US stocks posted modest gains in jittery trading this week. While weak employment data helped ease fears for a September taper of Federal Reserve monetary stimulus, investors continued to be anxious over the possibility of a US-led strike against Syria in retaliation for an alleged chemical weapons attack against its civilians.
Though President Obama has received support in his bid to get Congressional authorization for a strike, he lacks international support and faces growing pressure at the Group of 20 summit not to use military force. Additionally, Russian President Putin's intention on supporting Syria in the event of a strike is a cause of concern for US and will play a crucial role in the debacle over a strike in the upcoming week.
Following is an economic review for the week September 2 - September 6, 2013.
Tuesday, September 3
GB Construction PMI:
UK construction PMI rose to 59.1 in August vs. 57 in July — its highest level since September 2007, staying far above the 50 threshold for growth. More importantly, a key highlight that the PMI data showed was growth in residential construction that increased at the fastest pace since June 2010.
US ISM Manufacturing PMI:
US manufacturing PMI expanded at the fastest rate since April 2011 (PMI rose to 55.7 in August vs 55.4 in July), fueling optimism over economic recovery.
Wednesday, September 4
Canadian Trade Balance:
Canadian trade deficit in July more than doubled to $931 million vs. June as imports increased by 0.6% and exports fell by the same amount.
US Trade Balance:
Us trade deficit widened more than expected in July ($39.1 billion vs. expectations of $38.7 billion) as exports dipped, but a rebound in imports pointed to some firming in underlying demand early in Q3.
US Crude Oil Inventories:
US Crude Oil Inventories fell to a seasonally adjusted annual rate of -1.836M in August, from 2.986M in the July.
Thursday, September 5
BOJ Press Conference:
BoJ Governor Kuroda clarified his stance in regards to the most recent developments and the potential decision to increase sales tax in the country from 5% to 8%. Though policies were planned to come into effect post April 2014, better than expected results in economic growth pressed for sooner action to boost expansion and the consolidation of Abenomic policies.
BOE Rate Decision & Asset Purchase Plan:
BOE left its key interest rate at a record low of 0.5% and made no changes to its 375 billion pound asset-purchase program.
US Unemployment Claims:
US unemployment claims declined by 9K to 323K in the week ended August 31, 2013, beating expectations of 330K.
Friday, September 6
GB Manufacturing Production:
Industrial production stagnated in July (vs. expectations of a 0.2% increase) after a notable improvement in June, while growth in manufacturing sector slowed.
US Non-Farm Payroll:
Non-farm payrolls increased 169K in August missing expectations of 180K, while the unemployment rate dropped to a 4-1/2 year low to 7.3% vs. expectations of 7.4%.
Part-time employment helped the Canadian economy create 59K jobs in August beating consensus expectations of 20K.
This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.