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Hi and thank you for joining us for Russell Market Week in Review for the week ending
May 17, 2013. We're coming to you from Russell's world headquarters here in Seattle, WA. I'm
Mark Soupiset and we're joined this week by Rachel Carroll. Rachel, great to have you
back. Thank you very much.
Appreciate your time today. Let's start here in the US. As we're filming this Friday morning,
markets really rallying and on a really good consumer sentiment number. Talk about that
and other good news we've had in the US economy this week.
Right. Consumer sentiment came out just Friday morning, really strong number, highest level
that we've seen in six years, highest since July of 2007 so pre-crisis. Consumers seem
to be feeling pretty good. There was some other good news in the US economy this week.
We saw homebuilder confidence tick up a bit and we also saw a really large decrease in
gas prices. This is kind of a complicated one. The weakness in the global economy has
decreased the demand for oil, which has caused an 8% drop in gas prices in the US. This has
caused the CPI Index to drop .4%; that's the biggest drop we've seen since 2008. So people
have a little bit more money to spend, they're feeling a little better about it. Most of
the major averages are now on track to have their fourth straight week of positive numbers,
we've hit some big highs for both the Dow Jones and S&P this week.
Great news. But it's not all been good news, right? We have had some news that hasn't been
so great certainly here in the US as well. That's right. There were a couple of less
good news points that came out this week. We saw an uptick in jobless claims, they ticked
up 32,000 -- that's the biggest increase we've seen since November. So that kind of weighed
on the economy a bit. The Empire State Manufacturing Survey came out, lower than expected, industrial
production fell a little bit in April so those weighed on the economy as well. The big negative
that we saw yesterday in the markets was that there was some speculation about the Fed starting
to taper the bond buying program. So the San Francisco Fed president came out and he said
-- well, maybe we're going to start tapering the program this summer. And then the Philadelphia
Fed president came out and said -- well, maybe it can start as soon as next month. Now neither
of those two actually vote on the Fed policy but the markets did react and it was a negative,
down Thursday. We've recovered from that today but it'll be interesting to see what happens
when that actually does happen. There's been no policy change yet.
Absolutely. And it's just interesting that we have such a mix of good news and negative
news and it's kind of like the market's picking and choosing what it wants to pay attention
to day-to-day certainly. Let's shift gears and talk about what's going on in Europe where
also we've had somewhat of a mixed bag of news. Talk about what investors should be
paying attention to. So European equities did pretty well, not
quite as well as US equities this week and not quite as well as UK equities, but the
latest ECB Survey that came out showed some slowing in Euro Zone growth. There was actually
good news in Germany. In Germany GDP ticked up to .1%, they got good industrial production
numbers and strong exports, so that was great for Germany. In France, the news was not so
good. In France they fell back into recessionary territory with a .2 decline in GDP. So like
you said, a bit of a mixed bag when it comes to Europe.
I wanted to wrap up in Asia, just get your opinion on some of the news we've seen out
of China in terms of their economic growth. Right. So China has had some weakening in
their economic growth and I think there was maybe a hope by investors that China might
institute some kind of monetary easing or some kind of stimulative growth policy. Well,
this week the Premier came out and said -- nope, even though the markets are facing some uncertainty
and some headwinds, they're just going to let market forces work. So the interesting
thing is that in China they'd like their growth to be at about 7.5%; there is an expectation
it could actually come in lower than that. But most analysts don't expect any kind of
policy easing until we see a slightly more significant slump in growth. China's economy
right now is the weakest it's been in 13 years; that's not great for them. But when you look
at them compared to the other major economies, they're still looking pretty good.
Absolutely, we appreciate your insights as always, thank you for being with us, for taking
us around the world in five minutes, and we appreciate you joining us on Russell Market
Week
in Review. We'll see
you next time.