Summary for the 20th of May 2019


Japan’s preliminary GDP rose by 0.5% from the fourth quarter 2018 to the first quarter 2019. The market has expected a negative 0.1%. Have in mind, though that this is just a preliminary number. Japan exports have been weak, but they are compensated by weak imports. Domestic demand has been strengthened by an increased in public and housing investments. Even though the first quarter has showed strong numbers, the important indicators of private spending has declined by 0.1% and corporate investment has declined by 0.3%. The recent increase in housing investment in Japan might be due the tax increase, if so, the housing investment will start to declining eventually.

On Thursday (16th of May), the US initial jobless claims have declined by 212 000, this confirms a low unemployment rate also in May. Philadelphia Fed Manufacturing index shows a strong increase in future outlook from April to May, over market expectations. The preliminary consumer sentiment for May, released by the University of Michigan shows an increase from April to May. This indicates that US consumers don’t have much fear about diminishing positive effects from fiscal policy and the consequences of the trade conflict.

On Tuesday, the OECD will publish the Economic Outlook, new assessments for international trade and the consequences of the trade conflict are expected to be mentioned as well as its estimate for the global growth.

Fed’s FOMC Minutes from the meeting in May will be released on Wednesday, and its discussion of the weak inflation growth in the US.
EU area’s preliminary PMI numbers will be released on Thursday.

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