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International News (Issue 434) – 3 February 2017

Whilst Trump’s phone-call with Turnbull stole all the international headlines this week, there were far more relevant data points released to occupy our minds.

Though China spent the better part of the last week on holiday, we did see the release of manufacturing data for January which continued to show moderate growth.

China spent much of Q4 2016 gradually tightening interest rates, so our expectation is that China’s growth moderates in the coming months.

In the U.S we saw exceptional earnings results from Facebook (FB), good results from Apple (AAPL) and some slightly disappointing results from Amazon (AMZN).

FB post 50%+ annualized sales growth again for the 5th quarter in a row, and now has 1.23 BILLION people using Facebook each day. More interestingly, 93% of those daily users are accessing Facebook via mobile device.

Mobile advertising is now 85% of all advertising revenue for Facebook!

On the economic front in the United States we saw an acceleration in payroll data from the monthly ADP survey, and this points to not only a good number from tonights January non-farm payroll figure, but also to continued wage growth in the months ahead.

Higher wages confirms the markets forward outlook for rising inflation, and seems to suggest market expectations for US interest rate hikes should continue to move from 2 x 0.25% hikes to 3 x 0.25% hikes in calendar 2017.

 

Index Change %
U.S. S&P 500 2281 -16 -0.7%
London’s FTSE 7141 -21 -0.3%
Japan’s Nikkei 18915 -487 -2.5%
Hang Seng 23185 -189 -0.8%
China’s Shanghai 3159

 

 

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