THE BIG PICTURE: Markets move higher, despite global gloom

We are now well and truly into the final quarter of 2012, so it is an opportune time to see how global markets are tracking, as well as getting an insight about how they are likely to end the year.

Of the 73 global sharemarkets tracked by CommSec, 59 bourses are higher now than at the start of the year.

Leading the way is the Venezuelan market (up 190%), followed by Egypt (up 54%) and Pakistan (up 38%). Of the major advanced nation markets, the German Dax has lifted 22% with Singapore up 16% and Hong Kong up 14%. The Australian ASX 200 is up almost 11%, ahead of the US Dow Jones, up 9%. But the broader S&P 500 index in the US has lifted almost 14% in 2012 with the Nasdaq up almost 17 %.

At the other end of the scale, the sharemarket in Cyprus has plunged 60%, with the Ukraine down 34%, and Morocco down 14%. Notably the Spanish sharemarket is down 10 % but the Greek market has lifted 22%.

In terms of global currencies, the situation is more mixed. Of 118 currencies monitored, 52 have risen against the US dollar this year with 17 unchanged, while 49 currencies have weakened against the greenback. Hungary, Chile and Poland lead the gains.

The Aussie dollar is up 0.7% over 2011, the Euro has gained 0.3% while the Japanese yen has softened around 1%.

The week ahead

There are few highlights on the domestic economic calendar in the coming week. Lending figures dominate early in the week together with Reserve Bank Board minutes and new car sales figures. In China, the monthly ‘download’ of key indicators occurs on Thursday together with economic growth figures. And in the US, ‘top shelf’ indicators are progressively released over the week including retail sales and production.

In Australia the week kicks off with data on new car sales and housing finance on Monday. New car sales rose by 3.6% in August after two monthly declines of around 1%. On the basis of industry data, CommSec expects that sales rose again in September, up by around 1.5 %. Sales are being underpinned by the best car affordability levels since the mid-1970s.

Also released on Monday is home loans data for August and again a positive result is expected. CommSec tips a 2% lift in the number of owner-occupier loans which – if realised – would actually be the strongest result in 14 months. Over most of 2012 the home loan market has been going sideways with gains one month, erased the next, a reflection of fluctuating confidence levels amongst buyers.

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