Richard Cayne at Meyer International in Bangkok comments on the global markets;
U.S. – The U.S. economy shifted into reverse in the first three months of 2014 shrinking by an annualised rate of 1%, official estimates have shown.
It is the worst economic performance for the U.S. since the first quarter of 2011, it is also a significant fall on the 2.6% rise in economic output in the final quarter of last year notes Richard Cayne at Meyer International in Bangkok Thailand.
The U.S. Commerce Department’s first reading of gross domestic product (GDP) showed the economy grew at an annualised rate of just 0.1%.
Japan – Retail sales in Japan fell 4.4% in April, compared with the same period last year, as the effect of an increase in the country’s sales tax began to take effect.
Japan raised the tax from 5% to 8% on 1 April, the first hike in 17 years.
The country faces rising social welfare costs due to an ageing population and is trying to rein in public debt.
Analysts said sales had dropped in part due to consumers rushing to make purchases ahead of the tax rise.
Richard Cayne Meyer comments that trend was evident in March, when sales surged 11%, the fastest pace of growth since March 1997.
Russia – Russian equities have rallied strongly over recent weeks as investors set aside geopolitical tensions to examine the value opportunities in the heavily sold-off market.
The MSCI Russia index has gained 16.75% over the past month, outpacing the 4.29% increase in the wider MSCI Emerging Markets index and well above the MSCI World’s 2.63% advance. Investor sentiment has been boosted by signs of better relations between Russia and Ukraine.
The rally has been beneficial to funds focusing on eastern European equities, according to FE Analytics. Russian portfolios and Indian funds, which were buoyed by an opposition victory in the country’s elections, dominate a ranking of the 25 highest returning funds over the past month.
Middle East – Abu Dhabi’s stock index rose the most since December 2009 this week, as shares in Qatar and the United Arab Emirates gained before next week’s upgrade to ‘emerging markets’ status by MSCI.
The benchmark ADX General Index jumped 5.5% on Thursday, the most among more than 90 gauges tracked by Bloomberg globally. National Bank of Abu Dhabi PJSC, the largest lender in the U.A.E., soared 15%, the most since 2005 and the maximum allowed in a day explains Richard Cayne Meyer.
Stocks are rallying in the Gulf region on speculation the MSCI upgrade will lure investors managing around $8tn in assets.
Emerging Markets – Emerging-market stocks headed for the longest stretch of monthly gains since 2009 this week, as economic stimulus in China, a new government in India and easing political tension in Ukraine attracted foreign investors.
The MSCI Emerging Markets Index lost 0.1%. The gauge has advanced 4.3% this month, headed for the biggest rally since October and a fourth straight gain which is progressive comments Richard Cayne Meyer. The most-active emerging-market exchange-traded fund in the U.S. has attracted a net $4.8bn of inflows in April and May, according to data compiled by Bloomberg.
“We are still optimistic on equities,” Tai Hui, chief Asia market strategist at JPMorgan Asset Management, said in a Bloomberg interview. “We start to see stabilization in China.”
Commodities – Gold futures reached a 16-week low this week, amid speculation that the U.S. will rebound from its winter slowdown.
The American economy contracted for the first time in three years from January through March, a government report on gross domestic product showed. Federal Reserve policy makers said at their April meeting that growth has strengthened after adverse weather took its toll. Fewer Americans than forecast filed applications for unemployment benefits last week.
Bullion tumbled 28% last year on expectations that the Fed would cut debt buying as the economy accelerates. Assets in global exchange-traded funds backed by gold are near the smallest since 2009, and money managers have cut their bets on a rally by about a third since this year’s peak in March.
Richard Cayne Meyer born in Montreal, Quebec Canada resides in Bangkok Thailand and runs the Meyer Group of Companies www.meyerjapan.com. Prior to which he was residing in Tokyo Japan for over 15 years and is currently CEO of Asia Wealth Group Holdings Ltd a London, UK Stock Exchange listed Financial Holdings Company. Richard Cayne has been involved in the wealth management space in Tokyo Japan and has assisted many High Net worth Japanese families create innovative international tax and wealth management planning solutions. http://www.isdx.com/Asia Wealth Group.