The S&P 500 erased its gains for December on the last day of 2014, as soft economic data brought greater uncertainty over America’s economic recovery.
The index of American stocks fell 1% by the end of trading, ending the year up over 11%, while the Dow Jones Industrial large-cap index lost 0.9%. Volumes were 25% below recent averages, indicating light activity in the market.
The US dollar is trading with a slightly heavier bias as the last minute position adjustment takes a toll. The dollar-bloc and Scandi’s are doing somewhat better and sterling is a few ticks higher, while the euro and yen are straddling yesterday’s closing levels in moribund activity. Several markets in Asia, including Japan and Korea, and Europe, like Germany, Italy, Switzerland, and Sweden for closed today for the holiday.
China’s wine industry has exploded in recent years, with the number of wineries more than doubling over the past decade, propelling the country past Australia to become the world’s 7th-largest producer. What is driving this fast-paced growth and is the quality of Chinese wine improving?
As we count down the days and now the hours towards the beginning of 2015, what preoccupies most soothsayers of the outlook for the global economy in the coming year is the shape of the Chinese economy. Nudging the United States as the world’s biggest economy in real terms — measured in purchasing power parity it already accounts for 16 per cent of global output — anxiety about how long its growth rate, at more than twice the global average, might continue at this pace is on the rise.
George Orwell once observed ‘Whoever is winning at the moment will always seem to be invincible’. Not long ago, many in the West declared that China would soon be the number one economy in the world.
But in the past two years, many in the West have begun to see the writing on the wall. Labour unrest, the growing housing bubble, shadow banking, rising local government debt, and overcapacity all point to one thing: the coming collapse of the Chinese economy.
The failure of Greek Prime Minister Samaras to secure sufficient votes in the third and final parliamentary attempt to select a new president has sparked a sell-off in European stocks and peripheral bonds. Up until now, the contagion from Greece has been remarkably limited. Perhaps the thin holiday markets have exaggerated the knock-on effects. At the same time, the fear that the Greek election will morph a Greek exit from monetary union is palpable.
We identify six key issues for investors in the holiday-shortened week ahead.
Statistics suggest that Sydney may be holding up the entire Australian economy once again, after contributing approximately 40% of the country’s growth during the last financial year. In 2013-2014, the economy of greater Sydney experienced an expansion of 4.3%, its fastest rate of growth in fourteen years according to a report on the economic performance of Australian cities.
In thin trading conditions, the major currencies are little changed. The euro is straddling the $1.22 area. It has held above the low seen earlier this week near $1.2165. Since the low, the reaction high has been limited to the $1.2250 area. For the third consecutive session, the dollar held above the JPY120 level. It had reached a high earlier this week near JPY120.80.
2014 witnessed slow growth in the world economy. It tested economies of emerging markets and advanced economies. Economies like Eurozone, Japan and Russia saw some major financial shocks. On the other hand, when compared to 2013, advanced countries like USA improved their growth and raised their employment rate. India and China performed better than their counterparts when it came to emerging and developing markets. The last quarter of 2014 saw a lot of market fluctuations and some were big enough to question the strength of the concerned economies.
