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

November 3, 2014

"The US is a big bright spot in the world"

— Economics professor and former New York Fed research director Stephen Ceccetti, on the backdrop for the Fed's decision to end its bond-buying program. (Bloomberg BusinessWeek, October 20, 2014)

The week in review...


US: Estimated optimism GDP for 3Q rose an annualized 3.5% – according to the Commerce Department's first estimate for the period. The figure was better than expected, and after 2Q's 4.6% gain, capped the best six-month growth in over a decade. Contributing factors: rising oil production, which supports manufacturing growth despite a slowdown in demand from China; rising government expenditures, largely from a rebound in defense outlays; and a narrowing trade gap, from $460.4 bn to $409.9 bn, as imports of foreign oil and consumer goods fell.

US Fed: Lonesome dove While the Fed committed to continue its low interest rate policy for a "considerable time", the FOMC's post-meeting press release was newly optimistic about US economic growth – leading some observers to conclude that the FOMC had turned "hawkish", or more willing to consider hiking rates to limit potential future inflation.

Brazil: Beware what you wish for President Dilma Rousseff won re-election with 52% of the vote after a divisive campaign season, and now faces the twin challenges of rampant inflation and sluggish growth, in a political environment filled with charges of corruption and regional favoritism. A possible taste of things to come: the central bank's surprise decision to raise the overnight rate 25 bps to 11.25%, after having left the rate at 11.0% since April.


European banks: Dis-stressed The ECB and the European Banking Authority spent nearly a year assessing the health of 150 banks. The purpose: reassure investors that the banks are in good shape. The results: mostly positive, with 13 banks needing to come up with a total of €9.5 bn ($12 bn) in extra capital. Another 12 banks had already taken steps to shore up their balance sheets since the end of 2013, the cutoff date for the examination. The premise of the "stress test": Europe's economy falling 7% below forecasts and unemployment rising to 13%.


Growth: Just in time for the next blow? To boost the economy, the Bank of Japan (BoJ) expanded its record-breaking stimulus program to 80 tn yen ($724 bn). Industrial production rose 2.7% in Sept from Aug, beating the 2.2% median estimate – trimming the decline for the full quarter to 1.9%, following 2Q's 3.8% drop. Both the BoJ boost and the production pickup are considered supportive of the planned second annual hike in taxes this coming April. After the economic contraction caused by the first tax increase this past April, Prime Minister Shinzo Abe may find it difficult to follow through – especially given the country's now heightened need to cut its debt burden – the world's largest.

Signs of the times:

China Backs Growth in Housing Again as Slowdown Prompts U-Turn – Bloomberg

UK Housing Loses Momentum With Price Growth at 9-Month Low – Bloomberg

France, Italy Escape EU Reprimand on 2015 Budgets – Europe Online

Italians Protest Against PM Renzi's Contested Labor Reforms – Deutsche Welle

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, Deutsche Welle, Latin American Herald Tribune (Venezuela), Europe Online.

...And the week ahead:




Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Nov 2

New York City Marathon




Nov 3

Manufacturing growth


UK: mfg PMI

China: non-mfg PMI, mfg PMI
Hong Kong: retail sales

Nov 4

Factory orders, trade balance
Congressional mid-term elections, governors' elections for 36 of 50 states

Brazil: industrial production

European Commission: economic forecasts

S. Korea: consumer prices

Nov 5

Service industries growth
ADP employment


Eurozone, UK: services PMI
Portugal: unemployment

Japan: wage data, monetary base
China: composite and services PMI

Nov 6

Initial jobless claims, job cuts


ECB: rate decision
UK: rate decision, industrial production
Germany: factory orders
Russia: composite PMI


Nov 7

Monthly jobs report,
consumer credit,
Detroit bankruptcy decision


Germany, France: industrial production
Swiss: foreign currency reserves

Hong Kong: foreign exchange reserves

Nov 8




China: trade data


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.

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.

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The European Central Bank (ECB) is responsible for the monetary system of the European Union (EU) and the euro currency.

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Previous Editions

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


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

Previous month Poll

Go for growth: Where will a global recovery be strongest this year?

Europe, as countries emerge from bailouts
US, as consumers regain optimism
Japan, as stimulus programs begin to bear fruit
China, as reform and pro-growth policies continue