Markets in a Flash
• Asian equity markets closed up across the board overnight posting strong gains. The Nikkei 225 was up + 2.70%, while the Shanghai Index was up +2.26%.
• European equity markets started the day positive but at the European lunchtime the markets had fallen into negative territory. The FTSE 100 was down more than -0.25%.
• Commodities seem to be trading slightly higher this morning. Gold has risen slightly retracing some of its falls from yesterday which saw it at a 2 and a half month low.
• The GBP and the EUR are trading close to their recent highs against the USD. The EUR/USD is trading around the 1.3000 area.
• US equity futures are fluctuating this morning offering no real indication of direction at the opening bell.
News Focus
European markets break their six day rising streak as the European Stoxx 600 falls -0.12%. The European markets opened higher on Wednesday morning before falling into negative territory. Mervyn King, Governor of the Bank of England, made comments on Wednesday morning which may have put bearish forces on the markets in Europe. He expressed that the UK would be in no rush to raise interest rates, and indicated that conditions were nowhere near normal.
Just Released
0700ET – MBA Purchase Applications
Purchase Index - W/W Change
Previous 3.4 % Actual 2.0 %
This data shows a further rise in the number of mortgage applications for the US property market. This data shows that the demand in the housing markets has risen.
0830ET – Durable Goods Orders
New Orders - M/M change
Previous -1.1 % Consensus 1.0 %
Consensus Range 0.4 % to 4.0 % Actual -1.0 %
The figure shows the monthly change in the number of new orders placed with manufacturers for immediate or future delivery of hard goods. Last month’s reduction was the first that had been reported since the end of 2009.Todays repeat of a reduction in new orders comes in unexpectedly lower than predicted. This reduction will put bearish forces on the US equity markets and the USD.
Coming up Today
1030ET – Petroleum Status Report
The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.
1400ET – Beige Book
Released roughly every 6 weeks the beige book is evidence of economic conditions in the US. It is used by the Fed at its meeting prior to setting interest rates. The release of the book does not have major effects on the markets, but the details contained within can result in interest rate changes in the economy.
Wednesday 28 July 2010
Tuesday 27 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets were mixed last night, no real direction shone through. The Hang Seng was up +0.64%, while the Nikkei 225 was down -0.07%.
• European equity markets are up today. The Stoxx Europe 50 was up +1.2% at 0730ET. The FTSE 100 is up +0.83% at the same time.
• Commodities are mainly up this morning. Brazilian export problems push sugar to a 4 month high. Oil is trading slightly above $79 while Gold is struggling below $1200 as the risk appetite rises.
• The GBP has continued its strong run against the USD and has broken out to a 3 month high this morning.
• The EUR/USD has broken out above the 1.3000 level. This is as investors sell the greenback for increased risk while the Euro benefits from Fridays stress test results.
• The EUR is seeing good strength this morning as new 2 month highs have been made in its pairs with the JPY and the GBP.
• US equity futures are higher this morning indicating positive equity markets at the opening bell.
News Focus
Huge losses for BP and planned asset sale
Bob Dudley will take the role as BP’s new CEO from the start of October. This was confirmed after Mr Hayward stepped down from the position and will be taking on a role with BP’s Russian operations. This comes as BP announced that it made a post tax loss of $17Bn in the second quarter, this record loss was put down to the $32.2Bn put aside as a provision for the cleanup of the Gulf of Mexico oil spill. It has been reported that BP plans to sell $30Bn of assets to fund its clean up operations. Bp’s hare price is marginally up this morning on the London Stock Exchange at 418p.
Just Released
0745ET – ICSC-Goldman Store Sales
Store Sales - W/W change
Previous 1.4 % Actual 0.6 %
Store Sales - Y/Y
Previous 4.2 % Actual 3.8 %
The increase in store sales shown by these figures shows that consumer spending has risen slightly this week. The growth is slower than last weeks and shows that growth is slowing. Data showing that growth in the US is slowing is in line with other economic data of recent times.
Coming up Today
0855ET – Redbook
This weekly indicator is similar to the ICSC-Goldman Store Sales as it shows the health of retail sales but is less consistent. The figure reported backs up the ICSC-Goldman Store Sales data, and if similar should make for a stronger conclusion as to what is happening with consumer spending. If consumer spending increases it is bullish for the economy and the markets.
0900ET – S&P/Case-Shiller HPI
The house price index released each month gives an indexed figure representative of house prices across the US. The figure released lags 2 months, so today’s figure is for house prices in May. An increase in house prices reflects a recovery in the housing market and in the general economy. If house prices rise the economy must be recovering, this will prove bullish for equities and the US Dollar.
1000ET – Consumer Confidence
Previous 52.9
Consensus 51.0
Consensus Range 46.0 to 54.0
The conference board’s survey asks 5000 consumers across the US about present and future economic conditions. After a fall in the figure from May to June today’s figure for July is expected to continue the falling trend. Any figure that comes in above consensus will suggest stronger economic growth and should prove bullish in the markets.
• Asian equity markets were mixed last night, no real direction shone through. The Hang Seng was up +0.64%, while the Nikkei 225 was down -0.07%.
• European equity markets are up today. The Stoxx Europe 50 was up +1.2% at 0730ET. The FTSE 100 is up +0.83% at the same time.
• Commodities are mainly up this morning. Brazilian export problems push sugar to a 4 month high. Oil is trading slightly above $79 while Gold is struggling below $1200 as the risk appetite rises.
