Market Review

Keep up-to-date with our daily market review which covers forex, stocks commodities and indices. Read expert analysis on todays outlook and yesterdays asset prices.

Asia has a Muted Reaction to GDP from China

asian, nikkei, japan, china, gdp, dollar, yen

Last Friday, Asian and Pacific Rim markets closed mixed. Traders showed a rather muted reaction to the latest gross domestic product (GDP) number out of China. Their GDP came in-line with forecasts. The Australian S&P ASX 200 was up over 38 points to close at 5,157.48 as the energy and materials sub-indices outperformed.  Both reversed early losses to close up near one percent. The heavily weighted financials sub-index was up nearly half a percent on the day. The Australian headline stock bourse was up 4.4 percent for the week. In Japan, the Nikkei 225 snapped a three day win streak,…

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The Nikkei Index Leaders Winners

asian, nikkei, japan, china, gdp, dollar, yen

This morning, Asian markets, traded higher after most were closed on Friday for a religious holiday. The yen weakened and boosted stocks in Tokyo higher on the Nikkei 225. A weaker yen often bodes well for Japan’s exporting stocks, like Nissan Motors, Toyota and Sony. Profits for exporters increase as the yen loses value. Japan’s benchmark bourse, the Nikkei 225 rose modestly on the day. The Topix was also higher. In South Korea, the Kospi was moderately higher. In China, the Shanghai Composite was higher but it was the Shenzhen which led China’s stock markets. The Shenzhen was up over…

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Shanghai has a Good Day as Asia Falls

shanghai

At the time of this report, Asian markets were mixed to lower as there is very little economic data to go on. This will be a holiday shortened week as most Western markets will close for Good Friday. With the absence of data from China, the Shanghai Exchange was the leader in the Asian and Pacific Rim markets today. The South Korean Kospi lost early gains to trade moderately lower on the day. The Australian stock bourse, the S&P ASX 200 was also lower on the day. The energy sector dragged this market down, as it she over one percent. The…

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Asian Markets Look to Extend Gains from Friday

asian, nikkei, japan, china, gdp, dollar, yen

Asian stock markets traded mostly in the green to start he week off. Traders are taking a better view of the recent European Central Bank (ECB) monetary policy decision to expand its QE program and cut rates into the negative. In Japan, the Nikkei 225 jumped nearly two percent as it extended Friday’s modest gain. Across the Korean Straight, the South Korean Kospi was also higher as it extended gains from Friday. In Hong Kong, the Hang Seng Index was index was up over one percent. In the Down Under, Australia’s S&P ASX 200 was also up on the day…

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US Crude Oil Rises 9.5% for the Week

crude oil

US crude oil prices were higher for the day on Friday after losing ground on Thursday. Sentiment in the black gold was boosted by a strong US Job report and technical buying in crude oil after prices breached key technical resistance levels. New crossed the wires, on Friday that the US oil rig count fell by 8 to 392 in operation. This time last year, there were 922 rigs in operation. For the day, internationally traded WTI Brent futures were up $1.63 to close at $38.70 a barrel. Its counterpart, WTI US Crude rose $1.35 per barrel to close at…

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Germany’s DAX Has Good Day on Friday

european, German DAX

European markets, and especially the DAX in Germany, were sharply higher to close the week. Markets saw a rebound in mining stocks as oil prices boosted sentiment. Positive corporate news, save for only bad news from the Royal Bank of Scotland, also helped. The European STOXX 600 was up 1.5 percent on Friday, just under session highs. Nearly all the sectors saw solid gains. For the week, the STOXX 600 was up 1.6 percent. In Germany, the DAX soared nearly two percent. The FTSE 100 in London, rose 1.4 percent and stocks in France rose 1.6 percent as the CAC-40…

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Europe Goes South on Corporate News and Oil

European Stocks

Stocks in Europe ended up going south to close the week as a renewed decline in oil prices as well as mixed global indices dampened investor enthusiasm on the old continent. Investors were a bit nervous to go long into the weekend. Also, a mixed bag of corporate earnings did not help. In Europe, the pan-European STOXX 600 was down a marginal amount. All of the major sectors on this index were lower. However, for the week, the STOXX 600 was up over four percent. A solid gain for the week. All of Europe’s stock bourses underperformed on Friday. Germany’s…

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Markets in Asia Rise as the Nikkei Surges Higher

asian, nikkei, japan, china, gdp, dollar, yen

Financial markets in Asia were mostly higher to kick the week off as mainland China and Taiwan opened after the long Lunar New year holiday. The Nikkei surged higher after last week’s dramatic selloff. However, shares in China lost ground as weaker-than-expected trade data hurt sentiment. Japan’s Nikkei 225, retraced some of Friday losses as it surged over six percent on the day. The broader Topix was up over seven percent in morning trade. From the first of February till now, the Nikkei had been down as much as 12.88 percent. China Opens Lower Today thanks to Trade Data Going…

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Australia and Japan Erase Early Losses

asian, nikkei, japan, china, gdp, dollar, yen

The stock markets in both Australia and Japan rang in the year of the monkey mixed. They were able to erase early losses to close higher. Most of the other Asian markets were closed today for the Lunar New Year holiday. The S&P ASX 200, the marker in the Down Under, was down 0.7 percent at one point. The market closed flat this morning. The Nikkei 225 was, at one point nearly 1.5 percent lower. The Japanese stock bourse reverse course to close moderately higher. This ended a four day losing streak. Only the markets in Japan and Australia will…

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Asian Markets Mixed on the Day after Data

asian, nikkei, japan, china, gdp, dollar, yen

Asian markets were mostly mixed to open up Monday’s trading. The major bourses in Australia, South Korea and Japan were mostly higher. They extended Friday’s gains that stemmed from the Bank of Japan (BOJ) lowering interest rates into negative territory. This sent the markets from Tokyo to New York higher on Friday. This morning, the Nikkei 225 close up a little over two percent. The Topix was also over 1.8 percent higher on the day. In South Korea, the Kospi also edged higher. In the down under, the S&P ASX was also a bit higher. A one point the ASX…

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Asian Financial Markets Finally Bounce Higher

Asian markets climb

Asian financial markets had a positive start to the week as they continue to recover from the global rout of the first weeks of the New Year. The S&P ASX 200, Australia’s main equity market, was up around 1.47 percent. Energy companies led the way with a 2.7 percent gain on the day. In Japan, the Nikkei 225 was up 0.65 percent on heavy volatility. The Japanese market traded from 0.18 to 1.40 percent higher for the day. This follows the six percent gain to close last week on Friday. In South Korea, the Kospi was up 0.88 percent. On…

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Asian Markets Beaten up Again

