Peabody Energy Corp. said Thursday that severe flooding in Queensland has prompted it to declare force majeure on some Australian coal shipments.
The St. Louis-based coal producer didn’t specify the volume of shipments that have been interrupted or provide additional details.
Force majeure is a contract clause that frees a party from fulfilling obligations because of circumstances outside of its control, such as extreme weather check cash advance.
Peabody sold 20 million tons of coal through the first three quarters of 2010, or just over 10 percent of the company’s total. However, that production represented more than a third of the company’s total revenue and profit.
At a time when money managers’ concerns have swung between record government stimulus and the potential for a new recession, investors remain bullish on commodities that beat stocks and bonds for a second year.
The benchmark Standard & Poor’s GSCI gauge advanced 20 percent, more than the 9.1 percent gain in the MSCI World Index of stocks and 5.3 percent return on a Bank of America Merrill Lynch index of Treasuries. Currency traders are betting on a stronger dollar, sending a contrarian signal because commodities moved in an opposite direction to the currency in 16 of the past 20 quarters, data compiled by Bloomberg show.
Silver, an investment and an industrial material, will jump as much as 37 percent next year, leading gains in the 15 commodities covered in a Bloomberg survey of more than 100 analysts, traders and investors. Zinc, this year’s worst- performing metal, will appreciate 21 percent. Arabica coffee, which reached a 13-year high last week, will be the weakest performer, adding no more than about 7 percent.
The strength in demand “has been a surprise considering that we’ve just come out of the worst recession since the 1930s and carnage in most asset classes,” London-based Roxana Mohammadian-Molina, one of a team of 18 analysts at Barclays Capital who correctly called the bottom in oil and copper last year, said by phone Dec. 22. The bank says U.S. natural gas, will be the only one of the 25 commodity prices it follows that will average less next year.
Stocks Short
Global stocks are still about $11 trillion short of the record $62.6 trillion of market capitalization reached in October 2007, data compiled by Bloomberg show. Over the same period, commodity assets under management rose about 80 percent to $354 billion, and will attract a total of $60 billion in new money this year, the second most after 2009, Barclays estimates.
The S&P GSCI Index is extending last year’s 50 percent advance, which also beat the 27 percent jump in the MSCI World Index and the 3.7 percent loss on Treasuries.
Investors favored raw materials this year as China, the biggest user of everything from coal to iron ore to zinc, led the recovery from the first global recession since World War II. With economies now expanding, competition for raw materials is intensifying.
U.S. growth will rise to 3.25 percent in the fourth quarter of 2011, from 2.5 percent in the first, according to the median estimates of as many as 66 economists surveyed by Bloomberg. China’s will slow to 9 percent next year from 10 percent in 2010, still three times the rate of the U.S. and six times the speed of the euro zone, the surveys show. China on Dec. 26 raised interest rates to counter inflation.
Goldman’s Picks
Commodities gaining the most will be those in which China is least self-sufficient and with the smallest spare production capacity, according to Goldman Sachs Group Inc. analysts led by London-based Jeffrey Currie. Oil, copper, cotton, soybeans and platinum are the bank’s top picks.
Goldman on Dec. 13 forecast an 18 percent advance in raw materials in 12 months, led by a 28 percent gain in precious metals. That tallies with the results of the Bloomberg survey.
Silver, the precious metal most used in industry, will rise 37 percent to as high as $40 an ounce next year from $29.1238 an ounce Dec. 24 in trading in London, the survey shows. Palladium, used in catalytic converters for cars, will jump as much as 18 percent to $900 an ounce from $764 in trading in London Dec. 24.
Silver futures for March delivery rose 53 cents, or 1.8 percent, to $29.785 an ounce at 10:14 a.m. on the Comex in New York. Palladium futures for March delivery gained $11.90, or 1.6 percent, to $779 an ounce on the New York Mercantile Exchange.
Markets in London are closed for a second day today for public holidays.
Gold Outlook
“Investors will be cycling out of gold and into silver, platinum and palladium if financial and economic conditions improve,” said Jeffrey Christian, managing director of CPM Group, a research company in New York.