• The GBP has continued its strong run against the USD and has broken out to a 3 month high this morning.
• The EUR/USD has broken out above the 1.3000 level. This is as investors sell the greenback for increased risk while the Euro benefits from Fridays stress test results.
• The EUR is seeing good strength this morning as new 2 month highs have been made in its pairs with the JPY and the GBP.
• US equity futures are higher this morning indicating positive equity markets at the opening bell.
News Focus
Huge losses for BP and planned asset sale
Bob Dudley will take the role as BP’s new CEO from the start of October. This was confirmed after Mr Hayward stepped down from the position and will be taking on a role with BP’s Russian operations. This comes as BP announced that it made a post tax loss of $17Bn in the second quarter, this record loss was put down to the $32.2Bn put aside as a provision for the cleanup of the Gulf of Mexico oil spill. It has been reported that BP plans to sell $30Bn of assets to fund its clean up operations. Bp’s hare price is marginally up this morning on the London Stock Exchange at 418p.
Just Released
0745ET – ICSC-Goldman Store Sales
Store Sales - W/W change
Previous 1.4 % Actual 0.6 %
Store Sales - Y/Y
Previous 4.2 % Actual 3.8 %
The increase in store sales shown by these figures shows that consumer spending has risen slightly this week. The growth is slower than last weeks and shows that growth is slowing. Data showing that growth in the US is slowing is in line with other economic data of recent times.
Coming up Today
0855ET – Redbook
This weekly indicator is similar to the ICSC-Goldman Store Sales as it shows the health of retail sales but is less consistent. The figure reported backs up the ICSC-Goldman Store Sales data, and if similar should make for a stronger conclusion as to what is happening with consumer spending. If consumer spending increases it is bullish for the economy and the markets.
0900ET – S&P/Case-Shiller HPI
The house price index released each month gives an indexed figure representative of house prices across the US. The figure released lags 2 months, so today’s figure is for house prices in May. An increase in house prices reflects a recovery in the housing market and in the general economy. If house prices rise the economy must be recovering, this will prove bullish for equities and the US Dollar.
1000ET – Consumer Confidence
Previous 52.9
Consensus 51.0
Consensus Range 46.0 to 54.0
The conference board’s survey asks 5000 consumers across the US about present and future economic conditions. After a fall in the figure from May to June today’s figure for July is expected to continue the falling trend. Any figure that comes in above consensus will suggest stronger economic growth and should prove bullish in the markets.
Monday 26 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets made gains over night. The Nikkei 225 closed up 0.77% while the Hang Seng closed up 0.12%.
• European equity markets are flat today and are fluctuating between gains and losses. The Stress test results of Friday do not seem to have brought much direction to the markets.
• Commodities are mixed and Oil has fallen 0.84% today. Natural gas is also down on news of gas production in China.
• The GBP is strong today and has made gains against most other major currencies. GBP/USD is close to breaking out above its 5 month highs from April.
• The EUR/USD is trading around its 2 month highs and is pushing against resistance on the upside due to the European stress test results.
• US equity futures are very slightly down indicating a lower open at 0930ET.
News Focus
BP’s CEO is set to step down
Tony Hayward, CEO of BP Plc, is expected to resign from his position within the next few hours. After his departure is announced he is expected to remain at the firm for two months while work on sealing the leak in the Gulf of Mexico continues. He is expected to leave the company with a payoff of just over $1.55m (£1m) and a pension worth just over $15.5m (£10m). The man who is currently head of BP’s oil spill response unit, Mr Robert Dudley, is expected to replace Tony Hayward after his departure. Mr Dudley would be the first American to take charge at Bp and would be faced with the job of rebuilding the oil company’s battered reputation.
Coming up Today
1000ET – New Home Sales
Previous 300 K
Consensus 310 K
Consensus Range 280 K to 350 K
Last month’s figures released for the month of May showed new home sales fall to their lowest level since 1963. The figure of 300,000 was nearly a 33% drop from April’s new home sales figure of 446,000. The figure released today is expected to show a small rise this month to 310,000. Anything above this consensus figure is good news for the economy and will be warmly welcomed by the markets. If this month’s figure is below 300,000 it will put bearish forces on the markets as it will show that consumers are not spending as much.
Sunday 25 July 2010
Weekend View
After the success of our first poll the results show that 66% of voters felt bullish on the outlook for the US equity markets in contrast to the 33% that were bearish. Thank you to all the people who voted.
Tomorrow morning is Asia’s and Europe’s first chance to react to the News released on Friday that 7 banks failed the European stress tests. The data was released as the US markets were open but after the Asian and European markets had closed for the weekend. The US markets closed higher on Friday evening suggesting that other worldwide markets will be playing catch up in early trading.
The key data releases coming out of the US this week are Wednesdays Durable Goods Orders data, this is expected to show a monthly gain of 1% after last month’s 1.1% fall. Then on Friday the first release of Q2 GDP figures come out. This is a major market moving figure and will show a great deal about the strength of the world’s largest economy. The figure is expected to be 2.5%, a reduction from 2.7% for Q1. This would continue trend that shows that the US’s economic growth rate is slowing.
Friday 23 July 2010
Daily News Report
Markets in a Flash
• Asian markets closed higher across the board overnight following the strong performance yesterday in the US.
• European equity markets are tentatively up this morning on strong European data. Real direction seams to be dampened as markets wait for the stress test results.
• Energy commodities are controlled by the bears today, while commodities in the agriculture, metals and livestock sectors are pushing higher.
