September 03, 2010

Market Wrap: for the week ending 03-Sep-2010

• US nonfarm payrolls fell 54,000 in August and the unemployment rate was 9.6% (BLS)
• US Private-sector payroll employment continued to trend up modestly 67,000 (BLS)
• US home prices in June were 3.6% above their year-earlier levels (S&P)
• Euro area and EU27 GDP grew by 1.9% compared with Q2 of 2009 (Eurostat)
• Canada’s economy grew by 2% in the second quarter of 2010, compared with a 5.8% growth in Q1 (Economist)
• Australia's economy grew by 1.2% in the second quarter and by 3.3% on the previous year (Economist)
• China's purchasing managers index rose by a surprisingly robust 0.5 points to 51.7 (Eurointelligence)
• India's economy grows most since 2007, GDP rose 8.% in Q2 from a year earlier (Bloomberg)
• Global foreign exchange reaches an average daily turnover of $4 trillion compared to $3.3 trillion in 2007 (BIS)
• Germany's unemployment rate fell to 6.9% from 7.6% a year earlier (Economist)
• US consumer confidence improved to 53.5 (1985=100), up from 51.0 in July (Conference Board)
• Japan announced a $130 bn stimulus package including low interest loans for financial institutions (Economist)
• US Dollar fell to new 15 year low against the Japanese Yen at 83.58 (Reuters)
• Euro area unemployment rate stable at 10.0%, EU27 stable at 9.6% (Eurostat)
• SEC declined to charge Moody’s for violating securities laws rating derivatives (NY Times)

Weekly Market Barometers    
Stock-2010-0903   FX-2010-0903

Chart Of The Week
Having just travelled a fair amount in the past two weeks, I had the impression that there are some positive signs in the real economy. The hotels I stayed at were not fully booked, but it was more difficult to find rooms than during the last two years.  Courtesy of comes a nice chart reflecting that experience as well.  US consumers are certainly not back to their pre-crisis spending sprees but there are some positive signs on the horizon.


Recommended Read
While banks and institutions are busy studying the new financial overhaul bill, some of the institutions who had been contributing players in creating the bubble leading to the credit crisis have gotten away with a slap on the wrist; others simply got away on technicalities. Please consider: No Charges for Moody’s in Ratings Violation.

“Because of uncertainty regarding a jurisdictional nexus to the United States in this matter, the commission declined to pursue a fraud enforcement investigation,” the S.E.C. said in its report.

Wonderfully crafted words such as the “uncertainty regarding a jurisdictional nexus” is what does it for me; the inquiring mind has to wonder how “jurisdictional nexi” are going to be handled in the new financial overhaul bill...

Good luck and good investing!

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