Asian markets climb

Asian financial markets remained mostly lower to kick off the week today. They extended losses from Wall Street’s dramatic pounding on Friday. However, markets in China wavered between gains and losses all day. At the time of this report, the Shanghai Composite was up 0.08 percent in a volatile day. The market was up 0.60 percent at one point and down 1.84 percent at one point. The Shenzhen Composite was the same. Up 1.13 percent and down two percent at one point. The CSI300 was up 0.2 percent. China will Hit the Markets with Data China is set to release…

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Asian Markets Continue to Selloff in 2016

Asian markets climb

Mainland Chinese stock indices remain under intense selling pressure today. They have lost further ground and pulled other stock markets in the Asian and Pacific Rim lower this morning. The Shanghai Composite shed 2.4 percent this morning and the Shenzhen lost 3.5 percent. Last week the Shanghai Composite lost all of its gains for 2015 as it lost nearly ten percent. The Hang Seng Index lost 2.7 percent and is now below the key 20,000 barrier for the first time in three years. Mainland brokerage firms were hit very hard again today. They fell on average of 4.5 percent. However,…

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Shanghai Down Nearly Four Percent to Kick Off 2016

shanghai

Mainland Chinese stocks led the Asian and Pacific Rim stocks lower today after weak economic data cast a shadow of doubt over China’s economic recovery. The Shanghai Composite was down nearly 3.94 percent while the Shenzhen lost nearly 5.3 percent. Stocks throughout the region from Australia, South Korea, Japan and India were also in the red. Energy company stocks bucked the downtrend as prices in oil were up in early Asian trading hours. Mixed Yearly Results for the US Indices The major US indices were mixed for 2015. The Dow Jones and the S&P 500 each saw its worst performance…

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Asian Markets do not Feel Santa Rally Today

Asian Market

Asian and Pacific Rim equity market were rather mixed as trading opened up for the final week of 2015. Investors were hoping to see the traditional Santa Claus rally in markets this morning going into the New Year as investors took advantage of improving market valuations. Monetary policy conditions remain easy and new issuance of debt and other policy ventures dried up this week. However, a strong Dollar, weak commodity prices and emerging markets meant volatility would be high this week. We saw that today. The Australian financial markets remained close today for the Christmas Holiday. Oil Prices are Putting…

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Asian Markets Trade in the Red Today

Asian markets climb

Most of Asia’s equity markets traded in the red today as the tracked the losses on Wall Street on Friday. In Japan, the Nikkei 225 shed 1.7 percent after falling 1.9 percent on Friday. Stocks took one wild ride after the Bank of Japan disappointed once again by leaving monetary policy unchanged. The BOJ kept rates the same but announced a purchase of ETFs of ¥300 billion. This is in addition to the already existing program valued at ¥3 trillion. This move utterly confused investors. The ETF program targets funds that are not yet created. This is not a proactive…

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Asian Markets Follow the US Lower

Asian markets climb

Asian equity markets were broadly lower to open the week as investors remain focused on Wednesday’s Federal Open Markets Committee (FOMC) policy decision. The bourses in China, however, bucked the downtrend on the day. Today’s selloff was not surprising. Crude oil continues to move lower which indicates a weak global demand. Couple that with the Fed getting ready to raise its benchmark interest rate investors were jittery today in Asia. They are cautious and do not want to take many risks. Crude Oil Continues to Fall in Asian Trade WTI Oil futures, which are traded in the US, fell 15…

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US Stocks Surge on a Strong NFP

US Stocks, NYSE, Nasdaq, S&P

US stocks surged two percent Friday after a strong non-farm payroll (NFP) increased the certainty that the US Federal Reserve (Fed) would hike rates at their December meeting. Rather dovish remarks from European Central Bank (ECB) President Mario Draghi also helped sentiment. The strong NFP result, which showed the US adding 211,000 new jobs in November along with an upward revision to October’s result, removed some uncertainty of a Fed rate hike at their December monetary policy meeting. This meeting is set for December 16. You might have a lot of debate whether or not they will move to act…

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US Stock Markets Closed Mixed for the Week

US stock markets finished last week’s shortened holiday trading with very light volume on Friday. Main bourses were under pressure as oil fell even further, the Dollar Index rose and Disney declined on the day. Investors were also waiting on Black Friday results. Trading volumes, across the board was extremely low and the lowest in 2015. Trade volume came in around 2.85 billion. US markets closed at 1 p.m. after being closed Thursday for Thanks Giving Day. It is never easy to find a trend during a short holiday week. Not everyone is around but we did see some positive…

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Asian Markets Start the Week on a Mixed Foot

Asian Market

Asian financial markets continued to trade mixed as Asian trading came to a close to start the week. This follows the rally seen Friday in the US financial markets as investors continue the Fed watch looking for comments from policy makers regarding the trajectory of the US monetary policy in December. Major US bourses ended trading last week with gains near three percent. The Dow Jones was up 341 points or 1.94 percent at 17,824. The S&P 500 was up 36 points or 1.75 percent at 2,089 and the Nasdaq Composite was up 121 points or 2.65 percent to 4,686.35….

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European Markets to Open Lower Today

European markets, both stock and financial markets, are getting ready to open their doors to kick the week off. Traders are still digesting the potential impact of the brutal terrorist attacks in Paris on Friday night. Right now, at the time of this report, London’s FTSE is expected to open around 45 points lower. The DAX in Germany is now down 145 points in pre market trading and the French CAC is down 111 points at 4,696. Investor confidence has been shaken to the core after a series of coordinated terror attacks in Paris killed 132 and left hundreds injured. The…

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Asian Markets Diverge to Begin the Week

Asian markets climb

Asian and Pacific Rim markets diverged to begin the week. Both markets in China and Japan lead the way hitting their highest levels since the end of August. Other regional markets were near session lows after disappointing trade figures came out of China. According to the General Administration of Customs, for October, exports fell nearly seven percent and were down for the fourth month in a row. Imports fell 18.8 percent leaving China with a record high trade surplus of $61.65 billion. There is a general underlying weakness in trade growth effecting global demand and fixed asset investment in China….