• The GBP is strong today and has made gains against most other major currencies on the back of the better than expected UK GDP results. GBP/USD is approaching its 3 month high.
• The EUR/USD is testing its 1.2970 resistance at its 2 month highs as the EUR is bolstered by strong economic data.
• US equity futures are showing moderate gains suggesting a small rise at the opening bell.
News Focus
UK GDP figures better than expected
Preliminary GDP figures released today for the second quarter of 2010 show that the economy has grown nearly twice as fast as economists had expected. The statistics released by the office for national statistics show that Gross Domestic Production has grown by 1.1% in the second quarter, this is nearly twice the rate that consensus expected of 0.6%. This Q2 result follows the 0.3% expansion in Q1 and is the largest growth rate seen since Q1 of 2006. The strong growth has been fuelled by the services sector and the construction sector.
German Business Sentiment
The IFO business climate index which surveys 7000 business executives has reported a 3 year high. The 106.2 reported for July is higher than last month’s figure of 101.8 and is a huge improvement over the consensus expectation that the index would fall.
Coming up Today
EU Bank Stress Test Results
When these results are released later today it is expected that 10 out of the 91 banks tested are going to fail. The stress test results are expected to be release by the Committee of European banking Supervisors after European markets close at 1200ET.
The results of these tests are going to be crucial to the economic outlook in Europe and therefore affect the World. This means that these results will have a large effect on the markets, if fewer banks fail and their balance sheets are stronger than thought this should be bullish for the markets as it sets up the economy for a stronger recovery.
The VIX. Volatility in the markets.
The volatility index produced by the Chicago Board Options Exchange, more commonly known as the VIX, shows that volatility in the markets is returning to a pre financial crisis level. The index, often referred to as the fear index, is a weighted mix of options prices. The higher the index the higher volatility in the markets is expected to be. As market volatility increases or expectations of market volatility increase options prices rise. This is due to an options price being a function of volatility in the underlying asset. If the underlying asset is expected to be more volatile the corresponding options contract has a higher probability of being in the money so the price is higher.
The index has fallen back below 25 and is now trading below its 50DMA. The current level is in the range at which the VIX was trading in the one and a half years prior to the collapse of Lehman’s. The recent turmoil seen over the past couple of months in the markets saw a severe spike, a mini 2008, but now it appears to be trending back down after this spike. Will this trend continue and volatility will return to a level between 10 and 20? Who knows, the trend would suggest that volatility is reducing but it may spend some more time in the 20 to 30 range before the markets truly calm down to pre crisis levels.
Thursday 22 July 2010
Top 10 UK Dividend Stocks
During the current economic situation investors are demanding a high return on risk in the equity markets. This is due to the uncertainty felt in the strength of the major economies. As of recently economic data has showed that the economic recovery has begun to slow, bond prices are high and equity prices are who knows where. The question is whether the economies are going to continue to grow or are going to fall back into a double dip recession.
This aversion from risk has left some strong companies looking under priced and paying very attractive dividends. The list below shows the top 10 FTSE 350 companies ranked by projected yields. Companies with dividend covers of less than 1.25 have been filtered out, along with highly leveraged companies with gross gearing excluding intangibles below -100. The companies left offer attractive yields with some degree of safety.
All of the companies, excluding Hays Plc, have a projected P/E ratio under 12 and most offer a P/E to Growth ratio of under 1. The Game group Plc which is expected to increase its dividend over the next 3 years seem an attractive proposition at this price, but as investors always say “do your own research”.
Daily News Report
Markets in a Flash
• Markets in Asian countries had mixed sessions over night. China and Hong Kong rose while Japan fell.
• The Nikkie fell as the Japanese Yen gained hurting the countries exporters.
• European equity markets are trading higher after European economic data beats expectations.
• Commodities markets are looking strong today as European data is strong. Gold falls back further from $1200.
• The USD looks weaker today after investors sought safety in the currency yesterday after Bernanke’s comments.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
After Bernanke’s comments yesterday pushed investors towards less risky assets data released today in Europe has reversed this trend. The data released has pushed the commodities and European equity markets higher while weakening the USD.
Data for July’s manufacturing and service output in the Eurozone grew faster than was expected. The index rose to its three month high of 56.7 which beat analyst expectations of 55.5 and the previous month’s figure of 56.0. The main reason for the strength of the index has come from the major economies of Germany and France. This data relieves fears of a double dip recession in the Eurozone.
Retail sales data released in the UK came in better than expected. Sales volumes for the month of June rose by 1 percent. This is a strong increase in sales and has been boosted by consumer spending related the World Cup.
Just Released
0830ET - Jobless Claims
Previous 429 K Consensus 450 K
Consensus Range 430 K to 490 K Actual 464 K
This weeks Jobless Claims figure has come in worse than previous and consensus. The figure shows that more people than expected have filed for unemployment insurance. This proves bearish for the markets as it shows that the labour market is worse than was previously thought.
Coming up Today
As the earnings season continues a number of companies report today. Ones to watch are:
• Amazon
• American Express
• Caterpillar
• Microsoft
1000ET – Existing Home Sales
Previous 5.66 M Consensus 5.260 M
Consensus Range 4.800 M to 6.200 M
After last month’s fall in home sales it is expected that this months, for June, will repeat the pattern. The fall in home sales is a reflection of the slowdown in the economy and the weak labour market. A higher than consensus number will be bullish as it may suggest the economy is in better health than economists predict.
