Tuesday, December 17, 2013

Morning Memo: Tuesday, December 17, 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..mostly higher on the heels of yesterday's strong day in the US and Europe, both triggered by good data on the manufacturing and industrial production front.
  • Japan...softer Yen helped exporters.
  • Australia...minutes from the RBAs Dec meeting indicated a desire to keep rates in check and to continue to evaluate the impact of recent rates cuts.  The minutes keep the door open to more rate cuts.Meanwhile, Treasury released its budget forecast, predicting a widening deficit in '14, and for more deficit troubles for years beyond!
  • India...on the heels of recent spike in wholesale inflation, expectations are growing that the RBI will hike rates when it meets on Wednesday.
  • China...The FT reports that research firm Capital Economics forecasts Chinese growth to slow in Q4 to 7.5% fr 7.8% in Q3, based on their "China Activity Proxy" which has historically tracked actual GDP changes well.  They note slower activity at Chinese ports and on roads, rail and air.
  • Europe...lower, unable to sustain yesterday's strong rally. Markets seemingly bracing itself for the US Fed's two day meeting starting today.
  • Germany...after winning support from the opposition SPD Party in recent days, Merkel was formally voted in as Germany's Chancellor again.  Also, the ZEW investor confidence index hit the highest level since April '06
  • UK... inflation falls in November to lowest level in four years.
  • Sweden...in an effort to raise inflationary pressures (aka: fight deflation), cut rates 25bps to 0.75%.
  • Netherlands...gov't reports economic growth will be positive in '14, continuing the exit from the recent one-yr old recession, which was technically ended in Q3.  The gov't anticipates growth in '14 of 0.5% after 2013's contraction of 1%, helped by exports and investments.  Though unemployment is expected to rise from 6.75% to 7.5%.
  •  more later....
  • LATER:
    • CPI...Dec's read was flat, and +0.2% ex-food & energy, vs expectations of +0.1%/+0.1%.Certainly not evidence of any inflationary pressures that could add to the case of tapering.
    • NAHB Home Builder Confidence highest in four months.
    • Hungary...cuts rates.
    • Turkey...keeps rates on hold for the fourth straight month but tightened liquidity conditions in support of the currency.

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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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