The US trade deficit fell by 6.8% in
September to $64.3 billion (after August’s record $69bn), the largest 1
month decline since February 2001. US consumer credit FELL in September
by $1.2bn, with the total now at a staggering $2.366 trillion. Staying
with the consumer, the mid November University of Michigan’s Consumer
Confidence Index fell. For stocks, there was more bad news from the
house builders, but good Q306 results from Dow constituents, Disney and
AIG, whilst tech mega stock, Cisco also pleased. Over the week the Dow
gained 1%, whilst the S&P 500 and Nasdaq indices were higher by 1.2% and
2.6% respectively.
Euro land saw some downbeat economic data, as French GDP ground to a
halt during Q306 and German manufacturing orders fell by 2½% in
September. The Bank of England’s MPC increased interest rates by ¼% to
5%, a five year high. Staying with the UK, the value of London’s most
expensive homes are rising at the fastest pace in 18 years, according to
Knight Frank LLC, at 25% over the past 12 months, in anticipation of
demand by bankers, traders and Hedge Fund managers expected record
bonuses this year. At the stock level, good results from the likes of
Siemens and Marks & Spencer buoyed the main indices, with the FTSE 100
higher by 1% over the week, trailing the French CAC 40 and the German
Dax, which rose by 2% and 1.9% respectively.
Out East, the OZ Central Bank also hiked rates by ¼% to 6¼%, the third
rise this year and at the highest level in 6 years. Not good for a
country whose ‘household debt to disposable income rates’ has climbed to
156.9 from 110 in just 4 years. Their debts now stand at $A1 trillion.
Japanese machinery orders slumped by 7.4% in October from a month
earlier and by 11.1% during Q306, the biggest decline ever, whilst in
Hong Kong, the Hang Seng rose above the 19,000 level for the first time
as prime interest rates eased by ¼% to 7¾%. Over the week, the Nikkei
fell by 1.5%, whilst the Hang Seng rose by 0.85.
On the currency front, the $US index fell by 0.8%, unsettled by both the
‘lame duck administration’ prospects after the mid term elections and by
the confirmation that China, whose foreign reserves at $1 trillion
intends to diversify out of dollars.
Within the commodities complex, the $oil price jumped by 3% to $60 a
barrel, despite the fact that US crude oil supplies rose by 400,000 over
the week and the International Energy Agencies trimming of its 2006
global oil demand forecast due to falling Chinese demand during Q306.
The $ gold price was very volatile over the week, before ending it just
0.14% higher and $630oz.
Next week is all about inflation data, as October CPI numbers are
released for the US, UK and the wider Euro zone. The US also releases
October advance retail sales data and the minutes of the 24th October
2006 FOMC meeting.
So not even the ‘timed’ death sentence for Saddam Hussein could save the
Republicans from defeat. George W is in for a very difficult final two
years of his Presidency. The prospect of a lame duck administration,
higher oil prices and falling consumer confidence has failed to dent the
enthusiasm of the Bulls. ‘So far’.
“Before
borrowing from a friend, decide which you need
most”
[ Back ] [ Up ] [ Next ]