1030ET – Natural Gas Report
The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.
• Markets in Asian countries had mixed sessions over night. China and Hong Kong rose while Japan fell.
• The Nikkie fell as the Japanese Yen gained hurting the countries exporters.
• European equity markets are trading higher after European economic data beats expectations.
• Commodities markets are looking strong today as European data is strong. Gold falls back further from $1200.
• The USD looks weaker today after investors sought safety in the currency yesterday after Bernanke’s comments.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
After Bernanke’s comments yesterday pushed investors towards less risky assets data released today in Europe has reversed this trend. The data released has pushed the commodities and European equity markets higher while weakening the USD.
Data for July’s manufacturing and service output in the Eurozone grew faster than was expected. The index rose to its three month high of 56.7 which beat analyst expectations of 55.5 and the previous month’s figure of 56.0. The main reason for the strength of the index has come from the major economies of Germany and France. This data relieves fears of a double dip recession in the Eurozone.
Retail sales data released in the UK came in better than expected. Sales volumes for the month of June rose by 1 percent. This is a strong increase in sales and has been boosted by consumer spending related the World Cup.
Just Released
0830ET - Jobless Claims
Previous 429 K Consensus 450 K
Consensus Range 430 K to 490 K Actual 464 K
This weeks Jobless Claims figure has come in worse than previous and consensus. The figure shows that more people than expected have filed for unemployment insurance. This proves bearish for the markets as it shows that the labour market is worse than was previously thought.
Coming up Today
As the earnings season continues a number of companies report today. Ones to watch are:
• Amazon
• American Express
• Caterpillar
• Microsoft
1000ET – Existing Home Sales
Previous 5.66 M Consensus 5.260 M
Consensus Range 4.800 M to 6.200 M
After last month’s fall in home sales it is expected that this months, for June, will repeat the pattern. The fall in home sales is a reflection of the slowdown in the economy and the weak labour market. A higher than consensus number will be bullish as it may suggest the economy is in better health than economists predict.
1030ET – Natural Gas Report
The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.
Wednesday 21 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets showed gains overnight except for the Japanese market which fell with the Nikkei finishing down -0.23%.
• European equity markets are trading higher this morning. The FTSE 100 is up over 1.5%.
• Oil has risen above $78 and is continuing its trend towards $80. Gold is also moving higher but is just below the $1200 mark.
• The Yen is looking strong today, and the USD/JPY is trading around the 87.00 level.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
Blackrock, the world’s largest asset manager, has reported that its second quarter earnings have risen by 98 per cent. The rise in profits for Blackrock has been boosted by the company’s acquisition of Barclays Global Investors, this has increased the company’s assets under management and the fees for management.
Apple, the maker of the iPhone, has reported better than consensus results. The company has reported a strong revenue stream, which has broken the trend of company’s reporting strong earnings with weak revenue. These strong results come at a time when Apple is being plagued by problems with the release of its new iPhone 4.
Coca Cola has reported better than expected earnings figures for its second quarter. The company has beaten analyst’s expectations on earnings but the revenue generated has fallen slightly short of the expected figure. Profits are up 16% from the same period a year earlier at $2.37Bn.
Morgan Stanley and Wells Fargo & Co. are due to report Q2 results today. The results of the company’s will have an effect on the strength of the market during the day. But prior to the open its appears that there is a bullish day for the equity markets on the horizon.
Coming up Today
1030ET – Petroleum Status Report
The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.
• Asian equity markets showed gains overnight except for the Japanese market which fell with the Nikkei finishing down -0.23%.
• European equity markets are trading higher this morning. The FTSE 100 is up over 1.5%.
• Oil has risen above $78 and is continuing its trend towards $80. Gold is also moving higher but is just below the $1200 mark.
• The Yen is looking strong today, and the USD/JPY is trading around the 87.00 level.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
Blackrock, the world’s largest asset manager, has reported that its second quarter earnings have risen by 98 per cent. The rise in profits for Blackrock has been boosted by the company’s acquisition of Barclays Global Investors, this has increased the company’s assets under management and the fees for management.
Apple, the maker of the iPhone, has reported better than consensus results. The company has reported a strong revenue stream, which has broken the trend of company’s reporting strong earnings with weak revenue. These strong results come at a time when Apple is being plagued by problems with the release of its new iPhone 4.
Coca Cola has reported better than expected earnings figures for its second quarter. The company has beaten analyst’s expectations on earnings but the revenue generated has fallen slightly short of the expected figure. Profits are up 16% from the same period a year earlier at $2.37Bn.
Morgan Stanley and Wells Fargo & Co. are due to report Q2 results today. The results of the company’s will have an effect on the strength of the market during the day. But prior to the open its appears that there is a bullish day for the equity markets on the horizon.
Coming up Today
1030ET – Petroleum Status Report
The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.
Friday 16 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets performed poorly overnight and closed down. The Nikkei 225 finished down 2.86%
• European equity markets are trading higher this morning. The FTSE 100 is up over 1%.
• Oil has risen slightly to $76.79, while Gold is falling back towards the $1200 level.
• The EUR/USD continues to rise and is making new 2 month highs at 1.2988.
• The USD/JPY is falling and at its current level of 86.67 is approaching its yearly lows.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
As the Q2 earnings season gets fully underway three of the world’s largest companies report. The results seen by these companies will give direction to the market and indicate the condition of the economy.