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Asian Markets Move Lower on Data From China

Asian markets climb

Asian financial markets traded mixed to open the week, as investors digested weak data out of China. This data showed that their manufacturing sector remained in contraction, even though the rate of contraction slowed. Earlier today, the Caixin PMI was released showing a print of 48.3. This was up from the six year low of 47.2, printed the previous month in September. However, the PMI has contracted now for eight months in a row. Over the weekend, the official PMI came in at 49.8 for October. This contracted for the third month in a row but the number was unchanged from the…

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History Shows, This Will not Be a Good Week for Wall Street

This week will be a massive earnings event with more than 150 S&P 500 index listed companies getting ready to announce their results. These include corporate giants like Apple, Inc., the maker of the iPhone (Nasdaq:AAPL) and Exxon Mobile (NYSE: XOM). For many traders, this is not their biggest worry. What? Really? They are not worried about the pending volatility with earnings season? No. They are more concerned with history and historical performance this time of the year. Looking at data that goes back to the creation of the S&P 500 in 1957, we see a troubling pattern. The fourth week…

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Asian Financial Markets Mixed on Chinese GDP

Asian markets climb

Asian financial markets were widely mixed today after China’s gross domestic product (GDP) showed their economy was cooling less than what was expected. China’s economy grew at 6.9 percent in the third quarter, their worst expansion since 2009 but cooling less than expected as analysts expected a print of 6.7 to 6.8 percent. However, other economic indicators, released with the GDP, showed further weakness in their economy. The industrial production number came in at 5.7 percent, below the expected six percent. And below the August print of 6.1 percent. The Fixed-asset investment (FAI) number came in at 10.3 percent and…

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U.S. Economic Data Meets Expectations

Last week was a bit light on the U.S. economic data schedule and was overshadowed by geopolitical events and the release of the Fed’s minutes from the last Federal Open Markets Committee (FOMC) meeting. The two major report that were released last week, the ISM non-manufacturing number, which fell two points to 56.9 and the trade balance which widened considerably. There was little surprise with these releases and reduced expectations for the real third quarter gross domestic product (GDP) growth. Small Data Releases Dominate for the Week There was a number of smaller releases last week. These included the Fed’s Labor…

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United States Economic Data Disappoints Again

United States third quarter (Q3) gross domestic product (GDP) growth is starting to look like it will disappoint. The economy is seeing stiff headwinds from inventories and international trade. However, economic data, for the week, showed that the consumer sector shows more consumer spending in Q3. Consumer spending was up 3.5 percent for the quarter while personal income growth looks solid. The miss with the non-farm payroll number and sharp revision lower of August’s number could mean consumer spending will reverse lower over the coming months. There are also signs that manufacturing is still struggling as well. Non-farm Payroll Data…

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Investors Will be Eying Asia this Week

The Economy in Japan

In yet another holiday shortened trade week in parts of Asia, investors will remain alert to a slew of economic data coming out of the area’s top economies. Let’s look at two of them. Japan and India. Japan’s Economic and Data Releases The country of Japan is releasing a flurry of data this week and the numbers form the world’s third largest economy should be mixed. On Wednesday, investors will see industrial production and retail sales for August. While household spending and unemployment numbers are due out on Friday. Both industrial production and manufacturing sentiment are struggling thanks to a…

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The Fed Stands Pat and Who Wins?

Last week, Janet Yellen and Company, the US Federal Reserve (Fed) made no change to economic policy and interest rate sensitive sectors like utilities and real estate saw nice gains through the end of the week. Is this a clear buy signal for these long suffering sectors? Possibly. As these sectors have fallen, and are interest rate sensitive, it could be a good time to add to your portfolio, especially with the Fed keeping rates near zero. We saw the utilities sector ETF, called the XLU close up nearly 1.3 percent on Thursday, after the Fed decision. The US real…

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Crazy Ride on Wall Street and Some Economic Data

Last week was one that left traders sitting on the edge of their seats on Wall Street. News out of China, including them devaluating their yuan and soft economic data contributed to a wild ride on The Street since the US Treasury got a debt downgrade in 2011. This week saw crude oil falling below $40 per barrel and US Treasury yields hit two percent. At the end of the week, good US economic growth data and solid Fed talk about an upcoming rate hike calmed traders down. If you recall want Fed Chair Janet Yellen said, that we would…

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The Week Ahead is Critical For Global Equities

Global equities and stock markets come into this week edgy and nervous. They will be looking for signals from China and the US Federal Reserve (Fed) to help turn the tide. We could see a reflex bounce higher, unlikely but possible, after the S&P 500 lost six percent. Traders could now see thee first double digit loss in four years and a very rocky period ahead. This could happen if the S&P loses more than 10 percent, a true correction. If this happens then they will slip further lower and will take a long time to break even. In 2011…

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Japan’s Economy Contracted in the Third Quarter

asian, nikkei, japan, china, gdp, dollar, yen

Japan’s economy continues to stall. The world’s third largest economy shrank in the third quarter (Q3) but came in slightly better than expected. The gross domestic product (GDP) contracted 1.6 percent annually. Expectations were for a 1.9 percent contraction. Last quarter their economy contracted 0.4 percent, better than the 0.5 percent expected. The data does not look great. Exports are not good and consumption is lower. After two years of quantitative easing, nothing has happened. Tokyo will be forced to cut growth expectations for the year but will, likely, stand firm on monetary policy unless downward price pressure strengthens. There…

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China’s Recent Economic Data is Not Very Encouraging

There is more disappointing economic data rolling out of China that will increase the pressure on Beijing to introduce even more stimulus measures to support their economy. The National Statistics Bureau July’s producer price index contracted 5.4 percent on an annual basis. Analysts expected a five percent drop. This was the worst print since October 2009 and marks 40 straight months of declines. Consumer inflation was tepid at 1.6 percent, in line with expectation and higher than what we saw in June, which came out at 1.4 percent. Exports fell over eight percent in July, printing at -8.3 percent. This…

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The Fed is Watching Data

Last week, Federal Reserve Board Chair, Janet Yellen made it no secret that any decision that the Fed will make to raise rates and normalize economic policy will depend on upcoming economic data. Their statement said they view the US economy’s growth as moderate. Labor markets are improving. Inflation is creeping higher back to their two percent expected level. However, there are plenty of risks apparent. There is slow growth in China and in most emerging markets. This comes as energy prices are sliding again and the US Dollar is strengthening. There is a general consensus that the Fed will…

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The Fed Meets This Week. Will it Help Commodity Currencies?

This week, all eyes will be watching the US Federal Reserve meeting. It will be very crucial to the battered commodity currencies which are hoping for a weaker US Dollar. The Fed is not likely to normalize monetary policy or raise interest rates at this meeting. However, the markets will be listening to the post meeting comments to hear any signs if Janet Yellen and Company will raise rates in September. Should this occur, then the US Dollar could see another growth spurt. This will put more pressure on commodity currency nations like Australia, New Zealand, Canada, Brazil and Indonesia….

