Despite the despair in Ferguson, Missouri and the continued concerns in Iraq, Gaza and Ukraine, the major US equity markets managed to hover in the green for the majority of today’s trading session. However, economic conditions worsened in Europe during Q2-2014 when compared to the last flash reading. Quarter-over-quarter, gross domestic product (GDP) growth remained unchanged in the European Union, but increased by 0.7% year-over-year; both readings were lower than economists’ expectations. Strong numbers in Spain and Netherlands were not enough to offset shrinking growth in Germany, Italy and France. German GDP shrank by 0.2% between April and June as foreign trade and investment were weaker than expected. Germany accounts for about 28% of the total European GDP. Pricing in the Eurozone is also slowing: with no GDP growth to support prices, inflation is tumbling. Price growth in the region fell 0.4% year-over-year in the region, down from 0.5% in June. Domestically, there were two economic data releases that were expected to move the market but didn’t cause much fluctuation.

For the week ended August 9^th, the initial jobless claims moved higher, though the overall trend is still favorable. Initial claims increased by 21,000 to 311,000 – this happens to be the highest level since late June. However, the four-week moving average rose by 2,000 to 295,750, but is still at a level near 15,000 new claims below the level from one month ago, which actually hints at a potentially better monthly job report for the month of August. In addition, the continuing claims data for the week ended August 2^nd increased by 25,000 to 2.544 million with the four-week average up by 9,000 to 2.528 million. Here as well, the month-over-month comparison is improving showing an overall decrease in the initial claims by around 30,000. The report also noted that the unemployment rate for insured workers is still at a recovery low of 1.9%. Ultimately, we observe that these numbers aren’t likely inflated this week, since there were no major holidays or events this week. Also, it was noted that next week’s data will be important to observe because the initial claims will cover the sample week of the monthly employment report from the Bureau of Labor Statistics.

Additionally, the July data for U.S. imports and exports demonstrated that inflationary pressures in international commerce is relative stable and the Federal Reserve ought not be alarmed. In July, import prices declined by 0.2% and were noted as being unchanged when petroleum (gasoline) prices were excluded. Year-on-year rates are also muted at +0.8% overall and +0.7% excluding petroleum. The price of imported finished goods and motor vehicles were down for the month. Motor vehicles were down 0.8% in July, which is actually the largest decrease since December 1992, and year-over-year prices of imported autos were down 0.9%. Exports on the other hand, were unchanged in July with the year-on-year rate at +0.4%. Agricultural prices are the main proponent of exports and were down 2.2% in July, while the year-on-year rate was down 2.9%. Since the beginning of the year, the report had been showing slight pressure, but nothing more than that. Producer and consumer prices will be the major components worth watching in the coming weeks. Below is a chart of the import and export changes based on index points.