Google – The Company’s revenues looked good for their Q2 trading. But a fall in the earnings per share figure below analysts’ consensus hurt the share price. This worse than expected earnings figure seems to have been due to Google’s capital expenditure program to set the company up for the future.
Bank of America – The profits produced by the company came in ahead of what most analysts had expected. The figures released are a decline on the same figures from a year earlier. The company posted earnings per share of 28cents compared with 33cent last year.
General Electric – The Company announced today that it had beaten quarterly earnings estimates. This strong performance has been helped by the company’s financial services unit. General Electric reports earnings per share of 30 cents compared with analysts expectations of 27 cents.
Just Released
0830ET – Consumer Price Index
CPI - M/M change
Previous -0.2 % Consensus -0.1 %
Consensus Range -0.2 % to 0.0 % Actual -0.1 %
The consumer price index has come in on consensus. This is the third month in a row when the index has shown a negative figure. This relates to the producer price index figure released yesterday which also showed a negative figure. Falling prices may be another sign that the economy is slowing. This should not have a great impact on the markets as the consensus figure was probably already priced in.
Coming up Today
0955ET – Consumer Sentiment
Previous 76.0 Consensus 75.0
Consensus Range 71.0 to 76.0
The index measures consumer’s financial positions and attitudes toward the economy. The figure has been in a rising trend since its 2010 low in mid April, and consensus believes the figure will continue to grow. A reported figure below consensus or below previous will put bearish forces on the dollar and the US equity markets as it is an indication in a reduction in consumer spending.
• Asian equity markets performed poorly overnight and closed down. The Nikkei 225 finished down 2.86%
• European equity markets are trading higher this morning. The FTSE 100 is up over 1%.
• Oil has risen slightly to $76.79, while Gold is falling back towards the $1200 level.
• The EUR/USD continues to rise and is making new 2 month highs at 1.2988.
• The USD/JPY is falling and at its current level of 86.67 is approaching its yearly lows.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
As the Q2 earnings season gets fully underway three of the world’s largest companies report. The results seen by these companies will give direction to the market and indicate the condition of the economy.
Google – The Company’s revenues looked good for their Q2 trading. But a fall in the earnings per share figure below analysts’ consensus hurt the share price. This worse than expected earnings figure seems to have been due to Google’s capital expenditure program to set the company up for the future.
Bank of America – The profits produced by the company came in ahead of what most analysts had expected. The figures released are a decline on the same figures from a year earlier. The company posted earnings per share of 28cents compared with 33cent last year.
General Electric – The Company announced today that it had beaten quarterly earnings estimates. This strong performance has been helped by the company’s financial services unit. General Electric reports earnings per share of 30 cents compared with analysts expectations of 27 cents.
Just Released
0830ET – Consumer Price Index
CPI - M/M change
Previous -0.2 % Consensus -0.1 %
Consensus Range -0.2 % to 0.0 % Actual -0.1 %
The consumer price index has come in on consensus. This is the third month in a row when the index has shown a negative figure. This relates to the producer price index figure released yesterday which also showed a negative figure. Falling prices may be another sign that the economy is slowing. This should not have a great impact on the markets as the consensus figure was probably already priced in.
Coming up Today
0955ET – Consumer Sentiment
Previous 76.0 Consensus 75.0
Consensus Range 71.0 to 76.0
The index measures consumer’s financial positions and attitudes toward the economy. The figure has been in a rising trend since its 2010 low in mid April, and consensus believes the figure will continue to grow. A reported figure below consensus or below previous will put bearish forces on the dollar and the US equity markets as it is an indication in a reduction in consumer spending.
Thursday 15 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets performed poorly overnight and closed down. Shanghai was down nearly 2% at the close.
• European equity markets are flat today after recovering from a small loss in morning trading.
• Commodities futures are all showing gains today. Oil is continuing its bullish run and is trading at $77.50 while gold is at $1214.30.
• The GBP is looking strong today and is making new 3 month highs against the USD.
• The EUR is gaining against the USD and is making new 2 month highs.
• US equity futures are showing slight rises suggesting a small rise in the equity markets at 0930ET.
News Focus
Profits at JP Morgan have risen 76%, this was announced on Thursday by the international banking group. EPS came in well ahead of expectation at $1.08 compared with analysts’ expectations of $0.72. These earnings have been due to loan losses being better than expected but still being above normal conditions and credit costs being lower meaning borrowing costs have been less significant.
The rate of growth of the Chinese economy has slowed in the second quarter. The growth rate for the country in Q1 was 11.9% this compares with the most recent figure for Q2 of 10.3%. This figure was expected to fall and Chinese officials are not worried as it may prevent the economy from overheating and provide a chance for new economic models to take effect.
Just Released
0830ET – Producer Price Index
PPI - M/M change
Previous -0.3 % Consensus -0.1 %
Consensus Range -0.5 % to 0.2 % Actual -0.5 %
After the Producer Price Index has fallen in the previous 2 months this figure continues the trend. The -0.5% figure means that prices are falling and they are falling faster than expected. This fall further than expected has been due to energy and food due to the core index coming in on consensus.
0830ET – Jobless Claims
New Claims - Level
Previous 454 K Consensus 445 K
Consensus Range 420 K to 460 K Actual 429 K
This jobless claims figure is better than consensus. The figure shows that less people have claimed joblessness. This may mean that the employment market is in better health than previously thought. This figure proves bullish for the markets.
