Thungen Financial 9th June 2014 - Global Market Review

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Thungen Financial 9th June 2014 - Global Market Review

Asian markets are flirting with three year highs as a string of positive data helps global indexes keep posting gains.

The Nikkei continued its good run as the government announced that the economy expanded by 6.7%, coming in over 1.5% above forecast and allowing the Bank of Japan to insinuate that the economy is doing just fine. The expansion in the first quarter of 2014 is 1.6% greater than the previous year and comes just before a two day session being held in Tokyo by the BoJ as they look into the countries improving economy. It is not expected that any policy changes will be made as Japan's economy continues to hold its own. Data out of China this weekend was mixed. Exports rose 7% against May of 2013 however Imports for the same period dropped 1.6%. This increased the Trade Deficit from April's $18.5bn to $35.9bn for May. Although  many will use this as a reason for raising concern there is a need to allow for the rather large amount of fake export invoices that were created last year as local companies looked for a way to work around the currency restrictions they were facing at the time. Industrial data out of China towards the end of the week will be a good indicator as to the true health of the economy. Industrial Output for May is forecast to be 8.8% higher and will help convince some analysts that the economy is performing well.

European indexes are expected to open higher as they continue to post gains after the ECB rate announcement on Thursday. After confirming a reduction in Interest rates to 0.15% and a negative base rate of -0.1% set the ECB didn't make any shock announcements. This along with a program looking to secure small business loans in the form of a bond program and the implementation of €400bn fund for banks to borrow at reduce rates, depending on the amount they loan out, in an effort to get banks to loan more monies. The news was well received and due to the small amount of economic indicators this week, there is little to distract investors in Europe and we should expect the local markets to continue their gains as they look to add more value to the markets.

US markets are continuing their record streak. Both the Dow and S&P closed on record highs Friday after some positive jobs data and a day to reflect on the ECB rate decision. Closing at 16,924.28 and 1,949.44 respectively it was the sixth straight record close out of seven sessions for the S&P 500 and there are few signs that this will start to slow down. Late on Friday confirmation of 217,000 jobs being added to the workforce confirmed the forecast and was the fourth month in a row that over 200,000 jobs had been added to the job market. That was the first time since January 2000 that this had happened, over 14yrs. Unemployment still came in at 6.3% and is seen as dropping as the year progresses and the baby boomers continue to leave the workforce for retirement. Towards the end of the week we will get May's Retail Sales which are forecast to be slightly higher by 0.6% and Friday the Producer Prices Index will be released.

All in all the global markets should continue to rally in the fashion they have of late as economic indicators continue to back up that the global economy is recovering at full steam.

Asian Markets as of 9th June 2014:

Nikkei 15,124.00 +0.31%          SSE Comp. 2,030.54 +0.03%

Hang Seng 23,091.50 +0.61%

ASX 5,443.50 +0.44%

European Markets as of 9th June 2014

FTSE 6,858.21 +0.66%          Dax  9,987.19 +0.40%

CAC40 4,581.12 +0.71%

BEL20 3,171.51 +0.35%          Zurich SMI 8,685.69 +0.19%

MICEX 1,387.56 _7.07%

US Markets as of 9th June 2014

S&P500 1,949.44 +0.46%          Dow Jones 16,924.28 +0.52%

NASDAQ 4,321.40 +0.59%

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DISCLAIMER  The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.