Friday, July 5, 2013

Morning Memo: Friday, July 5, 2013

  • Asia rallies on heels of yesterday's positive "GUIDANCE" from the ECB and the BofE!  Stealing Bermanke-isms, both central banks indicated rates would likely stay low for a long time. That triggered a July 4th fireworks of a rally in European indexes.  Asia overnight followed along.
  • Japan's Leading Index was bte, helping Nikkei outperform other mrkts in the region.
  • Goldman lowered GDP forecasts for India from 6.4% to 6.0%....Sensex lagged other mkts but was still positive on the day.
  • IMF cuts Italy GDP forecast to -1.8% from -1.5%.
  • German manufacturing orders drop. Further indications of slowing domestic demand. Domestic investment in German machinerey and equipment has been in decline since Q4 '11.
  • US NFP much bte!  195k vs 165k exp. plus upward revisions.  UE rate unched @ 7.6%.  U6 jumps to 14.3% from 13.8%.  Participation rate goes up slightly to 63.5% from 63.4%.  Janet Yellen's much watched indicator of 'job quitters' also jumped to higher levels than has been seen in a long time...indicating people are more confident about finding other jobs and are therefore more willing to leave existing jobs.  Big gains in consumer sensitive sectors...restaurants, hotels, travel, and other discretionaries.  Losses in manufacturing generally. Wages higher by ten cents putting ave hourly earnings up to $24.01...up 2.2% over the past year.
  • US Tsy yields soar on Fed tapering expectations.
  • Oil jumps on reports of Suez Canal disruptions.
  • more later....
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