5 Smart Insights For Financial Advisors

What Falling Gold Prices Tell Us About The Stock Market (Advisor Perspectives)
"At a most rudimentary level, equities are residual claims in the capital structure. Gold, on the other hand, expresses confidence in the financial system," writes Mark Ungewitter of Charter Trust Company in Advisor Perspectives. "Confidence in banks, currencies, governments and Wall Street seems necessary for a secular bull market in junior claims – i.e. common stocks – to occur."
"The behavior of gold, then, helps confirm the stock market’s secular trend.  A sustained move in the S&P 500 above its 13-year range, corroborated by a sustained downturn in the dollar price of gold, would suggest the beginning of a new secular bull market."

Advisor Perspectives/Charter Trust Company

Wealth Management Firms Want Advisors To Spend More Time With Clients (Financial Planning)
A new survey by Ernst & Young has found that wealth management firms want advisors to spend more time with their clients. 75% said they have initiatives to do just this.
"Approximately 75% of wealth management firms surveyed plan to invest in mobile tools to increase advisor collaboration and effectiveness. Larger firms said they would use mobile technology to deepen client relationships by providing greater access to information, while smaller firms plan to use mobile applications to introduce new products and services and increase sales.
"Proprietary tools used for data and interfacing with clients will also come under scrutiny."
What The Big Gold Sell-Off Looks Like On A Chart Going Back To 1792 (Macro Tourist)
This chart shows how big the sell-off in gold has been even when taking a historical perspective.

Jim Rogers: Like I Said, I Expect Gold To Go As Low As $1,200
The gold rout continues and gold prices have fallen to $1,352 an ounce. Jim Rogers said the sell-off was being driven by falling gold demand in India, chartists, Cyprus and Bitcoins.
"I have repeatedly babbled about $1200-1300, but that is just because that would be a 30-35% correction which is normal in markets," he told Business Insider. "But I am a hopeless market timer/trader." Rogers said  he expects gold prices to fall further for the "foreseeable future" but expects "gold to eventually go higher over the decade."
Tommy Belesis Charged With Fraud And Intimidation (Finra)
Finra has accused Anastasios Tommy Belesis, CEO of at John Thomas Financial, and four other employees of fraud and intimidation. Finra alleges that John Thomas Financial (JTF) sold shares of America West Resources, Inc. (AWSR) "at the height of the price spike." But of the 15 customer orders received to sell over 1 million shares of America West, JTF just entered one.
"JTF and Belesis prevented the orders from being executed on the same day they were received and some customer orders were executed the following day or days after at prices grossly inferior to those obtained by the firm while other customer orders were not entered or executed at all. AWSR is now in bankruptcy and the customers' investments are virtually worthless.
"In addition, the complaint alleges that JTF and Belesis, through Misiti and Castellano, lied to the firm's registered representatives and customers about the reasons the customer shares could not be sold on Feb. 23, 2012, including that there was a problem with the clearing firm's trading systems, there was insufficient volume on that day to fill the orders, and the shares could not be sold because they were restricted under the Securities Act of 1933."

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US Futures Have Rallied And Turned Positive

After the stock markets closed at 4:00 PM ET today, U.S. futures traded lower.
However, they made a comeback, and now they're positive.

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If You're Shopping For Gold Jewelry, Don't Expect Cheaper Prices Anytime Soon

Gold has hit new lows.
But for Joe Consumer, it'll be mostly shrugs.
We spoke with several jewelers to talk about what impact — if any — plummeting prices would have for their wares, and their subsequent attractiveness for consumers.
They told us few people will notice any difference at jewelry stores for three reasons.
First, if you're buying a piece of jewelry for a specific occasion, a price cut is unlikely to even figure in to your purchasing decision.
"You're going to save $50 on a $4,000 piece of jewelry," Ken Walter, the owner of retailer Diamalux on Long Island, told us. "You're not going to see that much of a difference."
Another jeweler based in New York City who asked not to be identified said the final retail price for something like a gold-studded ring is most determined by the cost of craftsmanship and service than the underlying commodity.
Finally, the entire jewelry industry itself remains in secular decline, according to David Hopkinson, a gold manufacturer out of New Jersey.
"Now a days jewelery doesn't have the place in the world it did 25 years ago," he said. "Electronics seem to be the hot item, everyone wants to have smartphones, $300 or $400 cell phone plans. And gas is up, so all money you want to have going to jewelery is not going there anymore."

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The Yen Is Sliding

With just an hour to go before Asia opens for Tuesday trading, the yen is sliding.
Here's an Intraday look at the yen against the dollar via Bloomberg.

Bloomberg

Here's a longer term look for reference:

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Markets Are In The Red In Asia, Japan Down 1.6%

Markets have just opened in Asia, and they are trading lower.

Japan's Nikkei is down 1.6%.

Korea's Kospi is down 1.0%.

Australia's S&P/ASX is down 0.4%.

The sell-off comes in the wake of disappointing U.S. economic reports and a sharp Monday stock market plunge.

Gold tumbled by as much as 10% today.

Just before 3:00 PM ET, there were at least two explosions near the finish line of the Boston Marathon.  At least 22 are reportedly injured and 2 dead.  The story is developing.

