Last week saw many of the answers for the question, is the world economy recovering?
The green shoots are getting deeper and taller, and greener.
So the answer is ‘yes’.
But amid these, there’s always a weed or two: Japan saw record unemployment of 5.7% ahead of a change in government, record deflation at the consumer level and a fall in consumer spending as well.
European bank lending was weak to negative, for business and consumer.
Consumer spending rose in the US, but that was due to the start of the cash for clunkers scheme at the end of July. August will see another big rise..then a drought?
Three more American banks failed on Friday night to take the number of collapses so far in 2009 to 84.
Thery were small regional banks, the largest had around $US1 billion in assets.
US personal income fell (wages have fallen 7% in the past year): US consumers have no reserves to reassume the burden of dragging the world out of the economy, and that seems to be worrying more and more analysts in the US.
Gold, oil and US interest rates have traded in narrow bands all summer as investors wait to see where the rebound and the economy are headed.
This story from the Financial Times is probably the best on this subject from last weekend.
But for the moment things are improving, slowly for most, more quickly for Asia, including Australia.
This week we will see more answers from economies like Australia, Brazil, the eurozone and a bit more from America.
But despite the many positives, trading last week could hardly have been described as upbeat or positive.
Choppy trade, hesitant, might be better, as sentiment switched between wanting to further endorse the rebound, and fear that markets are increasingly ripe for a pullback.
Wall Street saw most shares ease Friday after a weak consumer sentiment report offset positive news from tech majors, Dell and Intel.
All three major indexes still posted their second weekly advance, although the gains were modest.
The Dow fell 36.43 points, or 0.38%, to 9,544.20; the Standard & Poor’s 500 Index lost only 2.05 points, or 0.20%, to 1,028.93, but improved outlooks and positive statements from Dell and Intel helped Nasdaq higher by just 1.04 points to 2,028.77.
For the week, the Dow rose 0.4%, the S&P 500 was up 0.3% and Nasdaq rose 0.4%.
Hardly a solid and more in tune with the continuing sense of bafflement about the outlook.
Elsewhere around the world, Chinese stocks fell for a fourth successive week.
Shanghai finished off 3.4%, on those concerns that China’s economic recovery might be easing and the government might want to slow down lending growth.
The recovery isn’t easing, it’s just the way Chinese monetary policy is conducted: a flood of lending in the first half, with a slow down in the second as the money gets spent, or withdrawn from banks and the market.
The 50% rise in the US from multi-year lows in March looks great, but is still making investors nervous, especially after last week, when the government-controlled basket cases, Citigroup and AIG went for enormous surges, driving out short sellers, who then had to cover at higher prices.
Fear tears were wept for the funds and other investors caught short in both stocks. AIG jumped 53% last week, Citi was up nearly 4% on Friday alone as the wider market fell.
This week in the US is considered to be the last week of summer, with autumn trading starting next week and September, one of the bad months (along with October) for markets.
Lehman Brothers fell over nearly a year ago, while 12 months ago Fannie Mae, Freddie Mac and AIG were stumbling towards crisis and government control.
Fannie Mae and Freddie Mac also had roaring weeks and Fridays last week.
Like Citi and AIG, both are essentially broke and can’t survive without tens of billions of dollars of government capital and loans.
Freddie Mac was up 7.1% Friday at $US2.40 and Fannie Mae added 6.3% in value to $US2.04.
In some respects the rally from March still remains a ‘dash for trash’ rebound at heart because many blue chips have not risen with the same vigour.
Friday saw the S&P 500 hit 1,039.47, its highest intraday level since October 14 of last year, but it then fell on the negative Reuters University of Michigan consumer sentiment figures.
In Australia the share market rose 0.9% Friday.
The S&P/ASX200 index ended at 4489.6 points, its highest close since October 7. The index rose 4.6% over the week.
The market looks like opening flat today after trading in the futures market early Saturday.
The All Ordinaries rose 0.9% as well 4495.9 points and was up around 4.5%.
Harvey Norman was the standout performer, surging 54 cents, or 16.9%, to $3.74 after the retailer reported a 40% drop in annual profit, but said it was a bit more upbeat on the outlook.
In China the Shanghai Composite Index fell 2.91% on Friday, or 85.71 points to finish at 2,860.69, down more than 16% this month.
The Shenzhen Component Index lost 3.76%, or 447.66 points, to end at 11,450.08.
Shanghai fell for a second day after the government said Wednesday it would move to address overcapacity in various sectors including steel and ce
