Top Stories Last Week
• US Stocks Set Records Again
U.S. stocks rose for the week, setting a few record highs along the way. It was another week of gains even the economic data during the week was a mixed bag, with retail sales and consumer sentiment exceeding expectations and initial jobless claims worse than expected. S&P index rallied 2.2%, and MSCI EAFE index jumped 0.6%. However, the MSCI Emerging Market Index declined by 0.6%. Gold price tumbled 6.1%. The SPGC commodity index was up 0.1% as oil prices rose again. The bond markets were sold off again. Barclays US Treasury index declined by 0.1%, and US high yield bonds was down 0.1%.
• US Retail Sales Rose 0.1% in April
U.S. retail sales rose in April, as consumers bought cars, building materials and other goods. Consumer spending rose 0.1% from the previous month. Excluding the volatile items, like fuel and cars, spending in the overall economy jumped 0.5%. Consumer demand drives about 70% of U.S. economic activity. The report surprised many economists who had predicted that retail sales would decline as the effect of tax increases and government spending cuts worked their way through the economy.
• Euro Zone Economy Shrank for the Sixth Straight Quarter
Economy of the euro zone contracted by a worse-than-expected 0.2% in the first quarter of 2013, keeping the region mired in recession. Economists surveyed expected the euro-zone economy to shrink by 0.1%. However, the data painted a brighter picture than in the fourth quarter last year, when growth rates fell 0.6% and 0.5% respectively. On a country-specific basis, Spain and Italy both shrank 0.5%, while France fell 0.2%. Germany narrowly avoided a contraction, with the economy growing 0.1%.
• Japan GDP Growth Beat Expectations under Abenomics
Japan’s economy kicked into high gear during the first quarter as policymakers worked to combat decades of falling prices and spur growth. Japan’s economy grew at an annual rate of 3.5% in the first quarter of 2013. The expansion was much quicker than the 2.7% increase expected by analysts. On a quarterly basis, Japan’s gross domestic product increased by 0.9%. Consumer spending and exports were particularly strong. The positive data should bolster hopes that the country’s economic outlook is brightening. The growth should also provide a boost to Prime Minister Shinzo Abe’s reform efforts — a set of policies called “Abenomics.”
Top Stories to Watch This Week
• Bernanke Testimony
Fed Chairman Ben Bernanke will testify before the congress on Wednesday. He may give some clue on when the quantitative easing will be scaled back.
• US Durable Goods Order
US durable goods order is expected to rise 1% in April.
• US Housing Markets
US existing home sales is expected to rise to annual pace of 4.98MM in April.
• Japanese Interest Rate Decision
Bank of Japan will issue interest rate decision on Wednesday.