Photo: Associated Press
Don’t blame yourself if you missed a few key things this week. Even with one eye on CNBC and the other on your Bloomberg terminal, it’s likely you’d only remember the details emerging from Greece and MF Global.But economic data in the U.S. gave investors some hope, even in the face of lackluster same-store sales.
Across the pond, things turned for the worse as a confluence of issues impacted markets.
Take a gander.
News that Euro members had come to a deal on Greek haircuts and a powerful levered EFSF buttressed markets. But new data pointing to recession largely fell under the radar. The Markit Eurozone Manufacturing Purchasing Managers Index was revised down to 47.1 for October, indicating cutbacks from the regions thousands of manufacturers. Individual countries fared much worse: Spain's figure contracted to 41.8 and Italy contracted to 43.9.
Also, the total number of unemployed people in Germany unexpectedly increased by 10,000, pushing the jobless rate back up to 7%.
China's non-manufacturing index showed expansion slowed in October to 57.7 from 59.3 a month earlier. The country has been hit hard by real estate stagnation, where a gauge measuring activity fell to 48.7, indicating contraction.
Tech and auto companies are seeing supply chains grind to a halt as flooding in Thailand persists. Toyota alone believes it will miss out on 91,000 units as production lines remain idled through November 12. Apple has already warned that hard drive shortages will impact its Mac lineup. Nearly 450 people have died, with bacteria from the flooding has killing two. Officials are concerned that disease could spread from the disaster.
The country committed itself to cutting an additional $5.2 billion from its budget deficit, while raising taxes and slashing spending. 2012 growth was also lowered to just 1.6%, from 2.5% earlier this year. Irish economists are now looking for an even lower 1.2% expansion.
The two financial giants continued to post huge losses as market volatility and other macroeconomic issues presented strong headwinds. Losses totaled $8.5 billion between the two and Freddie had to request an additional $6 billion from the government to cover future loan losses.
Portuguese 2-year yields continued to rise, passing 20% this Friday. That brings it back to highs not seen since July. The country is hoping to renegotiate part of the terms associated with its $107.5 billion bailout from the IMF, sparking fears among investors. New tax hikes could help the country pay down its heavy debt load, but with unemployment expected to climb as high as 13.4% in 2012 it may be difficult to see relief.
October 2011 had the highest weekly carload volume of any month since October 2008. Increases in traffic have been driven by a resurgence in the auto industry. The president of the Association of American Railroads said, 'Higher rail shipments of autos and intermodal are consistent with a potential pickup on the consumer side of our economy.'
President Obama's approval ratings lifted to 47%, as he shifted blame on his failed jobs bill to Republicans in the Senate. The president was also helped by vitriol filled debates as Republicans try to pick their next candidate. Feuding between Perry and Romney heated up, and cast the two as almost un-presidential.
Both retail and auto sales disappointed this month when growth came in below forecasts. Macy's, Costco and Target all came in below expectations, even as they posted same-store sales growth. The same could be said of the Detroit three -- even Chrysler's 27% improvement didn't satisfy investors. Abercrombie and Fitch shares declined more than 20% after it announced that same-store sales at international flagship stores were negative.
Of the slew of earnings announcements this week, there were both compelling and disappointing results. Starbucks blew by expectations as same-store sales posted strong increases. At Estee Lauder, earnings jumped 14% as its luxury unit outperformed. MasterCard blew through expectations as well, as consumers shifted more of their transactions to debit and credit swipes.