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Britain's FTSE down as EU meets to discuss bailouts

Britain's top share index succumbed to a bout of profit taking early on Friday, after climbing higher over the past four days, with some concerns building over extra funding needed to bail out euro zone strugglers such as Cyprus.By 2.45 a.m. ET, London's blue chip index .FTSE was down 20.52 points, or 0.3 percent at 6,395.62, having added 2.7 percent since Monday.
The bailout package for Cyprus will top the agenda of an informal two-day gathering of EU finance ministers in Dublin, after some documents showed the total bailout package will now cost 23 billion euros.
"There may be some caution regarding if euro zone policymakers will allow extra funds needed," Jawaid Afsar, sales trader at SecurEquity said.
He added the falls would likely be shallow before investors attempt a retest of recent highs.
The equity market remains firmly underpinned by ongoing central bank stimulus, which has favored equities and depressed yields in other classes, and by technical factors too.
"The FTSE100 index has broken the four-month up-trend and developed a sideways range between 6,250 and 6,500. Longer-term support is at 6,000," Dominic Hawker, technical analyst at Westhouse Securities, said, highlighting the tight range the FTSE 100 is likely to be bound into in the short-term.
On Friday, the cautious mood ahead of the EU meet fed through to those sectors acutely exposed to the plight of the euro zone such as the banks .FTNMX8350.
The sector fell 0.6 percent and continued it's underperformance in the year-to-date as political and economic woes in Europe crimped investor appetite for lenders.
Other financials were mixed, with UK life insurers in focus after a note from JP Morgan in which it said the best names in the sector offer a better combination of growth, cash/capital and valuation.
The investment bank upgraded its rating on Resolution (RSL.L) -- third top FTSE 100 riser, up 1.7 percent, and cut its rating on Legal & General (LGEN.L) -- top FTSE 100 faller, down 4.3 percent -- on valuation concerns.
JP Morgan comment also weighed on defense firm BAE Systems (BAES.L), which fell 2.4 percent.
The investment bank cut its earnings forecasts for BAE by up to 11 percent and downgraded its rating to "underweight" after learning the company cut its self-funded research and development for a third time.
Elsewhere, temporary power provider Aggreko (AGGK.L) endured a mixed opening but eventually rose 1.1 percent after reporting an inline trading update and reiterating full-year guidance.
Panumre Gordon raised its rating on the company to "buy", while Espirito Santo said in light of the recent profit warnings the update should provide some reassurance to investors.
The market view of Aggreko is a solid buy, according to Thomson Reuters Starmine data.

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Analysis: Japan's big "Abenomics" gamble: how to tell if it's paying off

 Debating the merits of "Abenomics" is much like talking about a new miracle diet or a life-saving drug: there are many skeptics, but very few who wouldn't want to see it work.

A stronger Japanese economy would help global growth and make domestic problems such as ageing and runaway debt more manageable, so it is no wonder many people give Prime Minister Shinzo Abe and his economic plans the benefit of the doubt.
So far, Abe's heady cocktail of massive money printing, public spending and promised pro-growth reforms has sent Tokyo stocks to five-year highs and kept his support at 70 percent - unheard of for a leader already more than three months in power.
But ultimately even well-wishing observers will want to be assured Abenomics is delivering the desired rise in economic activity: better jobs, wages and sustained growth Japan has not seen for two decades.
The first major test comes in June when the government will present its plans for reforms needed to sustain the impact of the initial stimulus brought about by money printing, a weakened yen and a feel-good effect of surging share prices.
Business executives and investors are likely to look how far the government will stray from a well-trodden path of lavishing subsidies on "growth sectors" picked by bureaucrats and seek to remove general barriers to investment and growth.
They will also gauge Abe's appetite for controversial steps, such as liberalizing healthcare services or making it easier for companies to fire workers.
"The real uphill battle for the Abe administration starts now," Yasuchika Hasegawa, CEO of Takeda Pharma drugmaker and chairman of Japan Association of Corporative Executives, recently told foreign journalists.
There are some promising signs.
Last month Abe declared Japan's willingness to join the U.S.-led Trans Pacific Partnership trade talks, seen not only as a way of boosting exports but also as a catalyst for market liberalization at home.
Earlier this month, the cabinet also approved a plan to separate electricity generation from distribution, a first step to break up regional power monopolies and boost competition.
A medium-term fiscal plan also due in June will allow bond investors to judge how convincing will be Abe's plans to rein in ballooning debt and whether he will proceed with a plan to double sales tax to 10 percent, starting from April 2014.
Equally important to a verdict on the quality of proposed reforms will be gauging how the economy is responding to the already deployed monetary and budget stimulus.
Abenomics is in principle a huge bet that a change in the expectations of investors, businesses and consumers - now already reflected in sentiment surveys and financial markets - will feed into the real economy.
Capital spending is one data to watch, given that cash-rich Japanese companies still have spare capacity so do not have a compelling reason yet to invest or borrow more.
In fact, while the latest BOJ tankan survey published this month showed an improvement in corporate mood, major firms said they planned to cut capital expenditure this business year.
PRICE-INCOME QUANDARY
Another worry for the government is that a weaker yen and a shift in inflation expectations will start pushing up prices before incomes start rising, squeezing household budgets and choking off rather than spurring growth.
"We need to pay attention to the possibility that this will become a big social problem as wage hikes may lag behind price increases caused by a weaker yen," a senior government official told Reuters.
There are some signs that the feel-good effect of a rising stock market has led to a pickup in sales of luxury goods.
But the last available retail sales data for February showed a 2.3 percent drop from a year earlier.
Fast Retailing (9983.T), Asia's biggest apparel company, reported on Thursday a jump in March sales at its flagship Uniqlo stores in Japan but left its profit forecast unchanged, as doubts lingered over whether Abenomics would thaw a decades-long freeze in consumer sentiment.
That may not happen until average Japanese "salarymen" become convinced that their incomes, after two decades of declines, will start rising again.
A BOJ household survey offers quarterly updates on such psychology. In March it showed a distinct shift upwards in price expectations as well as growing expectations that incomes would rise. But only 9.5 percent saw their wages keeping pace with prices.
Corporate results for the March quarter, which are mostly due next month, will also offer a first taste of how much Japanese exporters and their suppliers have already gained from the weaker yen.
Only a sustained improvement in earnings can persuade Japan Inc. to respond to Abe's plea to share the gains with workers. Summer bonuses may offer some early clues, though Tomo Kinoshita, chief economist at Nomura Securities, says it may take two years before regular salaries start rising.
"This year, only few companies will raise base salaries. Next year maybe we'll have the same, so we will have to wait until 2015 for them to change their minds," he said.
As the BOJ's goal is to defeat deflation, consumer prices are also on the Abenomics checklist.
Most economists and even some BOJ board members doubt the BOJ's target of 2 percent inflation is within reach in the next two years as the bank's new boss, Haruhiko Kuroda, says.
But Kinoshita says sustaining even 1 percent price increases would help Japan break out of its deflationary trap, where expectations of falling prices and incomes act as a self-fulfilling prophecy.
Laurence Wormald, head of research at SunGard APT, which provides research and risk solutions for institutional investors such as pension and hedge funds, says many seem ready to be patient and allow Japan to go through with what they see as an "experiment that needs to be done".
But he said they would watch Japan's export performance for signs that Japanese might not be reaping the full benefits of the weaker yen because of rising costs at home.
"The question is whether Abenomics will lead to increased competitiveness of the Japanese economy instead of just feeding consumption and helping certain sectors such as construction. Erosion of competitiveness, that's a worry."

