Thursday Morning Cheat Sheet: 3 Stories Moving Markets

Morning Cheat Sheet Main Image

Markets advanced in Asia on Thursday. In Japan, the Nikkei broke a three-day losing streak with a 1.22 percent gain and closed at 14,799.1o following news that the nation’s government may cut corporate taxes; the yen weakened slightly to 98.535 against the dollar. In Hong Kong, the Hang Seng fell 0.36 percent to 23,125.03, and in Shanghai, the Composite fell 1.94 percent to 2,155.81, a two-week low, on speculation that the People’s Bank of China will ramp up money market injections. In India, the Mumbai Sensex edged up 0.19 percent to 19,893.85. In Australia, the ASX All Ordinaries climbed 0.34 percent to 5,288.20.

Major European markets were mixed in midday trading. In the U.K., the FTSE 100 was up 0.07 percent; in Germany, the DAX was off 0.07 percent; in France, the CAC 40 was off 0.24 percent; and the Euronext 100 index was off 0.14 percent. The euro weakened slightly to 0.7407 against the dollar.

U.S. equity markets closed down on Wednesday for the fifth consecutive period, having lost steam following the no-taper announcement last week by the Federal Reserve. Fiscal negotiations and the threat of a government shutdown has helped generate uncertainty. Ahead of the bell, Dow futures were up 0.22 percent, S&P 500 futures were up 0.28 percent, and Nasdaq futures were up 0.52 percent.

Here are three stories to keep an eye on.

1. U.S. Economic Activity

The U.S. Bureau of Economic Analysis reported on Thursday morning that gross domestic product increased at an annual rate of 2.5 percent in the second quarter. The increase was led by gains in personal consumption expenditures and exports, with negative contributions from federal government spending. The price index for domestic purchases increased 0.2 percent, down from 0.3 percent in the previous estimate. Excluding food and energy prices, the price index increased 0.8 percent.

Separately, the Bureau of Labor Statistics reported that initial claims for unemployment insurance fell 5,000 in the week ended September 21 to 305,000. The four-week moving average fell 7,000 to 310,000.

UC 9.21

Source: Data from the U.S. Bureau of Labor Statistics

2. United Kingdom GDP

The Office for National Statistics in the United Kingdom reported on Thursday morning that its final estimate of second-quarter gross domestic product growth was unchanged at +0.7 percent. However, overall GDP growth between the fourth quarter of 2012 and the second quarter of 2013 was revised up from 0.3 percent to 0.4 percent. On the year, GDP grew 1.3 percent. Real (inflation-adjusted) GDP increased 0.4 percent on the quarter. Household final consumption expenditures increased for the seventh consecutive quarter, up 0.3 percent. The household savings ratio was approximately 5.9 percent, up from 4.4 percent in the first quarter.

UK GDP 2Q13 - 2

Source: Data from the U.K. Office for National Statistics

3. The Cheapest States for Retirees

Source: http://www.flickr.com/photos/68751915@N05/

Source: http://www.flickr.com/photos/68751915@N05/

There is no way to hide the fact that the financial collapse of the late 2000s was catastrophic for millions of Americans. The U.S. Treasury has estimated that 8.8 million jobs and $19.2 trillion in household wealth were lost. From the pre-recession peak to its trough, real gross domestic product contracted more than 5 percent, and many economists believe that the crisis has forever altered the growth potential of the U.S. economy.

Beyond broad strokes, the impact of the crisis on Main Street has been hard to quantify, but one area where the crisis struck particularly hard was the capacity of Americans to prepare for retirement. Equities collapsed by as much as 40 percent just as the oldest baby boomers were gearing up to retire, obliterating the retirement savings of millions. Older workers are also often the first to go when layoffs begin, and layoffs were all the rage heading through the turn of the decade.

With baby boomers getting ready to pack it in and head toward retirement, many people are wondering where they are going to want to spend their golden years. This is not only applicable to statisticians or government record keepers, but also to business owners, health care companies, nurses, and doctors. While some are sure to head for the warmth of Southern weather, the coziness of the countryside, or the long sought-after home of their youth, many will be looking to their bank accounts rather than their hearts to determine a final place of residence… (Read more.)

Don’t Miss: The 8 Cheapest States for Retirees