Christian correctly predicted in January that gold would reach $1,400 an ounce this year and is now forecasting prices to peak at $1,550 in the first quarter before declining as low as $1,200. The median forecast in the Bloomberg survey is for a 23 percent gain to as high as $1,700. Gold reached a record $1,431.25 Dec. 7 in London and closed at $1,381.47 Dec. 24.
Gold futures for February delivery rose $18.70 or 1.4 percent, to $1,401.60 on the Comex.
The popularity of precious metals suggests investors are seeking safety as governments and central banks pump money into economies to shore up recovery.
The Federal Reserve has kept its benchmark interest rate near zero since December 2008 and plans to inject $600 billion into the economy through June by purchasing government bonds through so-called quantitative easing. It already bought $1.7 trillion of securities in a first phase that ended in March.
Fiscal ‘Concern’
“I like gold because I’m concerned that our fiscal and monetary policies don’t make any sense,” David Einhorn, the president of Greenlight Capital Inc., which manages about $6.8 billion of assets, said in an interview in New York. “It leads potentially to a risk of greater instability later.”
Investors increased precious-metals holdings by 22 percent to a record 17,390 metric tons in the 10 months to Dec. 17, data compiled by Bloomberg show. That’s worth about $111 billion, of which 84 percent is in gold and 13 percent in silver, with the remainder in platinum and palladium.
GSCI Returns
Returns for commodity investors may be lower than the spot index suggests. The S&P GSCI Total Return Index, tracking the net amount received, rose 8.4 percent this year, reflecting the cost of maintaining positions in futures markets. When longer- dated contracts cost more than those for immediate delivery, a market structure known as contango, investors pay a premium to maintain their holdings as positions expire.
Gains in commodities may evaporate if currency traders’ bets that the dollar will strengthen are right.
Contracts on the dollar appreciating against the euro are at a three-month high and the U.S. Dollar Index gauge against six counterparts rose 6 percent since Nov. 4. The inverse relationship between the currency market and commodities last month reached the highest level in more than a year, data compiled by Bloomberg show.
Commodity experts in the Bloomberg survey are betting this time will be different amid surging demand and dwindling stockpiles.
Copper Deficit
Copper use will outpace supply by 825,000 tons next year, more than twice the inventory in LME-monitored warehouses, according to Barclays Capital. Prices which reached a record $9,392 a ton on Dec. 21 in London will rise to $10,475 next year, the Bloomberg survey shows. Zinc will be the best- performing industrial metal, advancing as much as 21 percent to $2,800 a ton from $2,308 in London on Dec. 24.
Copper futures for delivery in March rose 2.25 cents, or 0.5 percent, to $4.3025 a pound on the Comex. Earlier, the metal climbed to an all-time high of $4.3195.
Demand may also come from new exchange-traded products. ETF Securities Ltd. started offering investors ETPs backed by copper, tin and nickel this month, attracting about $25 million so far. JPMorgan Chase & Co., BlackRock Inc. and Credit Suisse Group AG also plan similar products.
Weather Markets
A stronger dollar may also be trumped by weather in agricultural markets. Wheat as much as doubled since June and corn jumped 83 percent as Russia’s worst drought in at least a half century, flooding in Canada and parched fields in Kazakhstan and Europe ruined crops.
While wheat should rise as much as 17 percent to $9.13 a bushel next year from $7.83 in Chicago on Dec. 23 and corn 14 percent to $7 a bushel from $6.14, coffee was picked as likely to be the worst performer in the Bloomberg survey. Analysts see a gain of no more than 7 percent to $2.53 a pound from $2.359 a pound in New York on Dec. 23.
Wheat futures for March delivery climbed 8.5 cents, or 1.1 percent, to $7.8875 a bushel today on the Chicago Board of Trade. Corn futures for March delivery rose 3.5 cents, or 0.6 percent, to $6.1875 a bushel, the eighth straight gain. Arabica- coffee futures for March delivery rose 1.05 cent, or 0.4 percent, to $2.385 a pound on ICE Futures U.S. in New York.
