Daily Market Reviews by MAYZUS - page 12
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08 January 2014: Investors Waiting For The Protocol Of Last FOMC Meeting
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday’s trading session was a victory for the "bulls". In Europe, the index of the Parisian stock exchange, CAC 40, grew by 0.83%, as well as the German DAX, and the index of the London stock exchange FTSE 100 added 0.37%. In the meantime in the US, the Dow Jones indicator increased by 0.64% up to the level of 16530.94 points, the S&P 500 rose by 0.61% and reached the level of 1837.88 points, and Nasdaq gained 0.96% and reached the level of 4153.18 points.
This morning, the American futures bargain in a weak plus, the futures contract on S&P 500 adds 0.12%. Almost all the main indicators of the Asian-Pacific Region are also trading in the green zone, for example, Japanese Nikkei 225 adds 1.93% and the Hong Kong Hang Seng increases by .18%.
Today it is necessary to pay special attention to the publication of the protocol of the last meeting of FOMC. This event is quite interesting to observe, due to the fact that at the last meeting, the representatives of the Committee decided on the long-awaited beginning of the turning of the QE3, however, having designated only symbolical reduction of stimulation. Thus, details of adoption of such a decision can be quite interesting and exciting for the market. If investors will see high motivation of the monetary authorities, and also readiness for further more considerable turning, it could increase demand for the American Dollar. Such an outcome is spoken of highly by many factors - the recent aggressive speech of Plosser and also Bernanke's comments that there is an opportunity of reduction of the program at each meeting.
However, there is a small probability that the members of the FOMC were taking this decision without significant willingness, especially, remembering that the managing director of the FED of Boston, Rozengren, acted against it, referring to a very high unemployment rate and to low a rate of inflation.
As for the EUR/USD currency pair, besides the minutes of the FOMC, has other factors of pressure. Deflationary tendencies in the Eurozone are causing more and more fears in the monetary authorities of E-17, as they obviously point to a lack of final consumption. In spite of the fact that the current economic situation in some peripheral countries starts being corrected, Italy and France considerably slows down the development. In this plan, it will be interesting to look at Mario Draghi's press-conference right after the meeting of the European Central Bank, planned for Thursday. Whether there will be hints on a deflation, and ways of fight against it, remains a riddle.
The influence from it we will be able to see on Thursday, but today the EUR/USD will move under the influence of the publication of the report on industrial orders of Germany, and also results of the FOMC protocol. If the protocol appears to be more positive than expected, it could send the pair to the area of 1.3550.
Brent is up by 0.29% on a level of 107.30$ per barrel. WTI is increasing by 0.51% and traded on a price of 94.32$ per barrel. Gold and Silver are losing 0.28% and 0.88% accordingly, bargaining next to the levels of 1226.06$ and 19.61$ per troy ounce.
Copyright: MAYZUS Investment Company Ltd
09 January 2014: ECB Meeting Will Outline Views Of The Authorities On The Situation In Europe
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
The FOMC protocol met our expectations, and gave the currency market even more confidence that Ben Bernanke's prophecy will come true, and reduction of incentive will be carried out at each subsequent meeting of the FED. This news gave support to the USD, and pushed its main competitors down, the result being the EUR/USD reaching the level of 1.3550, and traded this morning on a price of 1.3595. GBP/USD was pushed away from maximum levels to the area of 1.6440.
Dow Jones industrial average lost 0.41%, and reached the level of 16462.74. Nasdaq added 0.26% and finished the trading session on the level of 4163.88, and the S&P 500 weakened by 0.02%, to the level of 1837.49 points.
In Europe yesterday, there was quite a lot of macroeconomic statistical data published, the surplus of trade balance of Germany didn't hold to market forecasts in November, and made 17.8 billion Euros against the consensus forecast of 18.0 billion Euros. November industrial orders of the country, on the contrary, increased by 2.1%, having surpassed forecasts of analysts of 1.5%. The Eurozone retails in November recorded an increase of 1.4%, and the Eurozone unemployment rate in November didn't change, making 12.1%, as expected.
