Week Beginning 21st Apr 2014 Market and Economic Review.
After a long weekend for many markets, today we should see a return to normal trading levels and volumes. With all the European bourses back today and expected to open slightly higher after a positive day in the US, despite poor data out of Asia.
Asian markets remained weak today off the back of a quiet day in the US. News that Japans Trade Deficit had quadrupled did little for the region as figures showed an increase from ¥356.9Bn ($3.5bn) to ¥1.45tn ($14bn) largely put down to increased energy imports and slowed export growth. Since the government closed down its nuclear fuels program Japans increasing reliance on imported fuels, specifically LPG and LNG has gone up drastically. Imports of LPG went up 8% over the previous year and cost an additional 18% on March 2013's rates. The same was applicable for LNG with imports up 4% yet the value had increased 14%. This along with the increasing concern about the state of the Japanese economy has seen the dollar up 10% on the Yen over the last 12 months. This news saw the Nikkei down almost 1% in afternoon trading. Data out of China last week eased concerns about their economic stature. First quarter Economic Growth was seen at 7.4%, though down on the last quarter of 2013 it was still higher than predicted. Industrial Output helped the economy with an 8.8% rise for the month of March. Chinese markets are still cautious as the month runs to its conclusion as new concerns are raised about the local markets. 28 new companies are proposing to list by the end of the year and this has left some analyst to suggest that the local markets might very well be overweight.
European markets are back in business today. After a strong finish to last week they are expected to open slightly higher than their pre-Easter long weekend. The main news in Europe is the continuing crisis with the Ukraine. After their meeting in Geneva last Thursday were all parties involved agreed to end the violence in Eastern Ukraine and de-arm the pro-Russia supporters who have taken over a multitude of government buildings. The weekend saw more violence in the region and no real resolution appears to be on the cards. With both Moscow and Washington putting pressure on each other to resolve the situation, again the stand-off and threats of sanctions from the West has had little effect. Only time will tell whether a diplomatic solution can be tabled that will ease the tensions and allow the people of Ukraine to return to normality. There won't be much in the way of economic indicators this week, later today we will see Eurozone Consumer Confidence figures and tomorrow we get the PMI Manufacturing Index for the EU. Both are expected to be positive and continue the trend that the EU is indeed in recovery. On Thursday at the Dutch Central Bank conference, Mario Draghi, the ECB Chairman will speak and should maintain his previous statements regarding the Eurzone's proposed QE which will no doubt placate many a local investor.
In the US, both the S&P 500 and the NASDAQ continued a 5 day winning streak. Despite weak volumes the indexes managed to hold gains off the back of strong earnings reports which have added weight to the reported economic recovery. Of the 87 companies that have reported so far on the S&P 500 over 62% of them have beaten their projected earnings. Today's companies to watch will be AT&T, Bank of New York Mellon and Lockheed Martin to name a few. Later in the week we will see the likes of Apple, Facebook, Proctor and Gamble and Caterpillar all reporting their earnings. If the earning trend continues we expect a strong week in the States with only a few economic indicators left for the week to disrupt the run back to more supported levels on the indexes.
Major Indexes as of 22nd April:
Index % Change Close/
DOW Jones (+0.25%)
FTSE 100 (+0.62%)
CAC 40 (+0.59%)
Nikkei 225 (-0.61%)
Hang Seng (-0.35%)
The week begins in earnest as Europe gets back to work. As stated European markets should open higher and it is expected that the US should continue its run in the green as earnings will confirm that the world's largest economy is well and truly recovering, at least in line with expectations. This may well help the Asian markets later in the 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.