“We don’t see an imminent threat to commodity prices in 2011,” said Evan Smith, who helps manage $900 million at U.S. Global Investors Inc. in San Antonio. “You will still have concern over currency stability and in emerging economies there’s the wealth effect that’s driving demand.”
Christmas has come and gone but Canadians have continued to shop, lured into stores by discounts on big ticket items, such as appliances and big screen TVs, industry observers report.
But those same observers caution that consumer spending could slow in the New Year as economic growth moderates and consumers feel the weight of their record debt loads.
While little hard data is available at this time, there are few indications the industry fell short of the Retail Council of Canada
U.S. retailers expecting to ring up sales on the day after Christmas may have to intensify discounts after an East Coast snowstorm slammed the region yesterday, disrupting one of the busiest shopping days of the year.
Spending may shift into January, according to Marshal Cohen, chief industry analyst at NPD Group Inc., a research firm based in Port Washington, New York.
“It’s like throwing a party and nobody comes because the focus has gone from post-holiday shopping to post-holiday travel,” Cohen said in a telephone interview yesterday. “Look for sales to be repeated by retailers. They’re going to be more aggressive. They’ve got to throw another party.”
The day after Christmas is one of the five busiest shopping days of the year, and it may take retailers two weeks to capture sales lost yesterday, Cohen said. At the same time, shoppers may lose their enthusiasm as the holiday season wanes, he said.
Earlier this month, the National Retail Federation boosted its holiday retail sales forecast by 1 percentage point, to an increase of 3.3 percent. Today, MasterCard Advisors’ SpendingPulse, a Purchase, New York-based research firm, is expected to release sales numbers for the entire holiday season.
Consumer confidence rose in November to the highest level in five months as more Americans, whose purchases account for about 70 percent of the U.S. economy, put faith in improving job and income prospects.
At 9:30 a.m. yesterday, only two cars had pulled into the parking lot of a Sears Holdings Corp. store in Greensboro, North Carolina, even though the retailer had advertised early-bird discounts of up to 60 percent on clothing and 30 percent on refrigerators and washing machines.
‘Wife Wasn’t Happy’
“My wife wasn’t happy when I decided to come out,” said Michael Scarlett, shopping at the Hoffman Estates, Illinois- based chain after three inches of snow had accumulated overnight. He planned to pick up an Android tablet computer he’d ordered online and return home.
At 10:30 a.m, the Apple Inc. store in Greensboro had 17 customers and 17 red-shirted employees, including four at the front window watching a yellow bulldozer push snow into a pile in the parking lot. At a Macy’s Inc. location, the cosmetics counters had no customers shortly before 11 a.m.
Up the East Coast, in Whitehall, Pennsylvania, shopper Camille Qualtere was surprised to find the Lehigh Valley Mall “deserted no fax payday advances.”
“We thought, ‘Is the mall closed?’” said Qualtere, 54, who took her two daughters to return unwanted gifts and shop for discounted clothes at Cincinnati-based Macy’s before the storm started. “I didn’t hear about the snow because I was cooking all day yesterday. My daughter just told me about it.”
New Snow Boots
Shopping at the same mall, Kris Kotsch bought a pair of snow boots to prepare for the storm. With no snow falling yet, the 42-year-old photography teacher went back inside armed with the gift cards she received for Christmas to look for a new mobile phone.
“I came for the boots,” Kotsch said. “Now I’m going to look for more.”
Consumers may temper their spending if the storm’s aftermath stalls shopping for several days and the frugality of New Year’s resolutions kicks in, said Michael Dart, the San Francisco-based head of private equity at the New York consulting firm Kurt Salmon Associates.
“You’re moving into an environment where the consumer is going to be pulling back,” Dart said yesterday. “Retailers don’t want to lose too many of those shopping days. If it’s just today, it’s not a big deal. But the longer the weather remains bad, it becomes problematic for retailers.”
Wind Gusts
The snow was expected to persist today, with wind gusts of as much as 50 miles per hour (80 kilometers per hour), AccuWeather said. Boston was expected to get 12 to 16 inches of snowfall along with wind gusts of as much as 60 mph, and temperatures last night in New York, Philadelphia and Washington were expected to dip into the 20-degree range.
