QE3 hopes drive global markets( 10 Sept-14 Sept)


News

The Federal Reserve’s plans for quantitative easing proved to be the biggest driver of markets last week. In the US, the S&P500 index was pushed to its highest levels since 2007, gaining 1.9% for the week. The Stoxx Europe 600 index closed out the week with a 1.3% gain, a -15 month high and the MSCI Asia Pacific Index advanced 3.8%. Brent Crudesettled at $116.66 after gaining 2.1% for the week.

Views

While Austerity measures in Europe look to decrease Social Welfare , across the rest of Asia the welfare state has started to flower.

An interesting article explores the inner workings of the Chinese stock market. Heavily manipulated by the state, it is highly unaffected by market sentiment, a fact that can work to its detriment.

Oil prices have been driven up by speculators, Saudi Arabia accuses. However this isn’t stopping the hike in energy prices that resulted out of geopolitical concern surrounding the US’ vendetta against Iran. Even though supply levels have remained the same, speculation has driven prices higher.

The impact of coal crisis on developing nations like India and China.

Other views

College is still a great investment. But it’s getting worse.

Even Inside Microsoft, Users Rarely “Bing It” 

Speculation hopes fuel markets (3 Sept– 31 Sept)

News

US stocks rose on speculation of stimulus with the S&P 500 index rising 2.2% to the highest since 2008. Similar expectations contributed to the rise of European markets with the Stoxx 600 index advancing slightly by 2.3%. China’s stimulus measures and the EU’s announced bond buying program spurred Asia’s benchmark MSCI Asia Pacific index to a 1.1% gain, its first in 3 weeks. Brent crude slipped just 32 cents for the week.

Views

The Dynamics in the global oil market are changing with Iraq fast becoming a leading producer.

Soybean prices have been soaring while the world has been looking elsewhere. Soybean prices affect animal feed prices and thereby will affect food inflation in developing countries

An interesting article from a large global fund speaks of the need for emerging markets to be focused more on domestic sources for growth, given the volatile conditions of most traditional export markets.

Technological change and consumer preferences could be driving manufacturing away from developing markets and back into the developed West, a very relevant article asks how.

An interesting article examining the dynamics of the Bhutan, China and India Triangle.

Other Views:

The global debt clock – Our interactive overview of government debt across the planet

The Pipette Weekly (27 Aug – 31 Aug)

Markets respond to slowing global economic recovery
News
The S&P 500 fell 0.5% as slowing global economic recovery overshadowed speculations that the Federal Reserve may introduce new stimulus measures while the Stoxx Europe 600 added 0.5% after the positive remarks by the chairman of the Federal Reserve. The MSCI Asia Pacific Index slipped 2.1% as reports from Japan, China and South Korea signaled a deepening economic slowdown. US crude oil rose 0.7% after a volatile trading week.


Views

The lesser known emerging markets such as Indonesia and Poland who quite possibly could significantly challenge the domain of the BRICs.

Is the Chinese economy due for a hard landing? Not necessarily

 An article looks at Europe’s 4% Solution

Problems in China, it’s internal political division and it’s impact on policy

An article takes a look at Libor’s Trillion-Dollar Question

The Pipette Weekly (20 Aug – 24 Aug)

News

The S&P 500 rose 0.7% on positive comments from the Chairman of the Federal Reserve while Stoxx Europe 600 Index (SXXP) dropped 1.8% as Greece’s prime minister asked for a two-year reprieve from cutting government spending. MSCI Asia Pacific Index (MXAP) slid 0.4% on signs of slow growth in the two largest economies in the world and concern over the Euro zone. Brent crude fell 12 cents after reports that IEA is likely to tap strategic oil reserves as soon as September.

Views

What is the risk of escalating tensions in the Middle East contributing to higher oil prices especially given India’s dependence on Iranian oil?

Floating rouble could bring equity investors rich rewards

Vietnam is experiencing doubtful growth prospects with an emerging slump in its urban real estate sector.

Africa’s fast-growing middle class has money to spend while Emerging Markets are experiencing increasingly empty shopping malls.

