The Banking and Strategy Initiative

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US Economy (The Week ahead): Come back another day…(April 29, 2012 – May 05, 2012)

Market Interest is hot while Economic data see saws confirmed the ceiling of the recovery for 2012 and spending cuts from the government get into action while Obama rides out Romney Storms for a likely easy looking re-election campaign for the next two quarters. Election year will likely remain easy for the equity markets even if investors have gone away in may. (Fund Redemptions closed in on the $10 bln mark for April, when last heard)

China has recovered from Q1 lows in Manufacturing PMI but German confidence is likely to fail as recession deepens. The week begins with the Mid-West PMI report and the ISM Mfg index showing how much of the recovery is intact . The EMU money supply is mostly intact though below the 4.5% target for the ECB and the strains across the pond will likely show up in German unemployment data too. US’ employment data from Private payrolls on Wednesday to  the BLS monthly report on Friday is likely still tracking the higher Jan and Feb data and the pressure’s on from eager investors and Economists ( more around than you would have thought) to report more positive wage data that could reconfirm most of what was good in Q1 The Personal Income report on Monday may find buoyant market reactions easy on tiny moves in March 2012.

The Auto sales report tomorrow is just likely to show that Domestic sales can pick up from the 5% fall in March and most of the week will be Abuzz with month end reports including PMI, inflation and retail sales across Europe and the Pacific as Asia’s robust 20% retail sales growth ona smaller base continues to power the global recovery but faces its own challenges

Though most of the Italian dat on the Calendar is retail sales and inflation, that Super Mario would be the more likely candidate for the good news gravy train this week, well on course to take charge of the Recovery engine as Germany keeps fueling Target 2 and keeps its domestic and intra EU exports chugging for a new high in shares of German Economy.

Results Season has proved to be the litmus test that succeeded again with 3 out of 4 companies beating expectations. Amazon, Samsung and Hyundai(Kia) apart, both Delta and US Airways were in the black and upbeat on Q2 flying prospects.  Despite double digit RoE reports from CS, Barclays and Deutsche Bank, the negative effect of stresses on European banks was more than evident and the change in character played up by the FT ( esp between Barclays and Deutsche Bank) may more or less become immaterial as StanChart and HSBC report from a place of pride in the coming week ( HSBC reports on may 8th) thought he Credit Suisse ( and Brady Dougan) recovery on Basel 3 capital charges seems phenomenal in the very least.

 

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