Coming up Today
0915ET – Industrial production
Production - M/M change
Previous 1.2 % Consensus -0.2 %
Consensus Range -0.6 % to 0.2 %
This month’s figure is expected to show that industrial production fell in June after the previous month’s growth of 1.2%. The trend for the past year has been of positive monthly growth figures. Negative growth of 0.2% for a month will not damage the recovery of the industrial sector, but the fear is that this may be the start of a new trend. A higher that 0.2% figure will prove bullish for the markets as it will suggest the economy is in better health that expected.
• Asian equity markets performed poorly overnight and closed down. Shanghai was down nearly 2% at the close.
• European equity markets are flat today after recovering from a small loss in morning trading.
• Commodities futures are all showing gains today. Oil is continuing its bullish run and is trading at $77.50 while gold is at $1214.30.
• The GBP is looking strong today and is making new 3 month highs against the USD.
• The EUR is gaining against the USD and is making new 2 month highs.
• US equity futures are showing slight rises suggesting a small rise in the equity markets at 0930ET.
News Focus
Profits at JP Morgan have risen 76%, this was announced on Thursday by the international banking group. EPS came in well ahead of expectation at $1.08 compared with analysts’ expectations of $0.72. These earnings have been due to loan losses being better than expected but still being above normal conditions and credit costs being lower meaning borrowing costs have been less significant.
The rate of growth of the Chinese economy has slowed in the second quarter. The growth rate for the country in Q1 was 11.9% this compares with the most recent figure for Q2 of 10.3%. This figure was expected to fall and Chinese officials are not worried as it may prevent the economy from overheating and provide a chance for new economic models to take effect.
Just Released
0830ET – Producer Price Index
PPI - M/M change
Previous -0.3 % Consensus -0.1 %
Consensus Range -0.5 % to 0.2 % Actual -0.5 %
After the Producer Price Index has fallen in the previous 2 months this figure continues the trend. The -0.5% figure means that prices are falling and they are falling faster than expected. This fall further than expected has been due to energy and food due to the core index coming in on consensus.
0830ET – Jobless Claims
New Claims - Level
Previous 454 K Consensus 445 K
Consensus Range 420 K to 460 K Actual 429 K
This jobless claims figure is better than consensus. The figure shows that less people have claimed joblessness. This may mean that the employment market is in better health than previously thought. This figure proves bullish for the markets.
Coming up Today
0915ET – Industrial production
Production - M/M change
Previous 1.2 % Consensus -0.2 %
Consensus Range -0.6 % to 0.2 %
This month’s figure is expected to show that industrial production fell in June after the previous month’s growth of 1.2%. The trend for the past year has been of positive monthly growth figures. Negative growth of 0.2% for a month will not damage the recovery of the industrial sector, but the fear is that this may be the start of a new trend. A higher that 0.2% figure will prove bullish for the markets as it will suggest the economy is in better health that expected.
Tuesday 13 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets performed poorly overnight and closed down. Shanghai was down over 1.5% at the close.
• European equity markets are seeing a bullish day. European indices are up around 1.5%.
• Commodities futures are all showing gains today. Oil is up 0.5% while gold is up 0.7%
• The GBP is looking strong today, as it strengthens against the USD, JPY and EUR.
• The USD looks slightly weak as investors move away from safety and accept more risk.
• The EUR looks weak in response to the Downgrade of Portugal.
• US equity futures are showing rises suggesting a rise in the equity markets at 0930ET.
News Focus
The ratings Moody’s has downgraded Portugal’s debt rating from Aa2 to A1. This is a downgrade of two levels. Concerns over the Eurozone Country’s Debt to GDP and revenue ratios are cited as reasons for the cut. This follows the trend from the US ratings agencies in downgrading Mediterranean countries after Greece and Spain have already been cut. Portugal is expected to be running a debt to GDP ratio of 90% within the next couple of years and a debt to revenue ratio of over 200%.
Alcoa reported its Q2 earning last night and they came in ahead of consensus. This Q2 earnings figure sees America’s largest aluminium producer return to profit. Q2 profit was reported at $136M compared with a loss of $201M in Q1 of this year. As this is the start of the earnings season and Alcoa is the first to report it is seen as a barometer for the rest of the economy, this better than expected figure should be bullish for the markets when they open.
A complete ban on the export of iron ore in India has been proposed by the secretary in the ministry of steel. This is proposed to protect the natural resources that India has. India is the world’s fourth largest producer of Iron ore and supplies 220M tonnes to China each year.
Just Released
0830ET – International Trade
Previous $-40.3 B Consensus $-39.0 B
Consensus Range $-41.0 B to $-38.0 B Actual $-42.3 B
The international trade report shows the US’s trade gap. A negative figure shows that more money is leaving the country than is coming in. Today’s figure shows data for May. April’s data released last month showed a worsening of the trade gap from -$40.0B to -$40.3B. Today’s report shows that the trade gap has no improved over last month’s figure and has come in worse than consensus. This should prove bearish for the US markets when they open.
Coming up Today
1400ET – Treasury Budget
Previous $-135.9 B Consensus $-70.0 B
Consensus Range $-90.0 B to $-69.0 B
The monthly report shows the federal government’s fiscal deficit or surplus. This gives an indicator of how government spending is compared with government revenues. The result for June, released today, is expected to show that the fiscal deficit is being reduced. A figure below consensus will show that tax revenues are not as high as expected or spending is higher than expected, this would be bearish for the markets.
• Asian equity markets performed poorly overnight and closed down. Shanghai was down over 1.5% at the close.
