Recap 1-08-14

Commentary:

A few interesting charts I found while catching up:

First, this chart from JPM suggests further gains for stocks that is likely to be in the double digits:

GS thinks corporate profit margins are likely to be stable or even tick higher based on its historical relationship to Core PCE & Unit Labor Costs:

The global growth rate of smartphone user is expected to peak soon – in 2017! How will it affect tech companies?

Notable:

  • US ADP Employment rose to 238k vs 200k exp and 229k prev
  • FOMC Minutes
  1. many participants expressed concern about the deceleration in consumer prices over the past year, and a couple pointed out that a number of other advanced economies were also experiencing very low inflation. Among the costs of very low or declining inflation that were cited were its effects in raising real interest rates and debt burdens. A few participants raised the possibility that recent declines in inflation might suggest that the economic recovery was not as strong as some thought.
  2. A number of participants noted that current market expectations were reasonably well aligned with the Committee’s recent policy communications.
  3. Participants debated the advantages and disadvantages of lowering the unemployment rate threshold provided in the forward guidance… Most were inclined to retain the current thresholds for the unemployment and inflation rates and to instead provide qualitative guidance regarding the Committee’s likely behavior after a threshold was crossed.
  4. A number of members thought that the forward guidance should emphasize the importance of inflation as a factor in their decisions.

EU Unemployment ticked lower to 12.1% as exp vs 12.2% prev

Upcoming Data:

  • Wed: Australia Retail Sales, Building Approvals, China CPI
  • Thu: BoE, ECB, Canada Housing Starts, US Jobless Claims,
  • Fri: US Employment, Canada Employment, USDA Ag report
  • Mon: AU Home Loans, BoC Business Outlook Survey, Japan Eco Watchers Survey
  • Tue: France, CPI, UKPPI, US Retail Sales
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