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Three Things to Watch for in Asia this Week

We have been very busy watching events of the world, like the ongoing Greek debt crisis, over the last several weeks. It is now time to turn our attention back to the Asian and Pacific Rim markets as we will see some key data coming out. Here are three things to watch out for. There are also some corporate earning coming out that will affect these markets. In India, software company Infosys will report as well as oil rig builder Keppel Corp in Singapore. In Australia, the Macquarie Group will have its shareholders meeting which investors will look at for…

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China’s Exports Bounce Back in June

With the Greek saga continuing to drag on, as the two side fight to reach some form of compromise, investors are also turning their eyes towards the world’s second largest economy, China. For the month of June, exports staged a decent recovery. However, imports continues to contract and move lower. China’s economy is still tries to overcome overcapacity. Looking at the numbers, China’s exports were up 2.8 percent in June, on an annual basis. Analysts and economists expected a contraction of 0.2 percent. In May, the export number contracted by 2.5 percent. Import numbers slipped 6.1 percent on an annual…

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Will the Greeks capitulate? July 13, 2015

As we write this, the Greeks look like they are starting to capitulate, which of course will be good for risk appetite in general. Because of this, we believe that it should be a rather positive market overall, and as a result we believe that calls can be bought in several different marketplaces. The EUR/USD pair rose during the course of the day on Friday, testing the 1.12 level. We believe that short-term pullback should be call buying opportunities, and as a result we are bullish of this market. We think that eventually the markets will continue to go higher,…

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The Fed Takes a Dovish Tone

This past week the Federal Open Market Committee (FOMC), which is the policy arm of the Federal Reserve Board (Fed) met. They were overall dovish, more than what was expected, but left forward guidance unchanged. Their current economic assessment of the US economy improved as well. They did, however, lower their gross domestic product (GDP) forecast for 2015 but left their GDP forecast for 2016 and 2017 unchanged. What does all this mean? These projections mean the Fed will, or should tighten the fed funds rate by years end with a 50 basis point hike, however it is uncertain they…

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Consumers Are Coming out of Hiding in the US. Right?

The price of gasoline, in the United States, has fallen more than 25 percent in the past year. The US economy has also seen solid job gains as those are rising at their fastest paste in over 15 years. However, the weak rate of consumer spending has been somewhat of a puzzlement for economists. This week’s data might help solve this puzzle. Retail sales met expectations for the first time since November. Sales rose 1.2 percent in May. The report itself could suggest a stronger comeback for the latter half of the year for consumer spending. Sales in March and…

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BREAKING NEWS: China’s Trade Surplus Now at a Near Record

China’s exports fell less than expected in May, as they contracted 2.5 percent. Imports were down a whopping 17.9 percent placing its monthly trade surplus at 366.8 billion yuan or $54.5 billion. This is near the peak of $60.5 billion reached in February. Economists expected exports to fall five percent after a surprise 6.4 percent contraction in April. Imports were expected to drop 10.7 percent after May’s 16.2 percent falloff. The export number is welcome, however, the falloff in imports is worrisome as domestic demand is waning. As imports remain weak, it will threaten Beijing’s target of a six percent…

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BREAKING NEWS: China’s PMI Shows Improvement

ioption closes

This morning, a short while ago, China released two surveys which showed that its factory data improved marginally for the month of May. The official purchase managers’ index (PMI), which looks at large corporations, rose to 50.2 in May. This is up from April’s 50.1 in April. The demarcation between contraction and expansion is at 50. The final HSBC/Markit PMI, which looks at small and medium size businesses, stayed in contraction. This is the third month in a row of contraction as it printed at 49.2. A tad better than the print in April which was at 49.1. Improvements are…

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US Economy Struggles to Gain Speed

US Home sales

The US economy is struggling to make a comeback after a weak first quarter as it did last year. Thanks to this we expect the economy to grow 1.6 to 1.7 percent annually in the second quarter of 2015. Even though the rebound will be smaller than expected the negatives from the extreme winter weather will only be temporary. It is expected the US economy will accelerate throughout the second half. The factor sector is also along a broader trend. Industrial production was down for the fifth month in a row in April. The falloff in utilities is thanks to…

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China’s Home Prices Moderate in April

Home prices in China have been falling. However, April’s data shows that pace to moderating a bit fueling speculation that a bottom has been achieved. According to the National Bureau of Statistics, home prices across 70 cities in China fell 6.1 annually percent in April. This was unchanged from the March number. On a monthly bases, prices were flat compared to the 0.1 percent drop last month. China’s Home Prices Show Signs of Recovery Home prices in major cities also showed a positive light. In Shanghai and Beijing, prices fell 4.7 and 3.2 percent respectively on an annual basis. They…

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Will The US Economy Roar Back in the Second Quarter?

Last week the United States released some key data on Friday. We got the non-farm payroll data for April and other data through the week. Job’s data came in strong as it recovered to over 200,000 a job pace of growth.  Other data released showed the world’s largest economy is on the pace to bounce back softly after a harsh winter brought the economy a lot of headaches and softer than expected growth. The Second Quarter Data so Far Non-farm payrolls (NFP) rose 223K in April. The unemployment rate fell a bit to 5.4 percent. The more moderate job growth…

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BREAKING NEWS: China’s PMI Continues to Contract Sharply

China’s manufacturing sector continues to slow down. The HSBC PMI official and final print in April trailed forecasts and added fuel that the People’s Bank of China (PBOC) will add new monetary stimulus. The HSBC PMI came in at 48.9 missing the 49.4 estimate and widely below the estimate of 49.2 released earlier. Any number below 50 indicates contraction. Economic expansion is threatening to come below the target GDP of 7 percent. We could see a print for 2015 of 6.9 percent, and Beijing has already made moves to fight this. They have cut rates twice and the RRR for…

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Data Continues to Show a Soft Q1 for the United States

US Home sales

Durable goods orders bounced higher in March but not nearly enough to reverse February’s losses. Based on this data, and other data received over the last couple of weeks, out forecast remains unchanged as the GDP growth for Q1 should come in around 0.5 percent. Consumer spending will also be a drag along with weaker durable goods orders and industrial production numbers seen over the past week. The Biggest Change is the Q2 Forecast The forecasts for the second quarter GDP have been revised lower to 2.6 to 2.7 percent based on the lack of consumer spending. Housing data was…

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Is the US Economy Getting Ready to Roar Back?

The US Economy got off to a rough start in 2015 as economic data came in tepid but there are some signs the world’s largest economy is getting ready to get back on the path of growth. Retail sales, PPI, manufacturing and residential construction all posed gains last week. They reversed last month’s losses. Although the data came in stronger than expected, the gains were still rather soft overall. We will watching the numbers going forward for better gains. Industrial production fell 0.6 percent in March. The annual number was marginally around two percent for the year. The decline is…

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US Data Continues to Disappoint in Early 2015

Is this déjà vu allover again? We have seen this pattern before as the world’s largest economy gets off to slow start only to speed up in the second half of the year. Looks like this is happening in 2015. The string of soft data continued last week as economists lowered the US GDP first quarter growth forecast to around 0.5 percent annual. How much can we blame another harsh winter and how much is it on real fundamental problems. Many businesses were shuttered this winter as strong storms and extreme cold hit the United States. This weather also kept…

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Asian Central Banks in Focus this Week

Asian markets are starting this week digesting the non-farm payroll release and whether or not the US Fed will raise rates sooner than later. Reality is, the NFP missed the mark, rather widely, coming in at 126,000 new jobs for the month. Investors are also waiting on key inflation data this week out of China. Here Come the Regional Central Banks Tomorrow, the Reserve Bank of Australia (RBA will meet). The Bank of Japan (BOJ) will conclude its two day meeting on Wednesday. Analysts are expecting the RBA to slash rates, thanks to the fall off in iron ore prices….

