While you were sleeping... Our first report back sees us report the US S&P 500 down overnight a little over 2%, which comes on the back of a large sell off in emerging market currencies (Argentina, Ukraine, South Africa and Turkey). Volume was also a key indicator, with the number of stocks traded some 52% higher than the average for this time of the year. Elsewhere in emerging markets, Thai bond yields have soared over default fears as the protests against the countrys leaders continue to cripple the economy. Corporate earnings are the focus for the US reporting season and so far have been a mixed bag. Investors are skittish and any result that does not meet or exceed the market is being dealt with harshly. Domestically, our market ended the week in negative territory - we are increasingly becoming the proxy for how the market views China. A key Chinese Manufacturing index went into decline this month and while one month does not tell the story, (as producers traditionally run down inventories leading into Chinese New Year - as borne out by the fall in the iron ore price from over US$130/ tonne to around US$124/tonne) the key focus will be on whether this is part of a trend. Our thoughts at the moment are drawn to assessing the impact of lower interest rates in Australia and improved sentiment in property markets, against a short term declining employment outlook and continuing concerns over the sustainability of Chinas debt fueled growth ambitions. We expect this year will at least start a little more volatile than last. Enjoy your weekend and we hope that 2014 brings continued good health and a little bit of improved wealth to us all. Gareth Jakeman
Posted on: Fri, 24 Jan 2014 22:09:53 +0000
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