Week of Aug 9 2013 – Weekly Recap & The Week Ahead
1. China seeks recall of two Abbott infant formula products — MarketWatch, China has asked Abbott Laboratories (ABT) to recall some infant formula products after the New Zealand embassy said that two batches produced by the company could have been tainted by bacteria that can cause botulism.
2. Chinese trade data beats estimates — China’s trade data for July topped expectations and provided evidence that the economy might be stabilizing after over two years of slowing growth. Imports surged 10.9% on year vs expectations of +2.1%, while exports rose 5.1% vs +3%.
3. BOJ leaves monetary policy unchanged — the Bank of Japan (BOJ) has maintained its pledge to expand the monetary base by ¥60T to ¥70T a year. The BOJ also kept its assessment of the economy unchanged, saying that it’s “starting to recover moderately,” and the bank noted that “inflation expectations appear to be rising.”
4. Japan’s Debt Exceeds 1 Quadrillion Yen — Bloomberg, the country’s outstanding public debt including borrowings reached a record 1,008.6 trillion yen ($10.46 trillion) as of June 30, up 1.7 percent from three months earlier, the finance ministry said in Tokyo. Larger than the economies of Germany, France and the U.K. combined, the amount includes 830.5 trillion yen in government bonds. The world’s heaviest debt burden will weigh on Abe when he decides next month whether to implement a two-step plan to double the tax on consumers in a nation with ballooning welfare costs.
5. AAII Bullish Sentiment — from BIG, according to the weekly survey from American Association of Individual Investors (AAII), bullish sentiment increased from 35.6% up to 39.5%. At this level, even though the S&P 500 is within 1% of an all-time high, bullish sentiment is only one percentage point above its historical average for the current bull market (38.3%).
The week ahead — Economic data from Econoday.com:
