3rd April - Market and Economy Review
Global Market Data as of 3rd April 2014
FTSE 100 6,659.04 (+0.10%) Dax 9,623.36 (+0.20%)
CAC 40 4,430.86 (+0.08%) BEL 20 3,150.27 (-0.02%)
Madrid IBEX 10,435.80 (-0.26%) Zurich SMI 8,508.26 (+0.60%)
Moscow MCIEX 1,373.16 (-0.22%) Sydney ASX 5,415.58 (+0.12%)
Nikkei 225 15,111.98 (+1.09%) Hang Seng 22,557.28 (+0.13%)
Shang SSE Comp 2,058.98 (0.55%)
Dow Jones 16,573.00 (+0.24%) NASDAQ 4,276.46 (+0.20%)
S&P 500 1,890.90 (+0.29%)
The beginning of April has continued the end of Marches late gains and momentum is expected to continue forward as the week closes out.
Asian markets reached close to their 4mth high in early trading off the back of positive data out of the US and good news from the Chinese government with regards to an initial stimulus package that has seen the region posts gains on most indexes. In looking to quell concerns over their slow economic growth Chinese officials announced that they intend to push through with their infrastructure plans by completing rail network projects on time and increasing their network by 18%. This will be funded by the sale of government bonds to totaling ¥150Bn. In an effort to increase small business and the job market, smaller firms are set to benefit from tax cuts, expending the current concessions out to 2016.
This week has seen several economic indicators out of the US however yesterdays figures on Construction and Manufacturing Output drove the markets higher in afternoon trading. The S&P 500 closed out at its highest ever after news that Construction spending was back up to par and the Institute for Supply Management provided a positive figure too. Any number over 50 is seen as an expansion and a figure of 53.2 for February was bettered in March by 53.7. The news was taken positively by the major markets as a sign that things are getting back to normal after the inclement weather the States has seen over the last few months.
It's been a good week in Europe with several EU member making positive statements with regards to economic and policy updates. The European Central Bank meets later today to discuss the current Eurozone situation and no doubts concerns over Crimea will be at the forefront of discussions. As the crisis continues the EU needs to be wary about any moves it makes. With the EU looking as if it is at least starting on a road to recovery, the ECB will be keen to protect what work it has achieved. With Greece just agreeing on new bailout terms which will see it receive $11.4Bn over the next three months amid rises in taxation and spending cut, Cyprus stabilizing sooner than expected and many northern European countries economic data back to the levels they should, the ECB will want to look to address inflation as it reached 0.5% in March, the lowest since 2009. This was mentioned by Christine Lagarde as the IMF held a conference yesterday as she voiced concerns about the global economy. She said that the situation in the Ukraine could have far reaching effects and that it is something the Eurozone would need to pay close attention to. Citing a 3% growth forecast for the global economy over the next two years she said that inflation within the Eurozone was a key issue that needed special attention and action if the European Union as a whole was to escape what she quoted as a potentially global "Low Growth Trap.".
Any major announcement by the ECB today will no doubt have an effect on the markets for the rest of the week however strong gains in Asia and the US should be good enough to finish the week on a high note as nothing too ground breaking is expected out of Belgium.
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