Today, the European Central Bank will hold the first meeting on the interest rate in the current year, and in spite of the fact that we don't expect any changes in monetary policy, it will be very interesting to look at how the authorities estimate the current situation. On one hand, weak inflationary pressure becomes more dangerous every day, however, on the other hand, the position of Germany is getting more stable. We would like to remind you that in November, low CPI became the basis for the reduction of the interest rate of the European Central Bank. Since then, falling only continued: the indicator makes, at present, 0.8%, instead of the target level of 2%. Today, everything will depend on the placed accents: if the authorities will claim that the German growth will be sufficient to stimulate restoration of inflationary pressure, it will bring a sense of positivity to the European platforms.
Special attention should also be paid to the unemployment figures coming from the USA.
Copyright: MAYZUS Investment Company Ltd
10 January 2014: Negative Moods Prevail In The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
On Thursday, key stock indices of Europe showed negative dynamics due to the statements of Mario Draghi. Besides that, investors’ decisions were influenced by the last protocols of the last meeting of the FOMC, which contained obvious hints on turning of the program of quantitative easing.
It should be noted that yesterday, the European Central Bank and Bank of England kept monetary policy unchanged, thus, according to Mario Draghi, rates will remain at a low level for a long time, but as for the present it is too early to say that the Eurozone is out of danger. Draghi also emphasized that unemployment remains at a high level, and dynamics in the sphere of crediting is still rather weak.
As a result, the main European stock indices finished the trading session with Great Britain's index (the FTSE 100) losing 0.5%, the French of CAC 40 became 0.8% easier, and the German DAX went to a minus also by 0.8%. The regional STXE 600 indicator, in turn, decreased by 0.4% and was closed on a level of 328.41 points.
Currency markets were also influenced by presented data and statements, which added to the strengthening of the Dollar. After the press-conference after the ECB meeting, we first saw further strengthening of the EUR/USD to a maximum of 1.3632, and then witnessed a kickback to a minimum at the level of 1.3548, ending the trading day around 1.3580. At the present time, the currency pair is traded on a level of 1.35988 and its further development can be influenced by the labor market figures today, if they are going to be positive. The next purpose of the pair is on 1.3550 and further on 1.35.
Nevertheless, today it is necessary to pay an attention to the data on the labor market, which will be published in the second part of the day. Forecasts suggest that employment in the nonagricultural sector of the US is supposed to increase approximately by 200 thousand, and unemployment should remain at the former level of 7%. And last, but definitely not least, the factor bringing negative vibes to the markets has been the start of the season of corporate reports. Alcoa did not justify forecasts, the next in line to report are the banks.
Copyright: MAYZUS Investment Company Ltd
13 January 2014: The Markets Cannot Find Their Feet After Winter Holidays
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
For the first days after New Year's vacation, leading stock markets of the world show quite weak activity. Even publications of important macroeconomic indicators cannot push indices to start forming trends in one way or another, neither in the US, Europe, nor in emerging markets. Important indicators, which will be able to have an influence on the market, will be the statistics on industrial production of the Eurozone on Tuesday, and new data from the real estate market in the US on Friday. Besides that, American companies already begun the reporting period for the fourth quarter of the previous year, which could lead to an emergence of volatility in the markets.
On Friday, the statistics of the labor market in the US recorded a minimum level of unemployment in the country for the last five years. The coefficient fell from 7% last month to 6.7% in December, which increases the probability of further reduction of the program of monetary stimulation at the next meeting of the FED at the end of January. At the same time, the quantity of created workplaces for the same period was much lower than expectations, and made only 74 thousand, which was the minimum level for 2013.
For the last three years, the economy of the US created about 2 million workplaces, but at the same time, the unemployment rate remains quite high. It is worth remembering that the desirable unemployment rate, at which the FED could go for a rate increase, is on the level of 6.5%. The second indicator for the FED is the inflation, data on which is going to be published on Wednesday and Thursday.
