Monday, December 16, 2013

Morning Memo: Monday, December 16, 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!!

5:00am ET...

  •  Asia...broadly lower on worse than expected PMI data in China.  China's HSBC Preliminary Mftg PMI for Dec was 50.5, down fr the prior month's 50.8%, and a three-month low.  While still >50 indicating expansion, it raised concerns about a slowing Chinese manufacturing sector.  Australia's AUD fell on the news.
  • Tapering...with the FOMC meeting on Tues and Wedn, markets in Asia continue to be under pressure with the growing assumption that this meeting, Bernanke's last as Chairman, will be the beginning of tapering.  The heightened concern across the region led to some buying of Yen, which strengthened it vs the USD, sending the Nikkei lower.  This was despite a stronger than expected Tankan business sentiment survey which indicated a generally more upbeat mood, though forward looking sentiment did fall short of expectations.
  • India...Inflation data worse than expected, with wholesale prices rising 7.52% y/y in Nov, higher than estimates.  Fears grew that this could trigger another RBI interest rate hike.
  • Europe...generally lower at the open on the heels of Asia's negative showing.  But bounced back on stronger than expected Markit PMI data.  It showed the highest read for the Eurozone in nearly 3 years! (This follows two previous months of falling numbers).  But there were divergences, with France registering a seven-month low, and Germany a 30-month high.

  • Germany...Fin Min voices limits as to how far Germany will go in agreeing to the terms of the European bank bailout agreement.  Could slow down the process of reaching a deal which already is facing anticipated delays over bureaucratic and political issues.
  • Of interest:  Powerful tool in scanning global
  • more later....
  • LATER:
    • US Productivity...Q3 non-farm business productivity was revised up and beats expectations, rising 3% on a seasonally adjusted annualized basis vs initial estimate of 1.9%  Also, thought hourly compensation growth rose, unit labor costs fell to lower level than original estimates.
    • NY Empire State Mftg....misses expectations.While up from the previous month, it fell well short of expectations.
    • US Industrial Production...stronger than expected due to mining and utility output.  Manufacturing (3/4 of Industrial Production) rose for the fourth straight month largely due to autos, but also other industries including textiles, furniture, appliances and electrical equipment.
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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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