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Is the US Economy Slowing?

So far, for 2015, economic data for the United States has pointed to a trend of slower than expected growth. We are seeing the world’s largest economy starting to slow down. There are any number of factors at play here. From the unusually cold and snowy winter, slowing global economic growth, and a strong US Dollar. Durable goods orders came out this past week. They point to continued softness. Consumer prices, while very low, turned a tad higher, despite continued weakness in crude oil. The big bright spot this week was the significant upturn in the housing market data. US…

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The FOMC and Weak Data Dominate this Week’s US Headlines

FOMC and Weak Data Dominate This past week saw the Federal Open Market Committee (FOMC), which is the policy making arm of the Federal Reserve (Fed) conclude its two day meeting. We are now expecting them to raise rates in September as mixed data is making them cautious. Industrial production continues to show softening in the first quarter of this year. Weather played a key role in poor housing numbers and new home starts tumbled 17 percent in February. The index of leading indicators continues to show that economic growth will be soft going forward. Industrial production came in lower…

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Will Consumer Spending Perk up in the Spring? Hopefully but Unlikely

Consumer spending, in the US, has been unimpressive so far in 2015. It has also not perked up much in February. Retail sales fell, a bit of a shock here, off 0.6 percent. This is the third month in a row of declines. Sales are now contracting on the three month average at 4.8 percent (annually). However, there is a small bright side here. Price declines were harder to blame on sales falloffs at gasoline stations. AAA showed the first monthly increase here since June, as sales were up 1.5 percent. Core Sales Continue to Fall If you take out…

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Labor Market Soars as Consumers Advance

Last week the United States released its jobs report in the form of the non-farm payrolls (NFP). The NFP showed the US economy added 295K new jobs in February and the unemployment rate fell to 5.5 percent. We saw broad based gains but average earnings barely saw and growth. A strong NFP is good for consumer spending, which came in strong again in January. Real disposable incomes shot higher, which means consumers have more to spend. This will help consumer spending over the coming months. The factory sector came in weaker. The ISM manufacturing index slumped for the fourth month…

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Fed Chair Janet Yellen Spoke and we Listened

US Federal Reserve Chair Janet Yellen spoke to Congress this week. Her words indicated that there was one term, we should all pay attention to very closely. The word “patient.” This word will be removed from the press release just before the fed funds rate will be raised. We had expected this word to be removed in the March meeting and the first hike to come in June, however, Yellen made it clear that the word removal was not indicator as to the time rates will be raised. Such changes in monetary policy are dependent on data. Inflation a Concern…

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Greece Likely to Drive the Forex and Financial Markets this Week

Australian Dollar– the AUD/USD closed at a two week higher but needs to break above 0.78/0.80 for any chance of a strong bounce. Even in this market investors are watching Greece which could cause further range trading as investors wait and see what Greece will do. The big question here is risk appetite. In Australia, wage prices are expected to inch higher by 0.7 percent. There are global concerns with age inflation. Construction numbers and capital expenditure is also expected to soften.  This should keep the Aussie in its tight range unless some really weak US data shocks the markets….

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Good Economic Growth, but Some Problems Ahead for the US

There was some solid economic data out of the world’s largest economy this past week, however, thanks to the fall in oil prices, we are seeing some downward pressures being exerting on certain economic sectors. We are also seeing global demand start to weaken once again. Last week’s non-farm payroll report (NFP) continues to hint at job growth. The NFP printed 257,000 new jobs added to the US economy. Personal income, for December, as well as spending also pointed at signs consumers were doing some buying. In, the ISM Manufacturing showed slower global demand and this number was evident in…

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A Mixed Economic Picture Continues to Emerge from the United States

We have been seeing a mixed bag of data emerging from the world’s largest economy over the last several months. Recent data, from last week, continues this trend. Capital spending is not as strong as it should be. In the final quarter of 2014, the ISM rose to 59.0 in October and its new orders component rise to a solid 66.0 in November. A revision for these numbers, on Thursday brought them down a tad. We also saw the business outlook survey, which comes out of the Philadelphia Fed. Hit a new 25 year high at 40.2. Some of the…

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Syriza Comes to Power in Greece

The euro has now hit a decade low versus the Dollar and Japanese yen. Asian Stocks and US futures are lower after polls showed the far left anti-austerity party Syriza won a commanding victory in Sunday’s snap elections in Greece. At the time of this report, the EUR/USD was down 0.5 percent to 1.1151 and had already hit a low at 1.1098. The low was the weakest the euro has been since September 2003. The Nikkei was down 0.6 percent and the Hang Seng was off 0.3 percent and US futures were pointing to a shaky start with the DJIA…

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Oil Price Influences Economic Data

The slide in crude oil is influencing economic data out of the world’s largest economy. We saw a reversal in US retail sales this week compared to the last several months of data. This is part of the fall in the price of crude. Other indicators, like the import price index, producer price index and the consumer price index were all lower. These are all key inflation gauges. All are lower thanks to falling crude and energy prices. Industrial activity was also lower in December. Manufacturing output rose 0.3 percent. Thanks to this data, especially the poor retail numbers, the…

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US Labor Market Soars and the Price of Oil Tanks

The year of 2014 was one which saw 2,952,000 jobs created in the world’s largest economy. This was the largest annual increase the United States has seen since 1999. In December the labor market continues its hot pace adding 252K new jobs and the prior two months were revised higher has well. Those months were already impressive before the revisions higher. Every major sector showed a net monthly gain and the unemployment rate came down as well hitting 5.6 percent. Another positive sign, one which the Fed watches closely, was the number of part time workers who want to be…

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Time to Celebrate as U.S. Economy Rebounds?