As a result, the last trading day of the week finished with the Dow Jones industrial average index decreasing by 0.05% to 16437.05 points, retreat in a week made 0.2%. The Standard & Poor's 500 index raised 0.23%, having closed at the level of 1842.37 points, the increase in a week made 0.6%. The Nasdaq Composite index raised by 0.44% to the value of 4174.66 points, having added 1% within the week.
The price of futures of gold raised by 1.4% to the value of 1246.90$ per troy ounce, traded this morning at the level of 1249.20$. Gold rose in price, owing to the dollar weakening, and the dominating confidence of investors that weak data on growth of employment, will not allow the FED to continue further reduction of QE3. In total, gold lost 0.7% in a week.
Oil increased in price as a result of the retreat of the dollar, and against growth of the Chinese import in December. The price of futures of WTI raised by 1.2% to level of 92.72$ per barrel, traded this morning at 92.57$. Brent is down by 0.13%, at 106.47$ per barrel. Last week was the second unprofitable week in a row for oil prices.
Copyright: MAYZUS Investment Company Ltd
14 January 2014: Decrease Noted On World Platforms During Yesterday’s Trading Session
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
During yesterday’s trading session, the American players preferred to take profit from the majority of stocks before the publication of the results of the large banks for the fourth quarter of 2013. Growth of some stocks by 25-30% last year in many respects could be considered as an advance, and fears that reports will not be able to meet expectations, forced the participants of the market to take a third-party position, and take profit.
As a result, the Dow Jones on Monday lost its maximum level of 1.10% since 20th of September, reaching the level of 16257.94 points.The S&P went back to the levels of the middle of December, decreasing by 1.26% to the level of 1819.20 points, and Nasdaq Composite decreased by 1.48% to the level of 4113.30 points.
In comparison to the American indices, the European indices spent the day in a boring side trend, however managed to close the trading session with a small increase. Important statistics in the region were not published, however there were no reasons for sales either. Following the results of the day, the index of the London stock exchange FTSE100, increased by 0.26%, the French CAC40 added 0.3%, and the German DAX appeared in a plus for 0.39%.
This morning, the main indices of the Asian-Pacific region, following the American trading session, show, in general, negative dynamics. The exception being the Chinese Shanghai Composite, adding 0.86%. The Japanese Nikkei fell upon 3.07%, the Korean KOSPI lost 0.24%, and the Hang Seng decreased by 0.45%. Today in Japan, data on trade balance for the November period in 2013 has been published, which showed record deficit, which caused such a steep correction.
During the day, the attention of investors will be concentrated on news coming from the US and the published data on retails, which will help participants to understand more deeply the current development of the economy in the USA. This data could cause increasing volatility on the currency market and influence further decrease in the stock market.
Copyright: MAYZUS Investment Company Ltd
15 January 2014: Macroeconomic Data And Quarterly Reports Of Companies Are Bringing Positives On The Markets
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday, the American trading session finished on a positive note. Firstly, retails in the USA for December grew by 0.2%, at expectations of an increase of 0.1%. It is a very important indicator of the situation in the US economy, as the consumer demand makes about 70% of the gross domestic product of the country. Obviously, investors did not leave such a positive factor aside.
Statements from the representatives of the FED didn't spoil the mood of investors, and indices continued their growth. The president of the FED of Philadelphia, Charles Plosser, believes that the monetary easing program has to come to an end within the current year, as the economy steadily moves towards restoration. The president of the FED of Dallas, Robert Fisher, also considers that the quantitative program has to be completed, as it is similar to beer alcoholism, whereby everything is seen through rose tinted glasses. "We already reached a condition of intoxication", he stated.
As a result, the Dow Jones increased by 0.71% up to the level of 16373.86 points. The S&P 500 added 1.08% finishing the trading session on a level of 1838.88 points, and Nasdaq Composite grew by 1.69%, up to the level of 4183.02 points.
