Morning Memo: Monday, August 19, 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....

• Asia markets mixed, but generally lower. Japan and China slightly higher, but others lower on fears of Fed tapering (Fed minutes from last meeting coming out this week), higher bond yields and disappointing local economic news.
• Indonesia...market tanks close to 5% on news of  widening current account deficit. 
• India...drops over 2% on continuing concerns that gov't policies on capital controls and rates are not working. Rupee remains weak raising concerns about inflation due to higher import prices.
• Thailand...disappointing GDP, contracting in Q2 by 0.3% q/q, following Q1's contraction of  1.3%q/q, (technically, two quarter contraction = a 'recession') hit stocks, down 2.6%.
• China..last Friday's 'flash spike' in the Shanghai was attributed to a 'fat finger' error putting in an out-sized trade.  Separately, weekend data on house prices were positive, rising in 62 of 70 cities.
• Japan...trade deficit widens despite stronger exports, as the imports outpaced.
• Europe..opens lower on all of the above in Asia, and following last week's general concerns about higher bond yields, tapering, and ahead of this Wednesday's release of Fed minutes.
• One more thought on Asia: currency depreciation since May's tapering talk has been notable, and as cited here many times, putting countries like India, Indonesia and others in a position to choose between various policy responses to multiple problems.  This chart from the Financial Times' fastFT taken from Capital Economics is worth considering:
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• more later....

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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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