Hello everyone. It seems as if spring is trying to break through and win over the winter here in Shanghai, however the weather changes of late have been up and down like the markets! There is some exciting news this week to talk about so let’s get right into it.
Wow! 3 straight record high days for the DOW. Stocks are seeing levels they haven’t seen since 2007 and it’s got everyone talking! Given the multitude of factors leading to this, it’s a mixed bag of opinions over which data was the major contributor. But before we start believing the first report to flick across the screen let’s take a quick look across the globe.
In China manufacturing numbers were a little sluggish but still on the positive side of the fence. Some headlines read China growth slows, which is not to be confused with China grows slow! In Europe concerns subsided around Italy and things went right back to normal, although Europe still has a long way to go, they are moving in the right direction and making a lot better progress than last year. For example, last year saw Spain make front page news because their bond rates rose to 7%. Last week though Spain had a successful bond auction which was so successful no one even paid attention to it! Ironic isn’t it?
Then there’s the US. The US Fed released a few different reports of which most were positive. They announced the stress test of the 18 major banks which don’t have any issues, unemployment claims fell, some housing numbers improved, trade deficit was ok, and then amongst all the reports they also mentioned they would fund $982 billion to avoid the funding issues that were coming up at the end of this month. The US is back! Remember last week we thought it was unusual that the Sequester went by with no intervention and I was thinking that was unusual precedence? Maybe they thought the same thing and decided to come back and intervene with a big message – a $982 billion message!
The bigger picture sees a relatively calm Europe, the US is doing their thing, and some decent numbers have come out so far this year – so we’re seeing our expectations from last year come to fruition. Not to mention that the US has removed their next obstacle (the Budget Ceiling) that was scheduled for the end of this month but now resolved, so we would expect this trend to continue. That said, be sure to continue take a balanced approach to your investments.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more updates on the world financial news please visit our Weekly Global Economic Outlook.
Co-Head of Portfolio Management,
Darren Cox
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com
