This month has been quite interesting. The US ISM came in below 50 again against expectations of a figure above 50 whilst simultaneously the Non-Farm Payrolls data smashed estimates which saw equity markets rally on that particular day. In addition Housing starts and building permits beat expectations. Attached below is a snapshot of figures for this data from Bloomberg. This has led to many portfolios with positive themes with regards to a housing recovery in the US and the potential of going long US Housing stocks.
In the meantime the big question on investors' minds is whether Ben Bernanke is going to pump liquidity into the system by following through with the much anticipated QE3. There will be a keen eye on the Jackson Hole summit where the Fed Chairman, Ben Bernanke will be speaking and professionals will be looking at the rhetoric and signs of any additional stimulus to the financial system. Given that the unemployment rate has been stubborn for a while, the attention to this summit is particularly high. If comments suggest additional QE we know what is likely to happen given the effects of QE2. Let's see if markets are disappointed or excited?
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