The equity, currency and oil markets continued to consolidate today on overall low volume. The S&P 500 Index move up 2 points to 1140, while the Euro slipped 30 pips against the dollar. The Nasdaq market was the best performer moving up 9 points or .4%.
Cisco Systems Inc. unveiled a heavy-duty router for managing Internet traffic, as it seeks to regain market share it has lost in the arms race to manage telecommunications networks. Cisco said Tuesday its new CRS-3 router has 12 times the capacity of rival equipment. For example, executives said the device can handle simultaneous video calls for every person in China. AT&T Inc., a key Cisco customer, said Tuesday it completed a trial with the router, which allowed its long-distance Internet backbone to carry data traffic at 100 gigabits per second, or roughly 10,000 times faster than the average household cable or DSL connection. Cisco had another powerful rally moving up almost 4% in the past week.
In Japan, the January preliminary leading economic index firmed to a stronger than expected 97.1 following a 94.7 monthly outcome previously. The coincident index was also on the rise, firming to 99.9 in January following a 97.4 outcome in December. After 2 strong session pushing the USD/JPY above 90, the Yen has regained some momentum.
The economic data in the UK today does not paint a pretty picture. The RICS February house prices (with the main index falling to a much weaker than expected 17% from 31%) was released overnight in the UK and was negative news to digest this morning. The January trade balance data was highly disappointing, with the main deficit widening to a much worse than expected £7.98bn (vs -£7bn previously and vs -£7bn expected) while the non-EU trade gap widened to -£3.8bn (from -£2.6bn). This was the worse trade performance since August 2008 and resulted from a 6.7% monthly drop in exports while imports were down 1.6%. The slump in exports is disappointing at a time of sterling weakness but one should not forget that the UK main trading partner (the euro zone) recovery is extremely sluggish and a weaker currency will do little in the near-term if external demand is very weak to start with. Coupled with the negative adverse effects that the poor weather recorded in Q1 will have on GDP growth, the highly disappointing trade figures underline a further drag on economic activity.
