Here's my summary of the key news overnight in 90 seconds at 9 am, including a rush of surprisingly good news.
Markets were given every reason to rally today after economic data blew away expectations, the good earnings season continued and central banks maintained their dovish stance.
Firstly, manufacturing surveys for most of Europe indicated that the region’s economy is on the mend. The ones from Germany, France, Italy, the UK and even Greece all came in better than expected; only Spain disappointed.
Then the central banks - the ECB and the BofE - both stuck to their 'low rate' songsheet.
And then it was the US's turn. Their PMI surveys both came in much stronger than expected on surges on orders and production. Early reports of their jobless claims suggested these are falling. Markets are awaiting the important non-farm payroll data tomorrow, and a good result is anticipated.
And these of course followed the official China factory surveys which were better than many thought they would be.
All this optimism, based as it is in healthy factories, has seen equity markets surge higher.
Both the Dow and the S&P500 are in record territory. Gold is down, and oil is up sharply, up to almost US$108 per barrel. Oil may be up, but natural gas stocks are up sharply too, and that is encouraging a quick shift away from oil dependence in large northern economies. Natural gas prices are low. (Shell and Exxon both reported poor results.)
US Treasury yields rose, prices fell, on the basis that the better factory data may see the Fed's taper policy earlier.
Closer to home, Australian factory data was out late yesterday too, but unlike the rest of the world it was terrible.
Also, there are strong indications the Australian government is about to raise taxes, and that includes a new tax on bank deposits. Actually, it looks like a levy on banks to 'fund' the retail deposit guarantee they have in Australia. It has knocked bank share values hard overnight.
The strong northern data out overnight pushed the US dollar and euro higher, and the we fell back as a consequence.
The NZ dollar opens today at 78.9 USc, the Aussie dollar is at 88.2 AUc, and the TWI is at 75.0.
No chart with that title exists.
12 Comments
"and that is encouraging a quick shift away from oil dependence in large northern economies"
Overnight, eh? Just like that. I went to a lecture within the last month, by a fellow from the Helmholtz Institute - a 1000-person think-tank - who stepped us through what Germany is doing, re renewables. They have a goal of being 35% renewable by 2040 - which is too little, too late, and that's only their grid (electricity) not their fossil-fuel (transport/agriculture) demand.
http://www.otago.ac.nz/news/events/otago049281.html
Whay quick shift did you have in mind, David? Gas? How many petajoules over what time period? What's the EROEI drop? Where's it coming from? Russia?
I suggest that the only quantum 'shifting away' that is going on, is the offshoring of real activity to low wage low rule countries, resulting in more piled up proxy with no underwrite (inflated house prices being the classic example).
I wonder what happens when the Russians stop sending that "cheap" gas....lots of frozen little old ladies on the one hand and street bonfires on the other, but alls well David thinks so. In the USA the big guys are buying into the shale plays and if the CEO's comments are anything to go by losing their shirts...sure its going sooooo well, really.
Germany only 35%? bugger....they are probably one of the most advanced along this path? Funny but we may yet one day thank Muldoon and our SOEs (despite National now) when today we run 75%+.
"shifting away" yep...just a temp thing though...the transport energy cost continues to climb.
regards
Fear not Rudderless, some are ejecting cries of abject misery after counting the devastating cost of recent volatility in the best next to money asset class.
This is my number one must-do for today: -
- Go to my IPod
- Select Artist
- Scroll to Cat Stephens
- Select "Where will the children play"
- Listen to it three times (not that hard to do)
Then resume my day - thinking about how much my grandson will be left with - when he is my age. And his grandson. And so forth.
Where will the children play?
Think WW2 blitz ruins, lots of good wasteland, abandoned houses, factories, plots indebted for but never built on etc.
"left with" thats the moral issue ppl are avoiding, they are convinced that tomorrow will be better and hence can kicking a few problems down the road is no biggee.
Once you understand there is really not much likelyhood of it being better and very liely far worse then morally how can you can kick?
Of course life isnt one of fair share, there are those who think the cans get kicked down to other ppls children to pay for. Though they probably dont think that far, just concentrate on making sure they and their children are OK.
regards
Yes Chris Hedges refered to all of your comments above Stephen.
And while I am about it - thank you for the David Korowicz link that you posted late last week.
The most disturbing comment that Chris Hedges made - "Dont expect the elite to fix the problem - their education does not go that far".
Which is the simple reason the debt fuelled collapse that came with the GFC is being 'fixed' with yet more debt.
So the bond yields are up! (Subtext in the English I learned at school) - Bond prices have crashed.
Forgive me. A bit tired today. I watched this on my Apple TV for three hours last night - thinking that I was pushing the start button for 15 minutes worth. But it was worth it.
Chris Hedges covered the full spectrum. Why the middle class remain silent as they lose their connect to the real economy. The need to spy on them (us). The need for more casinos. Where will my grand children play?
Aha ha haaaaaaaaaaaaaaa ! ....... that'll teach you , David , never try to raise the tone around here , all the resident misery guts's have come out of their caves to stomp on your good news ......
..... listening to " Where will the children play " , whilst shuffling aound the wreckage of the blitz , as Mad Max roars past .... with their tin-foil hats on .....
Crikey Dick & Jane , these guys would be a riot at a candlelight supper ( power's down ! ) ......
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