China’s first quarter GDP grew 7.4% (compared to GDP a year ago), the slowest rate in 18 months. Result, slightly below the government’s 7.5% target Target.
Monthly report on industrial production operation – Mar 2014
“In March 2014, the total value added of the industrial enterprises above designated size was up by 8.8 percent year-on-year (the following growth rates of value added are real growth rates, after deducting price factors), 0.2 percentage points higher than that in the first two months of 2014. In March, the total value added of the industrial enterprises above designated size went up by 0.81 percent month-on-month. From January to March, the total value added of the industrial enterprises above designated size was up by 8.7 percent.”
National Bureau of Statistics of China, “Monthly report on industrial production operation in March 2014“, 16 Apr 2014 More
Total retail sales of consumer goods – Mar 2014
“In March 2014, the total retail sales of consumer goods reached 1,980.1 billion yuan, up by 12.2 percent year-on-year (nominal growth rate. The real growth rate was 10.8 percent. The follows are nominal growth rates if there’s no additional explanation). Of the total, the retail sales of consumer goods of units above designated size was 1,023.1 billion yuan, increased 10.2 percent. From January to March, the total retail sales of consumer goods reached 6,208.1 billion yuan, up by 12.0 percent year-on-year. Of which, the online retail sales of units above designated size was 81.5 billion yuan, increased 51.7 percent.”
National Bureau of Statistics of China, “Total Retail Sales of Consumer Goods in March 2014“, 16 Apr 2014 More
National Real Estate Development and Sales – Mar 2014 Quarter
“The total investment in real estate development in the first three months of 2014 was 1,533.9 billion yuan, a nominal increase of 16.8 percent year-on-year (actual increase was 15.5 percent after deducting price factors), 2.5 percentage points lower over the first two months. Of which, the investment in residential buildings was 1,053.0 billion yuan, up by 16.8 percent, 1.6 percentage point lower, and accounted for 68.7 percent of real estate development investment.”
National Bureau of Statistics of China, “National Real Estate Development and Sales in March 2014“, 16 Apr 2014 More
Quarterly business climate index – Mar 2014 Quarter
“The business climate index (BCI) of industrial enterprises was 128.0 in the first quarter of 2014, increased 3.7 points quarter-on-quarter, mainly due to a higher expected BCI of industrial enterprises that reflected the anticipation of future business climate of industrial enterprises. Of which, the current BCI of industrial enterprises that reflected the current state of business climate of industrial enterprises was 122.5, down by 6.1 points quarter-on-quarter; the expected BCI of industrial enterprises that reflected the anticipation of future business climate of industrial enterprises was 131.6, up by 10.2 points quarter-on-quarter. In the first quarter, the entrepreneur expectation index (ECI) of industrial enterprises was 124.3, up by 3.3 points quarter-on-quarter.”
National Bureau of Statistics of China, “Business Climate Index of Industrial Enterprises Increased in the First Quarter of 2014“, 16 Apr 2014 More
Janet Yellen’s speech
“At our most recent meeting in March, the FOMC reformulated its forward guidance for the federal funds rate. While one of the main motivations for this change was that the unemployment rate might soon cross the 6-1/2 percent threshold, the new formulation is also well suited to help the FOMC explain policy adjustments that may arise in response to changes in the outlook. I should note that the change in the forward guidance did not indicate a change in the Committee’s policy intentions, but instead was made to clarify the Committee’s thinking about policy as the economy continues to recover. The new guidance provides a general description of the framework that the FOMC will apply in making decisions about the timing of liftoff. Specifically, in determining how long to maintain the current target range of 0 to 25 basis points for the federal funds rate, “the Committee will assess progress, both realized and expected, toward its objectives of maximum employment and 2 percent inflation.”24 In other words, the larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained. This approach underscores the continuing commitment of the FOMC to maintain the appropriate degree of accommodation to support the recovery. The new guidance also reaffirms the FOMC’s view that decisions about liftoff should not be based on any one indicator, but that it will take into account a wide range of information on the labor market, inflation, and financial developments.
Along with this general framework, the FOMC provided an assessment of what that framework implies for the likely path of policy under the baseline outlook. At present, the Committee anticipates that economic and financial conditions will likely warrant maintaining the current range ‘for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.’”
