World stock markets were relatively stable this week. US leading indicators rose slightly by 0.3% on average, European indexes rose on average by 0.45% and the bloc of emerging market countries fell by 1.7%.
Government bond markets were trading in a slight increase.
The yield on the 10-year US government bonds dropped from 2.59% to 2.54%, a similar trend is seen in the UK and Germany.
Real economic indicators released this week around the world continue to be positive.
The Global Purchasing Managers Index (PMI) rose to 52.1 points in November, led by Europe and the US. Import and export data in China and Japan as expected.
Specific data to the American economy was good. The third quarter
growth is relatively high – about 3.5%.
Real estate data were more than expected, new home sales of 592 thousand apartments, the expected was 575 thousand homes.
Consumer sentiment is in line with expectations but at the peak.
Purchases of durables were weak and lower than expected revenues as well as individuals.
The inflationary expectations rise.
The Italian government has approved a government rescue plan for banks in crisis. Its ability to increase the deficit derived from the course of its bond purchases carried out by the ECB, which extended the period of quantitative easing.
The price of oil rose 2.2% this week, the commodity index prices fell 0.5% this week and an ounce of gold was steady this week.
The dollar traded steadily against the currency basket. The VIX index continues to fall.
The banking stocks were the focus, following the forming of an order between Deutsche Bank and Credit Suisse with the US authorities on the payment of fines and damages totaling approximately $ 12.5 billion, in regard to their involvement in defrauding mortgage pre-financial crisis.
It is preferred to expose to the oriented domestic operations (such as the Russell2000 index (IWM) of SMEs which generate the majority of their revenues in the US), compared to export-oriented options and multi-national activity (such as the S&P500 Index consisting of large companies, owning a broad global exposure).
There is of high importance to the balancing and to have a selective choice of sectors and stocks in the portfolios.
Accordingly, combining stocks from industries that are expected to benefit from recent developments such as financial services (VFH), energy (XLE), and basic industries (FXZ).
In Europe (XSX6 GY) the priority is for the companies with high exposure to markets outside of Europe. Also, there is a priority to the major stock indexes over the medium and small-cap indices.