Global Angst Eases


The markets were up for the week! In their defense, it was a holiday shortened week with light trading volume… What, too negative?


Nonfarm job openings reached the highest level in 15 years at 5.75M openings[1]. This is a great sign of stabilization in our job markets. This has the unfortunate luck of being viewed as a bad thing. Many people fear this supports the Federal Reserve Board’s (FRB) case to raise rates.

As of right now 28% of investor view a rate hike in September as likely[2]. Should the FRB raise rates with this low of an investor expectation, we could see round 2 of market correction as investor’s price in the hike.

Consumer sentiment in August fell sharply. The loss of sentiment is likely attributable to loss of wealth on the market. There has not been a correction in over 3 years, it is a pain that people have not felt in a while.

Domestic indices across the board did well last week, even with thin trading. They all ended up approximately 2%, and better in the case of NASDAQ. The ride getting there seemed more violent, with heavy moves on Tuesday and Wednesday.


Trade balance for China increased to $60.2B. The most telling factor was that imports slowed tremendously falling by 13.8% in August[3]. This is very indicative of slowing consumption for China.


Junk status… The debt rating for Brazil sovereign debt has officially been downgraded to junk status by S&P. At this point there does not appear to be a bright note for Brazil. They may be looking at prolonged issues until they resolve the scandal with Petrobras, the state owned oil company.


While much of the Eurozone is showing signs of improvement and economic growth, France continues to struggle. Year over year GDP is currently 1.5% for the region however indicators for France put it firmly in a contractionary phase. Last week industrial production for France came in at -0.8% for July[4]. Even with all the stimulus being provided, France has remained the dark spot in the Eurozone… well, there is always Greece…



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[1] www.mfs.com – week in review

[2] www.troweprice.com – weekly market wrap up

[3] www.mfs.com – week in review

[4] www.investing.com – economic calendar