While the economic docket is full with fairly big data events today, we had another record high for the Dow on Wall Street yesterday. The S&P 500 on the other hand, faced headwinds due to a disappointing consumer confidence number, which we predicted yesterday. However, the index did manage somehow to finish marginally higher.
Asian trading session also felt the heat of the political instability among China and Japan and the equity markets closed somewhat mixed.
The main focus for traders during the European session will be the Q3 GDP reading for the UK’s economy which is due at 09:30 GMT. I am not expecting any kind of a massive surprise in this reading and it is more than likely that reading of 0.8% could be confirmed, once the data is released. The important thing to focus in this reading will be the amount of export which is driven by this quarter’s growth, and how the private consumption have been over this quarter.
If we do want to see this recovery continue in the next quarter for the UK, then we must see the amount of government spending reducing on one hand, and the investment needs increasing on the other hand. Back in Europe, the fundamental problem which is the unemployment rate would be reminded again to investors when the data will be released later this week.
On the other side of the Atlantic, unemployment claims data for the US will be released earlier than normal, which is due to the Thanksgiving holiday which starts tomorrow. The data will be released at 13:30 GMT and the expectations are for 331K.
Yesterday’s data- consumer confidence, clearly testified, that the economic data is still coming patchy therefore, the expectations for the October reading of the durable goods numbers is also expected to be on a weaker side with the final reading of 1.9% which is much lower as compared to the September reading of 3.7%.
Investors were stunned last month when we had the reading of 65.9 for the Chicago PMI which was well above the expectations of 55.1 and many thought that Chicago avoided the curse of the government shutdown, as the reading was at its highest level in nearly 30 years. But, this reading has been revised lower this month and the expectations are for 60.6.
Certainly a good number would further fuel the December taper talk and a weak number could subdue it.