Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. Unemployment Claims @ 12.30
WHAT WE’RE WATCHING TODAY
China: Trade Rises Unexpectedly But Analysts Express Caution
China’s exports and imports unexpectedly rose in April, helping leaders halt a slowdown in the world’s second-biggest economy. Overseas shipments increased 0.9 percent from a year earlier while imports gained 0.8 percent, leaving a trade surplus of $18.46 billion. China stocks headed for the biggest gain in four weeks as the figures showed increased signs of improving global expansion. Export gains would reduce the urgency for Communist Party leaders to resort to larger-scale stimulus than railway spending and tax breaks, after first-quarter growth slowed to the weakest pace in six periods. The yuan, which is down about 2.8 percent this year against the U.S. dollar, reversed losses after the figures were revealed to advance 0.1 percent. The benchmark Shanghai Composite Index extended gains, rising 1.1 percent.
Analysts point out that while the numbers are positive, the key is that the momentum should be maintained. Some warn against reading too much into one month of data, especially as the country shifts towards domestic consumption and away from investment-led growth. There are also concerns the trade numbers, which are known to be volatile, could be distorted by fake flows of cash pouring into China. The trade figures do, however, provide valuable insight into the extent of impact to the economy in the rebalancing process.
Gold Drops Below $1,300 Following Yellen Comments; U.S. Stocks Fluctuate
Gold held below $1,300 an ounce after the biggest one-day drop in three weeks on speculation that the U.S. Federal Reserve will further reduce monetary stimulus as the economy recovers. Bullion for immediate delivery traded at $1,290.34 an ounce from $1,289.88 yesterday, when prices sank 1.4 percent, the most since April 15. Gold fell 28 percent in 2013 to end a 12-year rally, on expectations the Fed would scale back asset purchases. Chair Janet Yellen yesterday told U.S. lawmakers that the world’s largest economy still needs stimulus even as data supported the outlook for faster expansion this year. The central bank has announced cuts to bond-buying at each of the past four meetings. Gold has rallied 7.4 percent this year in part as tension in Ukraine spurred haven demand.
Meanwhile, U.S. stocks fluctuated as tech stocks tumbled amid Janet Yellen’s comments. The Standard & Poor’s 500 Index rose as optimism that the Federal Reserve will continue to support the U.S. economy overshadowed a drop in Internet stocks led by Yahoo! and Groupon. The S&P 500 gained 0.6 percent to 1,878.21 yesterday, rebounding after briefly dropping below its average trading level for the past 50 days. Nasdaq slipped 0.3 percent. The Dow Jones Industrial Average climbed 117.52 points to 16,518.54. About 7.1 billion shares changed hands on U.S. exchanges, 6.1 percent above the three-month average.
German Industrial Output Unexpectedly Falls As Growth Slows
German industrial output unexpectedly fell for the first time in five months in a sign that expansion in Europe’s largest economy is slowing. Production, adjusted for seasonal swings, declined 0.5 percent from February, when it gained a revised 0.6 percent. Economists predicted an increase of 0.2 percent. Production rose 3 percent in March from the previous year when adjusted for working days. Factory orders in March fell the most since November 2012 and the Bundesbank has warned that expansion will slow “noticeably” after a very strong first quarter. While the country benefits from ultra-low interest rates as it leads the euro-area recovery from its longest-ever recession, growth is threatened by risks including a slowdown in China and rising tension with Russia. Manufacturing declined 0.4 percent, while consumer-goods output rose 0.5 percent, and intermediate goods production slowed 0.9 percent.
That sums up today’s highlights! Keep in touch via Facebook, Twitter, Google+ and LinkedIn for all the latest trader news. We hope you have a profitable day on the markets.
