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

27 May, 2014

"Someone who tries to blow out another's oil lamp will set his [own] beard on fire"

– Chinese President Xi Jinping, at a Shanghai conference on regional security (China Daily, May 22 2014)

The week in review...


China manufacturing: Back in the groove? Preliminary private-sector estimates for China's overall manufacturing PMI rose to 49.7 for May, a five-month high, driven by rebounding output and orders. But the measure is still below 50, suggesting that full-on expansion has yet to take place.

China property: Raters finally notice After several months of high-profile challenges for the sector, Moody's revised its outlook for the property industry from neutral to negative, after holding it at "stable" for about a year and a half. But that's not the same as contraction; Moody's forecast is for 0% to 5% year-on-year growth, which is disappointing only in the context of 2013's nearly 27% year-on-year rise in signed sales.

India election: Great expectations Narendra Modi's election victory will be a tough act to follow. Modi's BJP party won an unusual absolute majority of 282 of the 543 seats at stake in the Lok Sabha, India's lower house of parliament, so Modi may face high expectations to rapidly deliver faster economic growth and better conditions for the poor. Markets could be reflecting these expectations; as of Fri May 23, the equity market rose 10.5% since Apr 7, the beginning of the month-long voting period.


UK property: Too much too soon With variable mortgage rates through Apr at a low 4.4%, prices for first-time buyers have reached a record 8X average earnings in the first three months of 2014, according to one mortgage lender. House values are now about 25% higher than the previous peak before the 2008 financial crisis. To stem the tide, the BoE is considering a change in its "Help-to-Buy" program.


US Fed policy: Maneuvering room The most recent notes from the FOMC show the members believe they don't "face a trade-off between its employment and inflation objectives" – in plain language, that there's room to expand aggregate demand without stoking inflation. The notes also show agreement with Fed chair Yellen that the US employment situation remains far from satisfactory, despite improvements.

US housing: Uneven upturn Sales of existing US homes rose 1.3% in Apr to a 4.65 mm annual rate for the first increase in 2014, reflecting better weather and easier pricing. But new residential sales dropped 4.2% year on year. The number of homes for sale jumped 16.8%. But price levels vary drastically from one market to another: one report states that a "good house" in San Francisco now requires a pre-tax income of $140,000. Even within markets, the spread is wide: the median sale price in Cambridge MA now approaches $600,000 and sales are taking place above asking price, while the median for Massachusetts is still down 9 percent from its pre-recession high.


Signs of the times:

Gain in U.S. Leading Index Points to Second-Quarter Rebound – Bloomberg

China's Gas Deal with Russia Could Benefit Rest of Asia – Wall Street Journal

Japan Trade Deficit Shrinks as Tax Increase Crimps Imports – Bloomberg

Thai Turmoil Exacts Growing Economic Toll – Wall Street Journal

Sources: Bloomberg, Reuters, Wall Street Journal, Financial Times, New York Times, New York Times, China Daily, Boston Globe

...And the week ahead:




Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

May 25





May 26



Ukraine: presidential election
European Union: parliamentary elections
Czech: business, consumer confidence
Egypt: presidential election

Japan: central bank meeting minutes

May 27

Factory and durable goods orders, Case-Shiller housing prices, consumer confidence


South Africa: GDP

Korea: consumer confidence
Hong Kong: trade figures

May 28


Brazil: rate decision, total outstanding loans


China: industrial profits

May 29

GDP, unemployment claims, pending home sales


Russia: gold, foreign reserves

Japan: retail sales
Philippines: GDP

May 30

Personal spending, consumer confidence, Chicago PMI

Colombia: rate decision

Poland: GDP

Japan: consumer prices, industrial output, unemployment
Korea: industrial production

May 31






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

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.

Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis.

The S&P/Case-Shiller Home Price Indices are the leading measures for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions.

The Consumer Price Index (CPI) measures the average change in U.S. consumer prices over time in a fixed market basket of goods and services determined by the U.S. Bureau of Labor Statistics.

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Previous Editions

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


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