Additionally, on the positive side, the World Bank raised forecasts of growth rates of the world economy yesterday. According to Bank forecasts, growth of the world economy will make 3.2% against the previous forecast of 3%. I would like to remind you that in 2013, the world economy grew by 2.4%. Optimism of the World Bank is connected with the improvement of the situation in Europe and the USA.
However, the situation in the commodity markets is not so positive. Oil prices and prices of precious metals continue to fall. Brent is down by 0.16%, to the level of 105.43$ per barrel, and WTI is decreasing by 0.09%, to the level of 92.7. Gold and silver prices are down by 0.37% and 0.70% accordingly, traded on a price of 1240.69$ and 20.14$ per troy ounce.
During the day, macroeconomic statistics will continue to be published, and reports of regulators on the state of the economy, which could have an impact on moods of the world markets. Among the most important, it is beneficial to note gross domestic product of Germany, the index of production activity of the USA, the price index of producers of the USA, and the monthly regional report "Beige book". Besides that, investors will follow the release of reports from the American companies, among which, is Bank of America, reporting today.
Copyright: MAYZUS Investment Company Ltd
16 January 2014: The Success Of The Banking Sector Promotes Growth Of Indices
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
European stock markets had a rather positive trading session yesterday, the German DAX increased by 2.0%, having reached a new historical record point. The economy of Germany looks forward with optimism, and, according to forecasts of the German Central Bank, gross domestic product of Germany will grow this year by 1.7% and by 2% in 2015.
Among the favorites of growth yesterday in the European stock market, were shares of banks such as Deutsche Bank, adding 3.1% in value, and Commerzbank, increasing by 3.0%, added on expectations of the announcement by the European Central Bank of parameters of the stress tests, which carried out, will hopefully increase trust in the European banking system.
The increase of forecasts on growth rates of the world economy by the World bank, and also the rise in price of shares of stocks in the banking sector, alongside the inspiring report of Bank of America, gave support to the American market.
From yesterday's published macroeconomic statistical data, it is possible to note the increase in the Producer Price Index in December by 0.4%, as it was predicted by the market. At the same time, oil stocks for the past week were reduced, according to EIA, on 7.658 million barrels, whereas analysts expected a decrease in stocks by only 0.613 million barrels.
As a result, the indicator of "blue chips", the Dow Jones Industrial Average index, got stronger by 0.66% and was closed on a level of 16481.94 points, the index of the wide market S&P 500 went to a plus by 0.51% to level of 1848.38 points, and the index of hi-tech companies, Nasdaq, recovered by 0.76% to the level of 4214.88 points.
Papers of the banking sector were, for investors, in special demand. Shares of the second biggest creditor in the USA, Bank of America, rose in price by 2.3% after it reported more than a quadruple increase in the quarterly profit, which absolutely surpassed forecasts of analysts. Quotations of Wells Fargo & Co and JPMorgan Chase & Co grew, in turn, by 1.8% and 3% respectively. Among the favorites of the trading session was also the American corporation, Apple, which market capitalization increased by 2% due to a statement given by China Mobile, which confirmed that advanced orders of the iPhone reached 1 million units.
The is one more important test ahead– the publication of the report of CPI reflecting inflationary tendencies in consumer level. This index needs to confirm a rise in prices in order to convince representatives of the FED of the possibility of further cutting the monetary easing program. If the numbers show amplifying inflationary pressure, it will mean that the American consumer will be able to overcome any short-term uncertainty, and will continue to spend their savings.
Copyright: MAYZUS Investment Company Ltd
17 January 2014: Investors Don't Rush Their Decision-Making
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
Yesterday, the trading session in the main European stock platforms passed rather quietly, and the main focus of the participants of the market was on statistical data, which mostly coincided with forecasts of analysts. Final data on the consumer price index of Germany was presented for December, which, as expected, increased by 0.4%. Meanwhile, the similar indicator on the Eurozone grew by 0.3%, also having coincided with market forecasts.
