Monday 1 Sep 2014

Today is Labor Day, a public holiday (and non-trading day) in USA.

In USA, Australia and some other countries, Labor Day is related to the campaign for an 8-hour day. The public holiday was proposed in USA in May 1886 following violence (leading to several deaths) during a strike in Chicago. It has been recognised in USA as a public holiday on the first Monday of September since 1887.

Week: 25-31 Aug 2014

USA

US market indices Impact

Index 29 Aug 2014 Week 22 Aug 2014 Month 31 Jul 2014 Year 31 Dec 13
S&P 500 2,003.37 +0.75% 1,988.40 +3.77% 1,930.67 +8.39% 1,848.36
DJIA 17,098.38 +0.57% 17,001.22 +3.23% 16,563.30 +3.15% 16,576.66
NASDAQ 4,580.27 +0.92% 4,563.55 +4.82% 4,369.77 +9.67% 4,176.59

The shape of the week

S&P500, DJIA and NASDAQ index performance this week  (Chart: Yahoo Finance)

S&P500, DJIA and NASDAQ index performance this week (Chart: Yahoo Finance)

PORTFOLIO

Bunting portfolio indices Impact

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

This week’s performance Impact

:-| About square 29 Aug 2014 Week 22 Aug 2014 Month 31 Jul 2014 Year 31 Dec 13
USD Index 1.676 +0.68% 1.664 +6.42% 1.574 +19.75% 1.399
Trading USD/AUD 0.93892 +0.31% 0.93606 +0.50% 0.93423 +4.57% 0.89789
AUD Index 1.784 +0.37% 1.778 +5.89% 1.685 +14.52% 1.558

Portfolio stocks

Apple AAPL +1.16%

AAPL share price performance this week (Chart: Yahoo Finance)

AAPL share price performance this week (Chart: Yahoo Finance)

Amazon AMZN +2.25%

AMZN share price performance this week (Chart: Yahoo Finance)

AMZN share price performance this week (Chart: Yahoo Finance)

Ebay EBAY +0.00%

EBAY share price performance this week (Chart: Yahoo Finance)

EBAY share price performance this week (Chart: Yahoo Finance)

Facebook FB +0.34%

FB share price performance this week (Chart: Yahoo Finance)

FB share price performance this week (Chart: Yahoo Finance)

Google Class A GOOGL -1.72%

GOOGL share price performance this week (Chart: Yahoo Finance)

GOOGL share price performance this week (Chart: Yahoo Finance)

  • Friday close: $582.36 -1.72% from $592.54.
  • P/E (historical): 30.09 Change from 30.61
  • P/E (1 year fwd): 26.34 Change from 26.89
  • Target (1 year): NASDAQ consensus $656 range $600 ↔ $750.
  • SEC filings (CIK 0001288776): Edgar Search (New, Beta)

Google Class C GOOG -1.88%

GOOG share price performance this week (Chart: Yahoo Finance)

GOOG share price performance this week (Chart: Yahoo Finance)

  • Friday close: $571.60 -1.88% from $582.56.
  • P/E (historical): 19.93 Change from 20.31
  • P/E (1 year fwd): N/A
  • Analyst recommendations: 6 strong buy, 3 buy, 0 hold.

Linkedin LNKD -0.29%

LNKD share price performance this week (Chart: Yahoo Finance)

LNKD share price performance this week (Chart: Yahoo Finance)

VMware VMW -3.58%

VMW share price performance this week (Chart: Yahoo Finance)

VMW share price performance this week (Chart: Yahoo Finance)

USD/AUD

USD/AUD this week (Chart: xe.com)

USD/AUD this week (Chart: xe.com)

Friday 29 Aug 2014

EUROPE

Economy

European inflation – Aug 2014 Opinion

Extract

Euro area annual inflation is expected to be 0.3% in August 2014, down from 0.4% in July, according to a flash estimate from Eurostat, the statistical office of the European Union.

Looking at the main components of euro area inflation, services is expected to have the highest annual rate in August (1.2%, compared with 1.3% in July), followed by non-energy industrial goods (0.3%, compared with 0.0% in July), food, alcohol & tobacco (-0.3%, stable compared with July) and energy (-2.0%, compared with -1.0% in July).

Eurostat, “Euro area annual inflation down to 0.3% (Flash Estimate Aug 2014)“, 29 Aug 2014 More

Comment

The ECB meeting is next week and Draghi kind of precommitted at Jackson Hole when he started talking about inflation being below their desired range. If they don’t do something different, global markets will be disappointed.
Paul Zemsky, Head of Multi-Asset Strategies, Voya Investment Management LLC ($213bn) More

European unemployment – Jul 2014

Extract

The euro area (EA18) seasonally-adjusted unemployment rate was 11.5% in July 2014, stable compared with June 2014, but down from 11.9% in July 2013. The EU28 unemployment rate was 10.2% in July 2014, also stable compared with June 20144, but down from 10.9% in July 2013. These figures are published by Eurostat, the statistical office of the European Union.

Eurostat estimates that 24.850 million men and women in the EU28, of whom 18.409 million were in the euro area, were unemployed in July 2014. Compared with June 2014, the number of persons unemployed decreased by 41 000 in the EU28 and remained nearly stable in the euro area. Compared with July 2013, unemployment fell by 1.634 million in the EU28 and by 725 000 in the euro area.

Eurostat, “Euro area unemployment rate at 11.5% – EU28 at 10.2% – in Jul 2014“, 29 Aug 2014 More

USA

Economy

Personal income and outlays – Jul 2014 Opinion

U.S. household purchases decreased 0.1 percent after increasing 0.4 percent in June, Commerce Department figures showed. None of the 79 economists in a Bloomberg survey projected a decrease. Incomes climbed 0.2 percent, the smallest monthly advance this year.More

Extract

Personal income increased $28.6 billion, or 0.2 percent, and disposable personal income (DPI) increased $17.7 billion, or 0.1 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $13.6 billion, or 0.1 percent. In June, personal income increased $67.1 billion, or 0.5 percent, DPI increased $62.9 billion, or 0.5 percent, and PCE increased $50.5 billion, or 0.4 percent, based on revised estimates.

Real DPI increased 0.1 percent in July, compared with an increase of 0.3 percent in June. Real PCE decreased 0.2 percent, in contrast to an increase of 0.2 percent.