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Cyprus seen raising risk to euro of new crisis flare-up

Cyprus's messy bailout has left the euro vulnerable to any new flare-up in the debt crisis, with aggressive monetary easing in Japan masking problems that would otherwise push the currency sharply lower.
Some analysts see the euro dropping to $1.20 or lower in a year's time and warn market participants, soothed by last year's European Central Bank pledge to preserve the euro and subsequent bond-buying plan, may not be fully pricing in the risks.
The euro bounced back to $1.31, from a 4 1/2-month low of $1.2740 hit last week in the wake of the Cyprus deal, helped by big gains against the yen after the Bank of Japan unveiled a $1.4 trillion stimulus plan on April 4.
Cyprus was the first euro zone bailout to hurt uninsured depositors, leaving questions over whether bank deposits are safe in indebted countries, such as Spain and Italy.
A new flare-up in the crisis could see depositors, fearing the Cyprus deal will become a template for the future, move money swiftly out of weaker peripheral banks.
"This would then create capital flight like we observed in 2011 and early 2012 (in Italy and later in Spain, where a bank rescue deal was agreed in mid-2012). This is new after Cyprus," said Ulrich Leuchtmann, head of FX research at Commerzbank.
"The OMT (ECB bond-buying program) is very good at preventing sovereign bond spreads from exploding but it is not geared to a privately-induced capital flight out of bank accounts and bonds."
Commerzbank has warned clients the increased risk of another crisis is not priced into the euro/dollar exchange rate.
DIVERTED BY JAPAN
A Reuters poll published on April 3 showed analysts cut their euro forecasts after the Cyprus bailout to a median $1.25 in 12 months. Ten of the 64 polled saw it falling to $1.20 or below.
But trends in options show that since the BOJ announced its bond-buying plan investors have scaled back bets on the euro falling, which built up after the Cyprus rescue was agreed in mid-March.
The BOJ's monetary easing steps have made the yen a more obvious sell than the euro, with traders speculating the euro will benefit from Japanese investors seeking higher yields.
Unlike central banks in Japan, the United States and the UK, the ECB is not printing money. Rather, its balance sheet is contracting, adding to the euro's appeal to some longer-term investors, such as central bank reserve managers.
"Currency wars elsewhere are masking inherent weakness in the euro system which is creating a false sense of security," said Nick Bullman, chairman of consultants CheckRisk, which advises on risk management on over $65 billion of assets.
Many analysts said the euro would do well in the short term after the BOJ action but that this may not last.
Steve Barrow, Standard Bank's head of G10 currency research argues the euro is being undermined in the longer term because various investors, now including depositors, are hit when a bailout occurs. He saw the euro at $1.20 by year-end.
Others, however, are reluctant to bet strongly against the euro as the ECB's OMT program makes it less likely that a crisis will spread from one country to another.
Just under a quarter of those polled by Reuters forecast the euro would rise to $1.30 or higher in 12 months time.
"$1.20 is not in my forecasts and it would have to gain a lot of steam to get there. But you can't rule anything out," said Jane Foley, senior currency strategist at Rabobank.
She said it would "take a very significant collapse in confidence" and investors were likely to wait and see how the ECB and EU politicians handle the next banking crisis.
Some analysts said the ECB's anti-crisis mechanism could not rule out a damaging flare-up in the debt crisis.
"The ECB's monetary framework has stopped the markets betting on the worst-case scenario, but they cannot prevent such a scenario from happening," said Lena Komileva, director of research consultancy G+ Economics.
CAPITAL FLOWS
Signs of crisis could prompt companies and private investors to shift deposits from the periphery into countries such as Germany. Others might switch to the Swiss franc and Danish crown, both of which are considered safe.
"Savvy investors, who tend to have the largest deposits, have been given a huge heads-up to be aware and to move money at the first sign of trouble," CheckRisk's Bullman said, adding the euro could drop as low as $1.15 by year-end.
Analysts said euro/Swiss franc, which hit a six-week low of 1.21305 francs on Monday, and euro zone bank shares .SX7P could indicate bank stress and capital flight.
"The investor who buys euro/Swiss franc tends to be the more pessimistic investor. It is a good indication of underlying crisis fears," Commerzbank's Leuchtmann said.

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Dollar retreats vs yen but 100 mark still in sight

The dollar inched lower against the yen on Friday as investors took profit on its recent surge, but the Bank of Japan's radical policy drive to beat deflation looked set to keep the 100 yen level firmly within its sights.

