Global and Economic Update - Week Ending 11th April 2014
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To say this week has been a rollercoaster is an understatement. Markets looked to be in recovery mid week only to tumble again Thursday with the Technology sector the main culprit.
Asian markets closed down at the end of Friday marking a terrible week for the area. The tech sensitive Nikkei opened down early Friday and continued the trend to finish -2.38% on the day. What should have been a better end to the week was thrown out of the window as a huge drop in the US markets infected the Asian region. The Nikkei ended the day at 6mth lows despite some relatively positive statements from the BoJ earlier in the week. Chinese data helped keep their local markets slightly better although they still posted losses at the end of the day. Import and export figures were released that were less than expected however they managed to turn a deficit into a surplus for March of $7.7bn. The previous month saw a deficit of $23bn which was not expected to rebound so quickly. With imports and exports at record lows there will be continued concern about the strength of the 2nd largest economy and its ability to maintain its growth targets.
Nikkei 225 at 13,960.05 (-2.38%) Hang Seng at 22,961.67 (-0.97%)
SSE Comp at 2,130.54 (-0.18%)
European markets opened lower today as expected. All the major indices have felt the effects of yesterday's trading and it is expected to continue. The EU has seen some good economic data lately which has led analysts to suggest that the Eurozone is recovering better than expected. One thing to bear in mind is the severe weather seen by many northern European countries at the beginning of the year. To confirm this, the UK announced substantially better than expected Trade data despite poor import and export figures. As with China the reduction in imports helped reduce the deficit down to £9.1bn for March. The same day the IMF announced that its growth forecast for 2014 in the UK increased to 2.9% and the Bank of England responded by making no major policy changes. Keeping inflation at 0.5% it is expected that this will not increase until early 2015. The UK and its special relationship with the EU cannot really be seen as a guide to the EU's recovery as a whole however considering the majority of established members are providing better than predicted economic data can only be taken in a positive light. The major issue hanging over the EU now is the situation in Ukraine. Should there be a negative ending to the crisis ,it would no doubt see the EU in dire circumstances and it will be at the forefront of their minds when they meet with Russia, the US and Ukraine next Thursday in Geneva to discuss the situation.
FTSE 100 Closed at 6,641.97 (+0.10%) Dax Closed at 9,454.54 (-0.55%)
CAC 40 Closed at 4,413.49 (-0.66%) BEL 20 Closed at 3,088.90 (-0.52%)
IBEX Closed at 10,366.10 (-1.42%)
Zurich SMI Closed at 8,420.58 (+0.11%)
Mid-week the FMOC notes appeared to settle the markets and start to make amends for the sharp sell-off that started late last week. The Fed continued to state that the economy in the US is recovering, they did however clarify when they would be looking to increase interest rates. The initial implication that interest rates would be increased as early as 2015 made investors nervous and this was seen late last week when the tech sector took an unexpected downturn. In what many analysts deem as a reactionary clarification, confirmation that the rate hike wouldn't be seen until 2016 had a hugely calming effect across the board and at first it looked like we would end the week back into positive territory. What wasn't expected was a massive profit taking session ahead of the start of earnings season. The NASDAQ was worst effected as the tech heavy index lost 3.1% on Thursday trading its worst drop since the end of 2011. With the S&P and Dow being down 2% and 1.5% respectively it is hard to see a recovery by the weekend as further earnings statements are released and the main news agencies all reporting that many 'Blue Chips" are overweight and due for some profit taking/ corrections. There are some economic indicators expected later today however they are rather lightweight and not expected to have much effect. The FED balance sheet and figures on Imports and Exports are released today but many analysts will be waiting to see both JP Morgan and Wells Fargo's earnings reports. Both are seen as good economic indicators in their own rights.
Dow Jones Closed at 16,170.22 9 (-1.62%)
NASDAQ Closed at 4,054.11 (-3.10%)
S&P 500 Closed at 1,838.08 (-2.09%)
Expect the week to continue its run into the red as more profit taking is expected to close out Fridays trading in both Europe and the US.
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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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