Daily Agenda: Has the Euro Zone’s Economy Hit Bottom?

Do European gross domestic product numbers represent an inflection point? Euro zone initial third-quarter GDP registered at 0.2 percent. France specifically saw an expansion of 0.1 percent, both higher than consensus forecasts, with Germany meeting expectations at 0.1 percent. On the equity side, several corporate earnings announcements today suggest that some areas of the euro zone’s private sector are seeing the drag on earnings from macro factors begin to abate. Despite these positive signals, however, theinflation data releasesyesterday combined with a downbeat report from theEuropean Central Bankcontinue to weigh on sentiment for the region. A GMP Securities report issued yesterday afternoon noted, “We suspect the bulletin really did little to provide anything new to the market’s cautious narrative about the precarious state of the region’s economy with hopes and prayers the ECB can support the region since political leadership remains lacking.”

China issues tax ruling for foreign investors trading on Shanghai-Hong Kong Stock Connect.China’s Ministry of Finance announced today clarification that foreign investors will not face capital gains tax in China when trading on theShanghai-Hong Kong Stock Connectlinked stock market facility, scheduled to go live this coming Monday. This move to address ambiguity in Chinese tax codes is regarded by many analysts as further evidence of Beijing’s desire to significantly increase flows of foreign equity investment directly into local market shares.

Earnings in Europe take center stage.European equities are in the spotlight today as several key large caps report quarterly results. Airbus Group beat analysts’ consensus forecasts with a 12 percent increase in operating profits for the first three quarters combined versus the same period last year. The aeronautical giant reaffirmed guidance for 2014. Leading European telecommunications providerVodafonealso beat expectations with third-quarter results that included a significantly smaller decline in revenues than was reported in the prior period. In the analyst call accompanying the release, CEO Vittorio Colao noted that Vodafone is seeing improvement in business conditions across all markets exceptPortugal.

U.S. consumer data is on deck.October retail sales data and preliminary University of Michigan consumer sentiment index levels for November will be released today. In the two-week run-up to Black Friday, the mood of the U.S. shopper will be a significant narrative for investor sentiment regardless of the actual impact of holiday discounting on aggregate consumer spending.

Portfolio Perspective: The Politics of Pipelines—Ted Harper, Frost Investment Advisors

President Barack Obama reiterated his stance on November 5 that the proposed Keystone XL crude oil pipeline’s ongoing cross-border permit review process should be allowed to proceed could prove interesting. With Republicans winning majority control of the Senate in elections a day earlier, Obama’s comments signal the way is open for legislation on the matter to reach the Oval Office desk. In aWall Street Journalop-ed, Senate Minority Leader Mitch McConnell and House Speaker John A. Boehner list authorizing Keystone XL’s construction first as they outlined bills which would provide an obvious bipartisan starting point for the new Congress.

Says American Petroleum Institute President Jack Gerard, energy was the big winner in the 2014 elections. “In race after race, voters from all regions of our nation and from both political parties voted for pro-development, true all-of-the-above energy policies,” he said.

再每基拉耳d, if the next Congress is serious about living up to its energy campaign promises, it should quickly advance a pro-energy, pro-growth agenda that includes increasing access to domestic oil and gas resources, reform the federal Renewable Fuel Standard and approve Keystone XL. Gerard said an election night telephone survey of 827 voters by Harris Poll for API found that 90 percent agree thatincreased U.S. oil and gas productioncould lead to more jobs. Of those polled, 86 percent said that domestic oil and gas production stimulated the general economy and 66 percent of respondents said they were more likely in 2016 to back a candidate who supported more domestic oil and gas development.

Ted Harper is a fund manager and senior research analyst for San Antonio–basedFrost Investment Advisors.