• European equity markets are seeing a bullish day. European indices are up around 1.5%.
• Commodities futures are all showing gains today. Oil is up 0.5% while gold is up 0.7%
• The GBP is looking strong today, as it strengthens against the USD, JPY and EUR.
• The USD looks slightly weak as investors move away from safety and accept more risk.
• The EUR looks weak in response to the Downgrade of Portugal.
• US equity futures are showing rises suggesting a rise in the equity markets at 0930ET.
News Focus
The ratings Moody’s has downgraded Portugal’s debt rating from Aa2 to A1. This is a downgrade of two levels. Concerns over the Eurozone Country’s Debt to GDP and revenue ratios are cited as reasons for the cut. This follows the trend from the US ratings agencies in downgrading Mediterranean countries after Greece and Spain have already been cut. Portugal is expected to be running a debt to GDP ratio of 90% within the next couple of years and a debt to revenue ratio of over 200%.
Alcoa reported its Q2 earning last night and they came in ahead of consensus. This Q2 earnings figure sees America’s largest aluminium producer return to profit. Q2 profit was reported at $136M compared with a loss of $201M in Q1 of this year. As this is the start of the earnings season and Alcoa is the first to report it is seen as a barometer for the rest of the economy, this better than expected figure should be bullish for the markets when they open.
A complete ban on the export of iron ore in India has been proposed by the secretary in the ministry of steel. This is proposed to protect the natural resources that India has. India is the world’s fourth largest producer of Iron ore and supplies 220M tonnes to China each year.
Just Released
0830ET – International Trade
Previous $-40.3 B Consensus $-39.0 B
Consensus Range $-41.0 B to $-38.0 B Actual $-42.3 B
The international trade report shows the US’s trade gap. A negative figure shows that more money is leaving the country than is coming in. Today’s figure shows data for May. April’s data released last month showed a worsening of the trade gap from -$40.0B to -$40.3B. Today’s report shows that the trade gap has no improved over last month’s figure and has come in worse than consensus. This should prove bearish for the US markets when they open.
Coming up Today
1400ET – Treasury Budget
Previous $-135.9 B Consensus $-70.0 B
Consensus Range $-90.0 B to $-69.0 B
The monthly report shows the federal government’s fiscal deficit or surplus. This gives an indicator of how government spending is compared with government revenues. The result for June, released today, is expected to show that the fiscal deficit is being reduced. A figure below consensus will show that tax revenues are not as high as expected or spending is higher than expected, this would be bearish for the markets.
Monday 12 July 2010
Daily News Report
Markets in a Flash
• Asian equity markets finished up overnight to start the week’s trading. The exception to this is Japan who saw a small fall of less than 1%.
• European equity markets are pretty much flat this morning with no real direction prior to the US open.
• BP Plc has continued its rebound this morning on the LSE. The share price has risen by 7% this morning.
• Commodities futures are slightly lower this morning. Oil is at $75.65 while Gold is at $1207.20.
• The GBP is looking weak today as it is down against all other major currencies. GBP/USD broke the 1.5000 level to the downside.
• US equity futures are showing small falls suggesting a slightly lower open.
News Focus
The UK’s recession was worse than initially thought. Previously the economy had been thought to have dropped by 6.2% but new data issued by the Office of National Statistics suggests that the economy contracted 6.4% from peak to trough. This information was released as the ONS also kept the UK’s predicted Q1 growth rate at 0.3%. The ONS had also found and reported that Government spending had risen by 1.5% rather than the 0.5% previously thought
The US Q2 earnings season starts today. Alcoa is the first major company to report their earning later today. The earnings reports from the large US companies are what will possibly be directing the markets in the short term future. A good earnings season should see a strong recovery in the equity markets. Later this week earnings are released by Intel, Google and JP Morgan.
The world’s largest insurance brokerage, Aon, has agreed to purchase Hewitt Associates for about $4.9Bn. The purchase of Hewitt Associates is designed to increase the abilities of Aon in the area of consulting. Aon is offering a premium of 41% over the value of Hewitt Associated according to their Friday closing price.
Coming up Today
No Important Releases Today
• Asian equity markets finished up overnight to start the week’s trading. The exception to this is Japan who saw a small fall of less than 1%.
• European equity markets are pretty much flat this morning with no real direction prior to the US open.
• BP Plc has continued its rebound this morning on the LSE. The share price has risen by 7% this morning.
• Commodities futures are slightly lower this morning. Oil is at $75.65 while Gold is at $1207.20.
• The GBP is looking weak today as it is down against all other major currencies. GBP/USD broke the 1.5000 level to the downside.
• US equity futures are showing small falls suggesting a slightly lower open.
News Focus
The UK’s recession was worse than initially thought. Previously the economy had been thought to have dropped by 6.2% but new data issued by the Office of National Statistics suggests that the economy contracted 6.4% from peak to trough. This information was released as the ONS also kept the UK’s predicted Q1 growth rate at 0.3%. The ONS had also found and reported that Government spending had risen by 1.5% rather than the 0.5% previously thought
The US Q2 earnings season starts today. Alcoa is the first major company to report their earning later today. The earnings reports from the large US companies are what will possibly be directing the markets in the short term future. A good earnings season should see a strong recovery in the equity markets. Later this week earnings are released by Intel, Google and JP Morgan.
The world’s largest insurance brokerage, Aon, has agreed to purchase Hewitt Associates for about $4.9Bn. The purchase of Hewitt Associates is designed to increase the abilities of Aon in the area of consulting. Aon is offering a premium of 41% over the value of Hewitt Associated according to their Friday closing price.
