ETX Capital Daily Market Bite, 18th October 2013: Markets Track Asia Higher; China GDP Impresses
October 18, 2013 7:59 am
October 18th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
Brighter session in Europe this Friday after stronger China growth data figures together with the S&P500 overnight closing at a record high. Traders on Wall Street responded with relief over the temp fix to America’s fiscal situation, kicking equity markets higher. Asian share markets jumped on the firmer session in the US together with the Chinese data; GDP reading was stronger than expected, up 7.8% in Q3 from the same period a year earlier — better than the 7.5% expected by the market.
Many in the market were comfortable with China’s GDP staying broadly at 7.5% for the year but an uptick certainly lifts sentiment over the health of the world’s second largest economy. That said, industrial output was strong, but slightly lower on the month — September increased by 10.2%, down from 10.4% in August. Retail spending and fixed asset investment was also slightly lower. So when taken all together, the overall growth figures will encourage investors about the current state of the Chinese economy, the breakdown of other economic indicators suggest that we could see some weakness in upcoming quarters.
That all being said, market participants are breathing a sigh of relief after the last month of watching the fiscal soap opera unfold in the Washington finally comes to some kind of solution, well more of a pause and the US government starts to slowly re-open. US nonfarm payrolls are due next week, Tuesday the 22nd of October and are likely to dominate market sentiment until the release as the data will be crucial in gauging the Federal Reserve’s next possible move, if any move at all. Many are now ruling out tapering during 2013 as the fiscal situation in the US will remain in the backdrop in some fashion until early next year when it has to be dealt with again.
There’s also Q3 earnings season, which so far, has been rather unimpressive from both the US and Europe — Goldman Sachs actually reported mixed numbers yesterday which says it all. GS almost always beats its US banking peers on the earnings front. Subdued session expected for Friday with little on the macro plate to invigorate us — on the corporate side, look out for numbers from Morgan Stanley, GE and Honeywell.
October 18th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist.
Brighter session in Europe this Friday after stronger China growth data figures together with the S&P500 overnight closing at a record high. Traders on Wall Street responded with relief over the temp fix to America’s fiscal situation, kicking equity markets higher. Asian share markets jumped on the firmer session in the US together with the Chinese data; GDP reading was stronger than expected, up 7.8% in Q3 from the same period a year earlier — better than the 7.5% expected by the market.
Many in the market were comfortable with China’s GDP staying broadly at 7.5% for the year but an uptick certainly lifts sentiment over the health of the world’s second largest economy. That said, industrial output was strong, but slightly lower on the month — September increased by 10.2%, down from 10.4% in August. Retail spending and fixed asset investment was also slightly lower. So when taken all together, the overall growth figures will encourage investors about the current state of the Chinese economy, the breakdown of other economic indicators suggest that we could see some weakness in upcoming quarters.
That all being said, market participants are breathing a sigh of relief after the last month of watching the fiscal soap opera unfold in the Washington finally comes to some kind of solution, well more of a pause and the US government starts to slowly re-open. US nonfarm payrolls are due next week, Tuesday the 22nd of October and are likely to dominate market sentiment until the release as the data will be crucial in gauging the Federal Reserve’s next possible move, if any move at all. Many are now ruling out tapering during 2013 as the fiscal situation in the US will remain in the backdrop in some fashion until early next year when it has to be dealt with again.
There’s also Q3 earnings season, which so far, has been rather unimpressive from both the US and Europe — Goldman Sachs actually reported mixed numbers yesterday which says it all. GS almost always beats its US banking peers on the earnings front. Subdued session expected for Friday with little on the macro plate to invigorate us — on the corporate side, look out for numbers from Morgan Stanley, GE and Honeywell.
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