Daily Market Color 08/22/2013

Daily Market Color

08/22/2013

Economic Reports & Headlines

Flash composite PMIs for France, Germany and the Eurozone were released today. All the flash reports that were released today accounts for manufacturing and service activity changes in August, relative to July.

Flash reports are estimates that are released ahead of the actual report. The estimates are based off of responses from 85 percent of PMI survey participants. This gives a strong indication of how the final report will turn out. Below are the actual figures versus consensus.

France: Manufacturing 49.7 Vs 50.2, Services 47.7 Vs 49.5

Germany: Manufacturing 52.0 Vs 51.1, Services 52.4 Vs 51.9

Eurozone: Manufacturing 51.3 Vs 50.8, Services 51.0 Vs 50.2

On the domestic front, jobless claims in the US climbed 13k this week. The report missed consensus this week by a modest margin, 336k Vs 329k. However, the four week average declined to 330.5k.

The flash manufacturing PMI in the US beat analysts’ estimates, 53.9 Vs 53.5. August report showed an expansion that marked a five month high, according to Econoday.   

NASDAQ trading was halted today.

Future Reports

Tomorrow we will get a read on growth in two major countries, Germany and Great Britain.

In the US, the government will release their report on New Home Sales.

 

Trades

The FOMC report was released yesterday and markets rallied today. Financial pundits appeared to be mixed in their interpretation of the minutes. Bloomberg stated that the majority of FOMC members are looking to taper. Econoday’s summary of the FOMC’s minutes states that FOMC members are cautious of tapering in the short term. When I looked at the minutes, all I saw was one FOMC member utilizing her vote to voice her desire to taper. Tapering appears to be something that can happen soon, but not as soon as next month. I really like ten year treasury notes. I expect for them to decline in value as the year progresses. In addition to that, I expect the move to accelerate once tapering is announced or when the jobless rate begins to approach 7.0%