The greenback has gained more than 7 percent from about 92.90 yen since the BOJ pledged last week to inject about $1.4 trillion into the Japanese economy in less than two years to achieve its target of 2 percent inflation.
The dollar was on track for its largest two-week gain versus the yen since early 2009 after it hit a 4-year high of 99.95 yen on Thursday on trading platform EBS.
But the pullback saw it down 0.4 percent on the day on Friday at 99.32 yen, with traders citing options-related offers also halting further progress.
"We are seeing some profit-taking this morning. Also dollar/yen has gone too high, too fast so we are seeing some pullback," said Morten Helt, senior FX analyst at Danske Bank.
"Nevertheless we see dollar/yen trade higher and eventually hitting that magic 100 mark."
The BOJ's easing steps have prompted many analysts to revise up their forecasts for dollar/yen. Societe Generale analysts now target an eventual rise to 110, up from 103 previously.
The yen showed little reaction to comments from BOJ Governor Haruhiko Kuroda on Friday where he said the BOJ has taken all necessary steps to meet its 2 percent inflation target in two years and will try to minimize the market disruption from its massive bond buying.
The euro slipped 0.7 percent to 129.65 yen, having pulled back from a three-year high of 131.10 yen set on Thursday.
EU WORRIES
Against the dollar, the euro was down 0.3 percent at $1.3060. Reported option expiries around $1.3000 could likely keep the currency pinned around that level.
Strategists said markets will focus on a meeting of European Union finance ministers starting later on Friday, expected to approve a 10 billion euro bailout package for Cyprus.
Ministers will also likely discuss revisions to the terms and conditions of bailouts for Portugal and Ireland.
"Some pullback (in euro/dollar) is expected today as the focus returns to the issues at the periphery of Europe," analysts at Morgan Stanley said in a note.
"However, the underlying expectations for portfolio flows into EMU are expected to keep the euro/dollar pullback limited to the $1.3040 area, from where we would anticipate a resumption of the uptrend towards $1.33/1.34."
The BOJ's sweeping monetary stimulus has put the focus on whether Japanese investors will increase their overseas investment.
"Markets are a little shaky that there is no evidence yet of Japanese domestic investors putting their money into foreign asset purchases," said Kiran Kowshik, currency strategist at BNP Paribas.
"Our take is that Japanese investors are not yet positioned for this and that there is lot of potential for them to start selling the yen."
Some analysts, however, remain skeptical that Japanese institutional investors would drastically increase their overall exposure to foreign exchange risk at this point, even if a few currencies such as the Australian dollar hold some attraction.
Japanese capital flows data released on Thursday showed no signs of any increase in Japanese capital outflows in the wake of the BOJ's easing, or even since the start of the year.
The data showed that Japanese investors sold a net 1.145 trillion yen ($11.5 billion) worth of foreign bonds last week, the biggest selling in a year, as they cashed in gains at the start of Japan's financial year. 

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Futures signal lower Wall St open

Stock futures pointed to a weaker open on Wall Street on Friday after four straight days of gains, with futures for the S&P 500, the Dow Jones and the Nasdaq 100 falling 0.1 to 0.2 percent.

The Labor Department releases the March Producer Price Index at 7.30 a.m. ET. Economists forecast a 0.2 percent drop, compared with a 0.7 percent rise in February.
U.S. March retail sales figures are due at 7.30 a.m. ET. Economists expect an unchanged reading, compared with a 1.1 percent increase in February.
On the earnings front, focus will be on JPMorgan (JPM.N), which is expected to post higher quarterly results.
Wells Fargo (WFC.N), the No. 4 U.S. bank by assets, is expected to post increased quarterly profit, and investors will be closely watching for an update on the mortgage business as a harbinger of what to expect in the rest of the industry.
Thomson Reuters/University of Michigan Surveys of Consumers release preliminary April consumer sentiment index at 8.55 a.m. ET. Economists expect a preliminary April reading of 78.5, compared with 78.6 in the final March report.
European shares .FTEU3 fell 0.6 percent on Friday to end a four-day rally, with some traders citing concerns that Cyprus may need more bailout money as a main factor weighing on markets.
U.S. stocks rose for a fourth straight day on Thursday, sending the Dow and the S&P 500 to new closing highs as positive data on the labor market and an encouraging retail outlook eased recent concerns about economic growth.
The Dow Jones industrial average .DJI gained 62.90 points, or 0.42 percent, to close at 14,865.14. The Standard & Poor's 500 Index .SPX rose 5.64 points, or 0.36 percent, to 1,593.37. The Nasdaq Composite Index .IXIC edged up 2.90 points, or 0.09 percent, to close at 3,300.16.

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Shares set for second best week of year so far

World shares dipped on Friday as investors locked in profits at the end of what was set to be the second best week of the year so far for stocks, while the dollar held near a four-year high against the yen.

A radical monetary stimulus plan from the Bank of Japan (BOJ) and signs of a growing recovery in China have spurred a near 3-percent jump in the MSCI world share index .MIWD00000PUS this week and sent the yen tumbling.
As investors booked some of those equity gains, a 0.3 percent pull-back in Asian equity markets was echoed in Europe, where there were also concerns that Cyprus could require more bailout money ahead of a meeting of European finance ministers.
The pan-European FTSEurofirst 300 .FTEU3 was down 0.7 percent by mid-morning as early losses on London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI extended to 0.6, 0.5 and 1.0 percent respectively. The MSCI world share index was 0.4 percent lower.

