Top Stories Last Week
• US Stocks Ended the Week at Record Levels Again
U.S. stocks ended the week at record levels again. The bull markets continued as more
and more retail investors jumped to the bandwagon, buying stocks. S&P index was up by
0.9%, and MSCI EAFE index increased 0.1%. The MSCI Emerging Market Index rose
1.0%. Gold price declined by 0.9%. The SPGC commodity index climbed 0.6% as oil
price rose again. The bond markets were sold off again. Barclays US Treasury index
declined by 0.2% while US high yield bonds was up 0.1%.
• China Returned to Trade Surplus
China’s exports rose 14.7% in April YOY while imports grew 16.8%, leaving the country with a trade surplus of $18.16 billion. That compares with a trade surplus of $18.5 billion a year earlier and deficit of $0.8 billion in March. The 14.7% increase in exports was led by a 57.2% jump in shipments to Hong Kong. Imports were stronger than expected, giving some encouragement about China’s appetite for global commodities. In April, imports from the United States increased 20% year-on-year while exports decreased 0.1%. Exports to the European Union were down 6% and imports up 12%. Trade with Japan decreased; exports by 1.2% and imports 3.3%. Exports to ASEAN and Taiwan rose 37% and 49%, respectively.
• Chinese Consumer Price Index Nudged Higher while Producer Price Index Declined
Chinese inflation nudged higher in April on the back of soaring vegetable prices but the data also pointed to industrial overcapacity and a fragile economic recovery. China’s consumer price index rose 2.4% year on year, rebounding from a temporary dip to 2.1% in March. The rise was fuelled by a jump in the cost of food, especially vegetables, after an unusually cold start to the spring. However, the non-food elements in China’s consumer price index increased just 1.6% year on year, lower than their average rise in the first quarter. Moreover, producer prices fell deeper into deflationary territory, a reflection of lower global commodity prices as well as excess factory capacity.
• Bank of England Kept Interest Rates Unchanged
The Bank of England held off from injecting more stimulus into the U.K.’s fragile economy, but incoming governor Mark Carney is expected to take action to shore up a fledgling recovery within months. The central bank held its benchmark interest rate at 0.5% and left the size of its bond-buying stimulus program at £375 billion ($583 billion). The decision was expected and sterling was little changed.
• Reserve Bank of Australia Cut Benchmark Interest Rate to 2.75%
The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down Aussie dollar to boost manufacture and employment. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75%, saying in a statement that the Aussie’s record strength “is unusual given the decline in export prices and interest rates.”
Top Stories to Watch This Week
• Retailers Earning Reports
Walmat, JC Penny, and Kohl’s are scheduled to report quarterly earnings.
• US Retail Sales
US retail sales in April are expected to decline slightly 0.2% from March.
• Euro zone GDP
Euro zone GDP declined by 0.9% YOY, according to economists’ survey.
• Japanese GDP
Japanese economy is expected to grow by 0.7% in Q1 13 from Q4 12.