After a record setting week, the majority of the global markets yesterday saw a solid retraction as a good start for economic data out of Japan wasn't followed by the Eurozone and United States.
Asia felt the heat today as the particularly sensitive Nikkei lost almost 1.5% towards the end of the day and the main Chinese indexes fared little better. After posting GDP growth of 1.5% for the first quarter of 2014 the Japanese markets then fell sway to weak data out of Europe and under par data out of the US as investors looked to lock in profits before the weekend.
Nikkei 225 at 14,096.59 (-1.41%) Hang Seng at 22,653.61 (-0.34%)
SSE Comp at 2,024.97 (-1.12%)
European markets are expected to open flat today. After many of the local indexes close to all time highs yesterday was a reality check and saw a correction across the board with some performing slightly better than others. The big news out of the EU yesterday was the huge reporting on GDP for the union. Surprisingly GDP failed to grow as expected and matched the previous quarters expansion of just 0.2%. Notably poor performers were France and Italy who both acknowledged the weather at the beginning of the year as a possible reason for slowed growth, however this was also counteracted by substantially less being spent by consumers in the first three months of the year. Germany and Spain helped keep the EU in positive territory by posting 0.8% and 0.4% gains in GDP respectively. This now points to further speculation that next month will see the ECB announce their implementation of stimulus to the economy. The European Central Bank has been motioning for some time about introducing some form of stimulus plan and their meeting on the 5th of June should shed light on their plan.
FTSE 100 at 6,840.89 (-0.55%) Dax at 9,656.05 (-1.01%)
CAC 40 at 4,444.93 (-1.25%) BEL 20 at 3,112.00 (-1.44%)
IBEX at 10,365.00 (-2.35%) Zurich SMI at 8,644.74 (+0.38%)
US stocks retreated from their highs yesterday as the economic data from the EU filtered across and reactions to indicators in the States were weighed in too. After seeing good news on the jobless claims front, analysts were then disappointed to hear CPI and Output come in under expectation. Jobless Claims took another drop, losing 24,000 claimants for April bringing estimates down to just under 300,000 at 297,000. This appears to be a continued trend and would have helped back up the FED's comments about an improving economy if the following data hadn't fallen so short. The CPI, the Consumer Price Index rose 0.3%, its largest increase since June 2013 and see's the cost of living increase over the last twelve months by 2%. Both Factory and Industrial Output came in under forecast raising flags that the economy is still fragile and not as robust as some may think. Factory output declined for the first time in two months by 0.4%, significantly lower than March's 0.7% increase and February's impressive 1.5% increase. Expect the local markets in the US to be fairly quiet today as investors react to the recent economic data and wait to see what the housing figures will be like when they are released later today.
Dow Jones Closed at 16,446.81 (-1.01%)
NASDAQ Closed at 4,069.29 (-0.76%)
S&P 500 Closed at 1,870.85 (-0.94%)
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