Julex Market Weekly 01-05-2013 | Global Stock Market Started the New Year with Negative Performance

Top Stories Last Week

• Global Stock Markets Started the New Year with Negative Performance

Global stocks started 2014 with negative performance. Last week, S&P index dropped 1.0%, and MSCI EAFE index declined 1.7%. Even worse, the MSCI Emerging Market tumbled 3.6%. On other hand, gold climbed 2.7%, while the SPGC commodity index dropped by 3.0%. The bond markets rose as investors took profits from stock markets. Barclays US Treasury index was up by 0.3%, while US high yield bonds rose by 0.1%.

• US Stocks Returned 30%, the Best Performance Since 1997

The equity rally in 2013 lifted the Standard & Poor’s 500 Index to the biggest annual increase in 16 years. The stock market, as measured by the S&P 500, had gained 29.6% in 2013, its biggest jump since 1997. The index ended the year at 1,862.79, an all-time high that is about 20% above the record 1,565.65 set in 2007.

• US Manufacturing Sector Continued to Expand

US manufacturing expanded at a brisk pace in December while November construction spending rose to its highest level in nearly five years, adding to a stream of data reflecting positive momentum in the world’s largest economy. The Institute for Supply Management said its index of national factory activity stood at 57 in November, in line with economists’ expectations, although slightly below November’s two-and-a-half-year high of 57.3. Signals on future business were positive as the new orders index increased in December by 0.6% to 64.2%, the highest reading since April 2010.

• Chinese Manufacturing Activities Showed Signs of Slowing Down

China’s manufacturing sector showed signs of losing momentum in December, according to official PMI report, indicating the challenges facing Chinese exporters. The official PMI index fell in December to 51.0, slightly below expectations, from 51.4 the month before. Rising wages and a stronger currency have hurt China’s exports, dragging down growth in the manufacturing sector. The Chinese yuan rose about 3% against the dollar last year while other Asian currencies, including the Indian rupee and the Indonesian rupiah, tumbled. Much low-cost manufacturing has already moved out of China.

Top Stories to Watch This Week

• US Employment Report

US employers are expected to add 194K jobs in December and unemployment rate is likely to drop to 7%.

• European Central Bank and Bank of England Policy Meetings

Both ECB and BOE are likely to keep monetary policies intact.

• Chinese Economic Data

China will report retail sales, industrial production and CPI inflation rate this week.

• German Unemployment Rate

The unemployment rate in Germany is expected to remain the same at 6.9%.