World economic reports (June 19-26): seeing some light...really!

Friday, June 26, 2009

Glimmers of hope are starting to emerge in the hard data. Exports in Asia are forming a more decided bottom; but since the trough is -20% to -30% off over the year, the recovery may be a long haul (or it may not). By some measures, home values in the UK and the US are showing signs of stabilization, as the annual pace of decline slows. German business sentiment continues its ascent, moving past its 1993 low! In contrast, inflation maintains its steady descent; Japan is hard hit.

Overall, the global economy is finding its footing on the path toward stabilization.

Exports in Asia: looking a little better, but still WAY down over the year!

UK and US home values: signs of hope? Yes and no.

The US measure, the Federal Housing Finance Agency (used to be OFHEO) includes only conforming mortgage homes; and therefore, it doesn't capture the full market (there are other measures of home values, i.e., the S&P Case Shiller indices, that do not signal such a decided stabilization in home values). This is a weak market; and with foreclosures persisting and inventories high, prices are likely to fall a bit further.

According to the Ifo Institute for Economic Research, German business sentiment saw its fourth monthly gain! Here is an excerpt from the release:

The brightening was solely the result of the firms’ expectations – the pessimism of the survey participants with regard to the six-month business outlook has again weakened. Their dissatisfaction with the current business situation is just as strong as it was in May. The survey results confirm that the German economy is gradually stabilising.

Inflation remains in (or is nearing) the red for Singapore, Hong Kong, and poor Japan.

The global economy this week: looks a little brighter but still bad.

Rebecca Wilder


Anonymous June 26, 2009 at 9:39 AM  

Your optimistic chirpings based on little data and second derivatives is tiresome.

Rebecca Wilder June 26, 2009 at 10:24 AM  

So how do you really feel, Anonymous?

It's weekly data! I only post what came out for the week; some weeks are more comprehensive than others. And furthermore, I call it as I see it - you want pessimism, perhaps there is another website out there that is better suited for your subjectively pessimistic tastes.

Thanks for commenting, Rebecca

Anonymous June 26, 2009 at 11:59 AM  

Not seeking pessimism, just facts. Like:Japan's exports fell at a faster pace in May, extending the nation's deepest trade slump since World War II.

Shipments abroad dropped 40.9 per cent from a year earlier, more than April's 39.1 per cent decline

And:Global top exporter sees sliding exports in first quarter 2009-06-23 16:47:24 Print

BERLIN, June 23 (Xinhua) -- Germany has seen sliding volume of exports in the first quarter of this year, signaling that the world's top exporter was still being ravaged by global economic downturn.

Also:Price-cutting in Japan points to repeat of deflation misery
12:30 AM, June 26, 2009
Japan, which showed the world how awful a sustained bout of deflation can be, may be heading back into that vortex.

The country’s main index of consumer prices dropped 1.1% in May from a year earlier, the biggest decline since 2002, the government said Friday.

Also:Redbook: US Retail Sales -4.4% First 3 Weeks June Vs May
Tue, Jun 23 2009, 12:55 GMT

Redbook: US Retail Sales -4.4% First 3 Weeks June Vs May

NEW YORK (Dow Jones)--National chain store sales fell 4.4% in the first three weeks of June versus the previous month, according to Redbook Research's latest indicator of national retail sales released Tuesday.

The latest numbers are starkly different from recent weeks because they don't include Wal-Mart Stores Inc. (WMT), which said last month it would no longer provide monthly sales figures.

The fall in the index was compared to a targeted 4.1% drop.

The Johnson Redbook Index also showed seasonally adjusted sales in the period were down 4.5% compared with June 2008, against a targeted 4.2% fall.

If I want to hear "green shoots flava" chirpings from sell siders and their economists/employees, I'd watch CNBS

Rebecca Wilder June 26, 2009 at 12:05 PM  

Redbook? I'll wait for the monthly retail sales report.

Japan exports and inflation - both included in my article above, with no rosy picture.

"Exports in Asia: looking a little better, but still WAY down over the year!" (which includes Japan's May report)

You are right, there are very different interpretations. Still contracting, but not as quickly is consistent with all of the releases to which you refer.

Thank you for your interpretations.


victorberry June 27, 2009 at 7:09 AM  

"Anonymous" sounds like a perma-bear who was/is caught on the wrong side of trades by the current bear market rally. Like perma-bulls trapped on the slope of hope, the perma-bears are now trapped on the wall of worry.

When the likes of Steve Leuthold and Lakshman Achuthan turn somewhat bullish (not to mention fund managers with billions in AUM), retail investors should take notice.

As far as the perma-bears' much ballyhooed and hoped for retest of the March low, consider this possibility: What if the March low was a retest of the November low? If so, the perma-bears may be holding dead money until the next Republican president is elected. Maybe perma-bulls are not the only ones who employ the much derided buy-and-hold strategy.

P.S. I'm a small-time, novice retail investor who hasn't made a dime from all the stock market gyrations in the last year, so my commentary is more than suspect.

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