Market Analysis

Movie promises to be interesting

On Friday equity markets frozen in anticipation of the U.S. GDP for the 2 nd quarter. In case of deviation from the real data forecast, we see sharp movements in stock markets. Let's try to analyze what we expect from the data on the economy of America for 2 square meters.

Let's start with the UK, published data on its GDP the previous week. They presented an unpleasant surprise for investors, showing a decline of -0.8% versus expectations of -0.3%. Hopes for a rapid exit the economy of this country of the worst recession did not materialize, even though the emergence of green sprout into a number of predictive indicators.

So, that includes data on U.S. GDP: consumption of goods and services, investment, government spending, balance of trade.

Special attention of investors in the GDP will certainly be drawn to the level of personal consumption of Americans, which currently occupies about 56% of U.S. GDP. Given that America is a net importer of goods and services from these data depends, as the level of potential exports from Europe and Asia, and the reduction of fear in the transfer of interest to Americans of the accumulation. I do not think that this component, we will see good numbers, considering that the unemployment rate in the country continues to grow and is approaching 10%, and the savings rate peaked in the last 14 years is 5.7%. Consumers traditionally cut their spending in order to withstand the worst conditions of the crisis for more than 60 years.

component investment. In the second quarter of American companies have continued to work in the preservation of money, reducing capital and investment. For example, the total amount of loans 15 largest banks in the U.S. declined in the 2 nd quarter to 2.8% quarter /quarter., With more than half of total lending went to previously re-made, not on new loans.

Gosrashody in the United States in the second quarter of continued growth, mainly by raising social benefits. Last June, the budget deficit rose to $ 94.316 billion and reached $ 1.086 trillion.

This component of the U.S. trade balance, perhaps, again play for the benefit of GDP growth. Recall that the U.S. trade deficit in May fell to a minimum since November 1999 and reached $ 25.96 billion last corporate accountability of American companies showed decline in sales volumes and export operations. Therefore, I think that in the 2 nd quarter, we no longer see past the pace of reducing U.S. trade deficits.

Thus, data on U.S. GDP, with the forecast of -1.5%, can give to an unpleasant surprise for investors and be a little worse than expectations. Weak U.S. GDP data will force investors to reconsider their medium-term priorities, as well as economic growth, to which we are accustomed, in the medium term is clearly weaker than forecasts. Hence, the rapid growth of stock indices this spring and summer was no more than a race for a ghost. Stock quotes and commodity contracts can quickly go down. It is also possible that the financial and stock markets react sluggishly to negative data on U.S. GDP, again confirming that they have lived their lives, far away from the real economy.

In the event that positive GDP data for the U.S., we will seecontinued transfer of speculative funds from the protected assets in stocks of cyclical companies: oil, metallurgy and mining sectors. True, too positive on the U.S. economy may raise the issue of phasing out programs to support the monetary economy and the possibilities to increase the refinancing rate.

So, be patient and take the place of the screen at 16.30 Moscow time. Movie promises to be interesting.

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