Thungen Financial Economic & Market Update 10th April 2014
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Thungen Financial Market Update 10th April 2014
After a long run in the red, global markets are back in the green and should close out the week in positive territory.
Asian markets were near five months highs on early trading on Thursday. Despite poor economic data out of China the major indexes were posting strong gains. China release rather poor export and import figures earlier but also a surprising turnaround in their trade surplus data. Exports were down 6.6% for the same month in 2013 and imports were down 11.3%. With February exports being down also (18.1%) this is the first time since 2009 that there has been a back to back drop. Rather interestingly, trade surplus stood at $7.7bn as opposed to a deficit of $23bn in February. Again, the Chinese New Year has been held responsible for the figures as the country returned to normality in March, whether this will hold true, we will have to wait another month to see. Indonesian elections have been completed. Although the results will not be fully counted and released until May, there is concern that the man deemed to be the next President, might not even make the elections in July. Governor of Jakarta Joko Widodo might not have received enough votes to be eligible to run. The leader of the Democratic Party of Struggle, tipped to be the new President only managed 19% of the votes at early counting, 25% is needed to guarantee a run at the General Elections held in a couple of months.
More data from China is expected tomorrow, CPI will be released and will be an indicator as to whether the Chinese economy is actually retracting as much as some analysts believe.
Asian Markets as of 10th April 2014:
Nikkei 14,303.71 +0.03% SSE Comp. 2,105.24 +0.33%
Hang Seng 23,144.54 +1.32% ASX 5,477.50 +0.32%
The UK added weight to the sentiment that the Eurozone is indeed recovering. After releasing better than expected Manufacturing data earlier in the week they followed up with a fall in the trade deficit. Manufacturing grew by 1% in February which was 3.8% higher than the year before and although import and export figures were both down, the final trade deficit was down from £9.4bn in January to £9.1bn for February. This was mainly due to the reduction in exports of 1.6% helping balance out the 2.2% reduction in imports. At £32.6bn, imports were the lowest since April 2011 and exports of £23.5bn were the lowest seen since November 2010. Mainly attributed to the poor weather and flooding experienced in the UK at the beginning of the year the data still pushed the pound up against the Dollar and Euro by 0.5% and the IMF economic growth figures for 2014 to 2.9%. European indexes are expected to continue their gains today following on from the FED notes released yesterday.
European Markets as of 10th April 2014
FTSE 100 6,635.61 +0.68% Dax 9,506.35 +0.16%
CAC40 4,442.68 +0.40% BEL20 3,105.16 +0.23%
Zurich SMI 8,411.43 -0.14% MICEX 1,350.46 +0.05%
The US indexes had a good day yesterday posting good gains after what some analysts said was the beginning of a bursting bubble. The Federal Reserve notes were accepted particularly well as they appeared to clarify the timeframe on when they will start their proposed rate hike. Last month Ms. Yellen the new head of the FED said that they were looking to increase interest rates and reduce their bond buying program. This news was initially well received but concerned investors started to worry about the effect this might have. Now with the clarification given yesterday, faith was restored and the NASDAQ managed to reverse most of the loses prior closing yesterday almost one and three quarters of a percent up. The FED hasn't confirmed the specific timeframe for the start of their program but it has been interpreted that instead of late in 2015, it will not start till mid to late 2016. This gave investors confidence again and the tech sector which saw some particularly harsh selling late and earlier this week had a strong recover.
US Markets as of 10th April 2014:
S&P500 1,872.18 +1.09% Dow Jones 16,437.18 +1.11%
NASDAQ 4,153.90 +1.72%
With just a couple of days to the week left the markets are expected to perform well as it draws to an end. With news that the US and Russia are looking to talk their way through the situation in the Ukraine this should help the markets continue to do well. Also, with some sensitive indicators expected later in the day out of the US it should be a good close.
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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.