As a result, the key index of Great Britain, the FTSE100, went down by 0.07%, the French CAC40 lost 0.3%, and the German DAX went to a minus by 0.17%. The regional STXE 600 indicator, in turn, decreased by 0.2% and was closed on a level of 333.99 points.
As for the macroeconomic statistics published in the United States, in general, it was of a neutral character. Data on inflation for December corresponded to average market forecasts, the consumer price index, taking into account seasonality, grew by 0.3%, and the basic indicator of inflation added 0.1%. Furthermore, the number of primary requests for unemployment benefits for the past week practically coincided with the forecast, having decreased from the reconsidered 328 thousand, to 326 thousand. Finally, the index of business activity of the FED of Philadelphia in January, made 9.4 points, when 8.6 points were forecast.
Following the results of the session, the indicator of blue chips, Dow Jones Industrial Average, went down by 0.39% to the level of 16417.01 points, the index of the wide market, Standard & Poor's 500, decreased by 0.13% to the level of 1845.89 points, and the index of high-tech industries of Nasdaq Composite went to a minus on 0.09% and reached the level of 4218.69 points.
In the commodities market, the situation seems to be stabilizing. The price for Brent is increasing by 0.23% and is on a level of 105.99$ per barrel. WTI is up by 0.52% on a level of 94.59$. Gold and silver are adding 0.18% and 0.13% accordingly, traded on the levels of 1242.44$ and 20.08$ per troy ounce.
Expectations of the continuation of the reduction of the program of quantitative easing, give support to the Dollar, and during the continuation of active discussions on this subject, the attention of investors is concentrated on speeches from the heads of the regional FED. Today, the report on the situation of the economy is going to be made by the president of the FED of Richmond - Jeffrey Lacker.
Copyright: MAYZUS Investment Company Ltd
20 January 2014: Sluggish Day Ahead Due To Lack Of Statistics, And The Celebration Of Martin Luther King Day In The U.S.
DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.
On Friday, the American stock indices couldn't decide where to move. The Dow Jones Industrial Average index was closed with an increase of 0.25% and reached the level of 16458.56 points, and at the same time, S&P 500 and Nasdaq Composite, following the results of the trading session, decreased by 0.37% and 0.49% respectively, traded on a level of 4197.58 and 1838.70 points. Today, the stock exchanges of the US are closed due to the celebration of a national holiday - Martin Luther King Day. Thus, the main attention of investors will be riveted on dynamics in Asia and Europe.
The published reports of the companies were ambiguous. The reporting of GE and Intel disappointed, whereas American Express, Visa, and Morgan Stanley shares grew after an exit of figures. The index of consumer moods of Michigan university in January decreased to 80.4 points, which was worse than the forecast of 83.5 points. In December, the quantity of new buildings was reduced by 9.8% compared to the last month, and here the result was also worse than the forecasts.
This morning, data was presented on the condition of the Chinese and Japanese economy, which were again a little weaker than expectations, which caused a small negative at the trading session in the Asian region. Annual growth of China decreased from 7.8% to 7.7% in the fourth quarter, in quarterly expression the gain of gross domestic product decreased from 2.2% to 1.8%. Industrial production in annual expression fell from a level of 10% to 9.7%, and investments into fixed capital of China were reduced from 19.9% to 19.6%. In the industrial sector of Japan, we also observe deterioration. The latest data for January showed a decrease in industrial production by 0.1%.
The Commodity market is flat, oil prices this morning are down by 0.11% on Brent, and 0.68% on WTI, traded on a level of 106.36$ and 93.94$ per barrel accordingly. Gold is up by 0.23% on 1254.87$ per troy ounce, and silver is increasing by 0.02% on a level of 20.31$ per troy ounce.
Copyright: MAYZUS Investment Company Ltd