Bureau of Economic Analysis, “Personal income and outlays – Jul 2014“, 27 Aug 2014 (08:30am) More

Comment

The weakness in spending will quickly subside this fall as consumer confidence is supported by record highs in the stock market, rising housing prices and improving labor market conditions.
Michael Woolfolk, Global Markets Strategist, BNY Mellon More

It’s a weak starting point for the third quarter. It’s going to lead to a markdown in third-quarter forecasts.
Jacob Oubina, Senior U.S. Economist, RBC Capital Markets LLC More

Thomson Reuters/Michigan Index of Consumer Confidence – Final – Aug 2014 Opinion

Extract

The Thomson Reuters/University of Michigan’s final August reading on the overall index on consumer sentiment came in at 82.5, up from 81.8 the month before.

It was above the the median forecast of 80.1 among economists polled by Reuters.

The survey’s barometer of current economic conditions rose to 99.8 from 97.4, marking its highest level since July 2007 and above a forecast of 99.5.

The survey’s gauge of consumer expectations slipped for a fourth straight month, to 71.3 from 71.8, marking its lowest level since March but above an expected 67.0.

The survey’s one-year inflation expectation fell to 3.2 percent from 3.3 percent, while the survey’s five-to-10-year inflation outlook was at 2.9 percent, up from 2.7 percent.

Thomson Reuters/University of Michigan, “Consumer confidence – Final – Aug 2014“, 29 Aug 2014 More

Comment

We expect growth to remain on a firmer trajectory as improving economic fundamentals continue to reassert themselves.
Gennadiy Goldberg, U.S. economist, TD Securities More

Stock market indices Opinion

The S&P 500 index achieved a record high today of 2,003.37.

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 2,003.37 +0.33% 1,848.36 +8.39%
DJIA INDU 17,098.38 +0.11% 16,576.66 +3.15%
NASDAQ IXIC 4,580.27 +0.50% 4,176.59 +9.67%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Comment

Today is a microcosm of what’s been going on all summer, a tug-of-war between geopolitical risk pulling one way, better economic data pulling a different way, and the bond market acting like it doesn’t care about anything but Europe. We’re seeing that play out on a slow end of summer day.
John Canally, Chief Economic Strategist, LPL Financial LLC More

Short term, you never know in advance of a holiday weekend, plus given everything else that is going on, people are just being cautious so you are not going to see any big upside. From a purely economic standpoint, if I look at the fundamentals, I really think there is some huge growth ahead and people are going to miss the opportunity because they are so focused on the short term stuff that is irrelevant.
Randy Carver, President and Founder, Carver Financial Services More

PORTFOLIO

Index values Opinion

:-| About square Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.676 +0.30% 1.399 +19.75%
Valuation Rate USD/AUD 0.93892 -0.17% 0.89789 +4.57%
Portfolio Index AUD 1.784 +0.48% 1.558 +14.52%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock prices

Apple achieved a record high today of $102.50 ahead of its 9 Sep 2014 product announcement.

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $102.50 +0.24% $80.1457 +27.89%
Amazon AMZN $339.04 -0.29% $398.79 -14.98%
Ebay EBAY $55.50 +0.13% $54.865 +1.18%
Facebook FB $74.82 +1.31% $54.649 +36.91%
Google A GOOGL $582.36 +0.35% $560.365 +3.93%
Google C GOOG $571.60 +0.42% $560.365 +2.00%
Linkedin LNKD $225.75 +1.12% $216.83 +4.11%
VMware VMW $98.58 +0.67% $89.71 +9.89%

Thursday 28 Aug 2014

GEOPOLITIAL CONFLICT AND DISASTERS

Ukraine Opinion

Ukraine’s president Petro Poroshenko told a meeting of security chiefs that Russian troops had entered his country in support of pro-Moscow rebels who have seized the town of Novoazovsk.

Dutch Brigadier-General Nico Tak, Director of NATO’s Comprehensive Crisis Operations Management Center, said “We assess well over 1,000 Russian troops are now operating inside Ukraine. They are supporting separatists (and) fighting with them.More

The UN Security Council commenced an emergency session on Ukraine at 18:00 GMT today. At that meeting Samantha Power, the US ambassador to the UN, said Russia has deceived throughout the conflict and the world had learned to “measure Russia by its actions and not by its words“. She said Russian President Vladimir Putin called for an end to the bloodshed but, on the same day, Russian units were operating in at least two locations inside Ukraine. More

Middle East Opinion

ISIL executes 250 soldiers in Syria

ISIL is reported to have executed 250 Syrian soldiers after capturing the Taqba air base last Sunday. ISIL is estimated to control roughly a third of Syria, mostly areas in the north and east of the country. More

West Africa Opinion

Ebola epidemic

The World Health Organization (WHO) said today that the Ebola epidemic is still accelerating and could afflict more than 20,000 people — almost seven times the current number of reported cases — before it can be brought under control. More

Geneticists at the Broad Institute of MIT and Harvard say that the epidemic in Sierra Leone appears to stem from recent funeral Koindu, a diamond-mining town just across the border from Guéckédou in Guinea of a traditional healer, an herbalist, who had been treating Ebola patients from across the nearby border with Guinea. “The team found 13 more people who were infected, all women who had attended the burial. It was those mourners who largely sparked Sierra Leone’s outbreak, which has sickened more than 900 and killed more than 390 people.More

EUROPE

Economy

Eurozone: Business and consumer survey – Aug 2014 Opinion

In August the Economic Sentiment Indicator (ESI) fell in the euro area (by 1.5 points to 100.6) and the EU (by 1.2 points at 104.6).More

In August 2014 the Business Climate Indicator (BCI) for the euro area remained broadly flat (at +0.16) compared to July (+0.17). Managers’ more optimistic appraisals of past production and, to a lesser extent, export order books were offset by a marked decrease in their assessment of expected production. Managers’ views on the level of stocks of finished products and overall order books remained broadly unchanged.More

USA

Economy

Unemployment Insurance Weekly Claims Report: Week to 23 Aug 2014 Opinion

Extract

In the week ending August 23, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 1,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 298,000 to 299,000. The 4-week moving average was 299,750, a decrease of 1,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 300,750 to 301,000.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 16, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 16 was 2,527,000, an increase of 25,000 from the previous week’s revised level. The previous week’s level was revised up 2,000 from 2,500,000 to 2,502,000. The 4-week moving average was 2,524,250, a decrease of 3,750 from the previous week’s revised average. The previous week’s average was revised up by 500 from 2,527,500 to 2,528,000.

