Despite a bit of good news, there was more bad news from Japan as indicated in its report on Industrial Production for October.
There was more than a little hype resulting from a report released on Friday by Japan’s Ministry of Economy, Trade and Industry, which revealed that the nation’s Industrial Production in October increased 1.8 percent from September’s level. This was the first increase for the Industrial Production Index in four months (NYSEARCA:EWJ). Nevertheless, when you consider the fact that Japan’s Industrial Production Index sank 4.1 percent in September, a 1.8 percent recovery is not such a big deal. Economists had been expecting a further decline of 2 percent. The report actually has the headline, “Industrial Production is on a downward trend”. On a year-over-year basis, Japan’s industrial production is down 4.3 percent. Worse yet, Markit Economics released its Markit/JIMMA Japan Manufacturing PMI for November on Friday and it was not pretty:
After adjusting for seasonal factors, the headline Markit/JMMA Purchasing Managers’ Index(PMI) fell to a 19-month low of 46.5, from a reading of 46.9 in October to indicate a further deterioration in manufacturing operating conditions. The PMI has now posted below the 50.0 no-change mark for six months in succession.
Despite the bad news from Japan, the Nikkei 225 Stock Average advanced 0.48 percent to 9,446 after Japan’s cabinet approved a second round of fiscal stimulus worth 880 billion yen (NYSEARCA:EWJ). EWJ, EMFN: Big ETF Outflows
Germany had some gloomy news after Destatis reported that the nation’s retail sales sank 2.8 percent in October from September’s level. The result was 0.8 percent lower than the total for October of 2011 (NYSEARCA:EWG).
Eurostat reported that unemployment in the Eurozone rose to a new record of 11.7 percent in October, edging out September’s record of 11.6 percent. In the broader, 27-nation European Union, the unemployment rate is 10.7 percent, with nearly 26 million people unemployed. Among the member states, Germany’s unemployment rate was indicated as 5.5 percent; the unemployment rate for Greece was up to 25.4 percent (as of August) and Spain’s unemployment rate was at a whopping 26.2 percent, with the nation’s banking sector set to lay off thousands more in the near future (NYSEARCA:EWP).
Istat announced that Italy’s unemployment rate increased to 11.1 percent in October (NYSEARCA:EWI).
As of 11:20 EST, the Euro STOXX 50 Index advanced 0.01 percent to 2,582 – staying above its 50-day moving average of 2,509 (NYSEARCA:VGK). The FTSE 100 Index crept upward by 0.07 percent to 5,879 (NYSEARCA:EWU). The German DAX Index advanced 0.21 percent to 7,416 (NYSEARCA:EWG). France’s CAC 40 Index slipped 0.05 percent to 3,567 (NYSEARCA:EWQ). Spain’s IBEX 35 Index declined 0.23 percent to 7,945 (NYSEARCA:EWP). Italy’s FTSE MIB Index dipped 0.11 percent to 15,845 (NYSEARCA:EWI). Egypt ETF in Trouble on Political Turmoil
As of 11:28 EST, the euro advanced 0.23 percent against the dollar, trading at $1.3009 (NYSEARCA:FXE).
Spain’s ten-year bond yield declined to 5.31 percent on Friday from Thursday’s closing level of 5.33 percent. Spain’s two-year bond yield rose to 2.85 percent on Friday from Thursday’s closing level of 2.80 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield dropped to 4.52 percent on Friday from Thursday’s closing level of 4.59 percent (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil advanced by 11 cents (0.10 percent) to $110.87/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
In China, stocks obtained a reprieve from their recent downfall after the government announced that it would ease its restrictions on real estate development. The Shanghai Composite Index advanced 0.85 percent to 1,980 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index advanced 0.49 percent to 22,030 (NYSEARCA:EWH).
American stock index futures were relatively unchanged ahead of Friday’s opening bell, as suspense about the budget negotiations kept things on ice. The December 12 Dow Jones Industrials future advanced 0.02 percent to 13,024 as of 9:12 EST. The December 12 S&P 500 future declined 0.05 percent to 1,415 (NYSEARCA:SPY). The December 12 Nasdaq 100 future was flat at 2,680.
Bottom line: There was good news and bad news from Japan, as the nation’s cabinet approved a fiscal stimulus package worth 880 billion yen, following a dismal PMI report and an Industrial Production Index which recovered less than half of September’s decline during October, leaving the index down 4.3 percent on an annual basis.