European Union finance ministers are meeting on Friday and Saturday, with Cyprus's bailout among the top agenda items.
Luxembourg's finance minister said that Europe and the International Monetary Fund could not increase their 10-billion euro ($13 billion) contribution to Cyprus's rescue, but economists worry that more support may be required.
"There is the potential that Cyprus may need more money, and that may be a reason for investors to book a bit of profit on the back of the recent strong run," said Central Markets' chief strategist Richard Perry.
The jitters also were seen in the currency market, where the euro was down 0.4 percent at $1.3054 and on track for its biggest daily decline in over two weeks.
The main focus remained the weakness of yen, however. The BOJ last week pledged to inject about $1.4 trillion into the economy to end a long phase of deflation and economic weakness; its move has seen the Japanese currency slump to long-term lows.
Governor Haruhiko Kuroda said on Friday that the central bank had taken all necessary steps to meet its two-year, 2-percent inflation target and would try to minimize the market disruption from its massive bond-buying. The yen showed little reaction to his comments.
By 5.30 a.m. ET, the dollar, which has gained about 7 percent on the yen over the past week, was off recent highs at 99.33 yen, while the euro was buying 129.78 yen.
"We are seeing some profit-taking this morning. Also dollar/yen has gone too high, too fast so we are seeing some pull-back," said Morten Helt, senior FX analyst at Danske Bank.
"Nevertheless we see dollar/yen trade higher and eventually hitting that magic 100 mark."
FUNDAMENTAL QUESTIONS
Europe's bond markets were eyeing the informal EU finance ministers meeting in Dublin.
Reuters obtained documents this week revealing Cyprus may have to contribute more than initially thought to its rescue package, including selling some of its gold.
German Bund futures climbed 55 basis points to 145.79 and Italian and Spanish bonds fell as investor caution crept back after what has been a better week for higher-yielding euro zone periphery debt following last week's Cyprus-linked sell-off.
"The Eurogroup is likely to dominate things. There's talk of this funding gap in Cyprus," one trader said. "I don't see a lot of good news for periphery ... There could be consolidation in the market while we wait to see what the Eurogroup says."
U.S. stock futures pointed to a softer end to the week for a Wall Street, which has set a string of record highs in recent days.
Whereas Japan's radical stimulus promise has fuelled the latest leg in a near year-long rally in world stocks, growth-attuned commodities appear to becoming increasingly disconnected from the trend.
Gold, an inflation hedge which investors would normally expect to benefit from the kind of rapid money-printing being announced in Japan, was on course for its third weekly decline on Friday as it steadied at $1554.80 an ounce.
Oil also struck a new eight-month low, slipping below $104 a barrelŸ as nervousness about conflicts involving Iran and North Korea undermined any resistance to a sell-off that was mainly pegged on concerns over slowing crude demand.
Reuters data show the difference in underlying values of stock markets and key commodity prices .TRJCRBTR is now the biggest in over a year: "We are a bit concerned about equities now," said KBC economist Piet Lammens. "We see the divergence between equities and commodities is growing.
"We started to disconnect somewhere in mid-November and since then stocks have continued to go up and up but it is not followed anymore by commodities, which might mean that equities are moving away from economic fundamentals."
(Additional reporting by Emelia Sithole-Materise and Sudip Kar-Gupta; Editing by Alastair Macdonald)

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Toyota denies report that Ford Focus topped 2012 sales

Toyota Motor Corp (7203.T) said on Wednesday its Corolla was the world's top selling car of 2012, contradicting rival Ford (F.N) which claimed top spot for its Focus model.

Ford said on Tuesday it sold 1.02 million Focus compact cars last year, citing data from automotive consulting firm Polk.
It did not detail Corolla sales in a press release on its website, but various media reports have cited the U.S. carmaker as saying Toyota sold 872,774 Corollas last year.

 

Toyota's Tokyo-based spokesman Ryo Sakai said the Japanese carmaker sold 1.16 million Corollas in 2012 and that "Toyota still sees the Corolla as the world's most popular car".
"The sales figure includes Corolla Sedan, which is over 90 percent of the total volume, and the Corolla Altis, Corolla Axio, Corolla Wagon, Corolla Fielder and Corolla Rumion," he said.
It does not include Corolla derivatives like the Auris, Auris Hybrid, Verso, E'z, Matrix, Scion xB and Rukus, which do not share the 'Corolla' name.
Polk could not immediately be reached for comment.

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Important to pursue sustainable fiscal policy: Japan's Abe

It is important for the Japanese government to pursue sustainable fiscal policy to ensure trust in the government bond market, Prime Minister Shinzo Abe said on Tuesday.
Abe, speaking at the lower house of parliament's budget committee, also said the government was always monitoring moves in the bond market.

 

Abe was answering questions about the Bank of Japan's decision last week to double the monetary base by ramping up purchases of government debt in a bold gamble to end 15 years of deflation.

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China March CPI eases, factory deflation stubborn

China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent while producer price deflation deepened, data showed on Tuesday, leaving policymakers room to keep monetary conditions easy and nurture a nascent recovery.

The National Bureau of Statistics said China's producer prices dropped 1.9 percent in March, faster than February's annual drop of 1.6 percent.

 

"Lower inflation will greatly ease investors' concerns that the policymakers would begin to tighten monetary conditions," Haibin Zhu, chief China economist at JP Morgan in Hong Kong, told Reuters.

Economists polled by Reuters had forecast March inflation to ease to 2.4 percent and factory gate prices to fall 1.8 percent from a year earlier.

Month-on-month consumer prices versus the market consensus of a 0.6 percent drop.

Much of the drop in the headline CPI was explained by a drop in food prices which economists say are normalizing after a seasonal spike in February caused by the Lunar New Year holiday.

The data is likely to reduce the anxiety building among some investors that China's policymakers may begin tightening monetary conditions at an early stage in the recovery cycle.

"We think the inflation outlook remains benign. If you look at the overall demand picture, China is recovering but the pace is still very gradual which means inflation is not a near-term concern," said Sun Junwei, China economist at HSBC in Beijing.

China's economy suffered its slowest year of growth for 13 years in 2012, expanding by 7.8 percent, though a fourth quarter bounce to 7.9 percent year-on-year was taken as the starting point of what is widely described as a modest recovery.

Investors expect GDP data due next week to confirm that the economy gained further traction in the first three months of 2013, with analysts in the Reuters poll forecasting that growth nudged up to 8.0 percent year-on-year.

China's central bank said last week the country's economic growth was stabilizing and that inflation was "basically stable". The bank made the remarks after holding its first-quarter monetary policy committee meeting.

But the central bank noted that future price trends bear a level of uncertainty, and that it would keep monetary conditions "stable".

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Wall Street closes higher, Alcoa volatile after results

Wall Street closes higher, Alcoa volatile after results

Stocks ended a volatile session higher on Monday as investors looked ahead to an earnings season expected to show modest growth despite concerns about the economy's health.

Wall Street fluctuated between positive and negative territory for much of the day before climbing in the final hour of trading, ending near its session highs. However, volume was light and the Dow's gains were limited by a selloff of Johnson & Johnson (JNJ.N) shares.


