Russian President Vladimir Putin said he saw no immediate need to invade Ukraine while leaving open the possibility of using force, as the U.S. weighed sanctions on Russia and offered aid to the Ukrainian government.
In his first public remarks since Ukraine said its Crimean peninsula was seized by Russian forces, Putin said yesterday he has a duty to defend ethnic Russians in the region and reserved the right to military action. U.S. President Barack Obama challenged Putin’s rationale for intervening, as Secretary of State John Kerry unveiled $1 billion in loan guarantees to Ukraine’s cash-strapped government during a visit to Kiev.
As a result stocks rebounded worldwide yesterday after Putin’s remarks stirred optimism that the worst crisis between Russia and the West since the end of the Cold War is cooling. Putin said troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases. Gunmen who’ve seized crucial infrastructure and surrounded military installations are acting independently, he said. At the time of writing, the US Dow Jones Index had rallied 227 points to 16,395 overnight while Australia’s All Ordinaries Index is up 0.60% to 5,444.
Perhaps more importantly, today, Australia’s quarterly GDP surprised on the upside posting an annualised rate of 2.8% – higher than the 2.5% GDP rate economists were expecting. When coupled with the announcement today, from Chinese authorities, that their growth rate ‘goal’ for 2014 will remain at 7.5%, this should add more fuel to the overall optimism currently taking hold of financial markets – great news for Westmount clients. (Rick Maggi. Westmount. Financial Solutions.)
The US economy is yet again reinventing itself. this has been helped along by a determination to get the US economy moving again after the Global Financial Crisis, but the real drivers are an energy boom, a manufacturing renaissance and American innovation. Read on Rick Maggi (Westmount. Financial Solutions.)
Today the All Ordinaries Index closed at its highest level since 19 June 2008 as Australian company earnings continue to impress, but also following a strong lead from Wall St overnight.
Interestingly, investors have been dismissing disappointing US economic data of late, pointing to harsh winter weather as a reason for unexpected weakness. Instead, investors have been taking a relatively optimistic view, positioning themselves for an improving growth trend in the US, betting that improved earnings will be enough to lift the market further this year.
In other words, sentiment, for better or for worse, is finally taking on a life of its own, pushing up US markets (and in turn our own), despite mediocre to ‘ok’ earnings results. Of course, we’ll need to see concrete improvement over the coming months to justify the optimism, and clearly there are are some headwinds out there if you really want to worry (Fed tapering, lower Chinese and Australian growth, Ukraine debt default etc.), however, for now, our general view remains unchanged – we’re still at 8pm, on the ‘Economic Clock’ (a quaint measure, certainly, but a useful tool just the same) View Economic Clock Here Enjoy your weekend. Rick Maggi (Westmount. Financial Solutions.)