U.S. Employment and Training Administration, “Unemployment Insurance Weekly Claims Report – Week to 23 Aug 2014“, 28 Aug 2014 (08:30am) More

Comment

Businesses are feeling better about the economic outlook. The improvement in the job market is also helping with consumer confidence.
Ryan Wang, Economist, HSBC Securities USA Inc More

GDP – Jun 2014 quarter Opinion

BEA increased its estimate of annualised GDP growth in the second quarter to 4.2% from its initial estimate of 4.0%.

Extract

Real gross domestic product – the output of goods and services produced by labor and property located in the United States – increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

Bureau of Economic Analysis, “National Income and Product Accounts: Gross Domestic Product, Second Quarter 2014 (Second Estimate); Corporate Profits, Second Quarter 2014 (Preliminary Estimate)“, 28 Aug 2014 (08:30am) More

Pending home sales – Jul 2014 Opinion

Extract

Pending home sales rebounded in July and have now risen in four of the last five months, according to the National Association of Realtors®. All major regions experienced healthy gains except for the Midwest, which saw a slight decline.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but is still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.

National Association of Realtors, “Pending Home Sales Pick Up in July“, 27 Aug 2014 (10:00am) More

Stock market indices Opinion

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 1,996.74 -0.17% 1,848.36 +8.03%
DJIA INDU 17,079.57 -0.25% 16,576.66 +3.03%
NASDAQ IXIC 4,557.69 -0.26% 4,176.59 +9.12%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Comment

There’s going to be light volume going into (Monday’s Labor Day) holiday regardless, but now you have these geopolitical concerns that are playing into that as well. These geopolitical events tend to be transitory, where the market may drop over the short-term but then tends to recover pretty quickly. Some of the economic data and home sales could potentially moderate some of the losses this morning.
Bob Landry, Executive Director and Portfolio Manager, USAA Investment Management Co. ($22.3bn) More

If you look at unemployment claims that should suggest we’ll get a very nice healthy payroll number next Friday. This patchwork of broader and deeper economic expansion is well under way in the United States.
Wilmer Stith, Money Manager, Wilmington Trust Investment Managers More

PORTFOLIO

Index values Opinion

:-) Outperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.671 -0.07% 1.399 +19.39%
Valuation Rate USD/AUD 0.94053 +0.19% 0.89789 +4.75%
Portfolio Index AUD 1.776 -0.26% 1.558 +13.97%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Apple’s “wish we could say more” invitation

Apple has sent out invitations to an event on 9 Sep 2014. The announcement is expected to include an iPhone 6, hopefully an iWatch. The location is the Flint Center for the Performing Arts, Cupertino where 30 years ago (1984) Apple announced the Macintosh.

On a “down” day for the market, this invitation lifted Apple’s share price by 0.12% to a new record close: $102.25.

Apple's invitation to an event at 10 AM Pacific Time on September 9th: Flint Center for the Performing Arts in Cupertino

Upcoming event: 9 Sep 2014 (10:00PT) Flint Center for the Performing Arts, Cupertino

Stock price movements

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $102.25 +0.12% $80.1457 +27.58%
Amazon AMZN $340.02 -0.92% $398.79 -14.74%
Ebay EBAY $55.43 -0.88% $54.865 +1.03%
Facebook FB $73.86 -1.04% $54.649 +35.15%
Google A GOOGL $580.32 -0.46% $560.365 +3.56%
Google C GOOG $569.20 -0.32% $560.365 +1.58%
Linkedin LNKD $223.26 -0.42% $216.83 +2.97%
VMware VMW $97.92 +0.43% $89.71 +9.15%

Wednesday 27 Aug 2014

USA

Economy

Metropolitan area employment and unemployment – Jul 2014 Opinion

Extract

Unemployment rates were lower in July than a year earlier in 348 of the 372 metropolitan areas, higher in 16 areas, and unchanged in 8 areas, the U.S. Bureau of Labor Statistics reported today. Fifteen areas had jobless rates of at least 10.0 percent and 68 areas had rates of less than 5.0 percent. Nonfarm payroll employment increased over the year in 327 metropolitan areas, decreased in 41 areas, and was unchanged in 4 areas. The national unemployment rate in July was 6.5 percent, not seasonally adjusted, down from 7.7 percent a year earlier.

Bureau of Labor Statistics, “Metropolitan area employment and unemployment – Jul 2014“, 27 Aug 2014 (10:00am) More

Stock market indices Opinion

The S&P500 inched up to a new record of 2,000.12 while the DJIA rose to 17,122.01, beating its previous record of 17,113.54.

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 2,000.12 +0.00% 1,848.36 +8.21%
DJIA INDU 17,122.01 +0.09% 16,576.66 +3.29%
NASDAQ IXIC 4,569.62 -0.02% 4,176.59 +9.41%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Comment

The market is not overly expensive, not cheap either In the absence of strong corporate earnings, you are not necessarily going to see a huge surge in equities over the next 12 months. But the little notch up, on a regular basis, you’re likely to see continue.

Ethan Anderson, Senior Portfolio Manager, Rehmann Financial ($1.5bn) More

PORTFOLIO

Index values Opinion

:-) Outperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.672 +0.68% 1.399 +19.47%
Valuation Rate USD/AUD 0.93872 +0.34% 0.89789 +4.55%
Portfolio Index AUD 1.781 +0.34% 1.558 +14.28%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $102.13 +1.23% $80.1457 +27.43%
Amazon AMZN $343.18 +0.39% $398.79 -13.94%
Ebay EBAY $55.92 -0.59% $54.865 +1.92%
Facebook FB $74.63 -1.76% $54.649 +36.56%
Google A GOOGL $583.00 -0.87% $560.365 +4.04%
Google C GOOG $571.00 -1.19% $560.365 +1.90%
Linkedin LNKD $224.20 -0.51% $216.83 +3.40%
VMware VMW $97.50 -0.31% $89.71 +8.68%

Tuesday 26 Aug 2014

JAPAN

Economy Opinion

Japan’s economy contracted 6.8% in the second quarter of 2014 due to an increase in tax in Apr 2014. Economists have reduced their forecasts for full year GDP (ending in Mar 2015) to 0.5%, down from 1.0%. More

Comment

Lloyd says: This contraction must make Japan’s deficit and debt to GDP ratios look much worse.

USA

Economy

Advance report on durable goods – Jul 2014 Opinion

New orders for manufactured durable goods in July 2014 increased 22.6 percent, to $300.1 billion. Excluding transportation, new orders fell 0.8 percent. Overall shipments increased 3.3 percent, while capital goods shipments rose 1.4 percent. Unfilled orders rose 5.4 percent, and inventories increased 0.5 percent in July 2014.