In Manhattan shortly before noon yesterday, 13 people waited in the checkout line at a Gap Inc. store, where cotton thermal long sleeved T-shirts were marked down to $10 from $22.50. Some items were selling at 80% off until noon and then half off for the rest of the day.
“I’m not concerned about the snow slowing us down,” said Janet Guillen, manager of the Gap store, which is near a subway stop. “People are still shopping,” she said, as the snowfall entered its second hour.
Victor Pauca will have plenty of presents to unwrap on Christmas, but the 5-year-old Winston-Salem boy has already received the best gift he’ll get this year: the ability to communicate.
Victor has a rare genetic disorder that delays development of a number of skills, including speech. To help him and others with disabilities, his father, Paul, and some of his students at Wake Forest University in Winston-Salem have created an application for the iPhone and iPad that turns their touch screens into communications tools.
The VerbalVictor app allows parents and caregivers to take pictures and record phrases to go with them. These become “buttons” on the screen that Victor touches when he wants to communicate. A picture of the backyard, for example, can be accompanied by a recording of a sentence like “I want to go outside and play.” When Victor touches it, his parents or teachers know what he wants to do.
“The user records the voice, so it’s something the child’s familiar with. It’s not robotic,” Paul Pauca said.
The app, which should be for sale for $10 in Apple Inc.’s iTunes store by early next week, is one of dozens of new software products designed to make life easier for people with a range of disabilities.
The category is expanding so fast that Apple now has a separate listing for it in the App Store. More apps are added every week, ranging from Sign4Me, a sign language tutor that uses an animated avatar, to ArtikPix, a flash card-like app that helps teachers and speech therapists improve their students’ articulation of words.
“It opens up his mind to us, because he can show us what he’s thinking,” said Victor’s mother, Theresa.
Victor has a rare genetic disorder called Pitt Hopkins Syndrome, a diagnosis he shares with about 50 other people in the U.S. The ailment causes delays in cognitive abilities, motor skills, social development and language skills. Victor’s progress, in many ways, has been good _ he could walk at age 2, whereas some children with the condition can’t walk until they’re 10 or older.
The Paucas tried a number of therapeutic devices designed to help people with similar disabilities communicate. These standalone devices are often low-tech _ the one the Paucas first tried required paper printouts. Or they are expensive: a top-of-the-line model similar to the one used by famed physicist Stephen Hawking can cost about $8,200.
Paul Pauca, a computer science professor, decided that he and some of his students could do better payday lenders. Starting in January, they worked to create an app that would use the versatility of the Apple devices to make communication easier.
Because the hardware already existed, and the work was done as part of a class, there were essentially no direct costs of development. The prototype was done by late spring.
“We’re not a big-budget operation, and that allows us to sell it for $10,” said Tommy Guy, who is one of Pauca’s students and is now a Ph.D. candidate at the University of Toronto.
Jim Tobias, president of consulting firm Inclusive Technologies and an expert on disability-accessible technology, points out that VerbalVictor takes advantage of general-purpose, mass-market gadgets that cost hundreds of dollars rather than thousands.
People who already own an iPhone or iPad need to pay only $10 more for the app, “instead of taking a risk with $1,000″ with specialized machines, said Tobias, who is not involved with the project.
There are dozens of apps designed to help people with a variety of disabilities, ranging from sign language aids to apps that play back text on the screen in a clear voice to help visually impaired people navigate their phones.
The apps also offer a rich experience with bright colors, high-definition photos and crisp sound recordings that weren’t possible before mobile computing technology, Tobias said. But a potential downside exists when people start to think of the apps as a magic wand. Not every app will help every person, he said.
“I’ve been contacted by about 100 eager and enthusiastic parents in the last three or four months about things like this,” he said, “and if it doesn’t work out, they’re a little bit at a loss as to what to do next. We still need to do more to help professionals understand what’s available and what might be best suited for individuals.”
For the Paucas, who founded the Pitt Hopkins Syndrome International Network to meet and share information with other families, something as seemingly commonplace as a smart phone app has added inexpressible richness to their family life.