Last week we got the third and final look at the economic growth for the world’s largest economy. The third quarter gross domestic product (GDP) grew at its fast pace in nearly a year as it rose a stunning five percent. This exceeded our expectations, which was more modest in nature. The jobs pickup has boosted incomes which means we are seeing more household spending as a result which is the biggest underlying boost to the U.S. economy right now. Personal consumption was up 3.2 percent last quarter. This is well above the previous estimate of 2.2 percent. Income Levels…

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Holiday Trading to Remain Quiet until 2015

The financial markets are quiet this holiday season. In particular the Forex market, as we are noting a lot of tight range bound trading. As traders return from the Christmas holiday, we are not noting any directional trade movement in the Fx majors. We did have some data come out last week, but there were no real surprises. The jobless rate in Japan is stable at 3.5 percent. Retail sales, in Japan, did disappoint. Retail sales contracted 0.3 percent and industrial production was also bleak at -0.6 percent.   Japan’s Inflation is Erased The CPI for Japan came in lower…

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Last Week was a Busy for Monetary Policy Announcements

Last week was busy for Monetary Policy Announcements and fiscal decisions as we heard from a number of countries including the United States. We also saw a tight vote in the House of Representatives as the Senate voted to keep the government funded through September. The Department of Homeland Security was the only Federal agency to get a short term budget ending on February 27. As far as monetary policy is concerned the Federal Open Markets Committee (FOMC) tweaked language to a softer tone but kept monetary policy the same. They use the word “patient” in regards to a rate…

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Industrial Production December 15, 2014

Looking at the Monday session, there isn’t much in the way of economic announcements will push the markets that we tend to follow. The one outlier might be the Industrial Production numbers coming out of the United States, which could have an effect on US stock markets in general, as well as the US dollar possibly. Nonetheless, we feel that this market will probably be erratic overall as the liquidity will start to dwindle. We feel that the EUR/USD pair will continue to offer put buying opportunities, and as a result that’s exactly what we are doing, buying puts. We…

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The U.S. NFP Surprises with over 320K New Jobs

There are clear signs of expansion in the world’s largest economy after a massive non-farm payroll report (NFP) on Friday. The closely watched NFP printed 321,000 new jobs in November. This shattered even the largest estimate of 275K. Most sectors saw robust gains as jobs accelerated for the month. We saw construction, retail trade professional services and financial activities leading job growth. The unemployment rate inched a tad higher but came in near a six year low at 5.8 percent. This should not cause a panic. Only 4,000 workers were added to the unemployment roll for November. This follows the…

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This Week’s Economic Data will Drive the Markets

The last week of the month saw gross domestic data (GDP) from the United States, United Kingdom, the EU and Canada driving the financial markets. We also got durable goods numbers from the U.S. and housing data. Last week’s GDP data out of the U.S. began with the first look of the second quarter number of 2014. According to the data released by the Commerce Department, the economy for the U.S. grew at an annual pace of 3.5 percent in the third quarter.  We had expected this number to come in lower than this at around 3.3 percent growth. Still,…

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U.S. Inflation Takes Center Stage

Inflation is taking center stage in the world’s largest economy as concerns are beginning to ease over the labor markets. This week we received data that inflation, while not robust, we have some. Weaker energy prices are putting downward pressure on price growth. The producer price index for final demand (PPI) which measure margins and not selling prices came in at 1.5 percent increase. If you exclude food, energy and trade then it was up 0.6 percent and 1.6 percent for the year. The more reliable core prices index (CPI) was unchanged for the month. Falling energy prices were offset…

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The Bank of England Slashes Growth Forecasts

london, ftse, brexit

Bank of England Slashes Growth Forecast We were expecting the Bank of England (BOE) to raise rates sometime in early Q1 of 2015. We have seen some solid gains in their labor sector as the unemployment rate is near a six year low, the GDP growing at three percent in Q3 2014 but expectations for this rate hike took a bit of a hit. The BOE slashed its growth outlook based on a weakening global outlook which will impact the British economy. They also made some downward adjustments on their inflation outlook this week as well. This did not support…

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U.S. Data, The Good Outweighs the Bad

The third quarter gross domestic product (GDP) in the United States was revised lower. Trade is the big drag and continues to remain the key problem. Construction spending continues to fall short as well as weaker factory orders are not helping. However when it comes to the U.S. Data, the good far outweighs the bad right now. Non-farm payrolls were up by 214,000 in October. The previous two months saw 31,000 new jobs added. The unemployment rate fell, and is now at 5.8 percent. This is a new cycle low. We are also seeing a higher labor force participation. Average…

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Japan Steals the Spotlight

Friday the Bank of Japan (BOJ) surprised the markets when they announced further JGB and real estate bond purchases. They are expanding their monetary base. Let’s look at some economic data first. The gross domestic product (GDP) for Japan has been erratic the entire year. It was up 7.1 percent in Q1 and down six percent in the second quarter. This erratic behavior, up and down, is due to the consumption tax rate hike in April. This pulled spending from Q2 back into Q1. With the tax hike fading, their economy should normalize over the next couple of quarters and…

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U.S. Economy Continues to Chug Along

US Home sales

Last week saw a plethora of economic data released and all of it indicates the world’s largest economy continues to expand and improve. The Chicago Fed National Activity index, which came out last week, confirms that the U.S. economy was trending higher in September. We saw solid gains in the Leading Economic Index which is a forward looking indicator, this pointed to more growth down the road. Consumer prices remain fairly benign and the labor markets continues gain momentum. The housing market is making gains, albeit moderately. The four week moving average for jobless claims has now reached its lowest…

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What is With the Month of October and Stocks?

It must be Halloween. The month of October is always unkind to global equities and financial markets in general. October is the home for some of the worst financial days on record for world financial markets. Black Monday, October 19, 1987. Black Tuesday, October 29, 1929 which was the two day selloff which led the Great Depression. The selloff in 1929 also included Black Thursday and Black Friday. A lot of black in the month of October. Last Wednesday, the Dow Jones Industrial Average (DJIA) was down 430 points at one point. The 10 year Treasury yield fell, briefly, 33…

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U.S. Labor Market Continues to Improve

We had a relatively light economic calendar last week. However our view on third quarter improvement and future Federal Reserve policy were no changed. Job data continues to improve signaling an improvement in the labor market. This is a strong indication that the fast pace of job growth is likely to continue through the end of the year and into 2015. We saw the minutes from the last Federal Open Markets Committee (FOMC) which showed they are concerned over global economic growth, a stronger U.S. Dollar and a faster than expected inventory building pace. Import prices continued to drop in September…

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Fundamental Review: NFP Report Impresses

The world’s largest economy continues to gain speed and recover. The U.S. economy is on strong ground after non-farm payrolls (NFP) not only came in strong, but was adjusted significantly higher from the month earlier. The NFP showed the U.S. economy added 248,000 new jobs in September and the really disappointing August number was adjusted significantly higher. The unemployment rate also fell to 5.9 percent. The average monthly job gain for 2014 is now at 227,000. It was at 197,000 for 2013. There are more jobs as well as an increase in the average work week. However, there is always…

