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  • Hello and welcome back to the note.

  • Back in New York, this week and just in time for a landmark,

  • it looks as though Google has taken over from Apple as the world's largest company by market cap.

  • This is how those two companies stood at the end of trading today and turn to their market cap.

  • Then Google announced their earnings which were considerably better than expected,

  • so were their revenues and judging by after-hours trading,

  • Their share prices up some 5%, that would be more than enough to take them ahead of Apple.

  • Now, that's an exciting development,

  • but in general earnings haven't been better than expected here, in the US.

  • And in general, stock markets today haven't been exciting at all.

  • And yes, it was almost exactly flat for the day.

  • That's followed (by) continued gains in Japan on

  • the back of Japan's shocking decision to go to negative interest rates on Friday,

  • but falls in European stocks.

  • Now, a lot of that could be due to ISM surveys, which we always get in the beginning of the month,

  • looking at manufacturing date.

  • Try if we take a look at this next chart, you can see here in the US,

  • the manufacturing ISM continues to signal contraction.

  • Yes, manufacturing accounts for a much smaller chunk of the economy than it used to do.

  • But as you can see, going back to 1980, it really,

  • this survey really does seem to map very well onto the absent flows of the economy itself.

  • You can see why this is contributing to growing nervousness about whether

  • the US economy really is as strong as many people have assumed.

  • Now that leads into one final big issue which is going to begin to bulk larger,

  • which is that over the next few hours, we will have the Iowa caucuses and

  • the process for deciding who the next US president is going to be.

  • We'll finally move into action.

  • Now if we take a look at the Iowa Electronic Markets, has no direct connection to the Iowa caucuses.

  • This is an electronic futures market run by the University Of Iowa,

  • which allows people to bet on who they think is going to be president.

  • You can see it's been much less volatile and exciting than the campaign has been so far,

  • and there is a general sense that the Democrats are more likely to prevail,

  • better two in three shots at this point.

  • That really says little more than the electoral map at this moment tends to favor the Democrats

  • if there's no other particular reasons of votes,

  • otherwise you would tend to think that the Democrats are more likely to win the presidency.

  • Well, I doubt very much that this level of calmness about the presidential process can last much longer.

  • The chances are that we're going to see more volatility there,

  • and that will be reflected in markets.

Hello and welcome back to the note.

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    Kristi Yang posted on 2016/02/02
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