US Job Data Shines

It was all in the name of Charity with the 3rd Annual Chi Fan for Charity event, organised by Austen Morris Associates, having taken place on Saturday 9th November across 55 different restaurants around town helping to raise funds for three worthy beneficiaries – The Renewal Centre, Home Sweet Home and Heart to Heart Shanghai. We would like to say a huge THANK YOU to all of the Shanghai community, restaurants, sponsors, hosts, volunteers, Austen Morris clients, our Money Matters readers, and all the diners that participated in the Saturday night festivities. Our dedicated team are now reviewing all the funds raised and we look forward to reporting back about how much was raised to support three beneficiaries in helping change many lives in China for 2013.
In other money matters, it was an interesting week in the markets with some positive data coming through late in the week after which we’d had a few days of decline that saw the Hang Seng down 2.5% erasing the gains from last week, and the FTSE ending the week down -0.9%. The S&P gained 1.3% on Friday to end the week just in positive territory, barely above where it started the week. But this was only after the jobs data printed on Friday helped drive the markets up.US jobs numbers came in at 204,000, well above the expected 125,000 and this was a surprise for most, sending some confidence back into the markets. Even at the higher than expected numbers, the US still has a long way to go on the employment side of things, but this is still good progress as employment is crucial to helping get the US economy back on track! The US also showed GDP at 2.8% which is over 1% higher than earlier in the year. Another good sign that the US is gaining some traction which it no doubt needs. A conversation with a client recently brought up an interesting topic. They thought QE3 stimulus wouldn’t be stopped until unemployment reached 7% and this got me thinking. I’d have to agree that this is not a bad benchmark considering Janet Yellen is expected to replace Ben Bernanke and that the FED can also manipulate the employment number giving them some room to move.
China continues to impress with their continued improving data with positive import and export numbers which follows China’s increased GDP from last week. These should help the growing trend that started back in July and help gain some further traction. In saying that, China, and the global economy in general, still needs to find firmer footing as there are plenty of concerns that remain. Nonetheless, the recent consecutive months of positive data should start to take hold and provide investors with more confidence as the large global economies continue to show improvement.
Over in Europe the ECB recently cut interest rates from 0.5% down to 0.25% to help stimulate further growth as inflation concerns remain very low. Inflation has remained extremely low around the developed nations despite the enormous volumes of extra capital through all the quantitative easing and stimulus measures, and this in turn will weigh on gold as it traditionally provides a good hedge against inflation. Although inflation is expected to rise at some point, it’s likely to remain low through into 2014 and with this, we may see the equity markets continue on their rising trends, keeping gold subdued. But this is based both on expectations and speculation given current conditions, and the way the markets play out could be much different! Therefore it is important to retain a well balanced and diversified portfolio to spread out any risk and broaden exposure to different regions.
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
Co-Head of Portfolio Management
www.austenmorris.com