Extract

New Orders. New orders for manufactured durable goods in July increased $55.3 billion or 22.6 percent to $300.1 billion, the U.S. Census Bureau announced today. This increase, up five of the last six months, was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 2.7 percent June increase. Excluding transportation, new orders decreased 0.8 percent. Excluding defense, new orders increased 24.9 percent. Transportation equipment, also up five of the last six months, drove the increase, $56.6 billion or 74.2 percent to $133.0 billion.

Shipments. Shipments of manufactured durable goods in July, up five of the last six months, increased $8.0 billion or 3.3 percent to $248.9 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.2 percent June increase. Transportation equipment, up two consecutive months, led the increase, $5.6 billion or 7.9 percent to $76.3 billion.

Unfilled Orders. Unfilled orders for manufactured durable goods in July, up fifteen of the last sixteen months, increased $59.2 billion or 5.4 percent to $1,158.5 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.0 percent June increase. Transportation equipment, up ten of the last eleven months, led the increase, $56.7 billion or 8.3 percent to $738.4 billion.

Inventories. Inventories of manufactured durable goods in July, up fifteen of the last sixteen months, increased $2.1 billion or 0.5 percent to $401.9 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.5 percent June increase. Transportation equipment, also up fifteen of the last sixteen months, led the increase, $0.7 billion or 0.5 percent to $129.6 billion.

Capital Goods. Nondefense new orders for capital goods in July increased $51.5 billion or 60.8 percent to $136.3 billion. Shipments increased $1.1 billion or 1.4 percent to $79.1 billion. Unfilled orders increased $57.2 billion or 8.6 percent to $725.2 billion. Inventories increased $2.3 billion or 1.2 percent to $184.2 billion. Defense new orders for capital goods in July decreased $1.5 billion or 15.3 percent to $8.6 billion. Shipments increased $0.2 billion or 1.7 percent to $9.6 billion. Unfilled orders decreased $1.0 billion or 0.6 percent to $159.5 billion. Inventories decreased $0.2 billion or 1.0 percent to $23.8 billion.

Revised June Data. Revised seasonally adjusted June figures for all manufacturing industries were: new orders, $505.6 billion (revised from $503.2 billion); shipments, $501.7 billion (revised from $499.8 billion); unfilled orders, $1,099.3 billion (revised from $1,098.5 billion); and total inventories, $654.1 billion (revised from $653.8 billion).

US Census Bureau, “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders July 2014“, 26 Aug 2014 (08:30am) More

Comment

This report reinforces the message that manufacturing growth is picking up and is likely to support stronger GDP growth in the second half of the year.
John Ryding, Chief Economist, RDQ Economics More

Everything is falling into place. We’re seeing signs that business investment is picking up. The gain in confidence is a reflection of labor market conditions, which has positive implications for consumer spending.
Aneta Markowska, Chief U.S. Economist, Société Générale SA More

The U.S. economy is on solid ground. Europe is struggling, Japan is struggling, but all of this suggests the U.S. is doing quite well.
Nariman Behravesh, Chief Economist, IHS More

Conference Board consumer confidence index – Aug 2014 Opinion

The Conference Board’s sentiment gauge rose to 92.4 in Aug 2014, up from 90.3 in Jul 2014. This was its highest level since Oct 2007, and better than economists’ expectation of a fall to 89.

Extract

The Conference Board Consumer Confidence Index®, which had increased in July, improved further in August. The Index now stands at 92.4 (1985=100), up from 90.3 in July. The Present Situation Index increased to 94.6 from 87.9, while the Expectations Index edged down to 90.9 from 91.9 in July.

Conference Board, “The Conference Board Consumer Confidence Index® Improves Again“, 26 Aug 2014 (10:00am) More

Comment

Consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings. Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market.
Lynn Franco, Director of Economic Indicators, Conference Board More

S&P/Case-Shiller 20-City Composite House Price Index – Jun 2014 Opinion

Extract

Data through June 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices … show a sustained slowdown in price increases. The National Index gained 6.2% in the 12 months ending June 2014 while the 10-City and 20-City Composites gained 8.1%; all three indices saw their rates slow considerably from last month. Every city saw its year-over-year return worsen.

The National Index … gained 0.9% in June. The 10- and 20-City Composites increased 1.0%. New York led the cities with a return of 1.6% and recorded its largest increase since June 2013. Chicago, Detroit and Las Vegas followed at +1.4%. Las Vegas posted its largest monthly gain since last summer.

S&P/Case-Shiller, “20-City Composite House Price Index – Jun 2014“, 26 Aug 2014 (9:00am) More

Stock market indices Opinion

The S&P500 closed just above 2,000 for the first time, exceeding yesterday’s record of 1,997.94 for an 8.21% gain YTD in 2014. The DJIA is close to its previous record of 17,113.54.

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 2,000.02 +0.11% 1,848.36 +8.21%
DJIA INDU 17,106.70 +0.17% 16,576.66 +3.20%
NASDAQ IXIC 4,570.64 +0.29% 4,176.59 +9.43%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Comment

There’s not a lot of direction in the market so far. The 2,000 number got a lot of attention, but let’s get back to basics and see how the economy is doing.”
Richard Sichel, Chief Investment Officer, The Philadelphia Trust Company ($2bn) More

I am still bullish on the U.S. market, but I do expect the S&P 500 to consolidate and slip back to 1,950 – 1,980 range as it’s due for a rest once it climbs to 2,000. Any dip will be a shallow one. The central-bank and data narrative is still supportive of risk.
Manish Singh, Head of Investments, Crossbridge Capital (London), ($2bn) More

PORTFOLIO

Index values Opinion

:-( Underperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.660 -0.33% 1.399 +18.67%
Valuation Rate USD/AUD 0.93558 +0.10% 0.89789 +4.20%
Portfolio Index AUD 1.775 -0.43% 1.558 +13.89%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

Apple is down from yesterday’s record high as analysts consider its slumping iPad sales and China’s possible blocking of US sales by Apple, Google and Microsoft. Not new issues, but enough to pause Apple’s recent run of record highs.

Amazon continues to rise after yesterday’s announcement of its acquisition of Twitch. More

Facebook achieved a new record of $75.96, exceeding its 19 Aug 2014 record of $75.29.

