Week Ending 7th Mar 2014 Market, Industry and Sector Update.
This week has been dominated by the Russian and Ukrainian standoff in the Crimea Region. Having drawn the attention of the entire global press the tense situation has had initially profound and then ultimately very little effect to the markets as a whole. After the expected negative reactions across the major indexes on Monday, loses across the board have been reversed as the week wore on.
The fact that Russia's Prime Minister Vladimir Putin has expressed his desire to end this peacefully there are still concerns that although shots may not be fired, the people of the Ukraine will not have it all their own way. News of 2 lengthy calls between both the US and Russian leaders did little to ease East and West relations as it is known that PM Putin does not particularly respect Obama's style of leadership. Threats of economic and financial sanctions (the US already having placed Visa restrictions on certain Ukrainian officials and the EU has halted talks over an economic pact and visa agreements as of Friday morning) did little to deter the Russian's stance as leaks from European governments proved that it would be more harmful to the EU members to participate in any sanctions the US could try to encourage.
Towards the end of the week China released it 2014 growth forecasts. With a conservative rate of 7.5% expected, this holds with the previous year's 7.7% and confirms that China's growth is slowing down, albeit much slower than many economists predicted. They also set an inflation goal of 3.5% as they look to parry increasing prices and entice consumer spending.
The ¥CNY managed to stabilize its fluctuations after what some were saying was a true indication of the Chinese economy. After seeing its value against the USD plummet it has seen its biggest weekly advance in 4 years and at time of writing was floating around ¥6.11 against the $1USD. This along with the economic forecast no doubt belays concerns for the time being.
With everything that has been going on, the markets appear to be ending the week with very little real gains or losses in monetary value.
At the close of trading Thursday, the majority of the global indexes has leveled out back to where they were towards the end of last week.
Index Close % Change
FTSE 100 6788.49 (+0.19)
DAX 9542.87 (+0.01)
CAC 40 4417.04 (+0.59)
HangSeng 22718.82 (+0.07)
NASDAQ 4352.13 (-0.13)
S&P 500 1877.03 (+0.17)
Even Russia's MICEX managed to keep the declines in check closing out Thursday trading at 1,337.98 (-0.97%). This does however still reflect a 11/12% drop since the Ukrainian crisis. This obviously doesn't mean that all the companies are back to their supportive trading levels as sanctions are being implemented and threatened, however it is believed that any efforts to enforce harsher economic sanctions would be met with a very direct response from Mr. Putin and his team. Rosneft AOA, Russians largest Oil and Gas company with heavy links with BP are down roughly 10% as of the beginning of the crisis however they are now relatively flat over the course of the last 2 days trading, after 52wk highs in the 270's they are now trading flat around the 230 ruble mark.
With only US Labour Force data expected today it is likely the markets will remain steady throughout. Although Job data is positive, with a small rise predicted (up to 149,000 new jobs added); it is still below last year's average. Given the extreme weather seen in the US this past month this is good news and hope is that the trend will continue upwards as the weather relaxes over the next few weeks. The US Jobless rate looks to stay the same at a 5yr low of 6.6%.
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DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Triumph Financial Advisors.All market data within this release is for your general information and enjoys indicative status only. Triumph Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.