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Hi and thank you for joining us for Russell Market Week in Review for the week ending
May 31, 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 Mark Eibel. Mark, thanks for being with us.
Always a pleasure. We appreciate your time today. We'll start
here in the US, quite a bit of economic news out this week, truly a mixed bag though. The
market continues to rally a bit on this news; talk about what we're seeing there for starters.
I think mixed bag is a perfect way of putting it. Look at just today; futures were negative
and as we filmed this on Friday morning, the market's a positive. Why? Consumer sentiment
came out positive, Chicago PMI came out positive. If we had filmed this maybe a day or two earlier,
last week I know Erik talked about home prices being up, but this week pending home sales
down a little bit. Initial jobless claims up 10,000 this week. First quarter GDP went
from 2.5 to 2.4. And we could add incomes and consumer spending relatively flat. That
also came out today. What does it mean? It truly means a mixed bag. So I think that's
what you're seeing in these markets and what's been interesting I think this week is the
futures markets haven't been great indicators. Sometimes they've been more positive and the
market trades down; sometimes more negative. Which just shows that every new bit of information
that's coming out right now, markets are moving on it. Today's a perfect example of that.
The big news story we talked about last week was concerns that the US Federal Reserve may
start to taper off its easing and we may see interest rates coming up sooner than people
perhaps thought. Still reacting to that and what -- if any -- impact do you see the economic
news that you were just talking about playing in a mix with that going forward?
I do think those two areas are tied together. I do think markets, particularly in Japan,
are still reacting to the Fed news. What did he say? What didn't he say? What message was
he starting to -- tapering that we all now talk about. Quantitative easing terminology
has now turned into tapering, I think, as things we talk about every single day. But
I think particularly in areas like Japan, which Erik talked about last week, has had
such a sharp rise. That market was looking for a reason to sell off and I think the Fed
-- along with some China news last week -- provided that. So I do think around the globe there's
a little bit of that effect going on. But I think related to really what we want to
know is -- when is the Fed going to move? It's this mixed bag of information that they're
processing. So what does that mean? I don't see us breaking up into that 3% GDP growth
yet because we don't have consistent economic data. What does that mean for the Fed? Probably
means tapering, not until at least the end of this year or the beginning of next year.
Until you get more consistent, yes maybe 75%-80% of the news is positive; as long as it's still
50-50, I think it's later. So I do think those two areas are related. I think reacting to
the Fed news now will slow down and reacting to the economic news -- whether here or around
the world -- is really what's moving markets. And Europe's another example of that. Just
looking at Germany, consumer confidence was up this week, retail sales just came down.
We're negative a little bit. So that mixed bag is going to continue.
It's a mixed bag, not only here but it's a mixed bag around the globe.
If you'd look into your crystal ball a bit now just to wrap up and give us your opinion,
looking at the week ahead, what should investors be paying attention to?
Nothing really on the horizon, with the exception of we will get the May jobs report, that should
come out the end of next week. If that has a two in front of it, 200,000 or higher which
we haven't seen too many of those, that'll probably really reignite again the Fed tapering.
If it's below 200,000 I think it's in that area of -- well, it's just another thing that
the Fed's going to be looking at. I think we continue to look at signs out of China.
China's slowing down. Any signs that they're going to do a little bit more traditional
stimulus, are they really going to be solid on that 7%-7½% growth? Other than that we're
not quite into earnings season yet, so we're going to be pulling for economic information.
We certainly got our dose of it this week; next week might be a little bit calmer. But
all pointing towards that all-important May jobs number which will be coming out.
We'll keep an eye on that. Mark, we appreciate your time as always.
Thank you. Thank you for being with us Mark, and thank
you for being with us for Russell Market Week
in Review.