VMware is down as investors responded to today’s decision at the VMworld 2014 Conference in San Francisco not to provide long term investor guidance. However VMware announced:

  • a collaborative effort with Google to deliver high-performance virtual desktops and workstation-class graphics to Google Chromebooks. More
  • an expanded relationship with SAP to help simplify mobile app delivery for end users through the integration of mobile place from the SAP Mobile Secure portfolio with AirWatch® by VMware solutions. More
Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $100.89 -0.64% $80.1457 +25.88%
Amazon AMZN $341.83 +2.34% $398.79 -14.28%
Ebay EBAY $56.25 +1.37% $54.865 +2.52%
Facebook FB $75.96 +1.25% $54.649 +39.00%
Google A GOOGL $588.12 -0.41% $560.365 +4.95%
Google C GOOG $577.86 -0.40% $560.365 +3.12%
Linkedin LNKD $225.36 +1.29% $216.83 +3.93%
VMware VMW $97.80 -2.96% $89.71 +9.02%

Monday 25 Aug 2014

USA

Economy

New residential sales – Jul 2014 Opinion

Extract

Sales of new single-family houses in July 2014 were at a seasonally adjusted annual rate of 412,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.4 percent (±11.9%) below the revised June rate of 422,000, but is 12.3 percent (±17.1%) above the July 2013 estimate of 367,000.

The median sales price of new houses sold in July 2014 was $269,800; the average sales price was $339,100. The seasonally adjusted estimate of new houses for sale at the end of July was 205,000. This represents a supply of 6.0 months at the current sales rate.

US Census Bureau, “New residential sales – Jul 2014“, 25 Aug 2014 (10:00am) More

Comment

It’s a little bit disappointing. The new-home sales data have no traction whatsoever and doesn’t seem to be gaining at all.
Thomas Simons, Economist, Jefferies LLC More

Stock market indices Opinion

The S&P500 achieved a new record today of 1,997.94 after reaching an intra-day high above 2,000 for the first time. The DJIA also gained, but remains below its record of 17,113.54.

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 1,997.92 +0.48% 1,848.36 +8.09%
DJIA INDU 17,076.87 +0.44% 16,576.66 +3.02%
NASDAQ IXIC 4,557.35 +0.41% 4,176.59 +9.12%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Comment

For the S&P500 index 2,000 is a pretty significant number from psychological and financial points. Perhaps we might reach a little bit overbought status, and it looks like the index is going to take a breather there.
Joe Bell, Senior Equity Analyst, Schaeffer’s Investment Research Inc. More

PORTFOLIO

Index values Opinion

:-( Underperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.666 +0.10% 1.399 +19.07%
Valuation Rate USD/AUD 0.93465 -0.15% 0.89789 +4.09%
Portfolio Index AUD 1.782 +0.25% 1.558 +14.38%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock news

Amazon AMZN +0.73%

Amazon.com, Inc. (NASDAQ: AMZN) today announced that it has reached an agreement to acquire Twitch Interactive, Inc., the leading live video platform for gamers. In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets, conventions and stadium-filling esports organizations.

“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month – from The International, to breaking the world record for Mario, to gaming conferences like E3. And, amazingly, Twitch is only three years old,” said Jeff Bezos, founder and CEO of Amazon.com. “Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.”

“Amazon and Twitch optimize for our customers first and are both believers in the future of gaming,” said Twitch CEO Emmett Shear. “Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently. This change will mean great things for our community, and will let us bring Twitch to even more people around the world.”

Twitch launched in June 2011 to focus exclusively on live video for gamers. Under the terms of the agreement, which has been approved by Twitch’s shareholders, Amazon will acquire all of the outstanding shares of Twitch for approximately $970 million in cash, as adjusted for the assumption of options and other items. Subject to customary closing conditions, the acquisition is expected to close in the second half of 2014.

Jeff Bezos, Founder and CEO, Amazon “Press Release: Amazon.com to Acquire Twitch“, 25 Aug 2014 More

Portfolio records today

Apple achieved a new record close today of $101.54, up 0.22%. (Chart: Yahoo Finance)

Apple achieved a new record close today of $101.54 (Chart: Yahoo Finance)

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $101.54 +0.22% $80.1457 +26.69%
Amazon AMZN $334.02 +0.73% $398.79 -16.24%
Ebay EBAY $55.49 -0.02% $54.865 +1.14%
Facebook FB $75.02 +0.60% $54.649 +37.28%
Google A GOOGL $590.57 -0.33% $560.365 +5.39%
Google C GOOG $580.20 -0.41% $560.365 +3.54%
Linkedin LNKD $222.48 -1.73% $216.83 +2.61%
VMware VMW $100.78 -1.43% $89.71 +12.34%

Week: 18-24 Aug 2014

UKRAINE

Russian aid convoy trucks return to Russia

Reuters reports “Trucks from a Russian aid convoy started crossing back into Russia on Saturday after igniting a storm of anger in Western capitals a day earlier by driving into Ukraine without the permission of the government in Kiev … A Reuters journalist at the Donetsk-Izvarino border crossing, where the convoy rolled into Ukraine on Friday, said over 100 trucks had passed back into Russia and more could be seen in the distance arriving at the crossing.More

USA

US market indices Impact

Index 22 Aug 2014 Week 15 Aug 2014 Month 31 Jul 2014 Year 31 Dec 13
S&P 500 1,988.40 +1.71% 1,955.06 +2.99% 1,930.67 +7.58% 1,848.36
DJIA 17,001.22 +2.03% 16,662.91 +2.64% 16,563.30 +2.56% 16,576.66
NASDAQ 4,563.55 +1.65% 4,464.93 +3.86% 4,369.77 +8.67% 4,176.59

The shape of the week

S&P500, DJIA and NASDAQ index performance this week  (Chart: Yahoo Finance)

S&P500, DJIA and NASDAQ index performance this week (Chart: Yahoo Finance)

PORTFOLIO

Bunting portfolio indices Impact

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

This week’s performance Impact

:-) Outperformed 22 Aug 2014 Week 15 Aug 2014 Month 31 Jul 2014 Year 31 Dec 13
USD Index 1.664 +2.80% 1.619 +5.71% 1.574 +18.95% 1.399
Trading USD/AUD 0.93606 -0.15% 0.93746 +0.20% 0.93423 +4.25% 0.89789
AUD Index 1.778 +2.95% 1.727 +5.50% 1.685 +14.10% 1.558

Portfolio stocks

Apple AAPL +3.41%

Apple closed the week on a record high – its first record since 19 Sep 2012.

