Markets Trading Higher After Chinese Inflation Figures And USA Retail Data

Last week ended in a high with consumer sentiment in the USA unexpectedly at its highest level in five years. Encouraging economic signs also came from banks which had saved aside less money to protect they mortgage lending business. Properties in the USA have been slightly recovering.

European markets are currently positive as inflation growth in China decreased from 2 percent to 1.9 percent. Markets expect that China’s economy will soon turn a corner, but the corner might be still a few 100 meters away as the Chinese government ask major coal producers to have an annual output below 4 percent, demand for power generation and prices has recently been in decline. The move will help the industry to be more sustainable until consumer demand increases again.  In China consumer confidence index, compiled by the Xinhua News Agency and China UnionPay, a national bank card association, dropped 0.41 point from August and 0.54 point year on year to 85.8 points in September.

The Hang Seng ended flat with a small gain of 11.82 points to 21148.25.

In the US, Wall Street is pointing to a higher start. At the moment is aiming to open around 50 point higher. It seem that China inflation news and data retail data released this morning in the US will push the market higher.

Retail sales increased for a second consecutive month by 1.1 percent. September 2012 retail and food services sales were $412.9 billion, up  from the previous month and up 5.4 percent from one year earlier. Excluding autos, retail and food services sales in September were $337.4 billion, up 1.1 percent from August and up 4.8 percent from September 2011

Retail sales are an important indicator followed by the market because  consumer spending accounts for nearly a third of economic activity. A strong retail figure is bullish for the stock market and specially companies involve in the retail industry.  In the contrary bonds market dislike strong retails figures, therefore it is a bearish news for this bond market.


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