Global Growth Lifts Exchanges Worldwide

The S&P 500 Index is on pace for its strongest January in 15 years, while
European and Asian stock markets are doing even better. Last week, the Dow Jones
Europe stock index rose 2.71% led by Greece, at 12% (for now) while DJ's
Asia/Pacific index rose 3.12%, led by Hong Kong (4.5%). These foreign stock
markets are reflecting strong economic growth in Asia and some
better-than-expected bond auctions in Europe. On Thursday, $8.5 billion in
10-year Spanish bonds had a very successful auction. With a healthy bid-to-cover
ratio of 2.17, robust demand delivered lower yields. Another piece of good news
in Europe is that Germany's ZEW indicator of economic sentiment rose by 32.2
points on Tuesday, reaching its highest level in seven months. Clearly, the mood
of many Europeans is picking up. On Tuesday, China's National Bureau of
Statistics announced that Chinese GDP grew at an 8.9% annual pace in the fourth
quarter. Even though this was China's slowest GDP growth rate since mid-2009,
it beat economists' consensus estimates of 8.6% and was just a minor drop from
the 9.5% annual GDP growth pace in the third quarter. Now that China's
Purchasing Managers Index (PMI) is back above 50 and its industrial production
is up 12.8% (annual rate) in December (versus 12.4% in November), perhaps the
fourth quarter represented the trough for China's economic "slowdown." So
with economic growth looking up in the U.S., China and Germany the world's
top economies global stock markets scored big last week. The biggest
international wildcard continues to be Iran. European leaders will vote this
week on economic sanctions and an impending oil embargo. Interestingly, Greece
(which imports significant amounts of Iranian oil) asked the European Union to
make last-minute concessions regarding the impending EU embargo on Iranian oil.
Apparently, Greece imports Iranian oil under highly favorable terms that are
hard to match elsewhere. This means the EU oil embargo could be delayed.