Hi all, There will be no video today as I had some unforeseen issues and a rather lengthy conversation with a brokerage this morning that have prevented me recording it. Elli. Markets Overnight US markets closed lower overnight after retreating from the record close yesterday, and the S&P moving to within a point of its all time close. The Dow hovered around the open price but eventually posted losses with the utilities and financials sectors dragging the index lower. Treasury yields drifted higher, nearing levels seen in the summer that alarmed the Fed with bond yields rising to their highest levels since September, and the dollar index moved higher, peaking against the yen to a one month high as investors anticipate the easing may occur sooner than originally thought. Feds Fisher (Dallas Fed President) spoke yesterday to CNBC saying that the Feds stimulus program could not continue forever. He is actually in Melbourne Australia at this time :). Talk continues in the markets of when the Fed may now taper given the better economic data emerging from the US, and investors remain cautious. Atlanta Fed President Lockhart cited downside risks to the 2014 economic outlook, saying consumer spending needed to rise and the fiscal drag on economic growth had to fade. European markets closed lower overnight also, as weak corporate results and news from Chinas reform agenda put the brakes on the recent rally. Corporate results have put a dim view on the economy with almost half of the companies on the pan European STOXX 600 index posting quarterly earnings results that have missed profit expectations. Commodity prices also took a hit with the China reforms on the agenda but more on that in a moment. Fed concerns continue to cause unrest in the markets as well as participants begin to expect the Fed to bring the tapering talk to the table again. The European Commission is looking at launching an in-depth review of the German economy this week as a debate lingers regarding the countrys large current account surplus, looking at whether the countrys current account surplus is negatively affecting the rest of the region. In the UK house prices rose more than 11 years during October with an increase in the demand for homes, fuelling fears that the UK may be on the brink of another property bubble. Today sees the Quarterly Inflation Report from the BoE which will be closely watched for the economic forecasts and speculation that interest rates could be risen sooner than expected. Consumer price inflation fell in the UK in October, its lowest rate for more than a year. In Asia, focus remained on the Fed and the reforms coming out of China. Chinas ruling party has pledged to let markets play a decisive role in allocating resources in the unveiling of its reform agenda for the next decade. They aim to achieve decisive results by 2020, with economic changes a central focus of comprehensive reforms. State agencies will now be left to nut out the details and set the reforms in motion, as the meeting has only set the broad agenda, however some reforms could face resistance from powerful interest groups such as local governments or state-owned monopolies. The Nikkei rallied yesterday as the dollar yen traded above the 99 handle, with the index rising 2% to a four week high. The Kospi also rose snapping their six day losing streak as investors went bargain hunting for large-cap stocks. Shanghai closed up after hitting multi week lows in the previous session but trade remained subdued. Sydney also closed slightly higher but sentiment was dampened after the NABs business survey showed confidence falling from three and a half year highs in October. Major news today includes NZD, GBP with several medium term events also. Please check your economic calendar.
Posted on: Wed, 13 Nov 2013 00:52:46 +0000
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