China's Growth Improved

As another month is upon us, and moving in to the last few weeks of 2013, it was China who stole the headlines last week reporting manufacturing numbers which were the highest they’ve been in the past year and a half! This helped add to the consecutive growth we’ve seen for China over the recent months. For our readers, you may remember that we started talking about this back in July when China’s data first started to turn the corner and mentioned that these positive numbers would have to continue in order to provide any sort of traction for growth. And so far, China has not disappointed because that’s exactly what we’ve seen. Granted their numbers aren’t as strong as they might have been several years ago, but China’s economy is evolving to be more consumption based, and so far it seems they are achieving this shift without the disastrous implications some thought it would have.
Over in the US, the latest FED meeting has been and gone, seemingly passing without a trace. For those that missed it though, not to worry. It’s much of the same story that’s being sung, and you’ve certainly heard it all before. But, to reiterate, the FED stuck with their current spiel of low rates and ongoing QE3 until further notice. We all know that the FED is trying it’s best not to shock the markets in any shape or form, but I would also venture out and speculate that the FED is biding their time and awaiting the new head to replace Ben Bernanke early next year before coming out with any major policy changes. That said, with Janet Yellen expected to be the next FED leader, and considering that her policy stance is almost identical to that of Mr. Bernanke’s, it’s hard to imagine a different stance with the anticipated changeover.
It was rather quiet in Europe last week with some small improvements in various country GDP’s, but taking into account all that’s happened in the past few years, this quiet period for the region isn’t such a bad thing. Unlike the US, Europe isn’t able to turn on the money printing machines nor push back on debt issues too easily, so although this small improvement has come at a cost, equally, the region is setting itself up to make it all worthwhile. Certainly, there is still a long way to go, but with most of the Eurozone having stabilized for the past several months, it might not be an indicator for a huge upturn, but could instead be an indicator that most of the worst has past. Certainly this is just our opinion, but based on the fundamentals, and what we’re seeing, we do feel that it’s a rather sturdy approach. We will continue to see how our thoughts of an increase in exposure to Asia as well as global equity plays out, as only time will tell.
And to close out this week’s commentary, last week saw the UK FTSE and US S&P both end the week right about where they started, while the Hong Kong Hang Seng ended the week up about 2.4%. But with the year’s end not upon us just yet, and coupled with the expected economic events on the calendar early next year, we continue to recommend a well balanced and diversified approach for investors at this time.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Austen Morris Associates Wealth Management & Investment Team
Darren Cox