Thungen Financial May 5th 2014 - Market and Economic Update

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Thungen Financial May 5th 2014 - Market and Economic Update

Nearly all the major markets are back today with just a handful of indexes closed for local holidays in the UK, Japan and South Korea.

With Japan on a two day holiday and South Korea taking a three day weekend the markets in Asia were relatively quiet in trading today seeing the Chinese markets, most notably the Hang Seng drop over a percent down off the back of data released at the weekend on PMI. HSBC reported a drop from 48.3 in March to 48.1 for April for their Purchasing Managers Index. This continued a four month contraction but did at least reverse the eight month low that was seen last month. The National Bureau of Statistics (NBS) did however give good figures for the service industry showing an expansion from 54.5 in March to 54.8 for April.

Asian Markets as of 5th May 2014:

Nikkei 14,457.51 -0.19%          SSE Comp. 2,027.35 +0.05%

Hang Seng 21,977.86 -1.27%      ASX 5,443.40 +0.08%

Europe opened slightly lower than expected no doubt over concerns about developments in the Ukraine over the weekend. With only the UK and Ireland not trading today in Europe it should be a relatively  normal day in the markets. The Dax and CAC were expected to open slightly higher after a quiet day in Asia and a strong finish in the US however concerns over the Ukraine will most certainly be on traders' minds today. The local government has taken the decision to attempt to take back the buildings which were being held in the East of the country by pro-Russian separatists and have been successful in several instances however reports from both sides are hard to authenticate and Europe will have awoken to further stress as more calls for sanctions against Moscow will need to be answered very soon. Moscow has been quite quiet about the situation over the weekend which will probably worry the Ukrainian government but also the loyal supporters who have seen their country divided. Russia has been warned not to send troops into the region but with the increased military action by local troops it is hard to say whether they will refrain from sending in support due to the pressures being placed on them, or whether they will simply send in armed forces to protect their Russian speaking supporters, as they have insinuated in the past. Some good news out of Europe, for Portugal at least, is their exit from the bailout they have been subjected to for the past three years. Portuguese officials stated that they were now in a position to exit the €78bn bailout program and that demand for their 10yr note was 3 times oversubscribed. The €750m bond sale ended closed on Friday at 5.1%.

European Markets as of 5th May 2014

FTSE 6,822.42 +0.20%          Dax  9,543.36 -0.27%

CAC40 4,449.32 -0.20%          BEL20 3,084.87 -0.20%

Zurich SMI 8,248.38 -0.17%          MICEX 1,280.81 +1.96%

US markets closed down on Friday but managed to hold gains for the week. Helping keep the bourses in positive territory was the better than expected jobs data reported late last week. With an addition of over 288,000 jobs, being substantially higher than expected the data was well received on Wall Street. Unemployment was also quoted as reducing, down to 6.3% however this was mainly due to a large exodus from the work force last month. The data did back up reports from the FED that the US economy is recovering well and it would appear that interest rates are still safe for the time being. There is a plethora of companies reporting earnings today and Global PMI data along with both Consumer Spending and the PMI Services Index to be reported on later in the US. Markets in the US should open higher today and should stay solid throughout the day as the economic indicators being released today should all be above expectation and continue the mini bull run we are in.

US Markets as of 5th May 2014

S&P500 1,881.14 -0.13%          Dow Jones 16,512.89 -0.28%

NASDAQ 4,123.90 -0.09%

May is often seen as a month to keep away from the markets. With the current global economy pointing in the direction of recovery and only political instability really affecting the global economy it will be interesting to watch how this month plays out and whether the old saying still holds weight today.

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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.