AAPL share price performance this week (Chart: Yahoo Finance)

AAPL share price performance this week (Chart: Yahoo Finance)

Amazon AMZN -0.61%

AMZN share price performance this week (Chart: Yahoo Finance)

AMZN share price performance this week (Chart: Yahoo Finance)

Ebay EBAY +5.43%

EBAY share price performance this week (Chart: Yahoo Finance)

EBAY share price performance this week (Chart: Yahoo Finance)

Facebook FB +1.28%

Facebook achieved a record close price of $75.29 on 19 Aug 2014.

FB share price performance this week (Chart: Yahoo Finance)

FB share price performance this week (Chart: Yahoo Finance)

Google Class A GOOGL +1.51%

GOOGL share price performance this week (Chart: Yahoo Finance)

GOOGL share price performance this week (Chart: Yahoo Finance)

  • Friday close: $592.54 +1.51% from $583.71.
  • P/E (historical): 30.61 Change from 30.16
  • P/E (1 year fwd): 26.89 Change from 26.54
  • Target (1 year): NASDAQ consensus $656 range $600 ↔ $750.
  • SEC filings (CIK 0001288776): Edgar Search (New, Beta)

Google Class C GOOG +1.58%

GOOG share price performance this week (Chart: Yahoo Finance)

GOOG share price performance this week (Chart: Yahoo Finance)

  • Friday close: $582.56 +1.58% from $573.48.
  • P/E (historical): 20.31 Change from 20.00
  • P/E (1 year fwd): N/A
  • Analyst recommendations: 6 strong buy, 3 buy, 0 hold.

Linkedin LNKD +2.97%

LNKD share price performance this week (Chart: Yahoo Finance)

LNKD share price performance this week (Chart: Yahoo Finance)

VMware VMW +0.97%

VMW share price performance this week (Chart: Yahoo Finance)

VMW share price performance this week (Chart: Yahoo Finance)

Proximity to record high close prices

Apple and Facebook achieved record high close prices this week. The S&P500 achieved a record close of 1,992.37 on 21 Aug 2014, and the DJIA closed the week above 17,000 on its way back to its record high of 17,113.54 achieved on 22 Jul 2014.

Stock Ticker Today % Below Record Date
Apple (*diluted) AAPL $101.32 0.00% $101.32 22 Aug 2014
Amazon AMZN $331.59 -18.00% $404.39 26 Dec 2013
Ebay EBAY $55.50 -6.72% $59.50 6 Mar 2014
Facebook FB $74.57 -0.96% $75.29 19 Aug 2014
Google (* A+C) GOOGL $1,157.19* -3.69% $1,220.17* 26 Feb 2014
Linkedin LNKD $226.40 -11.61% $256.14 11 Sep 2013
VMware VMW $102.24 -10.73% $114.53 3 Apr 2012

USD/AUD

USD/AUD this week (Chart: xe.com)

USD/AUD this week (Chart: xe.com)

Friday 22 Aug 2014

UKRAINE

Russian aid convoy reaches Luhansk

Ukraine declared on Friday that Russia had launched a “direct invasion” of its territory after Moscow sent a convoy of aid trucks across the border into eastern Ukraine where pro-Russian rebels are fighting government forces. Moscow, which has thousands of troops close on the Russian side of the border, warned against any attempt to “disrupt” the convoy but did not specify what action it was prepared to take if Kiev’s forces intervened. Kiev, for its part, said Ukrainian forces would not attack the convoy and had allowed it to pass to avoid “provocations”.More

Possible convoy routes to Luhansk (Google Maps)

Possible convoy routes to Luhansk (Google Maps)

Update

The convoy is reported to have arrived at Luhansk without incident enroute. More

IRAQ

Sunnis quit talks on forming a new Iraqi government

Iraq has been trying to form a government that involves both Muslim factions: Shi’ites and Sunnis. However an incident has led the Shi’ite participants to quit talks on forming a new Iraqi government. More That incident involves the death of at least 73 people, including the local imam, women and children, during a Shi’ite militia attack on a Sunni mosque in the village of Bani Wais near the city of Baqubah in Iraq’s eastern Diyala province. The attack, which occurred during Friday prayers, was a retaliation for a roadside bomb attack on a recruitment event organised by the same Shi’ite militia. The attack commenced when a suicide bomber blew himself up during Friday prayers and this was followed by gunmen storming the mosque to kill survivors. More

Bani Wais is a village near Baqubah North East of Baghdad

Bani Wais is a village in al-Sa’diyah, Khanaqin district, NNE of Baghdad (Map: Google Maps)

USA

Economy

Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming

Mario Draghi (ECB) and Janet Yellen (US Fed) at Jackson Hole

Mario Draghi (ECB) and Janet Yellen (US Fed) at Jackson Hole

Extract from Janet Yellen’s speech

In my remarks this morning, I will review a number of developments related to the functioning of the labor market that have made it more difficult to judge the remaining degree of slack. Differing interpretations of these developments affect judgments concerning the appropriate path of monetary policy. Before turning to the specifics, however, I would like to provide some context concerning the role of the labor market in shaping monetary policy over the past several years. During that time, the (Federal Open Market Committee) has maintained a highly accommodative monetary policy in pursuit of its congressionally mandated goals of maximum employment and stable prices. The Committee judged such a stance appropriate because inflation has fallen short of our 2 percent objective while the labor market, until recently, operated very far from any reasonable definition of maximum employment.

The FOMC’s current program of asset purchases began when the unemployment rate stood at 8.1 percent and progress in lowering it was expected to be much slower than desired. The Committee’s objective was to achieve a substantial improvement in the outlook for the labor market, and as progress toward this goal has materialized, we have reduced our pace of asset purchases and expect to complete this program in October. In addition, in December 2012, the Committee modified its forward guidance for the federal funds rate, stating that “as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored,” the Committee would not even consider raising the federal funds rate above the 0 to 1/4 percent range. This “threshold based” forward guidance was deemed appropriate under conditions in which inflation was subdued and the economy remained unambiguously far from maximum employment.

Earlier this year, however, with the unemployment rate declining faster than had been anticipated and nearing the 6-1/2 percent threshold, the FOMC recast its forward guidance, stating that “in determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee would assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation.” As the recovery progresses, assessments of the degree of remaining slack in the labor market need to become more nuanced because of considerable uncertainty about the level of employment consistent with the Federal Reserve’s dual mandate. Indeed, in its 2012 statement on longer-run goals and monetary policy strategy, the FOMC explicitly recognized that factors determining maximum employment “may change over time and may not be directly measurable,” and that assessments of the level of maximum employment “are necessarily uncertain and subject to revision.” Accordingly, the reformulated forward guidance reaffirms the FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments.

