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Mithril Asset management - Weekly Bulletin presented by Square Mile Financial Services
Weekly Finance Bulletin 21st January 2013
The market rally continued last week, with the vast majority of major indices maintaining their lofty levels.
Asia finished the week with strong gains, buoyed by expectation-beating Chinese economic data and Japan in particular further gaining as the Yen hit fresh lows. It was also reported that the Japanese Central Bank would add a further 110 trillion Yen ($110bln) to its asset buying program.
Indeed Japan’s Nikkei powered to a 2.9% weekly close as the Hang Seng added 1.1% and the Shanghai Composite 1.4%. Official Chinese data announced that 4th quarter GDP rose by 7.9% just beating expectation of 7.8%.
In Europe, markets were largely encouraged by news from China, but gave up some of that upside by weak readings from the US consumer, where the University of Michigan-Thomson Reuters gauge tracking US consumer sentiment declined in January, coming in at 71.3 after economists expected a reading of 74.2. Jobless claims however, came in at a 5 year low.
Stateside, it was green numbers across the board. The S&P500 climbed 5.04 points on Friday, or 0.3%, to end at 1,485.98, its highest close since December 2007, leaving it up 1% for the week. The DOW added 1.2% and the Nasdaq laboured to added 0.3% for the week as disappointing numbers from Intel hit the index.
News from Washington provided an adrenaline shot of optimism. House of Representatives will vote next week to authorize a three-month increase in the debt ceiling in order to give Congress time to pass a budget. This solves very little in the long term. Sooner or later Congress and Obama will need to agree on how to reduce the deficit without harming its credit rating.
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