Forecasts for first-quarter earnings have been scaled back in 2013, with profits seen rising just 1.6 percent from the year-ago quarter, according to Thomson Reuters data. In January, earnings were seen rising 4.3 percent.

The drop in expectations has come as economic figures suggest the recovery could be less robust than some had thought. Weak corporate results could give investors further reasons to sell, pushing both the Dow and the S&P 500 back from recent all-time closing highs.

"We're waiting for earnings for evidence that the market can be supported at these levels," said Jim Dunigan, chief investment officer at PNC Wealth Management in Philadelphia. "We will see growth in earnings, but clearing the expectations bar could be difficult, which could give us reason to pause."

The season unofficially started after the market closed with results from Alcoa Inc (AA.N). The aluminum company reported adjusted earnings that beat expectations, but revenue was down from the year-ago quarter. After initially rising in extended-hours trading, Alcoa's stock slid 1.1 percent to $8.30.

As the first Dow component to report, Alcoa is informally viewed as setting the initial tone for the season, though many more bellwether companies' earnings won't come out until next week. The S&P materials index .SPSMCM ended Monday's session up 0.4 percent.

Among the day's most active names, Advanced Micro Devices (AMD.N) jumped 13 percent to $2.59 as the S&P 500's biggest percentage gainer, while Monster Beverage (MNST.O) rose 4.7 percent to $52.01, helping boost the S&P consumer staples sector index .SPLRCS, which rose 1.1 percent.

On the downside, J&J fell 1.1 percent to $81.11 after JPMorgan downgraded the healthcare company's stock to "neutral" from "overweight," saying it faced "a messy first quarter and a likely downward revision to 2013 guidance."

The Dow Jones industrial average .DJI rose 48.23 points, or 0.33 percent, to 14,613.48 at the close. The Standard & Poor's 500 Index .SPX gained 9.79 points, or 0.63 percent, to 1,563.07. The Nasdaq Composite Index .IXIC advanced 18.39 points, or 0.57 percent, to close at 3,222.25.

Both the Dow and the S&P 500 finished Monday's trading at their session highs, while the Nasdaq was just below its intraday peak.

During the session, the Dow made a swing of 115.68 points - falling 67.45 points to its intraday low before it rebounded to end the day up 48.23 points at its session high.

Stocks have rallied strongly this year with major indexes hitting record highs, helped in part by the Federal Reserve's stimulus program. The S&P 500 is up 9.6 percent for the year so far, while the Dow has gained 11.5 percent.

Despite that, major indexes posted their worst weekly loss for 2013 last week, with the payroll report fueling concerns about economic growth.

"A lot of the momentum we had in the first quarter was based on improving economic news, and the jobs report really took the wind out of our sails," said Dunigan, who helps oversee $116 billion in assets. "We're still trying to sift through what that means for our prospects going forward."

Volume was light, with about 5.11 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well below the daily average so far this year of about 6.48 billion shares.

Two-thirds of the stocks traded on the New York Stock Exchange closed in positive territory, while about 60 percent of Nasdaq-listed shares ended higher.

Loose monetary policy from central banks around the world is expected to keep equities attractive. Recently investors have been using market declines as buying opportunities.

The Bank of Japan started its bond purchases on Monday after it announced last week that it will inject about $1.4 trillion into the economy in less than two years.

Fed Chairman Ben Bernanke will give a speech later on Monday after markets are closed. Investors have been watching for any insight into the Fed's thinking on how long the central bank will keep its asset purchase program in place as it tries to boost the economic recovery.

General Electric Co (GE.N) said it will buy oilfield pump maker Lufkin Industries Inc (LUFK.O) for about $2.98 billion, driving Lufkin shares up 37.6 percent to $87.96. GE, a Dow component, rose 0.8 percent to $23.12.

The news lifted energy names, with WPX Energy Inc (WPX.N) up 5.3 percent at $17.01.

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Yen hits 47-month low vs dollar, focus on 100 threshold

Yen hits 47-month low vs dollar, focus on 100 threshold

(Reuters) - The yen pushed deeper into multi-year lows versus the dollar and euro on Tuesday as the market saw every reason to sell the currency with the Japanese central bank on a warpath to battle deflation.

The dollar rose to as high as 99.67 yen on trading platform EBS, the greenback's strongest level versus the yen since May 2009. The dollar later pulled back a bit on profit-taking and last stood at 99.25 yen, down 0.1 percent on the day.

The euro hit its highest since January 2010 against the yen of 129.935 yen. The euro last changed hands at about 129.59 yen, up 0.3 percent from late U.S. trade on Monday.

Since the Bank of Japan (BOJ) unveiled a massive stimulus program last Thursday, the dollar has climbed roughly 7 percent against the yen.

"For USD/JPY, upside momentum remains strong and an eventual test of 100.00 seems in the cards, though there are likely to be a number of barriers between 99.50 and 100.00," said Vassili Serebriakov, strategist at BNP Paribas.


"Markets are increasingly focused on the notion that larger JGB purchases at longer maturities by the BOJ could push Japanese domestic long-term investors elsewhere."

Speculation that Japanese investors might start increasing overseas investment in search of higher yields has helped trigger a rally in some European bond markets in recent sessions, with French 10-year bond yields hitting a record low on Monday.

Some market players sold the dollar on Tuesday to lock in profits, and there was talk of dollar offers in the 99.80 yen to 100.00 yen area, a trader for a U.S. bank in Singapore said.

One possible technical resistance for the dollar lies at about 99.73 yen, which is the 50 percent retracement of the dollar's drop from a June 2007 high of 124.14 yen down to a record low of 75.311 yen set in October 2011.

Underscoring the Japanese currency's weakness, commodity currencies touched multi-year highs against the yen on Tuesday, with the Australian dollar hitting its highest since July 2008 at about 103.80 yen and the New Zealand dollar rising to its highest since February 2008 at about 84.49 yen.

