The US economy continues to show signs of weakness but you wouldn't have guessed just looking at the net change in stock prices yesterday. From MarketWatch:
U.S. stocks rallied Thursday, but still ended January with substantial losses, as a shaky market swung down on MBIA Inc.'s losses only to reverse higher when the bond insurer said it did not believe its triple-A rating was in jeopardy...
Down more than 100 points earlier on, the Dow Jones Industrial Average climbed 207.5 points, or 1.7%, to 12,650.4, giving it a monthly loss of 4.6%, its worst percentage decline for a January since 2002, when it fell 4.3%...
The turnaround came after bond-insurance giant MBIA offered assurances that it had enough cash to ride out the meltdown in the mortgage market, with the company's shares finishing up 11%.
I suspect William Ackman of Pershing Square Capital Management has some doubts about the latter.
Meanwhile, the economic reports from Europe have also been looking somewhat worrisome of late. Yesterday's were no exception. Bloomberg reports:
An index of sentiment in the euro area dropped to 101.7 this month, the lowest since January 2006, from a revised 103.4 in December, the European Commission in Brussels said today. The inflation rate rose to 3.2 percent, the highest in 14 years, a separate report showed.
But unlike in the US, employment hasn't shown any sign of deterioration yet.
[E]uro-area unemployment remained at a record low 7.2 percent in December, according to other data released today. In Germany, Europe's largest economy, the jobless rate fell to the lowest level in 15 years this month, the country's statistics office said today.
In Japan. there was some good news yesterday with the NTC Research/Nomura/JMMA Purchasing Managers Index holding up at 52.3 in January, unchanged from December. But on the whole, Japan isn't lacking in negative news, duly reported by Bloomberg.
Japan's wages fell at the fastest pace in more than three years in December as bonuses plunged, dimming prospects that consumers will help the economy overcome slowing overseas demand.
Monthly wages, including overtime pay and bonuses, dropped 1.9 percent from a year earlier, the Labor Ministry said in Tokyo today...
Deteriorating sentiment among small and midsized companies, which employ 70 percent of Japanese workers, is another reason wages aren't rising, according to Shunichi Ando, head of the Labor Ministry's statistics division. Sentiment among small firms fell to a five-year low in January, state-owned lender Shoko Chukin said today...
A separate government report today showed that housing starts fell 19.2 percent in December, the sixth monthly decline, matching economist estimates.
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