Morning Memo: Friday, August 2, 2013

 "Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  
We hope you find this useful and informative....and as always, that you'll share feedback!!

 5:30am ET...

• US..ISM mftg data yesterday launched US markets to new highs.  Exuberance over stronger US production data carried over into Asia markets.  Markets appear to be returning to accepting good economic news as good for equity markets, rather than the 'taper tantrums' that caused markets to fear that good economic news meant more imminent tapering which in turn would be bad for equities.  Just a reminder about how much bte (better than expected) the ISM was (chart from Financial Times' FastFT:
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• Asia markets higher on heels of US rally (record-setting S&P close >1,700) and ahead of US Non-Farm Payroll numbers today.  Nikkei up over 3% on weaker Yen.  Australia higher led by banks.
• Indonesia GDP falls short @ 5.8%, slowing fr prior, and risking missing Gov't's target.  (Soos Global editorial comment:  With weakening Rupiah and rising inflation, there's already been talk of the central bank raising rates!  In an environment of slowing growth, this is yet another example of a counter-cyclical policy response which could augur poorly for EM equity markets.)
• India...gov't relaxed rules on FDI (foreign direct investment) as a way to support the Rupee.  Focus was on department stores and other retailers.
• Europe...opens higher, but cautious ahead of US data.
• UK..Markit Construction PMI bte (better than expected).  Big rebound in residential building (helped by Govt stimulus program).
• more later....
• US...NFP 162k wte (worse than expected)!  Revisions take down jobs by 26k. Participation Rate drops slightly.  Average Hourly Earnings DROP!   Retail and luxury sectors showed job growth. Mftg payrolls added 6k, slightly bte. Those unemployed for > 27weeks unched @ 4.2mm!
• US Personal Income +0.3% below exp.  Spending +0.5% inline.  Spending outpaces income growth!
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