Thungen Financial 22nd July 2014 - Global Economic Indicator Review
As the global markets react to the crisis in the Ukraine it is a busy week with regards to economic indicators from all major economies. Although seen as a major political issue, the fact that the markets held relatively steady yesterday shows the resilience in the markets at this time.
Thursday see's the HSBC Manufacturing PMI for China which is forecast to see expansion again. Seen as slightly higher than last month the economy in China continues to expand and the fact that exports continue to drop we see that domestic demand is sufficient to keep the economy improving. The latest round of stimulus implemented in China has started to take effect and although it is not expected to reach its initial target of 7.5% growth, in the region on 7.4% is still seen as a healthy expansion for an economy of this size and age.
With Europe being far closer to the Ukrainian crisis, markets have been more volatile recently as the violence has increased. Serious concerns over the potential to cut gas supplies from Russia to Europe this winter will obviously be playing on many member states minds as calls for further sanctions on Moscow are called for. The EU has far more exposure to Moscow and will need to be a lot more subtle in their approach. Simply following the US's line is not good enough and more tactile meetings will need to take place. This week see's the release of consumer confidence tomorrow, and later in the week Markits PMI on Comp, Services and Manufacturing all of which are forecast to be similar to last month's however there is room for a few surprises.
As US markets continue to see record highs it is hard to see whether the indexes are indeed watching what is happening in the world. The US exposure to the Ukraine is minimal however their presence in the Middle East is far more prevalent and a return to military actions seen a few years ago would certainly shake things up. Also, with earning season continuing to show good results the markets have not looked so strong in a long time. Caution is always called for yet with volatility still well below what is expected and volumes starting to creep up, a correction could not be too far away.
Major Global Markets as of 22nd July 2014
FTSE 6,743.99 -0.23% Dax 9,612.05 -1.11%
Dow 17,051.73 -0.28%
Nikkei 15,343.28 +0.84% Hang Seng 23,708.47 +1.37%
MICEX 1,384.50 -2.67%
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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.