EUROPE ON THE UPSWING
Industrial production up by 1.5% in euro area
In November 2016 compared with October 2016, seasonally adjusted industrial production rose by 1.5% in the euro area (EA19) and by 1.6% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In October 2016 industrial production rose by 0.1% in the euro area, while it fell by 0.1% in the EU28.
In November 2016 compared with November 2015, industrial production increased by 3.2% in the euro area and by 3.1% in the EU28.
Spotty but clearly moving up strongly.
- Labor demand is improving. (The Daily Shot)
Source: Credit Suisse, @NickatFP, @joshdigga
- And inflation has returned.
China December Exports Tumble Sharply Chinese exports fell sharply owing to weak demand in many major markets, and the country is bracing for further difficulties this year given the prospect of a more protectionist Trump administration.
Exports slipped 6.1% in December from a year earlier compared with a 0.1% gain in November, China’s customs administration said Friday. December’s decline was steeper than the drop of 3% that was the median estimate of 11 economists polled by The Wall Street Journal. It also made December the eighth month out of the past nine in which exports fell, with November’s small increase the exception.
Imports in December rose 3.1% from a year earlier, roughly in line with expectations, compared with a 6.7% gain in November. China’s trade surplus narrowed last month more than expected to $40.82 billion from $44.61 billion in November.
Overall in 2016, exports fell 7.7% and imports declined 5.5%, resulting in an annual trade surplus of $510 billion, below the $594.5 billion trade surplus in 2015.
Chinese exports saw slipping demand across all major regions except the U.S., which saw a 5% increase, according to the customs data. (…)
Ministry of Commerce spokesman Sun Jiwen, a day earlier, cited mounting protectionism as a challenge and said that Beijing will “try all methods†to stabilize trade, including steps to help exporters expand foreign markets and become more competitive. (…)
Forecasters See Upside Risks to Their Economic Outlooks The election of Donald Trump has economic forecasters thinking hard about something that hasn’t been a problem for a while: upside risks. In a Journal survey, 64% of respondents said the risk was to the upside, the highest in over two years.
(…) The average forecast is for GDP growth of 2.4% in 2017 and 2.5% in 2018. That is a 0.2 percentage point increase for 2017 and 0.5 percentage point for 2018.
Forecasts also call for slightly higher inflation and interest rates over the next two years, and a somewhat lower unemployment rate by the end of 2018. The odds of a recession over the next year have declined for six months in a row and are now 16% from as high as 22% last summer, according to survey respondents. (…)
How about that risk to the upside?
Source: @Schuldensuehner (The Daily Shot)
Meanwhile:
Source: @epomboy, @jessefelder (The Daily Shot)
SENTIMENT WATCH
The Market Has Already Started to Dump Trump
Markets responded to Donald Trump’s rambling news conference on Wednesday by dumping Trump. The dollar and pharmaceutical and biotechnology stocks were sold, bonds were bought and stocks once regarded as out of favor with the president-elect outperformed.
This could be taken as a sign that investors prefer their presidents to be presidential. But it was also a confirmation of a move under way in the stock market for more than a month. The post-election Trump rally ran out of steam by mid-December, as hopes of a boom faded. (…)
The case for buying shares now is that the loss of enthusiasm for Mr. Trump within the market is just a pause after a rally driven by hope, while investors wait for signs of how the new president will behave.
The concern is that the U-turn in Trump trades is a signal that the market is already paying more attention to Mr. Trump’s potential negatives, such as attacks by tweet on individual companies, aggressive diplomacy against China and the risk of a trade backlash.
Either way, his news conference certainly didn’t help.
Donald Trump’s Tweets: A Trader’s Dilemma Investors are grappling with Mr. Trump’s visible but capricious social-media presence, which is upending how Wall Street thinks about trading.
(…) The president-elect has tweeted more than 300 times since the election. Excluding media companies, he has called out publicly traded companies by name or product in 18 separate tweets, including Boeing Inc., Ford Motor Co., and United Technologies Corp. unit Carrier Corp.
Big firms haven’t been the only targets. Shares of Rexnord Corp., a maker of bearings and gears with a market capitalization of $2.2 billion, fell as much as 2.5% last month on the first trading day after Mr. Trump took aim at the Milwaukee company’s plans to move jobs to Mexico. Trading volume was double the daily average. (…)
An E*Trade survey earlier this month of more than 900 active investors with at least $10,000 in an online-brokerage account found that three-fifths of those aged 25 to 34 had traded based on a tweet by Mr. Trump. Among those between 35 and 54, 36% had done so, and among those 55 and over, 20% had.
While many large trading firms increasingly depend on electronic algorithms that can be programmed to buy or sell an instant after an economic-data release or corporate-earnings report, the unscripted nature of Mr. Trump’s tweets poses a challenge.
High-speed trading strategies can quickly identify that a stock was referenced in a tweet. But discerning whether the underlying message is bullish, bearish or indifferent presents a significant programming challenge. (…)
TRUMPISMS
Could be the beginning of a lengthy list…’Cause the Donald can swing!
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Trump vs Streep
It’s funny that President-Elect Donald Trump thinks Meryl Streep is “overratedâ€â€”now that she has taken the stage during a nationally televised broadcast to criticize him in an eloquent, impassioned speech that has since inspired both the wrath of Republicans and over $60,000 in donations to the Committee to Protect Journalists. Why is it funny? Because just a year and a half ago—before Trump was elected president and Streep publicly attacked him—Trump actually called her one of his favorite actresses.
In 2015, when asked if there were any actresses that he is particularly fond of, Trump name-checked the Oscar winner.
“Julia Roberts is terrific, and many others,†Trump told The Hollywood Reporter’s Janice Min, before adding, “Meryl Streep is excellent; she’s a fine person, too.†There you have it—in 2015, before she had insulted him, Trump considered Streep to be great, professionally and personally. (Vanity Fair)