The second quarter is looking good, meaning that the third quarter should look a lot better

Analysts around the World are now saying that the recession may have begun to peter out during May and June, with the recovery in bank earnings as well as the buoyancy of equity markets all supporting that conclusion.

In the UK, the British Chambers of Commerce, the Royal Institution of Chartered Surveyors, and the British Retail Consortium have all reported improved performance in the quarter to June, with a similar story being told in the US. The word out on the financial street is that in the third quarter, most leading nations will see an increase in GDP for the first time in almost two years.

The first of the major banks scheduled to do so this week announced their results and there were no surprises. Banking group HSBC showed pre-tax profits of £2.98 billion in the first six months of 2009, half of what they earned for the same period last year.

Rising bad debts in the US, Europe and Asia forced the bank to write-off around £10 billion, which was a rise of 39% from the same period in 2008.

Earlier Barclays also announced their pre-tax half-year profits of £2.98 billion.

According to a recent survey from the Confederation of British Industry, small and medium- sized UK based manufacturers are reporting output and order books falling at a slower pace An index of new orders rose to minus 34 in the three months through July, down from the previous quarters minus 51, which was the worst since records began in 1988.
The report adds to signs that the worst recession in at least a generation is easing with the rise in sterling against the dollar beginning to boost exports.

Hammerson Plc, who own stakes in shopping malls such as London’s Brent Cross, reported a wider loss for the first half of 2009. Losses swelled to £786.1 million from £421 million pounds for the same period last year, after the London-based company wrote down the value of its properties by £766.2 million.

Hammerson’s shares advanced 2.45 pence to 347.2 pence in London trading, raising the company’s market value to 2.42 billion pounds. The investor and developer will raise its first-half dividend by 3 percent to 6.95 pence a share. The value of Hammerson’s assets, including a stake in Birmingham’s Bullring shopping center, depreciated by 14 percent in the first half of 2009. U.K. retail properties have lost value for eight consecutive quarters because of the recession and a collapse in investment demand.
Hammerson’s U.K. assets, which account for about two thirds of the total, lost 15 percent of their value in the first half, while the company’s French assets depreciated by 11 percent.
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On the FTSE yesterday, financial stocks were the principal driving force behind the gains. HSBC rose 5 per cent to 635 pence, while Barclays, also appreciated by 6.7 per cent to 322 pence. Pre-results, the Royal Bank of Scotland rose 3.5 per cent to 46½ pence despite concerns that the sale of their Asian assets may not be completed before the results are announced.

Shares in Smith & Nephew lost 1.2 per cent to 470 pence after analysts. Reduced their ratings in the company stating that growth forecasts were not supported by current sales trends.

British American Tobacco also dropped 1.9 per cent to 1823 pence after their second quarter earnings were less than inspiring.
Shares in British Sky Broadcasting closed down 2.8 per cent to 530 pence, largely attributed to o profit taking following a 20 per cent gain last month
The FTSE 100 rose 1.6 per cent to reach its highest level since October, adding 74.1 points to 4,682.46.
The FTSE 250 however continued with its rapid upward spiral, rising a further 158 points to close on 8,158.16

The pound rose to its highest level so far this year as global surveys raised hopes that the worst of the recession might be over.
Pound/US dollar 1.694
Pound/Euro 1.1765
Pound/Japanese Yen 161.2447
Pound/Swiss Franc 1.7934

According to officials and industry executives, Wall Street banks are reaping outsized profits by trading with the Federal Reserve, a matter that is raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties. During the ongoing financial crisis, the Fed has emerged as one of Wall Street’s biggest customers, buying massive amounts of securities to help stabilise the markets.

On Wall Street everything was looking rosy as the NASDAQ broke the 2,000 point barrier for the first time since October. The major US indexes all added 1.25% or more by close of trade after manufacturing surveys rose in July. The Dow Jones jumped 114.95 points to 9286.56. The NASDAQ rose by 30.11 points to close on the magic figure of 2008.61.

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Tags: Bank, Bank of England, Banking, British Economy, Credit Crunch, Economics, Economy, Financial News, FTSE, Money, Money Management, Money Markets, Recession, UK Banks, UK Recession