Morning Memo: Thursday, August 29, 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 equity markets rebounded, especially those that have been battered during August on tapering fears and more recently on Syria.  Philippines, Thailand and Indonesia, among the hardest hit this month, all traded up on the view that any US attack on Syria would be delayed, and on US economic data, mostly in the housing sector, that has been weaker than expected, thereby reducing fears of imminent Fed tapering.
• Japan's Nikkei up close to 1% despite July Retail Sales missing expectations, blamed on stronger Yen through the month.  Retail sales fell 0.3% despite expectations of a gain, and this is in the face of plans by the gov't to initiate a consumption tax in order to raise revenue!
• Indonesia...raised rates 50bp to 7% in further attempts to support the battered Rupiah.    
• India's Rupee rallied on gov't program to swap USDollars to oil importers in exchange for Rupee's, mitigating the need for oil importers to sell Rupees in the open market in exchange for USD.
• Philippines Q2 GDP @ 7.5%, better than expected.
• Brazil..late yesterday, raised rates 50bps to 9% in order to fight inflation and to support the weakened currency.  Fourth rate hike since April.
• (Editorial note:  just a reminder regarding the 'counter-cyclical' policy responses that we continue to see in Emerging Market countries as they grapple with weak currencies, higher inflation and high current account deficits.  A question to consider: could this be the early signs of a currency or debt crisis in the making?)
• Germany...number of unemployed climbed 7k, first time in three months.
• Spain..confirming initial estimates of Q2 GDP declining 0.1% q/q, 1.6% y/y.  These numbers are actually an improvement on previous quarters, so the country remains mired in recession, but slightly less so.
• Italy..business confidence data is stronger than expected.
• US...Q2 GDP revised up to 2.5% from initial 1.7%.
• US...Jobless Claims in line @ 331k.  (Editorial note:  before the open, equity futures gave ground on what appeared to be good GDP and Jobless Claims data, suggesting that the market is still in a "good economic news = more imminent tapering = bad for equities" mode.  But since opening, equities have been stronger, suggesting the economic data and the implied impact on earnings might be trumping tapering fears...at least for now!  The market appears to be increasingly divided over which argument should prevail).
• more later....

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