German consumer sentiment holds up

Perhaps it should be no surprise, what with getting free money for their dodgy cars, but German consumer sentiment is holding up OK at the moment. It’s pretty important for the rest of Europe that it’s biggest economy shows some resilience:

 

The GfK market research group said its forward-looking consumer sentiment index, based on a survey of 2,000 Germans, was unchanged at 2.5 in May after being revised up from an originally reported 2.4 in April.

The latest figure beat the mid-range forecast of a poll of analysts last week for a reading of 2.3 , but economists said consumer sentiment would soon weaken as unemployment rises.

 

“Looking ahead, we still expect private consumption to be the bright spot for the German economy and to cushion the collapse of German industry,” said Carsten Brzeski, an economist at ING Financial Markets.

Source: The Guardian

OK - so maybe their not THAT happy...

China: Its not so bad really

The communist captialist People’s Republic of China is not doing so badly… according to them. Chinese Premier Wen Jiabao is happy that China’s stimulus package is working, the country has sufficient capital, a solid banking industry and heaps of labour resources (ok, so we all knew that last one). And if China is going to pull out of this, hopefully they can pull the rest of us with them.

Wen (or his translator) puts it pretty well:

“Confidence is more important than currency or gold. Today, I want to say that hope is also important. It’s like a beacon.”

Source: WSJ

US Investor anxiety at a 6 month low

A key indicator of US stock volatility dropped to a six month low:

The volatility benchmark, known as Wall Street’s “fear index” because it almost always rises as stocks fall, has dropped 55 percent since soaring to a record 80.86 on Nov. 20, when stocks hit an 11-year low.

“There’s a glimmer of hope,” said Chris Bankovitch, head trader for institutional options at Portsmouth Financial Services, a San Francisco-based brokerage. “Wells Fargo saying they’re going to crush analyst estimates is definitely what the market wants to see.”

Source: MarketWatch

A drop in volatility also obviously improves chances that this rally is going to hold onto most of the gains of the last 5 weeks. 5 consecutive weeks of positive movement!

Australian consumer sentiment up in March

20% stock market rises have to have some impact on the real world, and that is borne out in the latest Westpac-Melbourne Institute survey on consumer sentiment. The index shows a rise of 8.3% in the April survey compared to the March one:

Consumers’ hopes for the economy have surged, rising for the first time this year, helped by the sharemarket rally and expectations of more cash handouts.

The monthly Westpac-Melbourne Institute survey shows consumer sentiment rose 8.3% to 92.7 points in April from 85.6 points in March, the most since August, when it expanded 9.1%, according to data from Bloomberg.

Source: Bloomberg, in The Age

Pwning the recession

Want some bang for your recession buck? Try some video games. For $50-60 the hours of entertainment that a single game can provide (let’s ignore the console purchase up front…) it has most other forms of entertainment beat in a dollar-per-hour equation. And consumers are putting their dollars behind this value proposition:

 

As people cut back on travel and going out, they are turning more to home entertainment, providing a boost to the videogame industry that is under pressure to keep gamers amused and beat the recession.

“Videogame sales have been impacted the least from the global recession and there are no real signs of it slowing,” said Michael Cai, vice president of videogame research at Interpret.

Last fall, as the effects of the economic downturn were being felt, videogame sales rose internationally. In the United States alone, sales increased 19 percent over 2007, topping $21.3 billion, according to The NPD Group.

 

Source: Reuters

This trend is keeping these guys pretty happy…

 

I just love any excuse to use this...

Manufacturing index ticks up again…

Faint signs of life? Manufacturing sector activity rose slightly in March… the surprising thing is it’s actually the third month in a row:

 Manufacturing sector activity rose slightly in March, inching up for a third month, but the index reading still indicates an ongoing contraction, a purchasing managers’ group said Monday.

The Tempe, Ariz.-based Institute for Supply Management’s (ISM) manufacturing index rose to 36.3 in March, up from 35.8 the previous month.

The reading beat estimates from economists, who expected a slight increase to 36, according to a Briefing.com consensus survey.

Source: CNN Money

Add to that better than expected housing and auto sales data and we saw another solid day on the Dow and world markets.
Source: WSJ Online

It possibly indicates the growing trend of alternative usage of manufacturing equipment as traditional consumer demand remains low.

 

“Courage and strength in times of danger.”

Apparently a motto for March according to William Morris is:

“Courage and strength in times of danger.” 

Source: World of Quotes

I’ll take it for today anyway… world stock markets are likely to post their best month in years.
Source: The Washington Post via Reuters 

Don’t worry about March, how about the year of the Ox? China has posted it’s best start to the year since 2000.
Source: Bloomberg

Cash for trash

The German government program to give cash handouts for trading in your clapped out jalopy for a new car looks like it will be extended. And if they can afford it – why not? The plan was successful in pumping up sales by 21% in February, and I’d argue it’s better than cash handouts to go into slot machines in most states of Australia.

The programme, also called the “environmental bonus,” offers Germans €2,500 to junk their old car and buy a new one. Worth €1.5 billion, it was included in the country’s second stimulus package passed earlier this year.

Car sales have reportedly increased significantly since the scrapping bonus came into effect on February 20, and now there is “department-wide agreement” that is should be extended

Source: The Local / Rheinische Post

Cheap hotel rooms

Good news if you can still afford to go on a holiday… the world’s most expensive hotels have become a lot cheaper thanks to crashing demand. Another nice Economist pic tells the story… NY down 16%, Paris down 8%… Delhi down 21%. 

Source: The Economist

 

An opportunity to upgrade perhaps?

Recovery in 2010

Its not the end of the world as we know it. The UCLA Anderson School of Management is seeing a recovery in 2010:

The U.S. economy has a good chance of starting to recover in 2010, but the rest of this year is going to be tough, according to a report released Wednesday.

The UCLA Anderson School of Management’s quarterly economic forecast calls for real gross domestic product to decline 6.8% in the first quarter of 2009, 4.5% in the second quarter, and another 1.7% in the third quarter.

But in 2010, the report predicts an average quarterly growth of 2.7% and an average of 4.1% in 2011.

Source: CNN Money

Hmmm… so try and suck it up for the next 9 months… things might be looking better post-Christmas 2009.