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Fundamental Review: U.S. Economy Firms into Fall

Even though, the fiasco of what was the second quarter gross domestic product (GDP) is in the past, the third estimate for the U.S. GDP appears to have rebounded rather impressively. The estimate shows the economy expanded at 4.6 percent annually. The previous number was at 4.2 percent. The expansion was driven by stronger growth across all major components. Even with this Q2 growth, the GDP for the first quarter was only up by 0.9 percent annually. With the third quarter nearly done, growth looks stronger for the second half of the year, and decidedly so. Durable goods orders fell…

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Fundamental Review: Fed Gets Ready to End QE

The Fed

Right now, the low inflation rate in the United States is going to give the Federal Reserve Board “considerable time” and until well after it ends its massive bond purchase program next month. At its monthly policy meeting, the FOMC left rates as is and slashed another $10 billion off the current quantitative easing (QE) program. They will end QE in October as planned and rates will stay super low at least until mid-2015. The Fed, once again, has lowered its forecast for the unemployment rate. The Fed also recognized that the economy, at present is having what they call…

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FUNDAMENTAL REVIEW: Australia Adds New Jobs

The Australian economy added new jobs at a nice and steady clip, according to data released last week. This time period is for the first several months of 2014 and was good enough to bring the unemployment rate down to 5.8 percent for March and April. However, hiring has not been very solid over the last month or so. Net layoffs in Australia, over the last four months, has been higher. The jobless rate, during this time period, is now at a higher rate not seen since the 2009 global recession. We also learned, that this week, consumer confidence fell…

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Fundamental Review: NFP Disappoints but is an Anomaly

Non-farm payrolls (NFP) disappointed. They missed the mark, widely. So far off the mark that the print cannot be accurate and is an anomaly. The NFP showed that the U.S. economy added a mere 142,000 jobs in the month of August. Even with the prior month’s negative revisions, the average monthly number stands at 215,000. All the ISM data and previous ADP numbers indicate that this print was an anomaly and will likely be revised higher in September. The factory sector has made strong strides to recovery. This is a good sign for business spending. The ISM manufacturing data came…

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Fundamental Review: U.S. Continues to Plow Ahead

We did not get great economic data out of the U.S. last week. However, the US economy continues to improve . The biggest news came out of durable goods orders as they jumped, no they leaped, a whopping 22.6 percent in July. This is the biggest gain on record and was led by aircraft orders. Aircraft orders mean lengthy building periods, which means the GDP will not be effected for some time yet. We also got a 10.2 percent jump in vehicles and parts. What is the real trend in manufacturing? Even after falling 0.5 percent in July, core orders are at…

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FUNDAMENTAL REVIEW: Mexico’s Economy Grows

Article Summary: Despite the rest of Latin America, Mexico’s Economy blooms. China’s PMI data, thanks to Europe, has slowed considerably. Even though numbers were not rosy, German data beat expectations last quarter. The country of Mexico is, once again, relying on geography and its closeness to the U.S. to grow its economy. The country of Mexico has done a better job managing its economy than its Latin America neighbors, especially Brazil, and as long as the U.S. economy continues to improve, so should Mexico’s economy. Their economy grew at one percent in the second quarter, compared to an upwardly revised…

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Is Economic Data Falling Apart?

Foreign economic data is giving us the distinct impression things are falling apart in global economies. The GDP in Japan contracted sharply by 6.8 percent thanks to the new sales tax. This could push their struggling economy back into a recession. The weakness in the Japan’s GDP is not indicative of the underlying state of their economy because it was due to the consumption tax hike. Consumers knew it was coming so they front ended purchases pushing the first quarter GDP higher. Real consumption expenditures was up 8.4 percent in Q1, only to collapse 18.7 percent after the tax hike….

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FUNDAMENTAL REVIEW: Some Signs of Growth

Summary: The U.S. economy continues to pick up steam, slowly. ISM non-manufacturing index came in at 58.7, a 2.7 percent jump. Durable goods orders jumped 1.7 percent in June. There are some breadcrumbs coming out of the U.S. economy hinting the economy is accelerating. We saw a solid payroll number in July as initial jobless claims continued to fall in the first week of August. The four week moving average has now reached its lowest level since early 2006. We are also seeing other indicators like the ISM non-manufacturing index as well as the manufacturing index returning to pre-crisis levels….

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Looking at the Friday Session

Fridays session

Looking at the Friday session, we see a couple of interesting numbers by at the end of the day we feel that this is going to be more of a currency related day than anything else. With that being said, sometimes you have days where technicals will take over, and this could in fact be one of them. Looking at the economic calendar, you can see that Chinese Trade Balance numbers come out during the early morning. This essentially represents the import/export number for China, and as a result a gives a slight look into the idea of how global…

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FUNDAMENTAL REVIEW: US Inflation Continues to Improve

US Home sales

Summary: Inflation is starting to pick up in the U.S. as the economy picks up steam The factory sector is also showing signs of improvement but core shipping remains weak. U.S. housing sector remains sideways. This will continue to be  drag on economic growth. Data coming out of the world’s largest economy shows that inflation is starting to pick up. We expect this trend to continue and gain strength as the economy continues to pick up steam. With this said, the U.S. Federal Reserve Bank is expected to raise rates in mid-2015. In June, the CPI eased a bit as…

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Is the U.S. labor Market Tightening? Looks that Way.

Summary: Small Business Confidence fell by 10 points as the recent GDP contraction shatters short term confidence. Wage pressures, among small business owners, is growing. Labor market conditions are still tight as small businesses are still finding it hard to hire. In June, the small business confidence fell with the NFIB optimism all but losing the gain seen in the previous month. The contracting Q1 GDP has shaken small businesses as firms who are expecting the conditions to improve fell by 10 points. While we are seeing short term confidence faltering in the economy, employers are still hiring. We saw…

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Non-Farm Payrolls Impress Again

SUMMARY: NFP shows 288,000 new jobs created in June. This is the longest winning streak since the 1990’s Other economic data, such as ISM manufacturing, is firming up. The Dow Jones Industrial Average is now in record territory and above 17,000. Last week, the U.S. had a shortened work week thanks to their Independence Day Holiday, but it did not stop data from setting off a few fireworks of their own. We had the all-important non-farm payrolls (NFP) release on Thursday, which came in stronger than expected. The ISM manufacturing index was well in the area of expansion. This helped…

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FUNDAMENTAL REVIEW: U.S. GDP Contracts Sharply

SUMMARY: US GDP Contracts 2.9 percent as healthcare spending disappoints. Actual US Consumer spending declines 0.1 percent after adjusting to inflation. US durable goods orders contract thanks to a cut in defense spending. This week started on a sour note concerning the world’s largest economy as revised data showed the gross domestic product (GDP) contracting sharply for the first quarter. Data showed the GDP, which was originally reported at a one percent contraction, was actually at negative 2.9 percent. This is the largest contraction since the start of the global economic crisis in 2009 (Q1). The key factors that caused…

