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Thungen Financial Market Update 7th April 2014
After last week ending on a low note, early trading in Asia on Monday continued in the same vein.
What should have been positive data out of the US ended up below analyst expectations and saw a sharp sell off as trading closed out on Friday. Payroll data was significantly below what was predicted, 192k instead of the 200-220K range widely quoted on Friday morning. The data saw the NASDAQ have one of the worst afternoons in months as it lost 2.6% on the day. The S&P 500 also took a fall off its highs closing out the week at 1,865.09, over 1.25% down on its previous benchmark high.
The markets in Asia are subject to plenty of economic indicators this week along with 2 major elections in the region. India starts its month long general elections this week. The largest democracy in the world has over 814.5mn eligible voters all of whom are keen to see their economy continue to grow. Indian Industrial Output is released Friday and this is expected to mirror the continued growth so far this year. Also, Indonesia will start its parliamentary elections this week, as one of the strongest emerging economies of 2013 and South East Asia, Indonesia is seen as a hot spot for investment and with Presidential elections due in July many people will be keen to see the outcome.
More economic data is due out of China later this week, On Thursday Trade Data for March is expected to be up on February due to the Chinese New Year finishing and businesses managed to get back to normal. The CPI will also be released on Friday so it is expected that unless something dramatic is announced this week, Asian markets will be quiet until this data has been released.
Asian Markets as of 7th April 2014:
Nikkei 14,809.05 -1.69% SSE Comp. 2,058.83 +0.73%
Hang Seng 22,366.17 -0.64% ASX 5,416.10 -0.23%
Late last week the ECB met in Brussels. Despite positive growth data from many EU member the economy is still seen as weak. With record low inflation and interest rates still at an all time low the ECB has tentatively stated that it may need to implement some form of quantative easing. Mario Draghi, the President of the ECB did little to address directly the type of easing they could employ, he simply stated that QE was a likely possibility. Despite this, markets in Europe remained in the red on Friday and this is expected to continue on Monday trading despite both Denmark and Germany announcing increases in their Industrial Output figures. With Germany posting a 0.4% increase on Industrial Output for February and Denmark 1.4% up on the previous month too, there are signs that the EU is indeed on the road to recovery. What concerns many commentators is the distinct difference between northern members and the counties in eastern Europe. Due to the nature of the European Union, it matters very little what the older more established members economies promise as they are all inherently and ultimately linked. With growing concerns over Moscow and its behaviour in the Ukraine, many of the countries in the EU who have borders in that vicinity are now voicing concerns about their own sovereignty and security, and the implications of the Crimea crisis are still being felt.
European Markets as of 7th April 2014
FTSE 100 6,695.50 +0.70% Dax 9,695.77 +0.70%
CAC40 4,484.55 +0.79%
BEL20 3,149.35 +0.07% Zurich SMI 8,503.00 -0.22%
MICEX 1,382.96 +1.47%
As stated, US jobs data had a major effect on the markets late on Friday. After a good start to the week the indexes managed to drop nearly all of their gains to end the day in negative territoty. Sharpe sell offs in the technology sector drove down the NASDAQ and S&P 500 with only the Dow barely holding on to some good ground. Technology is expected to continue down on Monday into early trading.
US Markets as of 7th April 2014:
S&P500 1,865.09 -1.25% Dow Jones 16,412.71 -0.96%
NASDAQ 4,127.73 -2.60%
This week will see further indicators out of Europe and Asia along with the usual data out of the United States. Political situations in Asia, the increased tensions in the Ukraine and the Middle East will probably have a cooling effect on markets as the week starts out. Any developments in the Ukraine will have a positive effect on the European markets and China data should help strengthen their indexes by close of play this week.
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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 Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen 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.