ETX Capital Daily Market Bite, 10th September 2013: European Stocks Perk Up On Easing Syria Fears
September 10, 2013 8:18 am
September 10th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
Risk sentiment kicked up overnight on a number of developments across the globe, propelling equities this Tuesday morning. US stocks finished higher Monday — fears over a strike by the US on Syria receded a fair bit in the past 24 hours as President Obama found that getting Congressional support is not as easy as he anticipated.
US lawmakers are at the moment too concerned with a range of domestic issues such as forthcoming talks over a new budget to raise the debt ceiling, the announcement of a new Federal Reserve chairman and the fact that the US does not have the kind of defence spending it once had thanks to this year’s sequester cuts. Syria appears to be complicating matters at Congress, meaning that lawmakers are likely to delay the vote on an imminent strike on Syria — a blow to President Obama. At the same time, Russia has put together a proposal for Syria’s Assad regime to hand over the control of the country’s chemical weapons stocks, a proposal that prompted Obama to say he would put planned air strikes against Syria on hold if Assad followed the Russian proposal.
So, fears over an imminent strike in the market have reduced on the back of these developments with investors welcoming the encouraging batch of economic data out of China overnight which helped Asian stock markets march higher. Chinese industrial output, investment and retail sales data all increased in August, indicating the world’s second largest economy is finally back above its knees after a turbulent first half of 2013. China’s policymakers are attempting to transform the country’s economy into one based on consumption over the current model based on spending and the macro indicators are suggesting that these measures are starting to bear fruit. The big fear in the market was if China’s GDP for 2013 will slip below 7% but policymakers in the country have reassured the market that growth will remain above 7.5% and stimulus is available on tap if needed.
China’s upswing could not have come at a better time as the market remains highly sensitive to any potential tapering activity by the Federal Reserve. This of course is the narrative in the market at the moment, particularly as last Friday’s US monthly jobs report was regarded as a mixed bag [soft on headline jobs growth, decent on downtick of unemployment rate] which has left the market feeling as unsure as ever over the prospects of tapering at this month’s policy meeting. There’s little on the economic agenda out of Europe and the US today so the focus will be on the US data out later this week such as weekly jobless claims on Thursday and the Michigan confidence report on Friday.
September 10th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
Risk sentiment kicked up overnight on a number of developments across the globe, propelling equities this Tuesday morning. US stocks finished higher Monday — fears over a strike by the US on Syria receded a fair bit in the past 24 hours as President Obama found that getting Congressional support is not as easy as he anticipated.
US lawmakers are at the moment too concerned with a range of domestic issues such as forthcoming talks over a new budget to raise the debt ceiling, the announcement of a new Federal Reserve chairman and the fact that the US does not have the kind of defence spending it once had thanks to this year’s sequester cuts. Syria appears to be complicating matters at Congress, meaning that lawmakers are likely to delay the vote on an imminent strike on Syria — a blow to President Obama. At the same time, Russia has put together a proposal for Syria’s Assad regime to hand over the control of the country’s chemical weapons stocks, a proposal that prompted Obama to say he would put planned air strikes against Syria on hold if Assad followed the Russian proposal.
So, fears over an imminent strike in the market have reduced on the back of these developments with investors welcoming the encouraging batch of economic data out of China overnight which helped Asian stock markets march higher. Chinese industrial output, investment and retail sales data all increased in August, indicating the world’s second largest economy is finally back above its knees after a turbulent first half of 2013. China’s policymakers are attempting to transform the country’s economy into one based on consumption over the current model based on spending and the macro indicators are suggesting that these measures are starting to bear fruit. The big fear in the market was if China’s GDP for 2013 will slip below 7% but policymakers in the country have reassured the market that growth will remain above 7.5% and stimulus is available on tap if needed.
China’s upswing could not have come at a better time as the market remains highly sensitive to any potential tapering activity by the Federal Reserve. This of course is the narrative in the market at the moment, particularly as last Friday’s US monthly jobs report was regarded as a mixed bag [soft on headline jobs growth, decent on downtick of unemployment rate] which has left the market feeling as unsure as ever over the prospects of tapering at this month’s policy meeting. There’s little on the economic agenda out of Europe and the US today so the focus will be on the US data out later this week such as weekly jobless claims on Thursday and the Michigan confidence report on Friday.
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