Thursday, March 31, 2011

The trouble with data

Today's initial unemployment claims were a little worse than expected at 388k (but still below the 400k number) but you wouldn't know it by reading the headlines today. Initial claims fall 6,000 - screams a headline on Bloomberg. Claims fall more than expected - shouts a CNBC headline. Here's the problem though, last week the reported number was 382,000 initial claims so claims went up last week right? Nope, last week's data was revised higher by 12,000 claims to 394,000 so while it's technically true that the number of claims fell from last week to this week the total number of claims grew meaningfully but you wouldn't know that if you just breezed through the headlines. I guess if the jobs number tomorrow is light we'll have to blame it on those torrential rain storms that hit the US in March :) ************************************************************* The first meaningful measure of Japanese economic data - the purchasing managers index - tumbled to it's lowest levels since April 2009 (at the bottom of the recession). I've been stunned by the way the global markets have shrugged off the potential impact of the 3rd largest economy in the world entering lock down mode. There was a great clip from a Nova special last night on the major highway connecting Fukushima to Tokyo. There wasn't a car on the road and that will have a ripple effect throughout the global economy. *************************************************************** The European Central Bank has decided not to come to the rescue of the Irish banks and that is sending ripples throughout the global credit markets today. There is talk of large bond selling in France and Italy. Something else to keep our eye on. *************************************************************** Finally, is this a sign of market strength or a sign of the top? Prada to file for IPO with a $10.7 billion valuation. Considering that Japan accounts for 24% of GLOBAL luxury goods sales (more than China, more than the middle east, more than Europe, more than North America) I think this might be a challenging time to sell stock in a luxury goods maker. Cheers!

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