Global and Economic Update - Week Beginning 7th April 2014
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Despite positive data towards the end of last week, the markets have continued to post losses as the this week progresses.
Asian Markets have seen a sea of red since last week and the trend looks set to continue until some positive data is released, hopefully later this week. The Nikkei had some support as the Bank of Japan held its policy. The Nikkei has taken quite a hit lately and news out of Japan has hardly been positive. Depending on how you view the BoJ's stance, by rights this should signal that the economy is on the road to recovery, even if it's only just starting to fully take effect. Towards the end of the week we will see more economic data out of China. With March's Trade Data figures on Thursday and the CPI on Friday there is a good chance that the indexes will remain quiet until this has been announced. The Chinese markets seem to be weathering the fairly poor performance of other Asian countries at the moment, whether this will continue in the question, however, with their current commitment to stimulus and the fact that they are posting continued growth it would be fair to suggest that they will come out relatively unscathed.
Nikkei 225 at 14,646.57 (-1.10%) Hang Seng at 22,593.75 (+0.91%)
SSE Comp at 2,058.83 (+0.74%)
European Futures are set to open lower today as they follow what has been a three day sell off across the board. All the major European bourses posted losses yesterday and this is set to continue today even despite a host of economic indicators which are expected to be positive. France released its trade balance data early this morning showing a reduction in the deficit from €27.1bn last year to €25.7Bn. Swiss unemployment has hit a low of just 3.3%, this is seen as rather unseasonable and a good indicator for the loval economy. In just a few hours the UK will release Industrial and Manufactuering Output figures, as with much data coming out lately, this is expected to be positive, and the local indexes should react accordingly.
FTSE 100 Closed at 6,622.84 (-1.08%) Dax Closed at 9,510.85 (-1.91%)
CAC 40 Closed at 4,436.08 (-1.08%) BEL 20 Closed at 3,127.52 (-0.69%)
IBEX Closed at 10,606.20 (-0.67%)
Zurich SMI Closed at 8,405.10 (-1.15%)
After what looked like a great week for the US markets, they continued a steep sell off throughout Monday trading. Worst hit was the NASDAQ and what were deemed overweight stocks. The NASDAQ three day losing streak was the worst since 2011 and the S&P 500 fared little better with the sharpest fall since January. The general consensus is that many believe that tech is over valued at the moment and as we enter earning seasons many investors obviously felt that it was time to take some profit. Technology wasn't the only sacrifice but it was definitely the sector that felt the pinch the most. The slump is expected to continue until later this week as economic and corporate governance are due back to back. As with any major retraction in a sector, it is only a matter of time before the value is again there. If the only reason is that there are fears of the tech sector being overvalued, it may well just be a manipulation before earnings are released. The words "Bubble" and "Bursting" have been mentioned, this is not something we believe to be the case and it will only be a short time before the markets re-correct what we have seen over the last few days.
Dow Jones Closed at 16,245.87 (-1.02%)
NASDAQ Closed at 4,079.75 (-1.16%)
S&P 500 Closed at 1,845.04 (-1.08%)
The re-ignited concerns over the Ukraine will no doubt have an influence on the indexes. With the situation looking at potentially getting more hostile there really is a need for NATO and the EU to work to a resolution. So far the only thing benefitting from the crisis is Oil, with both Brent and WTI Crude reversing their losses after it seemed the situation was on the way to being resolved in a calm manner. Now with renewed tensions from pro-Russian supporters taking over government buildings in three eastern Ukrainian cities there really is a need for a defined way forward. Moscow says it will not invade, yet we know from experience that they will do and say what they feel is right. The new Ukrainian parliament could not deal with a hostile Russia on its borders and the West would find it hard to employ sanctions should some small scale incursion happen. Hopefully the people will get the resolution they desire, and soon. Otherwise as we stare down the face of a new cold war, we could also be looking at a serious global financial crisis too.
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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 Hexagon Capital Management. All market data within this release is for your general information and enjoys indicative status only. Hexagon Capital Management 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.
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