A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

February 2, 2015

"There will be no duel."

— Newly-appointed Greek Finance Minister Yanis Varoufakis, on his government's intended approach toward negotiations with the European Union on his country's budget and debt (Bloomberg, Jan 28, 2015)

The week in review...


The Fed: Still patient No change in headline policies in the FOMC's most recent statement–but nods toward the impact of declining oil prices on overall inflation, and toward slowly improving employment. Many observers interpret its language as signaling a rate hike in either July or September, but uncertainty about China's slowdown and Europe's troubles are still keeping forecasters guessing.

Employment: Improving, state by state Payrolls in December rose in 41 states, with the unemployment rate falling in 42, as 2014 saw the best full-year US labor market since 1999. North Dakota had the lowest unemployment, at 2.8%, while Mississippi and Washington, D.C. had the highest, at 7.2% and 7.3% respectively.

GDP: Still growing The first estimate for 4Q2014: up an annualized 2.6%, just below forecasts. But personal consumption rose 4.3%, beating estimates. Are falling energy prices helping consumers at the expense of other sectors?

Earnings growth: Devil in the details As of Jan 29, 2015 two hundred nine S&P 500 companies have reported earnings. Overall earnings growth so far has come in at 5.53% quarter over quarter (Q/q), with the energy sector reporting the worst figures – an earnings decline of -17.04% Q/q, reflecting the impact of rapidly-falling oil prices. Several companies with significant operations outside the US have indicated that the strength of the US dollar eroded earnings for the quarter; the trade-weighted dollar rose 4.99% in 4Q14 against the world's other major currencies.


Greece: New job jitters The newly-formed post-election governing coalition was formed within a day of the election, putting an anti-austerity alliance of left and right in power. While new Prime Minister Alexis Tsipras announced his intention "...for Greece and its people to regain their lost dignity," some newly-minted officials made less cautious statements; Deputy Prime Minister Yiannis Dragassakis asked observers to ignore early-days pledges to increase the minimum wage and halt privatizations, noting Greece is in fact "interested in attracting investors."

Switzerland vs. Hungary: Orbanomics Hungarian Prime Minister Viktor Orban is benefitting politically from one of his unorthodox 2011 economic moves. New to borrowing, a significant number of Hungarian owners signed mortgages denominated in Swiss francs over the past few years, on the promise of increased economic stability. When the Swiss National Bank removed its cap on the value of its currency, Hungarian mortgagees could have experienced brutal 20% increases in their monthly obligations as measured in their own currency, the Hungarian forint – but were saved by the policy of putting the foreign-owned banks that wrote the mortgages on the hook for the depreciation. Degrading foreign banks' earnings in favor of local homeowners was a clear political win for the populist Prime Minister. Many Polish property owners also borrowed in Swiss francs, but their government has rejected a rescue plan similar to Hungary's.


Milestone: Renminbi joins the bigs According to Swift, the international currency clearing system, 2.2% of the world's payments were conducted in Chinese renminbi in December, putting it above both the Canadian and Australian dollars for the first time. That places the currency just behind the Japanese yen (2.7%), as well as the British pound and the top-ranked US dollar – which together account for 75% of all transactions. A spokesman for Swift said the latest data confirmed the renminbi's "transition from an 'emerging' to a 'business as usual' payment currency". During 2014, payments in the currency more than doubled from the previous year, and have risen over 360% since the end of 2012.

Signs of the times:

China sees 55% rise in M&A - Business – Chinadaily.com

Shanghai Scraps Growth Target With 'New Normal' Focus on Quality – Bloomberg

German Inflation Rate Is Negative for First Time Since 2009 – Bloomberg

Iraq Oil Surge to Fan OPEC Rivalry That Triggered Slump – Bloomberg

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, Nikkei Asian Review, China Daily, Deutsche Welle

...And the week ahead:




Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Feb 1

Super Bowl (football)



China: manufacturing PMI
S. Korea: trade data

Feb 2

Manufacturing growth, personal spending


Greece: New finance minister visits UK, France finance ministers
UK: manufacturing PMI

Hong Kong: retail sales

Feb 3

Factory orders

Brazil: industrial production


Japan: monetary base

Feb 4

Service industry PMI, employment


Eurozone: services PMIs

Japan: wage data

Feb 5

Unemployment claims, trade balance, job cuts


UK: interest rate decision
Russia: consumer prices
Germany: factory orders

Indonesia: GDP

Feb 6

Monthly jobs, consumer credit


Switzerland: foreign currency reserves
Estonia, Ukraine: consumer prices
Germany: industrial production
Spain: industrial output


Feb 7






Purchasing Managers Indexes (PMI) measure the manufacturing and services sectors in an economy, based on survey data collected from a representative panel of manufacturing and services firms. PMI greater than 50 indicated economic expansion; below 50, contraction.

The Federal Open Market Committee (FOMC) is a policy-making body of the Federal Reserve System (Fed) responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.

Gross Domestic Product (GDP) is an economic statistic which measures the market value of all final goods and services produced within a country in a given period of time.

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Previous Editions

Click on a date to view that week's edition of weekly snapshot.


What would be the best news for markets for the remainder of the year?


What would be the best news for markets for the remainder of the year?

Strong US corporate earnings validate US economic expansion
Strength in the US dollar convinces the Fed to keep short rates low longer
European Central Bank bond buying rekindles growth in European Union countries
Growth in China strong enough to leave room for financial system and structural reform

Previous month Poll

Which Asian country will have the strongest growth in the coming year?

Japan, as Shinzo Abe's policy initiatives take hold
India, as Narendra Modi's new government enacts changes
China, as Xi Jinping's reforms promote a stronger financial sector
South Korea, as President Park Geun-hye's plan to boost growth bears fruit