8th May 2014 - Market and Economic Report
Global Market Data as of 8th May 2014
FTSE 100 6,839.25 (+0.63%) Dax 9,607.40 (+0.90%)
CAC 40 4,507.24 (+1.37%) BEL 20 3,144.79 (+1.18%)
Madrid IBEX 10,591.20 (+1.70%) Zurich SMI 8,465.66 (+0.52%)
Moscow MCIEX 1,371.52 (+0.36%) Sydney ASX 5,442.10 (-0.25%)
Nikkei 225 14,217.09 (+0.38%) Hang Seng 21,850.83 (+0.06%)
Shang SSE Comp 2,015.25 (+0.26%)
Dow Jones 16,550.97 (+0.20%) NASDAQ 4,051.50 (-0.40%)
S&P 500 1,875.63 (-0.14%)
Earlier in the week we reported on a Reuters poll that was taken prior to the release of several economic indicators out of China. It was a mixed bag of data with the analysts polled getting fairly close to the figures given so far.
One area where the poll was adrift was the trade surplus deficit. After seeing what was deemed as possibly manufactured figures for the first quarter the trade deficit was again higher than expected. At $18.45bn this was a surprise to many as exports managed to recover, albeit nominally by 0.9% however this was a huge improvement on the previous two months declines of 6.6% and 18.1% for March and February respectively. Imports bucked the current trend too with a positive 0.8% as opposed to the fall of 11.3% in March.
Consumer inflation came in under expectation, but was still positive at 1.8% better than 2013. The producers price index also fell as per expectation, dropping by 2% on 2013 figures.
There was a lot being put on this round of data and although the Chinese will play down the figures, as they look to turn their economy into a consumer based one, rather than an export based, one can look to the measures they have put in place so far, and feel they may not be enough to see the growth they desire in the time frames they are looking to achieve this in. Improving infrastructure is an obvious decision, whether they can come up with more novel and deliberate plans is yet to be seen.
This data helped keep Asian markets fairly steady today. The Nikkei has had a short week and although there seemed to be some hedging before the weekend and drop of almost 2% in early trading was reversed close to the end of the day and finished the short week just below 1% down. The Hang Seng faired a little worse looking to end the week down just over 1.5% and the SSE Comp should end up slightly lower than the start of the week.
European markets had a strong day yesterday no doubt off the back of Vladimir Putin looking to ease tensions by suggesting the pro-Russian supporters in the Ukraine delay their voting this weekend. This has been the first time Putin has looked to ease off the situation however they separatists still plan to go ahead with the vote and this could just have been a ploy by Moscow to appear to be doing the right thing. Should the referendum go the way of the separatists it would obviously give Russia an excuse to send troops in should there be further violence in the region. As we go through what has to be the worst situation in Eastern Europe since the end of the Cold War there is no real end in sight; and what most people thought could be resolved peacefully and with all parties involved feeling satisfied, could be taking a step closer to real trouble. Hopefully the bureaucrats involved will fix this problem before further people get hurt. European markets should stay in the green today as they close out the week.
US markets were mixed as they reacted to news out of Asia and Europe. The ECB continued the line of possible FED style stimulus and Ms. Yellen continued her line on the economy's recovery and the FED's preparedness to react if necessary. The markets seem to like the FED's current stand point however it could be noted that Yellen has said roughly the same thing in each of her last three public statements, maybe it is time to hear what she intends to do should QE need to be ramped up again.
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