Spreadex Market Update
European stocks dropped for a second day
European stocks dropped for a second day whilst US stock futures are indicating a softer open. Yesterday the Federal reserve cut its monthly bond buying to $25 billion in its sixth consecutive $10-billion reduction, staying on pace to end the purchase program in October. The FOMC statement provided little clarity when the Fed will start increasing interest rates.
The negativity that we are witnessing today seems to be coming from a string of corporate earnings which failed to meet expectations. Fifty-one S&P 500 companies are set to report quarterly earnings today, including the likes of Exxon Mobil Corp., MasterCard Inc. and Colgate-Palmolive. So far, 75 percent of those that have released results this season have topped analysts’ estimates for profit. However, a string of US stocks that reported after the bell yesterday all missed expectations including Whole Foods, Kraft, Timer Warner Cable and Yum! Leading the decliners in Europe, Adidas dropped over 15% after they lowered its profit forecast whilst Banco Espirito led a plunge in Portuguese’s equities after a 3.6 billion euro loss.
US unemployment claims came in as forecast, with 302,000 Americans filling applications for unemployment insurance benefits. Figures from the past month saw the lowest number of applicants than in any other month for more than eight years, singling employers are hanging on to workers as demand improves. However, last week’s figure was revised up to 303,000 from the 284,000 initially expected.
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