Week of Aug 24 2013 – Weekly Recap & The Week Ahead
“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.” — George Soros
1. J.P. Morgan Faces New Probe on Energy Trades — the Department of Justice is reportedly investigating JPMorgan (JPM) over whether it manipulated U.S. energy markets. The speculation comes less than a month after the bank agreed to pay $410M to the Federal Energy Regulatory Commission to settle charges related to such manipulation. The latest probe adds to inquiries over the London Whale, metal warehouses and mortgage bonds problems.
2. Moody’s lifts outlook on U.S. states — WSJ, the ratings agency changed its collective outlook on U.S. states to stable from negative, where it has been for the past five years. Credit quality among the 50 states is generally high, Moody’s said, with 30 states rated at triple-A or Aa1, the two highest ratings. Moody stated the slowly recovering economy has helped states’ revenue and reserves.
3. China manufacturing sees surprise rebound — MarketWatch, the “flash” reading of the China manufacturing PMI, compiled by HSBC and Markit, rebounded to a four-month high of 50.1 from a final reading of 47.7 in July, an 11-month low.
A reading below 50 indicates contraction in sector activity, while one above 50 shows growth.
4. Eurozone business growth hits two-year highs — Eurozone flash manufacturing PMI has increased to a 26-month high of 51.3 in August from 50.3 in July and exceeded consensus of 50.8. Services also showed expansion, as did the composite figure.
5. Emerging markets selloff intensifies after Fed — Reuters, after the FOMC minutes released late last week, which caused the recent spike in U.S. debt yields has caused borrowing costs to increase globally, which, along with the rising dollar, has not been healthy for emerging markets with large current account deficits, such as India. The country’s rupee, along with Turkey’s lira, hit new record lows, while the currencies of Indonesia, Malaysia and Thailand dropped to multi-year troughs.
6. Deficit Budget Deal Talk Break-Down — NYTimes, budget talks between the White House and Senate Republicans have gone nowhere since Congress began its summer recess, increasing chances of a fiscal stalemate that could lead to a government shutdown in October or the threat of a government default later in the fall.
7. AAII Bullish Sentiment — from BIG, according to the weekly survey from American Association of Individual Investors (AAII), bullish sentiment dropping to its lowest levels since early 2012.
The week ahead — Economic data from Econoday.com:
Tags: AAII, FOMC Minutes