According to the ADB, Myanmar Economy May See Annual 8% Growth for a decade

The Pipette Weekly (13 Aug – 17 Aug)

News

The S&P 500 index rose by 0.9% for the week on optimistic expectations from Europe while the European Stoxx 600 climbed 0.6% to a 13 month high. The MSCI Asia Pacific Index again saw a slight rise (0.2%) based on positive comments from the Chinese premier and expectations of a US recovery. Brent crude pared larger weekly gains and advanced only 75 cents as North Sea output looked to rebound and investors engaged in profit taking.

Views

How can the ‘resource curse’ be turned into a ‘resource blessing’ or how can countries avoid the resource curse altogether? Relevant to Sri Lanka as possible discovery of commercially viable oil reserves loom.

A look at Columbia’s problems amidst the benefits it stands to gain with its US FTA. Throw in natural resources in the mix and you have large internal risks; relevant to Sri Lanka in terms of its trade partnership with India.

Has India‘s ‘growth miracle’ has finally ended?

Wealth and riches haven’t really bought the Chinese a lot of happiness.

The Harvard Business Review on why marketing, as we know it, is dead

Science says vacations and breaks are good for productivity

The Pipette Weekly (03 Aug – 10 Aug)

 

News

Asia’s MSCI Asia Pacific Index rose 3% for the week as better US economic data and Chinese stimulus hopes spurred investor confidence, the S&P 500 also rose slightly by 1.1% on similar hopes. The European Stoxx 600 increased by 1.6% on better than expected corporate earnings and stimulus hopes for the region. Meanwhile, geopolitical concerns and North Sea supply constraints induced Crude oil prices to rise for the week with Brent Crude gaining 3% to end at $112.95 a barrel.

Views

What are the implications of Pakistan’s political instability to regional security? (With nuclear weapons thrown in the mix)

The US drought has begun to affect food prices globally with corn surging 60%, dangerous for Asia and Sri Lanka in particular as it battles the affects of high inflation and economic volatility.

The RBI is unable to use monetary policy to boost the economy due to mismanagement of India’s government finances. Sri Lanka itself faces higher inflation, and questions as to whether it is capable of meeting its deficit reduction targets

Monsoon trouble has seriously affected Indian cotton crops, which will in turn affect cotton prices globally and impact Sri Lanka’s number one export item; garments

Standard Chartered Bank came under a spate of accusations of laundering Iranian money.

The Eurozone still flounders, not a good prospect for near term Sri Lankan exports to the region, meanwhile, ideas for possible solutions to the area’s problems are still being thrown around.

The Big (Global) Business that is the MBA

The Pipette Weekly (30Jul-03 Aug)

News

US Stocks rose for a fourth week on better than forecasted jobs data with the S&P 500 and the Dow Jones rising slightly by 0.4% and 0.2% respectively. European markets also rose on US optimism despite negative sentiments locally, the Stoxx 600 index rallying 2.2% for the week. Asia’s MSCI Asia Pacific Index rose slightly by 0.9%, dropping from higher gains earlier in the week as hopes of European, US and Chinese stimulus measures failed to materialize. Brent crude rose 2.3% and WTI crude rose 1.95% due to escalating geopolitical conditions and positive US jobs data.

Views

Why did India suffer that massive crash in power supply? Corruption, inefficiency and even bad weather conditions all had a role to play, relevant to Sri Lanka in the light if its own recent power problems.

Not a week after the ECB president’s reassuring comments Spanish Bonds crashed again, this time drastically.

China is facing some unexpected BOP trouble due to an increase in Yuan in its system. This in turn is creating a problem in its stimulus plan causing pessimism about its economic prospects to deepen.

A study looks at India’s ‘transfer raj’ or the phenomenon of the mass shuffling and changing of bureaucrats every time a political change occurs; in no way unfamiliar to Sri Lanka.

Capitalism has ‘image problems’ in the US, mainly because of cronyism, state collusion and financial speculation. Relevant to Sri Lanka as it too struggles through much of the same issues in an economic model largely identified as capitalist.

This article argues that ‘peak oil’ as a concept is dead. As more oil reserves become easier to extract as technology improves.

The Economist’s latest Big Mac Index gives interesting perspectives on the relative values of global currencies, in the aftermath of a global ‘currency war’ of sorts.

Economists provide insights into which factors help make countries successful in their bids for Olympic glory.