Thursday, 21 November 2013

Markets fall as US retail sales rise, Japanese trade deficit doubles

Markets fell on Wednesday. The S&P 500 fell 0.4 percent, its third consecutive decline. Ten-year Treasury note yields increased nine basis points to 2.80 percent.

Markets fell after the minutes of the last Federal Open Market Committee meeting released on Wednesday showed that Fed officials “generally expected that the data would prove consistent with the Committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months”.

Economic data on Wednesday did suggest that US consumer spending started the final quarter of the year positively. Retail sales rose 0.4 percent in October, the most in three months.

Retail sales rose even as the consumer price index fell 0.1 percent in October, the first decline in six months.

US existing home sales did not fare as well, falling 3.2 percent in October, according to a report from the National Association of Realtors on Wednesday.

Elsewhere in the world, Japan had reported earlier on Wednesday that its trade deficit rose to 1.09 trillion yen in October, nearly double the deficit a year ago. It was the 16th straight month of deficit, the longest spell since 1979.

Exports rose 18.6 percent from a year ago. Imports jumped 26.1 percent on higher energy costs.

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