“He has the most positive attitude and the brightest smile,” Theresa said about Victor. “He teaches us something new every day about what we need to be thankful for.”
France’s status as one of the world’s safest borrowers was affirmed by Standard & Poor’s in a bet the euro-area’s second largest economy will get to grips with its budget deficit.
At the end of a year in which rating companies downgraded the debt of European nations from Spain to Ireland, New York- based S&P said today that France deserves a AAA sovereign credit rating because of the “wealth and depth” of its economy and the view that President Nicolas Sarkozy’s government will consolidate its budget gap.
The announcement may encourage investors to buy French debt after the yield on the country’s 10-year bond rose this week as analysts speculated the euro-area’s sovereign debt crisis may cost the nation its top grade. Fitch Ratings today downgraded Portugal’s debt by one level and separately said the turmoil in Europe reflects investor concern about the euro’s “viability.”
“The stable outlook is based on our view of the French government’s substantial achievements with its budgetary consolidation strategy, enabling it to meet its fiscal targets through 2013,” S&P analysts including Madrid-based Marko Mrsnik said in a report today payday loans direct lenders.
The cost of insuring French government debt rose to a record this week, having trebled this year. The country’s credit default swaps are now more expensive than those of lower-rated securities from the Czech Republic and Chile, according to data provider CMA.
France’s top credit rating was vulnerable to a rethink by the credit rating companies because of its budget deficit and because its banks are the biggest holders of debt issued by so- called peripheral countries, analysts said before today’s announcement.
Brian Johnston is ending this year with a far different outlook than in 2008 when the economy stalled.
The president of Monarch Corp., Canada
Canada has taken a giant and long-awaited step in protecting consumers from unsafe products.
Bill C-36 received royal assent Dec. 15. It gives Health Canada the power to order recalls of dangerous products
U.K. consumer confidence fell to a 20-month low in November as the looming government budget squeeze dented Britons’ outlook for 2011, Nationwide Building Society said.
The index of sentiment slipped 7 points from October to 45, the lowest since March 2009, the customer-owned lender said in an e-mailed report today. The gauge has now fallen for three consecutive months. The measure of consumers’ future expectations fell 9 points to 61, also a 20-month low.
Prime Minister David Cameron’s drive to tackle the record budget deficit with the deepest spending cuts since World War II threatens to slow economic growth. The squeeze will eliminate 330,000 public-sector jobs and increase sales tax to 20 percent next year from its current level of 17.5 percent.
“The strong rally in sentiment that took place from the middle of 2009 into the first quarter of this year has now been almost completely reversed,” Martin Gahbauer, chief economist at Swindon, England-based Nationwide, said in a statement. “The fall in confidence can largely be attributed to consumers growing increasingly cautious over the outlook.”
An index of people’s current perception of the economy dropped 5 points to 21, while a gauge of whether now is a good time to spend slumped 13 points to 79, the report showed. TNS-RI questioned 1,000 people for Nationwide between Oct. 18 and Nov. 21. GfK NOP Ltd.’s consumer-confidence index fell in November to a four-month low, according to a Nov no fax cash loans. 30 report.
Sentiment Lag
Weakening sentiment is “not uncommon in the early stages of a recovery” as improvements in the labor market often lag turnarounds in the wider economy, Gahbauer said.
While jobless claims fell in November, unemployment measured by International Labour Organization methods rose by 35,000 to 2.5 million people in the quarter through October.
The Chartered Institute of Personnel and Development said in a separate report that fewer British employees expect a pay raise next year as government workers grow more pessimistic about the future. Fifty-eight percent of the 3,000 respondents in a survey said they anticipate a wage increase in 2011, compared with a result of 67 percent last year, CIPD said.
Meanwhile, a gauge of U.K. residential rents was little changed in November as increases in London offset declines in other areas of England. The average monthly rent for a home in England and Wales was 692 pounds ($1,079) last month, compared with 691 pounds in October, the Newcastle, England-based company said today. While London posted a 1.8 percent gain, rents fell by 3.1 percent in eastern England and 2.4 percent in the East Midlands.
RBC Economics is predicting the pace of Canada
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