The Australian dollar gained a quarter of a cent against the U.S. dollar after data showed China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent, leaving Chinese policymakers room to keep monetary policy loose to support an economic recovery.

The Aussie dollar hit an intraday high of $1.0448 after the Chinese inflation data and last fetched $1.0432, up 0.2 percent from late U.S. trade on Monday.

Elsewhere, the euro rose 0.4 percent to $1.3059, having triggered some stop-loss buying at levels near $1.3050.

(Additional reporting by Reuters FX analyst Rick Lloyd in SINGAPORE; Editing by Richard Borsuk)

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Yen still in focus, Asian shares rise on Wall Street

(Reuters) - The yen fell to fresh multi-year lows and Japanese stocks extended gains on Tuesday as effects of the Bank of Japan's aggressive reflationary campaign reverberated through markets, while Asian equities drew support from a solid start to the U.S. quarterly earnings season.

Benign Chinese inflation data also boosted sentiment as it kept hopes that an expansive monetary stimulus will stay in place to support the world's second-largest economy, but escalating tensions in the Korean peninsula took a toll on South Korean shares and its currency.

 

The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.8 percent, led by Australian shares .AXJO which gained 1.3 percent on rises in blue chip financials and miners.

"It's hard to say which direction the market will go but I think near term the biggest catalysts will be the results from the U.S. earnings season," said Haris Khaliqi, research analyst at Foster Stockbroking.

Alcoa Inc (AA.N), the largest U.S. aluminum producer, kicked off U.S. earnings on Monday, reporting an increase in quarterly profit on Monday and easing concerns about corporate results in the first three months of 2013.

Earnings forecasts have been scaled back heading into the first-quarter reports, with S&P 500 company earnings seen up just 1.6 percent from a year ago, according to Thomson Reuters data, down from a 4.3 percent forecast in January.

South Korean shares .KS11 were the sole exception to the regional equity rally, falling 0.5 percent, while the South Korean won briefly dipped to a fresh 8-month low of 1,145.3 per dollar earlier.

North Korea suspended its sole remaining major project with the South on Monday, the Kaesong industrial park, amid speculation that it will take some sort of provocative action - another nuclear weapons test or missile launch - in what has become one of the most serious crises on the peninsula since the end of the Korean War in 1953.

China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent while producer price deflation deepened, data showed on Tuesday.

"The lower inflation will greatly ease investors' concerns that policymakers would begin to tighten monetary conditions," said Haibin Zhu, chief China economist at JPMorgan Chase in Hong Kong.

The Australian dollar rose to a high of $1.0448 from around $1.0424, before drifting back. Australian assets are sensitive to economic indicators out of China, as it is Australia's largest export destination.

JAPAN STILL LEADS

The yen was expected to stay under pressure, while Japanese shares were seen garnering sustained support from the unprecedented scale of the stimulus unveiled late last week by the new BOJ Governor Haruhiko Kuroda.

Japan's Nikkei stock average .N225 rose 0.5 percent, after jumping as much as 3.1 percent to its highest since August 2008 earlier on Monday. .T

"Kuroda's done a commendable job of letting the market know he is not fooling around. He is certainly not shackled by economic theories," said David Baran, co-founder of Tokyo-based hedge fund Symphony Financial Partners.

He expected Japan's markets to perform in a similar way to U.S. markets after the U.S. Federal Reserve first opted for quantitative easing four years ago with an asset buying program. Both the Standard & Poor's Index .SPX and the Dow Jones industrial average .DJI have hit all-time highs during the last couple of weeks.

The Nikkei, currently at around 13,260, remains far below a lifetime high of 38,915.87 notched on December 29, 1989.

Early in Asia on Tuesday, the dollar hit its highest since May 2009 of 99.65 yen while the euro climbed as far as 129.72 yen, its highest since January 2010. The Aussie dollar soared to 103.78 yen, the highest since July 2008.

Traders expect the dollar to trade at 100 yen as soon as this week, as the effects of the BOJ's latest move reverberate through markets.

"Markets are increasingly focused on the notion that larger JGB purchases at longer maturities by the BOJ could push Japanese domestic long-term investors elsewhere," said Vassili Serebriakov, strategist at BNP Paribas.

A sharp decline in Japanese government bond yields across the curve has stirred speculation Japanese investors will turn to higher-yielding assets elsewhere, pushing sovereign bond yields lower in the United States and the euro zone.

Concerns over the euro zone were offset by sharp falls in yields of Spain and Italy due to demand for higher-yielding euro zone bonds from Asia after the BOJ plan.

U.S. crude futures were up 0.2 percent to $93.57 a barrel and Brent rose 0.4 percent to $105.04. <O/R>

Growth in developing Asia is seen gaining momentum this year, powered by rising domestic consumption and intra-regional trade, but authorities need to ward off risks of inflation and asset bubbles arising from strong capital inflows, the Asian Development Bank said in its latest regional outlook report for 2013.

Firmer stocks underpinned risk appetite in Asian credit markets, tightening the spread on the iTraxx Asia ex-Japan investment-grade index by 3 basis points.

(Additional reporting by Ian Chua in Sydney and China Economics Team in Beijing Thuy Ong in Sydney; Editing by Simon Cameron-Moore)

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French finance minister, U.S. Treasury Lew's to meet Tuesday as planned

(Reuters) - French Finance Minister Pierre Moscovici and U.S. Treasury Secretary Jack Lew will meet on Tuesday in Paris as planned, a U.S. Treasury official said on Monday, restoring a get together that had been canceled earlier in the day.
The two will meet at the U.S. embassy in Paris on Tuesday afternoon, and then hold a joint press conference.

