For the US a holiday shortened week
saw the release of the May FOMC minutes and a disappointing jobs
creation of only 75000 new jobs in May, albeit that the official
unemployment rate eased from 4.7% to 4.6%,. The equity market fell
sharply at the beginning of the shortened trading week, as consumer data
showed a fall off in May versus April, only to rally on the FOMC minutes
and jobs creation number that appeared towards week’s end.
For the week, the Dow eased by 0.3%, whilst the S&P 500 Index and the
Nasdaq Composite rose by 0.6% and 0.4% respectively.
Europe’s largest mutual insurer, Standard Life, confirmed that its
planned flotation in July had gained 98% of its members’ votes.
Meanwhile the EU commission raised its forecast for Eurozone GDP growth
to a range of 0.5% to 0.9% in the 2nd & 3rd quarters of 2006.
Unemployment in the Eurozone remained unchanged in April at the 8%
level. At a stock level BAA remained the target of bid activity, whilst
the Telecoms sector proved to be a safe haven. Vodafone shares rallied
in price after the company announced a loss of £22bn, the largest in
European corporate history. Crazy world that it is but punters were
urged on by a promised increased dividend and a £9bn pay out as part of
the company’s new business strategy. The UK FTSE 100 Index fell by 0.5%
over the week, whilst the French CAC and German Dax were lower by 1.7%
and 1.8% respectively
Out East, China’s tax authorities announced that they are to impose a
20% tax on the resale of a home owned for less than 5 years in a further
attempt to take the steam out of the Real Estate market and credit build
up. Japanese industrial production for April rose by 1.5%, whilst in
Hong Kong, the Bank of China IPO enjoyed a strong trading debut. As with
their Western counterparts, it was an erratic trading week with much
volatility for Equities. Over the week Japan’s Nikkei fell by 1.1% as
the Hang Seng was even.
The $US index fell by 1% as US Treasury Bond yields eased. The 5 & the
10 yield were lower by 1.5% and 1.6% respectively, although their
equivalent in the UK, Eurozone and Japan rose.
With the Commodities complex, the $Oil price jumped by 1.4% over the
week to$72.3 a barrel, and the $Gold price fell by 2.3% to $639oz.
Next week we get to see the latest US trade balance. Consumer confidence
data and Mortgage applications, while the Bank of England MPC and the
European Central Bank decide in any interest rate change.
It’s to be ‘all change’ time again at the head of the US Treasury.
George W has nominated the Chief Executive of Goldman Sachs, Hank
Paulson, as the next Secretary to the US Treasury, bidding ‘au revoir’
to John Snow. With Paulson’s pedigree and connections, some suggest that
he may even be as revered as another Goldman executive, Treasury
Secretary, Robert Rubin, whilst we personally feel that he is going to
need every part of his skills and the luck of the Irish.
“Things
turn out best for people who make the best of
the way things turn out”
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