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FUNDAMENTAL REVIEW: Eurozone Data Crawls Higher

SUMMARY: – Eurozone Data & Economy trudges higher. – German ZEW Index shows institutional investor confidence climbing, especially in manufacturing and services. – Canadian consumer sales spike higher showing a 1.1 percent climb in April. We got some indicators last week which showed us the economic activity in the Eurozone is expanding, albeit at a very slow rate. For the fifth quarter in a row, construction rose 0.8 percent in April. This sector remains depressed when looking at its numbers pre-crisis era. Still, output here is starting to show a trend that is higher, which is something we have not…

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Uneven Global Growth Dominates Data

Article Summary The situation and outlook for the emerging markets has deteriorated and is not what it once was. Emerging markets are expected to show some growth but this growth is not expected to emulate what we saw in the first decade of the twenty first century. China is now showing some stabilization and growth lies ahead as retail numbers exceeded expectations and  industrial production met expectations. The economy continues its path of uneven global growth through many countries. We are still seeing some countries with stronger growth rates than others. The U.S. and British economies are examples of countries with strong…

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FUNDAMENTAL REVIEW: The NFP Shines

Non-farm payrolls accelerate for the month of May The first two months of Q2 have seen an average of 250K new jobs added. Unemployment rate remains steady at 6.3 percent. 2014 did not start out with a bang for the world’s largest economy. The first quarter was slow, to say the least. Among some other less than stellar economic data, there was the report, two weeks ago, that the U.S. GDP contracted by one percent. This caused a flutter that there was a fundamental problem. However, data this past week gave us a much needed boost of confidence. The non-farm payroll report accelerated during the first…

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U.S. GDP Contracts 1 Percent

US GDP Contracts larger than expected Durable Goods up in April, thanks to Defense orders Consumer Spending Retreats but Consumer Confidence Higher The U.S. is off to a weak start in 2014. Weaker than anyone thought as first quarter gross domestic product (GDP) contracted by one percent. This is after the Q4 2013 growth of 2.6 percent. There is some good news here. Data points to a more robust growth in Q2 and for the second half of the year. Durable goods spending was up 0.8 percent in April. Most of this was coming from transportation orders. Turning to consumers,…

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FUNDAMENTAL REVIEW: U.S. GDP Likely to Come in Weak

Fragile Five Now the Fabulous Five

While last week was a slow economic news week for the United States, this week will be busy with one glaring gorilla in the headlights. There are signals that the first quarter economic activity will come in weaker than anyone thought. We saw international trade data narrowing as exports, in March, rose faster than imports. The April ISM non- manufacturing report continued to show that momentum in the service sector continues to gain strength. Although, we saw softness in the employment part of the report. Productivity, for Q1, was also very disappointing as that declined and labor costs (per unit)…

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FUNDAMENTAL REVIEW: The U.K. Economy Continues to Chug Along

The United Kingdom (UK) release data this past week which showed their economy grew at an annual rate of 3.3 percent and 0.8 for the first quarter of this year. The data was broken down into key components and showed that consumer spending was the key underlying factor for this report. It also showed that momentum, for consumer spending is continuing into the second quarter. Retail spending volume was up 1.3 percent in April. This pushed the annual rate of growth to 6.8 percent, its strongest level in over a decade. However, there seems to be one caveat. Inflation. Despite…

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FUNDAMENTAL REVIEW: Japan’s Growth Picks Up, But Will it Last?

The gross domestic product or GDP in the first quarter for Japan came in at a sizzling 5.9 percent. This was well above expectations and its fastest pace since the snap back after the tsunami in 2011. However, this should be short lived as we feel this was a surge in purchasing before the consumption tax hike in April. Real private demand was up an impressive 2.3 percent. This is ties the single quarter record set 20 years ago in the private sector. In April, the consumption tax was increased by three percent to eight percent. This will cause a…

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FUNDAMENTAL REVIEW: US Jobs Report Surprises for the Better

The United States suffered through one of its coldest and stormiest winters on record. Economic data was impacted and growth slowed. The US barely showed growth squeezing out a one percent GDP gain for Q1 of this year. Then we got good consumer spending numbers, which gave a boost to real GDP. Most of the gains were concentrated in services, higher healthcare spending along with higher bills for heating oil helped boost these numbers. However, we had lower inventory numbers which fell 0.6 points. Net exports lost 0.83 percent. This was all due to the weather. Expectations for a pickup…

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US Housing Market 2014

US Home sales

The US economy has been held back thanks to the housing market. It appeared, this past spring that was going to change. This week’s data showed sales and new construction sputtering as mortgage rates moved up from record lows. This week’s data shows we need more than the start of the spring home buying will be needed to get this market going.  We saw existing home sales slipping 0.2 percent in March. Some of this could be aftereffects from a brutal winter, but sales have fallen by 15 percent since hitting a high in July. A shortage in supply could…

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FUNDAMENTAL REVIEW: China Shows Some Improvement

China's PMI

Last week China released its Q1 gross domestic product (GDP) which, as expected, moved the markets this past week. We were more concerned with how bad the number would be, that even though the GDP showed China’s  growth was below the standard we expect from China, markets were happy it was not as bad as it could have been. There is always some doubt regarding China’s economic data, and its accuracy, but numbers showed that the world’s second largest economy grew 7.4 percent (annually) in the first quarter of this year. For now, this data will help to calm fears…

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FUNDAMENTAL REVIEW: U.S. Economy Continues to Improve with Spring

After a long, hard, brutal winter which saw the NFP severely contract and other economic data suffer, we are seeing a spring thaw in the United States. We saw continued improvement this week in small business optimism, consumer credit and the economy got fewer jobless claims. While the economy seems to be making some progress with growth, this progress is rather subdued and small. There is an underlying story to the economic improvement, as it is sluggish and revealing a lot of slack. One can say a job is still hard to come by in the U.S. Employer are also…

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FUNDAMENTAL REVIEW: The Spring Thaw Continues in The U.S.

The March non-farm payroll (NFP) made just the right move to strike the right chord in investor sentiment. The NFP came in line with analyst expectations, well just below forecasts, showing the U.S. economy added 192,000 new jobs. While the gain is modest, we are seeing some broad base gains which are highly encouraging. We only got declines in the following subcategories: federal and state jobs and non-durable manufacturing. The unemployment rate did not change. That remained at 6.7 percent, however the labor force participation rate rose 0.2 percentage points to 63.2 percent. The unemployment population rate was up 0.1…

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