Janet Yellen, President, Federal Reserve “Labor Market Dynamics and Monetary Policy – Speech at Jackson Hole“, 22 Aug 2014 (10:00am EDT) More

Extract from Mario Draghi’s speech
Figure 1: Change in the unemployment rate since 2008 – the euro area and the US

Figure 1: Change in the unemployment rate since 2008 – the euro area and the US

Figure 4: Evolution of euro area employment by sector and educational level

Figure 4: Evolution of euro area employment by sector and educational level

Unemployment in the euro area is a complex phenomenon, but the solution is not overly complicated to understand. A coherent strategy to reduce unemployment has to involve both demand and supply side policies, at both the euro area and the national levels. And only if the strategy is truly coherent can it be successful.

Without higher aggregate demand, we risk higher structural unemployment, and governments that introduce structural reforms could end up running just to stand still. But without determined structural reforms, aggregate demand measures will quickly run out of steam and may ultimately become less effective. The way back to higher employment, in other words, is a policy mix that combines monetary, fiscal and structural measures at the union level and at the national level. This will allow each member of our union to achieve a sustainably high level of employment.

We should not forget that the stakes for our monetary union are high. It is not unusual to have regional disparities in unemployment within countries, but the euro area is not a formal political union and hence does not have permanent mechanisms to share risk, namely through fiscal transfers. Cross-country migration flows are relatively small and are unlikely to ever become a key driver of labour market adjustment after large shocks.

Thus, the long-term cohesion of the euro area depends on each country in the union achieving a sustainably high level of employment. And given the very high costs if the cohesion of the union is threatened, all countries should have an interest in achieving this.

Mario Draghi, President, European Central Bank, “Unemployment in the euro areaMore

Stock market indices

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 1,988.40 -0.20% 1,848.36 +7.58%
DJIA INDU 17,001.22 -0.22% 16,576.66 +2.56%
NASDAQ IXIC 4,538.55 +0.14% 4,176.59 +8.67%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Nightly Business Report: 22 Aug 2014 Watch
Comment

Janet Yellen does not appear to have broken any new ground. The advance to the (S&P500) record has been supported by good U.S. economic data of late. The Fed is also doing a good job at preparing the market for the eventual increase in interest rates. As long as the economy continues to perform well, the market is in good shape.
Jim McDonald, Chief Investment Strategist, Northern Trust Corp. ($924bn) More

PORTFOLIO

Index values Opinion

:-) Outperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.664 +0.56% 1.399 +18.95%
Valuation Rate USD/AUD 0.93606 +0.26% 0.89789 +4.25%
Portfolio Index AUD 1.778 +0.25% 1.558 +14.10%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

 Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)


Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stock news

Apple: screen production may limit iPhone 6 stocks Opinion

aaplSuppliers to Apple are scrambling to get enough screens ready for the new iPhone 6 smartphone as the need to redesign a key component disrupted panel production ahead of next month’s expected launch.More

Portfolio records today

:-) Investors were not upset by the component supply issue on the Apple iPhone 6. Apple’s share price rose 0.74% to a new record of $101.32.

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $101.32 +0.74% $80.1457 +26.42%
Amazon AMZN $331.59 -0.40% $398.79 -16.85%
Ebay EBAY $55.50 -0.70% $54.865 +1.16%
Facebook FB $74.57 +0.00% $54.649 +36.45%
Google A GOOGL $592.54 +0.02% $560.365 +5.74%
Google C GOOG $582.56 -0.14% $560.365 +3.96%
Linkedin LNKD $226.40 +3.28% $216.83 +4.41%
VMware VMW $102.24 -0.32% $89.71 +13.97%

Thursday 21 Aug 2014

JAPAN

Economy

Markit / JMMA Flash Japan Manufacturing PMI – Aug 2014 Opinion

Extract

Flash Japan Manufacturing PMI at 52.4 (50.5 in July). Modest improvement in growth registered in August.
Flash Japan Manufacturing Output Index at 53.2 (49.8 in July). Output increased at solid pace.

Markit / JMMA, “Markit/JMMA Flash Japan Manufacturing PMI – PMI points to strongest manufacturing expansion since March“, 21 Aug 2014 More

CHINA

Economy

HSBC/Markit Flash China Manufacturing PMI – Aug 2014 Opinion

Extract

Flash China PMI: 50.3 in August (51.7 in July). Three-month low.
Flash China Manufacturing Output Index at 51.3 in August (52.8 in July). Three-month low.

HSBC/Markit, “HSBC Flash China Manufacturing PMI – Output and new orders both expand at weaker rates in August 2014“, 21 Aug 2014 More

Comment

Pressure for more policy easing will mount further and we continue to expect more targeted stimulus measures to be rolled out. The bank is sticking to its 2014 forecast of 7.4 percent economic growth but this will only be possible if Beijing acts quickly to prop up aggregate demand.
Dariusz Kowalczyk, Senior Economist, Credit Agricole CIB (Hong Kong) More

The government is supporting the economy, but compared with 2009 it’s still mini. They are trying to protect the bottom line of growth which is around 7.5 percent, so with a lot of difficulty probably will achieve it.
Wang Tao, Head of China Wconomic Research, UBS AG (Hong Kong) More

EUROZONE

Economy

Flash Eurozone PMI Composite Output Index – Aug 2014 Opinion

Extract

Flash Eurozone PMI Composite Output Index at 52.8 (53.8 in July). 2-month low.
Flash Eurozone Services PMI Activity Index at 53.5 (54.2 in July). 2-month low.

Markit / JMMA, “Markit Flash Eurozone PMI® – Eurozone recovery makes steady progress in August, as France stabilises“, 21 Aug 2014 More

Comment

For the euro zone right now, bad news is good news, as bad news intensifies expectations for QE. I’m sticking to my range-bound view. The current soft patch in the economy is offset by increased QE expectations. The ECB will keep those expectations alive.
Gunther Westen, Head of Asset Allocation and Fund Management, Meriten Investment Management GmbH (Dusseldorf) ($35bn) More

USA

Economy

The Kansas City Fed Economic Symposium commences today at Jackson Hole

The Kansas City Fed’s Economic Symposium commences today at Jackson Hole, Wyoming

Unemployment Insurance Weekly Claims Report: Week to 16 Aug 2014 Opinion

Jobless claims to 298,000 – below the forecast 303,000. Ongoing claims fell to the lowest level in more than 7 years.

