Photo: Societe Generale
This week actually turned out to be a pretty busy one.It started off with China telling us it grew at a 7.4 per cent rate in Q3, which reassured everyone that the world’s second largest economy wasn’t heading for a hard economic landing.
A series of housing data gave many confidence that the market’s bottom was behind it.
Meanwhile, Q3 earnings season hit a crescendo on Thursday when Google’s earnings announcement was accidentally released early.
The best minds in finance were out analysing all of it this week.
'We think the position of German Chancellor, Angela Merkel, with respect to Grexit, has shifted recently as the German elections are getting closer (September 2013, most likely) and she fears the negative economic repercussions of an event like Grexit on her chances of reelection.'
'We made a caustic remark a while back that it would be reasonable to assume that Canada will experience a surge in the birth rate come summer and fall of next year. I mean...it stands to reason.'
'According to our (2009) metrics, the aftermath of the US financial crisis has been quite typical of post-war systemic financial crises around the globe,' they wrote. 'If one really wants to focus just on United States systemic financial crises, then the recent recovery looks positively brisk.'
'During QE1 & QE2 wholesale gasoline prices jumped 30% and 37%, respectively, and the Goldman Sachs Commodity Food Index (GSCI-Food) rose 7% and 22%, respectively. From the time the press reported that the Fed was moving toward QE3, both gasoline and the GSCI Food index jumped by 19%, through the end of the 3rd quarter.'
YARDENI: I Think I've Figured Out What's In ECRI's Top Secret Index, And They're NOT Signaling Recessions
'My strong suspicion is that the ECRI-WLI includes two rather volatile financial variables, namely the S&P 500 and the yield spread between high-yield corporate bonds and 10-year Treasuries. Sure enough, it is highly correlated with the former as well as the inverse of the latter. In other words, the ECRI-WLI is providing the same information as can be gleaned gratis from these two financial variables. Neither one is signaling that a recession is imminent.'
Citi Has Invented A New Measure Of Misery And It's Incredibly Accurate At Predicting The Stock Market
He believes a better indicator of financial well being is the cumulative total of the year-over-year change in the unemployment rate and those enrolled in the supplemental nutrition assistance program (SNAP):
'Rising unemployment can be depressing but receiving supplemental support for basic food can be even more debilitating. Thus, combining the two may provide a better sense of general economic satisfaction.'
'The exceptionally strong surge in residential construction activity and building permits approval in September has caused us to question whether homebuilding activity is beginning to edge too far ahead of the market's capacity to absorb the new supply,' wrote Mulraine. 'Particularly given the current weak economic outlook in the medium term.'