Bad news in the US, good news in Europe, Chinese droughts, and the Brazilian bikini wax inflation.
Plus a Cartman Q&A.
Just a few of things to chew on for the long weekend.
• Bad news across the board has led the Dow and the S&P to its fourth week in the red. The bad news being soft Richmond numbers indicating a continued slowdown in manufacturing as well as deterioration in demand. Add in a historically weaker housing market and higher inflation to offset the rise in incomes, all signs point to lower growth for the second quarter.
• The greenback weakened against most of its rivals following thecommodity rally and the IMF’s Juncker correction.
• The US isn’t alone in seeing their incomes eaten away by inflation; services in Brazil has seen prices creep up into new highs, bikini waxing in particular rose around 10%. I am now looking for a sponsor to further my bottom up analysis on this issue.
• It’s been another good week for the European indices as higher commodity prices and a few positive figures helped lift the markets for the second straight week.
• The FTSE ended the week +0.80%, the DAX +0.30%, the CAC +0.80%, and the IBEX +0.40%.
• The Eurozone economy does exhibit signs of a Q2 slowdown though; manufacturing and service indices fell sharply from last month and all confidence indicators have slipped below expectations.
• The CHF took the spotlight this week as it edged up against all its crosses and now tests new highs after hawkish IMF rhetoric. It’s interesting to note that some of the smart money is using the franc to gauge GLD strength, which makes sense given the Dollar’s current quirks.
• Equity markets across Asia rallied this week and finished strong with the Nikkei +0.1%, the ASX +0.5%, the Kospi +0.6%, the Hang Seng +1.0%, and the Taiex +0.7%.
• The Shanghai index on the other hand is at a four month low amid concerns of an economic slowdown while Yuan tightening is starting to hurt profits across industries. Food and commodity prices are also feared to fundamentally rise as droughts in Central and Southern China widen while other commodities such as coal are experiencing shortages.
• Japan just might have experienced inflation for the first time in over 2 years; Japanese coreincreased 0.6%, but Econ Minister denies rise as anything inflationary.
• Fitch also cut its outlook on Japan from stable to negative, given how things are going this was understandable. The Yen however, oddly strengthened on the news.
• Even further hawkishness came out of the Philippines as BSP chief Tetangco reiterated that they would take any action required to meet their 2011 inflation target. It’s worth noting that earlier this year, GS reported that among all N11 nations it was the Philippines that would get the highest inflation rates if left neglected.
• Indian FY12 economic growth forecast would be revised lower.
• Moody’s downgraded Kiwi banks one notch to Aa3 while the Kiwi is at its strongest against the Dollar in over three years.
And with that, I leave you with my clip of the week:
It's old as hell but hilarious nonetheless.
Enjoy your weekend monkeys.