It was a wild, wild week.
Last Monday, bombs exploded near the finish of the Boston Marathon. Not long after, media outlets let the public know letters to President Obama and a senator from Mississippi contained the poison ricin. On Wednesday, the town of West, Texas was flattened by an explosion at a fertilizer plant. By the end of the week, a man had been arrested for sending the ricin letters, the city of Boston had been locked down, the bombing suspects had been captured, and folks were returning to their homes in West, Texas.
The week’s economic news wasn’t all that encouraging. The pace of economic growth in China slowed unexpectedly, the International Monetary Fund reduced its 2013 growth forecast for the United States for the fourth time and U.S. earnings results were mixed.
However, in the U.K. property market the 12 months to February 2013 UK house prices increased by 1.9%, down from a 2.2% increase in the 12 months to January 2013. House price growth remains relatively stable across most of the UK, although prices in London are increasing and prices in Northern Ireland are falling.
In the year to March the output price index for goods produced by UK manufacturers (factory gate prices) rose 2.0%, compared with a rise of 2.3% in the year to February.
All three major indices – the FTSE 100 Index, the FTSE All-Share Index, and the FTSE AIM Index – finished the week down about 1%.
The most significant move of the week took place in the gold market which lost about 9 percent on Monday. That was the biggest one day fall in 30 years. The market recovered some value later in the week, finishing down about 8.5 percent. According to The Economist, “The usual explanation for sharp price movements, when an economic rationale seems lacking, is that someone is selling off their holdings at any price. Some have pointed at Cyprus which may have to sell gold in response to its debt crisis. Although Cyprus’ gold holdings are small, the fear is that other troubled eurozone nations may follow suit.”
Will this week be calmer? It’s possible, but economic news will include the first estimate of U.K. GDP growth for first quarter. According to the guardian the consensus forecast in a Reuters poll is for a tiny 0.1% quarter-on-quarter uptick. But predictions range from a 0.2% drop in GDP to growth of 0.3%.