Kokomo, IN – (StockNewsDesk) – 11/20/2014 — U.S. markets shrugged off early losses and bolstered gains on the back of better than expected economic results. The inflation rate and consumer prices, month over month (MoM) and year over year (YoY) is primarily responsible for investor optimism. However, the number of people filing for unemployment benefits fell short of expectations. On the other hand, European and Chinese economy continued to show signs of the slowdown.
Consumer prices inched towards the goal set by the federal reserve of 2%. MoM consumer prices remained unchanged against expectations of a fall of 0.1%, while on a macro-basis, the inflationary level increased by 1.7% compared to the Street’s expectations of 1.6%. On the other hand, number of Americans filing for unemployment increased by 5000 to 291,000 compared to estimates of 286,000. In addition to this, the manufacturing sector of the U.S. came in below expectations. The manufacturing sector of the country grew at 54.7 compared to 56.2. Existing home sales data and Philadelphia manufacturing index raised investor optimism to new heights. Existing home sales grew impressively at 1.5% compared to estimates of a negative of 0.3%, while Philadelphia grew robustly at 40.8 compared to estimates of 18.5.
European Economic Indicators Disappoint
The major indices of the U.S. declined initially because of disappointing economic indicators provided by the Euro zone. Gauge measuring manufacturing sector declined to 50.4 compared to estimates of 50.9 while the one measuring the services’ index declined to 51.3 compared to 52.3. The second-largest economy of euro zone area, France, provided service index marginally better than expectations. The index came in at 48.8 compared to estimates of 48.6. However, the manufacturing sector remained below the 50 level marks at 47.6 against estimates of 48.9. The largest economy of the Euro zone, Germany, failed to impress investors in both manufacturing and services sector. Manufacturing sector of Germany came in below Street estimates of 51.5 at 50.0 while services industry declined to 52.1 against 54.5. The consumer confidence of Euro zone came down below estimates of -10.7 to -11.6 in light of disappointing economic indicators.
Chinese Manufacturing Slows
The world’s second-largest economy declined for the first time to a level of 50.0. This is a well-off expected level of 50.3. A below than the expected manufacturing level, affirm the economic slowdown. However, the Chinese government still expects the Gross Domestic Product of the economy to expand by 7.1. The economy is well-off the growth trajectory primarily because of the slowing property market. Investors anticipate stimulus measures in light of the slowing economy.