Chillin' out till it needs to be funded
Markets will of course be happy in an otherwise dull week that the GDP report has not thrown any negative surprises, and forget any planned surprises like yesterday’s Reuters report suggesting 3.6% no less. That 3% of course is for the Q4 of 2011 and not the first quarter now whence it is already estimated to be half at 1.5%. We of course expect the full year GDP number in 2012 to remain to 3% but then there is no recovery data we are still waiting for and the JP Morgan estimate and that of Goldman Sachs has already been rounded to 2.2% and 2% respectively. Tha annual growth rate comparing with 9% in China and 6% in India is 1.7% for 2011
Initial Jobless claims for March 17 revised upward to 364,000 from the 346,000 earlier and thus the number for March 24 at 359,000 is an improvement, the 4 week average from 356,200 two weeks ago to 365,000 this week Continuing claims reign at 3.34 mln The government data on Corporate profits again showed reason why one should use annual comparisons as Q4 data dipped 2% over Q3 to $1.494 Tln and 11.7% up on year compared to 6% in Q3
Even as Boeing corrects course for the Fog ahead, BRICS nations are farther ahead in 2012 to commission their own manufactured airplanes from BRazil with Embrae r to the Chinese plane and even a 80 seater Indian civil aircraft being built at a state facility. Facebook stops trading early at Sharespost aheado f the IPO in May and Ray Burgundyis coming to a cinema near you with his style of news cast.
Meanwhile German unemployment fell a tenth to 6.7% and 2.841 mln remain unemployed all in all a happy enough momentum to sentiment but Great Britain (UK) started showing its weaknesses after strong pre-budget essaying as Money supply (measured on the M4 in London) fell 3.4%, Bank lending contracting 1.4%.
In European Banks the pecking order after deleveraging stands at #1 Deutsche Bank at EUR 1.27 Tln (netting Derivatives) , then HSBC ( probably stil EUR 1.98 Tln, but that is apparently without netting their outstanding derivatives) and BNP which fell on gross Assets to EUR 1.97 tln and by IFRS to EUR 900 mln, as deleveraging mars the recovery speak on the continent and yields start creeping north in anticipation of a new failure.
However as the Euro gets more votes of confidence and trade partners including US and China get at it the Euro and thus Europe should have a niuce 2012 with a positive result except for the budgeted contractions in Italy and Ireland, even France though Spain,Portugal and Greece seem unable to grab controls of the Economy with empty pockets.
Retail sales in Japan delivered a big positive surprise yesterday night with Retail Sales up 3.5% led by a 21% rise in Auto sales and a 5% uptick in energy sales ( petroleum fuels) and including most discretionary/non discretionary categories from textiles to toiletries, groceries and machinery and equipment , which are the main Japanese and German export suffered big losses in price on export weakness
The Swiss seem to be the most sharply recession minded across the pond, while Italy is all wine and roses while BRICS met to aver on the coming UNCTAD meeting agenda, the agri subsidies they want to continue and more mundane staff unlike the OECD which finds itself breaking over the division of growth between Europe and North America. BRICS want to use the forum to tell the advanced nations to take more responsibility for Carbon emissions and let Asia and LatAm subsidies alone, the Delhi Declaration focussing on..
global issues that pit them against the Western approach of using sanctions and speculation about the use of force to resolve complex global issues.
Russia also signed a three year local currency (LCY) agreement with India to facilitate bilateral trade.