Thungen Financial May 15th 2014 - Market and Economic Review

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Thungen Financial May 15th 2014 - Market and Economic Review

The markets were relatively stable yesterday possibly due to news from Reuters suggesting that the ECB had a planned rate cut scheduled to be announced at their meeting next month.

Asian Markets

Good economic news out of Japan this morning on their GDP for the first three months of the year. The country saw its fastest growth in almost three years mainly attributed to the increase in consumer spending before the sales tax increase implemented on April 1. Consumer spending was up 2.1% and Capital spending, spending by businesses, was also up by almost double the forecast at 4.9%. This all went towards a GDP growth for the first quarter of 1.5%, a marked improvement over the previous quarters 0.1% growth. Despite this, the Nikkei ended the day down by 0.75% no doubt brought down by Sony and their announcement that they have again seen looses for the second year in a row. The former giant of electronics is making serious efforts to re-establish its business with several measures being announced such as no bonuses for its execs, substantial jobs cuts and the sale of its PC brand, Vaio.

Asian Markets as of 15th May 2014:

Nikkei 14,267.83 -0.75%          SSE Comp. 2,47.91 -0.14%

Hang Seng 22,660.25 +0.34%      ASX 5,490.20 +0.26%

European markets

European markets slowed their gains yesterday as investors noted a possible rate cut announcement by the ECB next month. Several sources reported that the European Central Bank meeting on June 5th will be the forum for their rate cut announcement. Although this has been in the making for some time it was reported that Mario Draghi was finally ready to underline the ECB's program to stimulate the economy and what time frame the proposed program would be implemented over. Seen as a stepping stone to possible further stimulus the majority of the indexes checked their gains of earlier in the week as they looked to further economic data from the Bank of England. The BoE did not raise interest rates as expected and from the comments made the general consensus is that they will remain the same until the second half of 2015. The BoE was buoyed by a fall in unemployment of 6.8% for the first quarter of 2014, effectively reducing the number of people out of work by 133,000. Later today will see a range of economic indicators out of Europe, including inflation rates data year on year/ month on month and GDP growth rates for both periods. This along with data from individual members will see a cautious day in Europe.

European Markets as of 15th May 2014

FTSE 6,879.49 +0.08%          Dax  9,754.39 +0.00%

CAC40 4,501.04 -0.09%          BEL20 3,157.51 0.04%

Zurich SMI 8,611.70 +0.80%          MICEX 1,387.56 +0.22%

US Markets

It's a busy day in the US today. Economic data on everything from the Consumer Price Index to Jobless Claims, Manufacturing and Industrial Production figures and Inflation numbers will be reported and should provide another insight into the state of the United States' economic health. With two of its main indexes sticking close to all time highs and the Dollar just having a reprieve against the Euro on possible EU stimulus it's fair to say that when Janet Yellen speaks later today, we will again hear how the recovery is in full swing and that the Federal Reserve is there to provide more QE if need be. With the continued scaling back on bond buying and feeling that the economy is performing, the data today will need to come in on expectations to help solidify what we are being told on a month by month basis by the FED Chairwoman.

US Markets as of 15th May 2014

S&P500 1,888.53 -0.47%          Dow Jones 16,613.97 -0.61%

NASDAQ 4,100.63 -0.72%

Today is a day for economic data, hopefully with very few surprises. If the analysts have it right the story tomorrow should be that of positivity and conviction and if that is the case the markets should react accordingly and look to close on a strong note.

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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.