Japan Recession Fails to Smash Stocks
Nikkei Stock Average remains in positive territory despite new Japan recession.
The Nikkei 225 Stock Average managed to advance 0.07 percent to 9,533 despite reports of a new Japan recession. Japan’s Cabinet Office reported that its second estimate of third quarter GDP indicated contraction by 3.5 percent, 
consistent with its first estimate. Because second quarter GDP indicated 0.1 percent contraction, the nation’s economy is now in recession (NYSEARCA:EWJ).
Destatis reported that Germany’s exports rose by 0.3 percent in October, despite expectations for a decline of 0.3 percent. Imports increased by 2.5 percent from September. On a year-over-year basis, exports increased by 10.6 percent and imports increased by 6.0 percent (NYSEARCA:EWG).
In France, the National Institute of Statistics and Economic Studies (INSEE) reported that manufacturing output declined 0.9 percent in October and industrial production as a whole decreased 0.7 percent (NYSEARCA:EWQ). The Bank of France released its November Survey on Industry and Services on Monday. The survey indicated that the business sentiment indicator declined to 91 in November from October’s 92. The Monthly Index of Business Activity (MIBA) indicated that the nation’s GDP is expected to decline 0.1 percent in the fourth quarter.
As of 11:14 EST, the Euro STOXX 50 Index declined 0.18 percent to 2,595 – staying above its 50-day moving average of 2,517 (NYSEARCA:VGK). The FTSE 100 Index advanced 0.13 percent to 5,922 (NYSEARCA:EWU). The German DAX Index advanced 0.18 percent to 7,531 (NYSEARCA:EWG). France’s CAC 40 Index advanced 0.21 percent to 3,613 (NYSEARCA:EWQ). Spain’s IBEX 35 Index fell 0.80 percent to 7,785 (NYSEARCA:EWP). Italy’s FTSE MIB Index took a 2.31 percent nosedive to 15,336 (NYSEARCA:EWI).
As of 11:21 EST, the euro advanced 0.01 percent against the dollar, trading at $1.2928 (NYSEARCA:FXE). EURUSD Weekly Outlook
Spain’s ten-year bond yield increased to 5.55 percent on Monday from Friday’s closing level of 5.44 percent. Spain’s two-year bond yield rose to 3.05 percent on Monday from Friday’s closing level of 2.97 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield spiked to 4.84 percent on Monday from Friday’s closing level of 4.55 percent after the early resignation of Prime Minister Mario Monti as Silvio Berlusconi returned to make another run for the office. The news crushed Italian stock prices (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined by $1.00 (0.94 percent) to $107.17/bbl. (NYSEARCA:BNO, NYSEARCA:USO). How Investors Are Playing “New World Order” in Oil and Gas
December Gold futures advanced by $10.10 (0.59 percent) to $1,714.10 per ounce (NYSEARCA:GLD). Will the Government Confiscate Your Gold?
In China, the nation’s Bureau of National Statistics reported that industrial production jumped 10.1 percent, compared with economists’ expectations of a 9.8 percent advance. Retail sales surged 14.9 percent, slightly edging out expectations for a 14.6 percent increase. The nation’s Customs Bureau reported that exports increased at a less-than-expected rate of 2.9 percent. The Shanghai Composite Index jumped 1.07 percent to 2,083 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index advanced 0.39 percent to 22,276 (NYSEARCA:EWH).
American stock index futures were mixed ahead of Monday’s opening bell as cliff-hanging budget negotiations continued. The December 12 Dow Jones Industrials future advanced 0.01 percent to 13,144 as of 9:14 EST. The December 12 S&P 500 future dipped 0.08 percent to 1,414 (NYSEARCA:SPY). The December 12 Nasdaq 100 future declined 0.17 percent 2,631 (NASDAQ:QQQ).
Bottom line: Japan’s Nikkei 225 Stock Average managed to stay in positive territory on Monday despite the disclosure that the nation’s economy sank into a new recession.
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