The Weekend Wrap-up 7.23.11

Americas:

• Good news from Brussels sent US indices up for the week with the Dow up 2% and the S&P as well as the NASDAQ up 4%.

• Corporate earnings were also good and showed signs of business expansion, offshore earnings look to grow steadily over the next few quarters.

• Manufacturing and Construction sectors have bounced back with Philly Manufacturing figures as well as US Housing starts posting gains. Good news for the economy.

• It wasn’t all good though, Boehner walking out of the deficit talks leaves us without a debt deal with only a few days left until we run out of money. Jobless claims have risen, while home purchase applications as well as existing home sales have declined.

• NY Fed VP Brian Sack revealed the other day that the SOMA portfolio (The Treasuries they bought through QE, just a small position of roughly $2.7 Trillion), is now under significant duration risk, making it very sensitive to movements in interest rates. Another round of market rigging anyone?

• The Bank of Canada kept lending rates steady but was hawkish on things going forward, Brazil on the other hand raised rates again by 25 bps to 12.50% - Damn. As noted before, Brazilian banks have been very generous with credit lately so if inflation keeps up, things might get interesting down there in the near future.

Europe:

• The Greek bailout pushed European indices higher this week with the FTSE, the DAX, the CAC, and the IBEX all up around 1%. The Euro also staged a rally but quickly lost steam as traders digested what the whole deal was about.

• Eurozone industrials also picked up, with new orders growing at its fastest since last year. Manufacturing and Services however have fallen to their lowest.

• The EFSF (European Financial Stability Facility) has been modified to some weird bailout/printing press platform which raises more questions than answers. Nevertheless, it will definitely ease the current burdens of the peripherals but the question still remains: who will guarantee all these funding?

Asia:

• Asian markets were also solid with the Nikkei up 1.3%, the ASX up 1.1%, same with the Kospi, while the TAIEX, the Hang Seng, and Shanghai were all up 0.6%, 1.7%, and 0.5% respectively.

• The Yen tested 78.50 the other day, indicating that the BoJ really doesn’t have any plans to intervene or weaken the Yen just yet. Either way, things are looking up for Japan as they’ve recently posted a trade surplus, suggesting that their economy is finally recovering and should bounce back within the year.

• China PMI fell 50 points and despite Premiere Wu’s claims of conquering inflation, further tightening is sure to come. Their Ministry of Commerce also commented that Chinese export growth will slow down soon.

• The Indian Finance Ministry released another hawkish statement regarding inflation.

• ASEAN Sec-Gen expressed that Asian nations are working toward integrating their economies. Sigh.

And that’s it, here’s my clip of the week:

Enjoy your weekend WSO.