Coming up Today
No Important Releases Today
Friday 9 July 2010
Daily News Report
Markets in a Flash
• Asian markets closed moderately higher overnight. Chinese markets were up over 2%.
• European markets are trading slightly higher this morning, but are p less than 0.5%
• Commodities slightly higher this morning. Oil and Gold are trading higher but Gold is still just below $1200.
• The GBP is looking strong today making gains against other major currencies.
• The Canadian Dollar strengthens after an upbeat jobs report.
• US equity futures are showing small falls suggesting a slightly lower open.
News Focus
Google’s license to operate in China has been renewed by the Chinese authorities. The Chinese authorities had threatened to remove the company’s right to operate in the country after Google had stopped censoring search results in the country. Google offered Chinese user the ability to access the uncensored Hong Kong page with the click of an extra button on the Chinese homepage. This option appears to have satisfied the Chinese authorities as confirmed by their actions today in renewing their license.
South Korea has raised their base rate from 2% by 25 basis points to 2.25%. This is the country’s first rise in interest rates since the economic crisis and the first in 16 months. The rise has been implemented in response to the threat of inflation and following the recent rises in rates Malaysia, Taiwan, India and New Zealand.
Coming up Today
No Important Releases Today
• Asian markets closed moderately higher overnight. Chinese markets were up over 2%.
• European markets are trading slightly higher this morning, but are p less than 0.5%
• Commodities slightly higher this morning. Oil and Gold are trading higher but Gold is still just below $1200.
• The GBP is looking strong today making gains against other major currencies.
• The Canadian Dollar strengthens after an upbeat jobs report.
• US equity futures are showing small falls suggesting a slightly lower open.
News Focus
Google’s license to operate in China has been renewed by the Chinese authorities. The Chinese authorities had threatened to remove the company’s right to operate in the country after Google had stopped censoring search results in the country. Google offered Chinese user the ability to access the uncensored Hong Kong page with the click of an extra button on the Chinese homepage. This option appears to have satisfied the Chinese authorities as confirmed by their actions today in renewing their license.
South Korea has raised their base rate from 2% by 25 basis points to 2.25%. This is the country’s first rise in interest rates since the economic crisis and the first in 16 months. The rise has been implemented in response to the threat of inflation and following the recent rises in rates Malaysia, Taiwan, India and New Zealand.
Coming up Today
No Important Releases Today
Thursday 8 July 2010
US markets pre open run down
Markets in a Flash
• Asian markets closed higher overnight with most Asian markets closing up over 1 or 2%. Chinese markets finished slightly down.
• European markets are all up in morning trading following the bullish finish in the US markets yesterday.
• Commodities prices are mainly up. Oil and energy commodities are all up. Agriculture commodities are mixed in their directions.
• The USD loses strength as risk appetite regains. The EUR/USD makes new monthly highs at 1.2675. The GBP/USD makes new monthly highs at 1.5234.
• US equity futures are showing small falls after yesterdays large rises in the equity markets.
News Focus
World growth has been upgraded for 2010 by the International Monetary Fund. The rate that the global economy is expected to grow by in 2010 has been raised from 4.2% to 4.6%, this is after a better than expected first half to 2010. The expected growth rate for 2011 was held at 4.3%. The global economy is being help out of recession by the world largest economy and is neighbour Canada. China, India and Brazil are also seeing strong growth which is helping the recovery. The IMF did also make reference to the problems faced by Europe and the banking problems in the region.
Just Released - Jobless Claims
Previous 472 K Consensus 465 K
Consensus Range 450 K to 475 K Actual 454 K
This week’s jobless claims figure came in better than expected. The figure has come in under consensus showing less people than thought have claimed joblessness. This figure suggests that the employment market is in better health that initially thought. This figure should prove bullish for the equity markets when they open at 0930ET.
Coming up Today
1030ET – Natural Gas Report
The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.
1100ET – Petroleum Status Report
The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.
• Asian markets closed higher overnight with most Asian markets closing up over 1 or 2%. Chinese markets finished slightly down.
• European markets are all up in morning trading following the bullish finish in the US markets yesterday.
• Commodities prices are mainly up. Oil and energy commodities are all up. Agriculture commodities are mixed in their directions.
• The USD loses strength as risk appetite regains. The EUR/USD makes new monthly highs at 1.2675. The GBP/USD makes new monthly highs at 1.5234.
• US equity futures are showing small falls after yesterdays large rises in the equity markets.
News Focus
World growth has been upgraded for 2010 by the International Monetary Fund. The rate that the global economy is expected to grow by in 2010 has been raised from 4.2% to 4.6%, this is after a better than expected first half to 2010. The expected growth rate for 2011 was held at 4.3%. The global economy is being help out of recession by the world largest economy and is neighbour Canada. China, India and Brazil are also seeing strong growth which is helping the recovery. The IMF did also make reference to the problems faced by Europe and the banking problems in the region.
Just Released - Jobless Claims
Previous 472 K Consensus 465 K
Consensus Range 450 K to 475 K Actual 454 K
This week’s jobless claims figure came in better than expected. The figure has come in under consensus showing less people than thought have claimed joblessness. This figure suggests that the employment market is in better health that initially thought. This figure should prove bullish for the equity markets when they open at 0930ET.
Coming up Today
1030ET – Natural Gas Report
The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.
1100ET – Petroleum Status Report
The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.
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