote Sept. 2 in an e-mail response to questions, Bloomberg reported. "We are not planning to buy any of the pending offerings we have seen thus far but it all depends on the final pricing."