Weekly Economic Review (August 5 - 9, 2013)
Major US stock indices struggled this week, notching small moves in light volume as an absence of trading incentives kept investors at bay. This week marked the weakest weekly volume on the S&P 500 for August since 2006.
Recent comments from Federal Reserve officials, which underlined confusion over when the Fed may start winding down its stimulus program, further added to uncertainty.
Asian stocks also remained in red this week, with the regional benchmark index posting its biggest drop since June 20, 2013, as the yen touched a six-week high against the dollar.
Following is an economic review for the week August 5 - 9, 2013.
Monday, August 05
ISM Non-Manufacturing PMI:
US ISM Non-Manufacturing PMI rose more than expected in July (actual:56 vs. expectations:53), from 52.2 in June.
Tuesday, August 06
Great Britain Manufacturing Production:
Britain's manufacturing output rebounded with a bang in June, providing further evidence of the country's broad-based economic recovery — Output jumped 1.9% in June from May, when it had fallen by 0.7%.
US Trade Balance:
Trade gap fell more than 22% during June, to $34.2 billion from $44.1 billion in May. US trade data showed exports rose by 2.2% to $191.17 billion in June, the most in almost a year. The improving trade situation spurred a number of economists to raise their estimates for Q2 GDP growth from the government's initial 1.7% estimate last week.
Canada Trade Balance:
Canada's merchandise exports grew 1.4% and imports increased 0.6% in June. As a result, Canada's trade deficit narrowed from $781 million in May to $469 million in June.
Wednesday, August 07
Bank of England Inflation Report:
Bank of England provided explicit forward guidance on its future monetary policy for the first time, tying its key lending rate and easing program to a drop in UK's unemployment rate. Governor Mark Carney said that the monetary policy committee intends to keep the lending rate at a record low of 0.5% until UK unemployment drops below a threshold of 7% — not expected until at least 2016. He also vowed that the institution stands ready to expand its quantitative-easing program if "further stimulus is warranted."
US Crude Oil Inventories:
US crude inventories decreased 1.3 million barrels (0.4%) for the week ending Aug 2, 2013. Last week's report put oil inventories back on the downward trend, clocking in 1.8% below year-ago levels.
Canada IVEY PMI:
Canada purchasing managers' index tumbled to 48.4 in July from a reading of 55.3 in June, sharply below expectations of an increase to 57.
Japan Monetary Policy Meeting and Press Conference:
Bank of Japan decided to keep its monetary policy and economic assessment unchanged. The central bank said it will increase the country's monetary base at an annual pace of 60 trillion to 70 trillion yen under its quantitative and qualitative easing policy, introduced in early April to help Japan achieve 2% inflation in about two years.
Thursday, August 08
China Trade Balance:
China's July trade surplus fell 29.6% year-on-year to $17.8 billion, as imports recorded a larger increase than exports during the month. Exports rose 5.1% to $186 billion in July from a year ago, while imports jumped 10.9% to $168.2 billion. The July results offered hope that the world's second-largest economy may be stabilising after a slowdown that has prompted the government to shore up activity.
US Unemployment Claims:
Weekly applications for unemployment aid increased by 5K last week to a seasonally adjusted 333K.
China's consumer inflation remained steady in July, with the consumer price index increasing 2.7% year-on-year.
Friday, August 09
Canada Unemployment Rate:
Canadian labour market took an unexpected turn for the worse in July, shedding a surprisingly high 39,400 jobs that included a record loss in the public sector (loss of 74K jobs) that more than offset gains among private employers. July's decline lifted the official unemployment rate to 7.2% in July from 7.1% in June 2013.
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