16.05.14 Friday Morning

The week will be remembered by traders for global indices shrugging off worries in Ukraine and China to hit new record highs. The FTSE hit 14-year highs of 6,873 on Tuesday while the S&P broke through the 1,900 level for the first time and the Dow hit a record high of 17,615.44. However, prices retreated on Thursday before levelling out in early Friday afternoon trading.

Global markets received a lacklustre start to the week as risk continued to be priced into the index. Over the weekend, a referendum in Ukraine showed the majority was in favour of a break away from Kiev. Markets seemed unfazed, opening marginally higher since Fridays close. Futures extended throughout the day, with little data to get in the way of the strong upward trend. A rebound in technology and emerging-market shares has contributed to more than $500 billion to be added to global stocks.

Gains were capped during Tuesday's Asian session after China industrial production fell unexpectedly last month. A report from the National Bureau of Statistics showed production fell to 8.7% from 8.8% in the preceding month. The US dollar advanced to the highest level in over a week ahead of speculation a government report will show US retail sales rose for a third month. However, US retail sales failed to meet expectations, coming in at 0.1% versus the 0.5% forecast.

By midweek, markets struggled to keep a direction. Global markets flicked between gains and losses as many believed equities were overpriced. Bullion had a great session on Wednesday with metals making a move away from their recent range. Both gold and silver inflated through resistance levels to make new short-term highs. Silver breached the $20 level, with gold trading through the $1,300 mark up at $1,308 for June delivery.

With markets ticking up throughout the week, Thursday saw the trend halted after European growth data sent jitters through the market. Asian stocks mimicked the retreat of US stocks throughout Wednesday night, falling off one-month highs. Sony Corp reported their earnings throughout the night, dropping 6.8% as they expect to report its sixth loss in seven years. Global markets continued their slide throughout the day after a mix of economic data sent nerves through the markets. Despite US Core CPI, Unemployment Claims and Philly Fed Manufacturing data coming in better than expected, markets shifted lower on a late reaction to European flash GDP figures and weaker earnings. Wall Street was down over 200 points at one stage, pressured by weaker-than-expected earnings from Wal-Mart. The Biggest US retailer fell over 2%, blaming cold weather for the fall in profits. The euro continued its losing streak against the dollar, hitting 11-week lows after the subdued euro zone growth and inflation data bolstered expectations of further easing.

Stock of the week – EasyJet
Shares in EasyJet fell by more than 4 percent during Tuesday trading despite the company reporting interim results that beat expectations. They reported a pre-tax loss of £53m during the first half of its financial year, which was ahead of guidance of about £55m provided just six weeks previously. The final interim result was a significant improvement on previous guidance for a loss of up to £90m. The company said profits were boosted by lower costs as a milder winter meant less de-icing of planes and other cost-saving initiatives were ahead of schedule. As a comparison, the company reported a loss of £61m during the same period last year. Load factor inching up 0.4pc to 89pc whilst the capacity has increased from 30m to 31.1m seats a year – both below those figures quoted a year earlier. Shares were hit hard again on Thursday as investors threated about European growth concerns. Shares in EasyJet closed over 6 percent lower with a further 2 percent being wiped off during early Friday trading, hitting the lowest level this year.

Economic data:

Monday:
- n/a

Tuesday:
- AUD Monetary Policy Meeting Minutes
- EUR German PPI
- GBP CPI

Wednesday: 
- JPY Monetary Policy Statement
- JPY BOJ Press Conference
- GBP MPC asset Purchase Facility Votes, MPC Official Bank Rate
- GBP Retail sales
- USD FOMC Meeting Minutes

Thursday:
- CNY HSBC flash Manufacturing PMI
- EUR French Flash Manufacturing PMI
- EUR German Flash Manufacturing PMI
- EUR Flash Manufacturing PMI
- GBP Second Estimates GDP
- USD Unemployment Claims
- USD Core Retail Sales
- USD Existing Homes Sales

Friday:
- EUR German Ifo Business Climate
- USD New Home Sales

Earnings calendar:

Monday:
- Innovation Group – earnings release
- Babcock International – earnings release
- Cranswick – earnings release

Tuesday: 
- BTG – earnings release
- Marks and Spencer – earnings release
- Blur group – earnings release
- Topps Tiles – earnings release

Wednesday:
- FirstGroup – earnings release
- UK Mail Group – earnings release

Thursday: 
- Royal mail – earnings release
- Booker group – earnings release
- Halfords Group – earnings release