Markets  |  November 13, 2012 14:11:21

Energy Suicide of Europe

Equity markets in the U.S. yesterday attempted during business seans two times the growth, but neither attempt was not successful and, ultimately, the major stock indexes finished trading with minimal changes: SP500 +0.01%, Nasdaq Composite -0.02%. The reason they were continuing concerns about the fiscal cliff as well as the still unresolved question of the distribution of aid to Greece.

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While stock indices failed to grow, especially the pharmaceutical sector will be fairly successful at yesterday. Supported by new reports of the Office for Drug Control FDA. The company Gilead Sciences in 2011, the company bought by Pharmasset in 10.4 billion to assist him in the development of drugs intended to halt the spread of hepatitis C virusIn February this year, the company said that grief is the new antidote entertained with great success. That has changed however, and further clinical trials have been successful and those whose results were announced yesterday, had even more successful at 100%. Shareholders Rewarded share growth of about 13.72%.

Have also been successful at Celgene Corporation. Its shares have risen by 5.82%. Fourth largest biotech company revealed that it liek pancreatic cancer has reached the desired stage, subsequently results in the tests. Finally, even the company Abbott Laboratories has published successful results of its testing of a medicinal product for the treatment of hepatitis C, there no market reacted cautious and shares better off by only 0.05%.

USA might be the largest oil producer in the world

The energy sector yesterday was relatively little active, but the last days are very often just talks about future energy. New ways of extracting oil and natural gas in the U.S. has worked, according to the International Energy Agency EIA U.S. outperforms Saudi Arabia as the largest oil producer in 2017. In 2020, the U.S. economy should have been a net exporter of natural gas.

Vast reserves of natural gas has also China, but the problem is there when hydraulickom narúšaní subsoil rich in oil and natural gas is there a huge need for water. Tú also need a coal power plant (for cooling), which currently produce most of the energy in China but also in the world. When extraction through hydraulic fracturing is the necessary but it much more, which may complicate the development of this method of obtaining oil and natural gas.

In the U.S., water is not a problem and the landscape is still huge investments are aimed designed to further increase production. Low gas prices, one-third compared with Japan or Europ cause that many companies begin to drag their chemical factory in the U.S.. For example, Dow Chemical Society canceled its activities in Belgium, Holland, Spain, Japan and the UK and plans to concentrate them in Texas. Huge investments in the production of natural gas is doing well in Australia, there is no production intended for export to Japan and Asian countries.

Low energy prices, good infrastructure and we again competitive wages in the U.S. are doing in the United States an attractive place to invest and it is expected that even more companies begin to produce again in the U.S..

Energy Suicide of Europe

Europe that was trying to recover from the crisis, but the path to reducing energy independence through fracking sees. Even to their position worsened by the fact that it is intended to limit the number of nuclear power plants. Subsoil rich in natural gas is located in Poland, UK and France, no any country so far no plans to actively develop this region, France even banned it. So while the U.S. is leading to self-sufficiency, Europe has an energy Pácha suicide, what is it can backfire later. Transition to renewable sources is a nice thing, but extremely expensive.

It is expected that the Baltic States Wind power plant will provide power throughout Europe, in addition to that there is no high voltage interconnection with Northern Europe it Juho. Europe should have more than twenty summits to resolving the crisis in the EU, but the impact of closure of nuclear power plants in Germany in 2022 was not dealt with too.France and Italy also are aimed to stopping nuclear energy, but so far have no alternative.

Better yet, on the United Kingdom. In 2015, eight coal-fired power plants zatvorených, nuclear plants are out of date and did not get a new license. Landscape plans in 2020 to Wind power plant built offshore supply up to 17% of electricity in the country. In absolute terms, but to the volume of electricity comparable with the team who deliver all such projects in the world combined.

U.S. economy to be based on the crisis much better. Total debt is slightly reduced, the economy is growing, interest rates are low and energy is not enough. In Europe, on the contrary debts rise, the economy is in contraction, interest rates are higher than U.S. energy independence and solves the evil way. Let's hope that politicians have a plan B.

Greece gets two years in addition

He will need some soon nachystať also for Greece, since landscape will be a problem to fulfill its goals. About Greece, therefore, at the meeting of Eurogroup finance ministers spake EU countries. Press Conference of the meeting came even before midnight. Chief meetings of the euro area finance ministers Juncker started conversations about 23:14. He said the Eurogroup welcomes Greek progress. The budget for 2013 is compelling and, therefore, is an extension of compliance with the conditions of two years appropriate. From Greece wants the landscape continued fulfillment of conditions. Another meeting will be next Ecofin next Tuesday (November 20th) ... They confirmed the information so that the politicians do not agree on the help and expenditures to meet one more. Hopefully, then it will be done Troika report. Greece is waiting to distribute aid tranche of a total of 31.5 billioneuro since June, when Greece resources were frozen. Juncker admitted that the objective of debt sustainability can be displaced in 2020 from the 2022nd Then should the debt ratio to reach 120% of GDP. Despite the enormous debt he said that does not expect an official haircut on Greek debt. IMF to expand compliance assistance did not respond, no resources of loved ones by the institution of the fund against the prolongation of compliance assistance. This requires additional financing in the volume of 33 billion euros ... The margo Spain Juncker said that the first source of banks may receive rescue package early in December.

Today's view

Summit not produce anything new, and today even result ZEW investor sentiment, which in Germany declined to a minimum in June 2010. Euro but the administration responded only slight decline.It is possible that we have maximum pessimism on the other day in a row and the markets would be reflected above. Euro could benefit from this development and, therefore, we see scope for reflection of the single currency.

Author: John Benaki | TRIM Broker, as | Trading on exchanges TRIM Broker

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