UPDATE: Chile March Industrial Output Falls 1.0% On Year
(Updates with additional data and an analyst's comments)
SANTIAGO (Dow Jones)--Chile's industrial output decreased 1.0% year-on-year in March, which compares with a 5.7% increase in February, Chile's government statistics agency INE reported Wednesday.
The March tumble was well below analysts' expectations of a 2.5% increase.
According to the INE, the drop was mostly due to the seasonal effect of the three-day Easter holiday weekend.
In 2007, industrial output rose 4.1% from the previous year.
Industrial sales fell 0.7% on the year in March, which compares with a 2.4% on-year increase in February, INE reported.
Among industrial sectors, capital goods output fell 12.3% on the year, compared with a 42.8% surge in February. Capital goods production is a key indicator for future growth.
Durable goods output tumbled 6.1% compared with a 25.1% increase in February.
On the year, intermediate goods output growth inched up 0.1%, versus a 3.7% on-the-year gain in February.
Consumer goods output slid 1.6% in March, down from 7.3% growth in February.
"The overall set of demand and supply side indicators was relatively weak but the March figures are beset by the significant distortion introduced by the impact of Easter week holidays," Goldman Sachs economist Alberto Ramos said in a comment.
He added that demand-side indicators were still relatively robust, in line with "vibrant investment spending," mostly in the mining and energy sectors, and strong private consumption.
Retail sales in March, meanwhile, jumped 4.2% on the year in real terms and 10.1% from the previous month, the INE reported. The gain was due, in part, to a 3.2% on-year increase in department store sales and a 5.2% gain in specialized store sales.
Supermarket sales for the month rose 4.4% on the year in real terms and 16.3% in nominal terms, the INE reported.
INE Web site: http://www.ine.cl
-By Carolina Pica, Dow Jones Newswires; 56-2-460-8544; carolina.pica@dowjones.com
(Patricia San Juan contributed to this report)
(END) Dow Jones Newswires
April 30, 2008 12:56 ET (16:56 GMT)
Copyright 2008 Dow Jones & Company, Inc.
Wednesday, April 30, 2008
Thursday, April 3, 2008
U.S. Market Update
The Senate Finance Committee heard testimony from Fed officials today over the state of the economy. Fed Chairman Bernanke once again defended the actions taken by the Fed in rescuing Bear Stearns last month. The New York Fed's Geithner called for stronger supervision of the financial industry and urged banks to put in place more fail-safes to prevent the liquidity problems that felled BSC. Geithner added a new justification for the Fed rescue, saying that a lack of response from the Fed “would in effect have penalized” other businesses and banks that had “behaved more prudently” than BSC.
Weekly jobless claims sent stocks lower along with U.S. Teasury yields after claims climbed above the 400K mark that is often associated with a recession. The initial jobless claims data released today indicated that the economy is seeing the highest level of unemployment payouts since September 2005. The number climbed 38,000 to a total of 407,000, although traders should note that a Labor Department official said that the early timing of the Easter holiday may have influenced the reading. Immediatly the May fed fund future saw the odds of a 50 basis point cut rise from roughly 15% to closer to 25%. The March ISM non-manufacturing reading came in a smidgen higher than expectations, at 49.6 v 48.5e. The data showed the services sector contracting only slightly last month, indicating a stronger performance than February. Treasury futures did move away from their best levels after March Non-manufacturing ISM beat expectations but yields still remain marginally lower.
Financials opened the session with some profit taking in the wake of further bank write-downs across the pond, while Lehman and Citigroup analysts were seen cutting some numbers. LEH indicated overnight that it would shutter its UK subprime units. “It's another nail in the coffin for the subprime section of the market,'' said Ray Boulger, senior technical manager at mortgage broker John Charcol Ltd. “They had been pretty active even after some other lenders pulled their horns in.''
Altria Group and other cigarette makers spiked this morning on news that the industry had won a critical legal victory blocking a $200B lawsuit against them. The Federal appeals court decision blocked a racketeering class-action suit filed on behalf of smokers of "light" cigarettes. The court reversed a lower court decision allowing the suit to move forward.
Various technology names also got off to a weak start after CSCO was downgraded to neutral at UBS, while Garmin and Memc Electronic cut their outlook. Garmin's CFO said he sees Q1 revenues down 40-50% m/m, while MEMC revised its Q1 revenue guidance down to $500M v $559Me, from earlier guidance of $560M. The company noted that it saw a good deal of plant downtime due to equipment maintenance problems, saying it would recover most of the lost revenue in the second half. Offsetting some of the weakness in tech were shares of RIMM and MU which have posted solid gains after earnings reports.
Crude mounted another mid-day rally on very little in the way of news sending the May contract back above $105. June gold began the session in the red after the Greenback posted some gains in the overnight session but has since rebounded back towards $910.
In currencies, the price action was choppy as softer economic data reverberated in both Europe and the US regions. EUR/USD initially broke below the 1.56 level after weaker-than-expected retail sales data for the Euro Zone. However, the US weekly jobless claims neutralized any upward momentum in the USD. The ECB's Wellink noted that the US was probably near or in a recession, adding that he was more worried over EU inflation than economic growth. ECB's Garganas also expressed his concerns over inflation, which is boilerplate for the ECB. French officials continued their verbal currency intervention ahead of next week's G7 meeting.
EUR/JPY encountered some selling pressures above the 161 level as Japanese exporters took advantage of the recent climb in the cross. Dealers noted that fresh Toshins issues had pushed the JPY lower since the start of the month. JPY buying accelerated when global equity markets turned lower following the soft round of economic data on Thursday. USD/JPY dipping back towards the 102 level during the NY morning after probing the 103 neighborhood in Europe.
The pound was broadly weaker following the March PMI data and BoE credit conditions report. GBP/USD fell over a big figure from the highs seen during Asia and tested the 1.9760 level. EUR/GBP retested above the 0.79 level before retreating on weak Euro-zone retail sales data and continued M&A flow. GBP/JPY probed below the 203 level.
CAD strengthened on continued technical buying following the failure to sustain above the 1.03 level earlier in the week. USD/CAD was 1.0070, with strength attributed to comments from BoC's Jenkins on Wednesday to the effect that there was no specific target for CAD.
European fixed income futures were mildly firmer in the session. June Bunds +17 ticks at 115.35 and the June Gilts firmer by 8 ticks at 110.64. Euro-Stoxx 50 lower by 0.8% at 3,766; FTSE -0.7% at 5,873; CAC-40 off 0.6% at 4,882 and DAX lower by 0.7% at 6,731.
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