Mixed Data, Muted Market Changes

November 25, 2014

U.S. GDP growth in the third quarter was revised unexpectedly higher by almost a half percentage point to 3.9%.  The 2-quarter rise between 1Q and 3Q was the strongest in more than ten years.  The core PCE deflator inflation rate of 1.5% remains a half percentage point below target.  Growth was led by private domestic demand, but government spending and net exports also made positive contributions.

Not all U.S. news was favorable.

  • Violent street protests in Ferguson followed the Grand Jury decision not to indict.
  • The Richmond Fed manufacturing index fell significantly to a reading of 4, a fourth as much as forecast.
  • House price inflation decelerated according to the FHFA and Case Shiller indices.
  • The Conference Board’s measure of consumer confidence dropped 5.4 points unexpectedly to 88.7 in October.  Analysts had forecast a modest rise.

German GDP edged up 0.1% last quarter, reversing the second quarter’s 0.1% dip and avoiding a technical recession.  Business investment contracted further, and net exports contributed very little.  GDP rose 1.2% on year and at a 1.0% annual pace in the two quarters between 3Q12 and 3Q14.

Japanese corporate service prices increased 0.1% in October, the third such monthly change in five months.  In July, the CSPI was unchanged, and it fell 0.2% in August.  On-year CSPI inflation was 3.6%.

Canadian retail sales rose 0.8% in September and by 4.5% on year.  Motor vehicles accounted for all the monthly rise.

Italian retail sales dipped 0.1% on month and 0.5% on year in September.

British mortgage approvals, 37,076 in October, constituted a 17-month low.  Bank of England Governor Carney noted the elevation of external risks that the British economy faces.

French business confidence ticked up a point to a reading of 99 in November from an upwardly revised 98 in October.  Service sector confidence also improved.

South African GDP grew 1.4% both on quarter and on year in 3Q.  Singaporean GDP was 2.8% greater than a year before in 3Q.

Spanish producer prices slid 0.2% in the year to October.  Swedish producer prices were 2.1% higher over the same statement year. 

The dollar rose against the Australian and New Zealand dollars, fell 0.3% versus the euro and Swissie and is little changed relative to the yen and yuan.

Chinese share prices climbed 1.4%, Japan’s Nikkei rose 0.l3%, but most other Asian markets closed lower.  European equities improved.

Commodity prices are higher.  Opec ministers on Thursday decide whether to cut production.

Sovereign debt yields are somewhat lower.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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