JULEX WEEKLY REVIEW 11-25-2012 | Markets Rallied on Easing of Middle East Tension and Hope for a Resolution of Fiscal Cliff

Top Stories Last Week

  • Markets Rallied on Easing of Middle East Tension and Hope for a Resolution of “Fiscal Cliff”

The stock markets enjoyed some Black Friday cheer, rising sharply as consumers rushed to start the holiday shopping season. Major stock indexes closed one of their best weeks of the year. Investors were encouraged by positive economic news from Germany and China.  Earlier in the week, major indexes were boosted as hopes rose that the U.S. fiscal cliff can be averted following the meeting between President Obama and the congressional leaders. The cease-free agreement between Israel and Hamas also helped lift the market sentiment. Standard & Poor’s 500 Index rallied 3.7%, MSCI EAFE index jumped 4.7% and MSCI emerging market index climbed 2.9%.  Gold continued its ascent, up by 2.2% while the GSCI commodity index was up 1.9%.  In the bond markets, Barclays US Treasury index lost 0.9% while US high yield bond gained 1.6%.

  • Israel and Hamas Agreed to a Cease-Fire

A cease-fire between Israel and Hamas was reached after eight days of hostilities that killed five Israelis and 162 Palestinians. The deal called for the end of rocket attacks into Israel from Gaza and a stop of Israeli targeting bombing on Hamas.

  • Chinese Manufacturing Showed Sign of Recovery

Chinese manufacturing sector saw expansion in November for the first time since October 2011, HSBC PMI survey results showed, a sign that the economic growth has revived after seven consecutive quarters of slowdown. The China HSBC Manufacturing Purchasing Managers Index (PMI) rose to a 13-month high of 50.4, the latest indicator of recovery in the Chinese manufacture sector after data showing solid credit growth, improving exports and rising industrial output in the recent month.

  • US Housing Recovery Gained Traction

U.S. existing home sales unexpectedly rose in October, a sign that slow improvements in labor market are helping the housing sector recovery gain traction. The National Association of Realtors said on Monday that existing home sales increased by 2.1% to a seasonally adjusted annual rate of 4.79 million units, which was higher than the median forecast of 4.75 million units by economists.

  • Bank of Japan Kept Monetary Policies Intact

Bank of Japan will keep interest rate unchanged at 0.1%,  holding off launching fresh easing measures on Tuesday, despite growing calls for further stimulus to spur the economic growth. After a two-day policy meeting,  the BoJ said in a statement the European debt crisis, an unsteady US economic recovery and an export-denting territorial dispute with China have all weighed on the Japan’s growth prospects.

Top Stories to Watch This Week

  • Greek Aid

Euro-zone finance ministers will meet on Monday to discuss the debt situation in Greece.

  • Earning Reports

Kroger and Tiffany will post earnings results on Thursday.

  • US GDP

US third-quarter GDP is expected to be revised up to 2.8%.

  • Euro-zone Inflation and  Unemployment Rate

Euro-zone CPI inflation rate is expected to be moderate at 2.5% in November on a YOY basis and its unemployment rate to remain high at 11.7%.