The Banking and Strategy Initiative

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US Morning Report: Depressed Prices, Jobless claims makes news again

Sheryl Sandberg

Sheryl Sandberg (Photo credit: jdlasica)

Import Prices are now down 2.7% on year after they first breached the zero line in May ever so slightly. Export prices are similarly depressed by 2.1% on year. However on the back of higher consumer credit offtake in May the first piece of good news in two weeks of July has been that Seasonally adjusted Jobless claims are down to 350,000  and continuing claims at 3.304 M also lower by 6000 over previous week. Last week’s claims could have been a flash in the pan but with even continuing claims ticking below the moving average it looks like good news is here for the rest of 2012 at least. ADP Payrolls had thrown a positive data series point for June but the BLS reported otherwise an dAmerican markets have been edgy thru the month

Meanwhile in China money supply ticked up to above 13% and the Russian trade surplus for June was not so bad either. India’s outsourcing companies produced mixed results, Infy, engendering a 10% intra day fall after it broke the mould to produce a Sales number that grew in Rupee terms but shrank more tha n a percent in Dollar terms. Infy guidance may be muted but TCS added one European clearing house, Two Chinese banks, one North American retailer and 25 other new clients to grow Dollar revenues by 3% in the quarter over April reports to gro to $2.7B sequentially. TCS also reported a 27% OP Margin and a NPAT of 22.5% for INR 148 B in Sales and INR 48B in op profit growing 15% and 14.6% in Rupee terms

Outsourcing Law becomes a reality soon as country based restrictions go away for Visas as also Tax Benefits for outsourcing are replace by those for onsourcing. At Idaho Sheryl Sandberg took in more media attention than the Sun and those taking in the sun on the networks incl. Warren Buffet had not much to talk about except the crisis of governance and really none of them are preparing ofr a political career so are happy just brushing the politicians. If Mario Monti cut any deals before he leaves Italy to the politicians, it did not show up in the newsflow. Sit by and see the destroyed US economy heating up the Dollar index charts till QE becomes real???

US Dow Jones futures are down 80 points to below 12460 on the FOMC minutes, traders torn asunder by the lack of understanding from the Fed to a QE. The December Fiscal cliff for the USA is however going to be stone alled by a weaker Euro as International trade continues growing and printing US Dollars seems to have no downside in the increasing Debt ceiling.

Nothing new happened at Sun Valley either while the Budget Deficit data from the US is next aexpected to come down to $75B in May. The Euro got closer to its $1.19 support and the Pound Sterling continues its march up French and German  inflation data were deflated at 0.0% and -1% (WPI) while Greek unemployment rate grew further to 22.5% However, Italian 12 mo BOTs had a happy ending at the auction with a 2.7% yield, more than 120 basis points south from nearly 4% last month. Australians could be looking at more weakness with hopes from china converting into no real good news and the Jobless rate up to 5.2%

 

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