 

Lew is in Europe for talks with officials regarding the sagging European economy, which is suffering from a prolonged sovereign debt crisis.
The government of French President Francois Hollande has recently come under pressure after a former budget minister admitted lying about a secret 600,000-euro foreign bank account.
Hollande and Moscovici have spent the past week fending off accusations of a cover-up. A poll on Sunday showed a majority of the French favor a government reshuffle.
A spokesperson from the French Finance Ministry said the meeting was initially canceled due to scheduling conflicts.
The spokesperson said Moscovici would meet with Lew next week when the minister travels to Washington for the semi-annual meeting of the International Monetary Fund.
(Reporting by Anna Yukhananov in Brussels and Catherine Bremer in Paris; Writing by Jason Lange in Washington; Editing by James Dalgleish and Leslie Adler)

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Healthcare sector leads European share bounce

* FTSEurofirst 300 up 0.2 percent
* Novartis boosted by BofA-ML upgrade
* Portugal uncertainty highlights euro zone problems
By Tricia Wright
LONDON, April 8 (Reuters) - European shares were led higher by the healthcare sector on Monday as investors tiptoed back into the market with a cautious focus on the start of the U.S. first-quarter earnings season.

 

The FTSEurofirst 300 closed up 0.2 percent at 1,164.79 points, in the aftermath of Friday's 1.6 percent drop on weak U.S. jobs figures. The euro zone's blue-chip Euro STOXX 50 advanced 0.2 percent to 2,589.25 points.
Traders noted a lack of conviction on Monday - evidenced by low volumes - with some investors apprehensive before the start of the U.S. earnings season, which kicks off with first-quarter results from aluminium producer Alcoa later in the day.
The FTSEurofirst 300 traded 83 percent of its 90-day daily average.
"I think the markets are taking stock and thinking what are company earnings forecasts (going to be like), what is the consensus going to be for forward P/Es (price/earnings ratios)," Michael Hewson, analyst at CMC Markets, said.
Investors who dipped into the market opted for sectors better suited to a low growth environment, such as healthcare , ahead 1 percent.
Swiss drugmaker Novartis, up 1.8 percent, was among the biggest individual points contributors to the FTSEurofirst 300, helped by an upgrade on the stock from BofA Merrill Lynch to "neutral", according to traders.
Some fund managers, however, highlighted that so-called defensive sectors, which have spearheaded the rally since the turn of the year, are now looking expensive.
The healthcare and consumer staples sectors trade on respective 12-month forward P/E ratios of 13.9 times and 16.7 times, according to Thomson Reuters StarMine data.
"Clearly the economic environment isn't as good as it has been... but still there are sound valuation opportunities out there," said Kevin Lilley, who runs Old Mutual's European Equities fund, which has 55 million pounds ($84.1 million) assets under management.
Lilley is "overweight" financials which, according to Thomson Reuters data, trade on a 12-month forward P/E of 9.8 times.

PORTUGAL UNDERPERFORMS
Traders said that while the long-term outlook for European equities remained positive, with equities offering better returns than cash and bonds, near-term prospects were clouded by uncertainty due to the euro zone's debt crisis.
Concerns over the euro zone - which resurfaced last month after inconclusive elections in Italy - were heightened when Portugal's constitutional court rejected some of the austerity measures introduced as a condition of the country's bailout.
Portugal's benchmark PSI 20 equity index underperformed gains elsewhere in Europe, with the Lisbon market falling 1.4 percent.
Some investors were relatively unfazed by the bouts of political turmoil which have led to jittery trade in recent weeks.
"There's always going to be something out there that goes against the grain but what this crisis has shown... is that there is a real political will for things to continue and for the euro to hold it together and the euro zone to hold it together," Old Mutual's Lilley said.

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UK Stocks-Factors to watch on Monday April 8

UK Stocks-Factors to watch on Monday April 8

(Reuters) - Futures on Britain's top index rose 0.4 percent ahead of market open on Monday. For more on the factors affecting European stocks, please click on

* The UK blue chip FTSE 100 index closed 94.34 points lower on Friday at 6249.78. Britain's top share index posted its worst weekly loss since November after falling for a third straight session on Friday when weak U.S. jobs data dampened expectations of steady recovery in the world's largest economy.

* BANKS - Big bank depositors could take a hit under planned European Union law if a bank fails, the EU's economic affairs chief Olli Rehn said on Saturday, but noted that Cyprus's bailout model was exceptional.

* BP - A U.S. judge's ruling Friday against BP means the company can proceed with its appeal of the way a court-appointed administrator apportions payments for claims related to the 2010 Gulf of Mexico oil spill, some of which BP called "absurd."

* TESCO - The Telegraph reports that the food retailer is facing a bill of about 1 billion pounds ($1.54 billion) to quit its loss-making Fresh & Easy business in the US.

* British businesses expect to increase hiring over the next six months but do not anticipate overall growth in the nation's economy, a survey showed on Monday. An optimism index from accountancy firm BDO, which measures business performance expectations two quarters ahead, rose to 92.2 in March from 90.6 in February.

* CAIRN ENERGY - Bid rumours are mounting in the oil and gas explorer after David Einhorn, who runs the 5 billion pound hedge fund Greenlight Capital, took his stake in the company to 3 percent, fuelling speculation of a 1.6 billion pounds shake-up of the Edinburgh-based firm, according to the Daily Express.

* MECOM - The publisher says that earnings are likely to fall materially short of current market expectations if conditions do no improve.

* GEMFIELDS - The mining company sees a possible ban by the Zambian government on the company's ability to sell its gemstones outside of the country, potentially affecting the Kariba amethyst mine in which Gemfields has a 50 percent interest.

* FINDEL - Findel expects to report full-year results in line with market expectations.

* FAROE PETROLEUM - Faroe Petroleum says that the Darwin exploration well is dry.

* XCITE ENERGY - Xcite Energy reports a significant increase in both reserves at its Bentley field and value attributable to its assets, saying the time is right to seek partners for the project.

* WILLIAM SINCLAIR - The horticulture firm says that the beginning of the important spring selling season has been delayed by bad weather, although it remains confident that the industry is relatively recession resistant.


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> Other business headlines Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit* BridgeStation: view story .134(Reporting by Alistair Smout)

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