Janet Yellen, Chair, US Federal Reserve, “Monetary Policy and the Economic Recovery“, Speech given to the Economic Club of New York, 16 Apr 2014. Text
Industrial production and capacity utilisation
“Industrial production increased 0.7 percent in March after having advanced 1.2 percent in February. The rise in February was higher than previously reported primarily because of stronger gains for durable goods manufacturing and for mining. For the first quarter as a whole, industrial production moved up at an annual rate of 4.4 percent, just slightly slower than in the fourth quarter of 2013. In March, the output of manufacturing rose 0.5 percent, the output of utilities increased 1.0 percent, and the output of mines gained 1.5 percent. At 103.2 percent of its 2007 average, total industrial production in March was 3.8 percent above its level of a year earlier. Capacity utilization for total industry increased in March to 79.2 percent, a rate that is 0.9 percentage point below its long-run (1972–2013) average but 1.2 percentage points higher than a year prior.”
Federal Reserve, “Industrial Production and Capacity Utilization – G.17“, 16 Apr 2014 More
Residential construction Mar 2014
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 990,000. This is 2.4 percent (±1.0%) below the revised February rate of 1,014,000, but is 11.2 percent (±1.1%) above the March 2013 estimate of 890,000.
Single-family authorizations in March were at a rate of 592,000; this is 0.5 percent (±1.0%) above the revised February figure of 589,000. Authorizations of units in buildings with five units or more were at a rate of 370,000 in March.
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 946,000. This is 2.8 percent (±14.7%) above the revised February estimate of 920,000, but is 5.9 percent (±8.4%) below the March 2013 rate of 1,005,000.
Single-family housing starts in March were at a rate of 635,000; this is 6.0 percent (±15.5%) above the revised February figure of 599,000. The March rate for units in buildings with five units or more was 292,000.
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 872,000. This is 0.2 percent (±13.2%) below the revised February estimate of 874,000, but is 7.7 percent (±14.3%) above the March 2013 rate of 810,000.
Single-family housing completions in March were at a rate of 602,000; this is 3.8 percent (±12.6%) below the revised February rate of 626,000. The March rate for units in buildings with five units or more was 258,000.”
Department of Housing and Urban Development and US Census Bureau, “New Residential Construction in March 2014“, 16 Apr 2014 (08:30am) More
Stock market indices
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Nightly Business Report: 16 Apr 2014 Watch
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Mar 2014 quarter reports
IBM and Google disappointed investors in their Mar 2014 quarterly reports, released after market close today.
IBM’s revenue ($22.5bn) was 1.86% below estimates ($22.9bn) – mainly caused by reductions hardware sales in emerging countries (e.g. BRIC revenue, with the largest reductions in China). EPS ($2.54) were in line with estimates.
IBM closed down 4.48% at $188.20 in after hours trading.
Google’s EPS ($6.27) missed analysts’ estimates ($6.40). Revenue ($15.4bn) was also slightly below estimates ($15.5bn).
GOOGL closed down 0.73% at $544.70 in after hours trading.
“We completed another great quarter. Google’s revenue was $15.4 billion, up 19% year on year. We got lots of product improvements done, especially on mobile. I’m also excited with progress on our emerging businesses.”
Larry Page, CEO, Google. Report
“Google Inc.’s costs are rising as the search provider finds it harder to keep up with a broad shift to advertising on mobile phones, with sales falling short of estimates.
Revenue, excluding sales passed on to partners, was $12.2 billion in the first quarter, falling short of a projection by analysts for $12.3 billion, according to data compiled by Bloomberg.
Google’s audience is steadily migrating to smartphones, where the company gets less money for marketing spots than on desktops and tablets. Facebook Inc. and other rivals are also challenging Google’s dominance in the online market. Even though Chief Executive Officer Larry Page is getting more advertisers to buy promotions, with total volume rising 26 percent, the average price for an ad fell 9 percent.”
Brian Womack, Reporter, Bloomberg More
Portfolio stock prices
Temporary exhuberance: Google’s Mar 2014 quarter report disappointed investors.
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