Extract

In the week ending August 16, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 14,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 311,000 to 312,000. The 4-week moving average was 300,750, an increase of 4,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 295,750 to 296,000.

The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 9, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 9 was 2,500,000, a decrease of 49,000 from the previous week’s revised level. This is the lowest level for insured unemployment since June 16, 2007 when it was 2,453,000. The previous week’s level was revised up 5,000 from 2,544,000 to 2,549,000. The 4-week moving average was 2,527,500, a decrease of 2,000 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 2,528,250 to 2,529,500.

U.S. Employment and Training Administration, “Unemployment Insurance Weekly Claims Report – Week to 16 Aug 2014“, 21 Aug 2014 (08:30am) More

Comment

We have seen significant progress in the labor market over the last three years, and particularly this year. As we look at the healing we’ve seen in the economy and that progress, we’re in a good place to begin talking about normalisation.
Esther George, President, Federal Reserve Bank of Kansas City (speaking at Jackson Hole) More

The job market is doing well right now, there’s no doubt about it. There’s a good chance we’ll get another solid month of payrolls. Lower layoffs, together with faster hiring, mean better prospects for consumer spending.
Guy Berger, Economist, RBS Securities Inc. More

Markit Flash US Manufacturing PMI – Aug 2014 Opinion

Extract

PMI flash 58.0 vs 55.8 prior, and 55.7 expected
Employment 54.6 vs 51.2 prior
Output 60.2 vs 59.7 prior

Markit, “Markit Flash U.S. Manufacturing PMI – U.S. Manufacturing PMI rises to highest level since April 2010“, 21 Aug 2014 (09:45) More

Existing home sales – Jul 2014 Opinion

Extract

Existing-home sales increased in July to their highest annual pace of the year, and the ongoing decline in distressed sales reached an important milestone, according to the National Association of Realtors®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July from a slight downwardly-revised 5.03 million in June. Sales are at the highest pace of 2014 and have risen four consecutive months, but remain 4.3 percent below the 5.38 million-unit level from last July, which was the peak of 2013.

The median existing-home price for all housing types in July was $222,900, which is 4.9 percent above July 2013. This marks the 29th consecutive month of year-over-year price gains.

Total housing inventory at the end of July rose 3.5 percent to 2.37 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace. Unsold inventory is 5.8 percent higher than a year ago, when there were 2.24 million existing homes available for sale.

Distressed homes – foreclosures and short sales – accounted for 9 percent of July sales, down from 15 percent a year ago and the first time they were in the single-digits since NAR started tracking the category in October 2008. Six percent of July sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in July, while short sales were discounted 14 percent.

National Association of Realtors, “Existing-Home Sales Continue to Climb in July 2014“, 21 Aug 2014 (10:00) More

Comment

We’re moving from a market that was driven by the overcorrection, driven by distressed asset sales, to a market that’s returning to being based on the fundamentals. It’s jobs and wages, it’s traditional homebuyers and particularly first-time buyers.
Budge Huskey, President and Chief Executive Officer, Coldwell Banker Real Estate (New Jersey) More

Stock market indices Opinion

The S&P 500 index achieved a new record high of 1,992.37, exceeding its previous record of 1,987.98 on 24 Jul 2014, and approaching 2,000. At 17,039.49 the DJIA is nearing its record of 17,113.54 achieved on 22 Jul 2014.

Index Ticker Today Change 31 Dec 13 YTD
S&P 500 SPX 1,992.37 +0.29% 1,848.36 +7.79%
DJIA INDU 17,039.49 +0.36% 16,576.66 +2.79%
NASDAQ IXIC 4,532.10 +0.12% 4,176.59 +8.51%

The shape of the day

Market indices today (Chart: Yahoo Finance)

Market indices today (Chart: Yahoo Finance)

Nightly Business Report: 21 Aug 2014 Watch
Comment

The market is really in a sweet spot for U.S. stocks, fundamentals continue to be very good.
Jeff Kravetz, Regional Investment Director, US Bank’s Private Client Reserve More

We’ve had a paradigm where good economic news is bad news, but it’s clear this week that good news is just good news. The package of data today was strong and the market is responding accordingly.
Quincy Krosby, Market Strategist, Prudential Financial Inc. ($1 trillion) More

PORTFOLIO

Index values Opinion

:-( Underperformed Currency Today Change 31 Dec 13 YTD
Portfolio Index USD 1.655 -0.05% 1.399 +18.28%
Valuation Rate USD/AUD 0.93504 +0.15% 0.89789 +4.14%
Portfolio Index AUD 1.770 -0.20% 1.558 +13.58%

52-week performance Opinion

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

USD and AUD denominated indices over the last 52 weeks (Chart: Bunting)

Stock price movements

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

Portfolio stocks and market indices: price changes today (%) (Chart: Bunting)

PayPal spinoff rumour

Ebay rose 4.66% on a rumour that PayPal may be split from Ebay. (Chart: Yahoo Finance)

Ebay rose 4.66% on a rumour that PayPal may be split from Ebay. (Chart: Yahoo Finance)

Ebay’s 4.66% price rise is driven by this morning’s rumour that PayPal may be spun off as a separate company. This is not a new issue – activist Carl Icahn has been pushing for this since at least Jan 2014 More

However tech news website The Information reported this morning that “Ebay has been telling potential recruits for the position of PayPal CEO that it’s considering spinning off the payments business as soon as next year, according to two people briefed on the conversations. The search for a new head of the unit began in June after former PayPal CEO David Marcus said he was leaving for Facebook.More

eBay spokeswoman Amanda Miller has commented “The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed.More

"Blue Horseshoe loves Anacott Steel" (Movie: Wall Street)

“Blue Horseshoe loves Anacott Steel” (Movie: Wall Street)

Portfolio records today

Apple added a cent to yesterday’s record high close price, closing today at $100.58.

Portfolio stock prices

Stock Ticker Today Change 31 Dec 13 YTD
Apple AAPL $100.58 +0.01% $80.1457 +25.50%
Amazon AMZN $332.91 -0.85% $398.79 -16.52%
Ebay EBAY $55.89 +4.66% $54.865 +1.87%
Facebook FB $74.57 -0.32% $54.649 +36.45%
Google A GOOGL $592.42 -0.50% $560.365 +5.72%
Google C GOOG $583.37 -0.19% $560.365 +4.11%
Linkedin LNKD $219.20 +0.59% $216.83 +1.09%
VMware VMW $102.57 -1.03% $89.71 +14.34%