Wednesday, 29 January 2014

Weird economic data in the US, malaise in Europe and a Chinese crowd buying gold

Yesterday (Tuesday) was an unusual economic data day.  US durable goods were messy and I note the year-on-year change was just 0.1%.  Watching the absolute size of the new orders book also worthwhile too. 

Official consumer confidence data was strong but I noted this short-term Gallup survey.  Did the worst week on the S&P in the last 18 months really have this impact?  What would happen in a real pullback?

European consumer confidence data was generally written up by the financial press as positive.  Sequentially, in France and Italy, this may have been so, but I am focused on the bigger picture.  Look at the structurally low levels of consumer confidence in France on a 40 year view. 

And this different world in Europe is reflected in the current low inflation and lack of impact of the - to date - base money expansion (aka QE) by the ECB.  This great chart from the ECB themselves nicely captures the current challenge.

And finally, the inevitable near Chinese New Year crowd photo.  A queue for train tickets?  The shop counter at a specialist seasonal food stall?  No...the crowd are buying/looking at gold barsWhat China buys, you should buy.

(h/t @missXQ)

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