Week Beginning 14th Apr 2014 Market and Economic Update.
European markets have opened slightly lower after poor data out of China earlier today despite a strong start to the week.
Asian markets were mixed today as data out of China seemed to continue to support that their economy is weakening. Money supply figures were at a decade low in March and this had a stifling effect on the Chinese markets. With more economic indicators due tomorrow concern is still rife that the economy is not recovering as well as it should be. Tomorrows data, GDP Growth Rates for YoY and QoQ are expected to be lower however data on Retail Sales and Industrial Output should be better according to analysts. The Nikkei managed to avoid the red as it returned from a 6mth low yesterday with a 0.5% gain today. Singapore and Australian markets also had a better day, up 0.91% and 0.55% respectively.
Despite opening lower European markets are expected to continue the gains of yesterday. As questions of a recovery in Europe continue to be backed up by stronger economic data coming from its members it was no surprise to see that Industrial Output for the Eurozone grew in February by 0.2%. Although not a huge increase it confirms that the region as a whole is indeed turning the corner. To add weight to this the World Trade Organisation (WTO) announced that Global Commerce was set to expand by 4.7% in 2014. The WTO said that since the financial crisis of 2008/9 global commerce has gradually recovered and is now just reached levels seen pre-crisis. With a prediction that 2015 should see 5.3% global growth this see commerce back to growth level rates back into the 20yr average. Although positive, Global Commerce is still reportedly 19% down on where it should have been had the 2008/9 crisis not happened. First for commercial services the United States comes in second to China as the World's largest goods trader. One thing to bear in mind is that should you take the Eurozone's 18 member as one, Europe would surpass both China and the US as the largest trader of goods. Tensions in the Ukraine continue cause concern for investors. Sustained pro-Russian attacks in the East of Ukraine and the missing of the deadline to vacate government buildings has done nothing to ease the situation. Both the EU and US yesterday announced economic packages aimed at allowing the Ukrainian government deal with their debt to Moscow. A €1bn pledge from the EU along with a temporary reduction of customs duties for Ukrainian exports to the EU and a $1bn package from the US will no doubt help smooth the path for negotiations however there is hope that the meeting in Geneva on Thursday will set some solid outlines for resolution that will allow the Eurozone to focus on its economic recovery and not the political issues on its borders.
After a week that many US investors would like to forget, there was finally some breathing space on the markets yesterday. With all three major indexes posting strong gains off the back off better than expected Retail Sales Data and positive results from Citi Group. Citi's 4% ($3.9Bn) rise in quarterly profits helped support the markets return to positive territory along with a 1.1% growth in Retail Sales. This was the biggest gain since 2012 and backs up the sentiment that the US is following Europe on the road to recovery. The Fed Chairman will make a statement later today, Ms. Yellen is expected to confirm previous statements made just last week that the economy is improving and that their policy to reduce QE is going ahead. Along with the Consumer Price Index and Housing Market Data we should see the markets continue their gains and claw back some of the losses of last week.
Major Indexes as of 15th April:
Index % Change Close/
DOW Jones (+0.91%) 16,173.24
FTSE 100 (+0.34%)
CAC 40 (+0.43%)
Nikkei 225 (+0.67%)
Hang Seng (-1.29%)
As we go through Holy Week there are a plethora of economic indicators to be released which should help calm the markets from the selloff of last week. Data from both China and the US should provide guidance and we expect the markets to remain steady in this shorter than normal 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 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.