Week Beginning Mar 31 2014 Market and Economic Update.
The last day of March was a good day for the indexes and it looks like April 1st will continue to see green.
Initially having an adverse affect on the local Asian markets, official data out of China showed that although there are concerns regarding growth, manufacturing did increase slightly in March. Governmental figures on PMI (Purchasing Managers Index) posted a 50.3 over February's 50.2. Even a small gain is seen as good news and any figure over 50 is seen as positive data. It wasn't all good however when HSBC and Markit both released their data showing that PMI had actually decreased. It is to be noted that both private firms monitor small factory output and the government data catches large and government owned factory output. The news had an adverse effect at the start of trading on Monday however the markets in Asia managed to recover their initial losses with the Hang Seng and SSE both posting gains in the afternoon which have continued at time of writing Tuesday morning. Unexpected news out of Japan on the eve of their Sales Tax increase did little for the Nikkei. Factory Output was down 2.3% on February's figures raising concerns about the local economy and where it was heading. Seen as a positive step towards reducing the deficit the sales tax increase from 5% to 8% is also an attempt to increase spending.
A statement from the FED in the US by Janet Yellen stirred the markets despite concerns over Asian data. In first public speech Ms. Yellen didn't really give much away. Continuing concerns about the job market and the economy she said that the Central Bank will continue to give support and look to deal with two specific areas, unemployment and inflation. With the current unemployment figures standing at 6.7% this is way above the governments acceptable level of 5.2%-5.6%. With inflation set at just 1% this is substantially lower than the CB's target of 2%. Despite the lack of real news, the US markets responded well with all 3 major indexes posting good gains on Monday.
On Monday Russian PM Vladimir Putin pulled some of his forces away from the frontiers with the Ukraine. Seen as a positive step towards negotiations the MICEX posted gains for the second day in a row. Closing over 1.5% up on last week's close at 1,366.69 the local markets are starting to recover as it looks like there could be a peaceful resolution to the Crimea Crisis. Many commentators have stated that the US will have difficulty in pushing through harsher sanctions and the mere fact that Moscow is appearing to play ball will be seen as a step in the right direction and no doubt will calm some EU members nerves. The news pulled Crude futures off their 3 week high after they rallied against fears of Russia closing the tap on Europe, which is now seen as a long shot.
In technology, Facbook Inc. founder Mark Zuckerberg did well last year according to regulatory filings. After selling the remainder of his stock options from the IPO he pocketed $3.3bn in 2013. Shares of the social media company have doubled since its listing but fell yesterday on the news of another takeover, this time of Oculus VR and virtual reality company. As Facebook continues to spend its cash, investor concerns are to how these new additions will drive the social media giant forward in the future. Closing down on the day at $60.24 you don't have to feel too sorry for Mr. Zuckerberg, he still holds over 426m shares at a rough value of $25.7bn.
Major Indexes as of 1st April:
Index % Change Close/
DOW Jones (+0.82%) 16,457.66
FTSE 100 (-0.26%)
CAC 40 (-0.45%)
Nikkei 225 (-0.10%)
Hang Seng (+0.86%)
Commodity markets have been very active over the last few weeks. With the situation in the Ukraine and new and continuing problems in the Middle East oil traders have had a busy time. As previously stated, Crude futures dropped after news on Moscow pulling troops away from the Ukraine border. Down almost 3.25% on the month futures are now at $107.50 however increasing concern is coming from Syria and the lack of any resolution still make oil at over $115.00 a distinct possibility according to some analysts in the next few weeks. Both Gold and Silver have seen their April contracts reduce. The "Safe-Haven"
Commodity Prices as of 1st April:
Brent Crude (-0.20%) $107.50
WTI Crude (-0.40%)
Comex Gold (-0.02%) $1,291.75
Comex Silver (+1.30%)
This week sees several global economic indicators which will hopefully push the markets in positive territory. Along with a whole host of economic data out of Europe expected and an ECB meeting this week it's going to be very busy.
Happy April Fool's Day!
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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.