20.11.15 Friday Morning

Last Friday’s tragic events in Paris cast a long shadow over the markets this week, with cautious and nervy trading followed by moments of super-charged catharsis.

Eurozone
Despite the understandably tentative nature of the markets at times this week, certain Eurozone indices still somehow managed to hit fresh 3 and a half month highs. A combination of decent, and higher than forecast, region-wide inflation data, and a much better than expected German ZEW economic sentiment number helped the DAX to crossed 11000. The rest of the region’s indices weren’t quite as robust, with an unexpectedly low Eurozone ZEW economic sentiment figure preventing the likes of the CAC (obviously supressed for other reasons also) from joining in with a DAX-like rally.

Next week is a bit busier, data-wise; a flurry of manufacturing PMIs on Monday are followed by German GDP data on Tuesday, the M3 money supply figures on Thursday and Spanish inflation, German import prices and French consumer spending on Friday.

US
It was an odd week for the US markets. A solid inflation figure, hawkish comments from Fed members Dudley, Lockhart, Mester and Lacker and, most importantly, a set of FOMC meeting minutes that firmly hinted at a December rate rise, should have, if the past few months have been anything to go by, sent the Dow and co. spiralling. However, the US markets largely spent the week rising, gaining around 600 points between Monday and Friday.

Now, given the events in France the week has had a peculiar air about it, with moments of incredible, almost inexplicable, growth joined by periods of nervous stagnation. That may, in part, help explain the Dow’s performance. Yet there may also be the gradual acceptance by investors that a rate hike is likely going to appear before the end of the year. And whilst they might not be too happy about that fact, the removal of the growth-sapping uncertainty that has plagued 2015 is, as the markets have seen, deserving of a least a little bit of joy.

Whilst Thanksgiving makes the end of next week a bit of a snooze-fest for the US markets, there certainly is plenty packed into the first half. Monday brings with it the flash manufacturing PMI and existing home sales, before Tuesday sees the preliminary GDP figure, the consumer confidence number and the goods trade balance. Wednesday is then the biggie, seeing durable goods orders, jobless claims, the core PCE price index, personal spending and income, the flash services PMI, new home sales AND the revised UoM consumer sentiment number.

UK

The week’s odd trading patterns saw the FTSE rise back above 6300 after tumbling to 6100 by last Friday’s close. The second negative inflation figure in a row didn’t do the index any favours; neither did an unexpected drop in retail sales. However, despite fluctuations from Brent Crude and copper themselves, an overall solid performance from the index’s oil and mining stocks saw the FTSE join in with the global gains, even if it remains short of the 6400 ceiling it struggled with across October.

It will be interesting to see how the FTSE fares next week. The data-wise Friday sees the release of the second estimate GDP figure; beforehand comes the CBI realized sales on Tuesday and a speech from Mark Carney on Thursday. However, the biggest item of the week will likely be Wednesday’s Autumn statement, usually an index-wide market mover in one way or another.

Stock of the week: Poundland Group PLC
Poundland was pounded this Thursday, dropping nearly 20%, at one point hitting an all-time low of £2.15, as it revealed a 26% plunge in first half pre-tax profit to £9.3 million. It’s the latest bit of bad news from the bargain retailer, which has suffered in recent months as its 99p Store take over hit multiple snags on the way to completion. The stock bounced back slightly on Friday, rising to £2.28; however, that still leaves Poundland in the doghouse, with its performance over the last 8 months a stark contrast to the initial 99p Store acquisition-inspired surge that culminated in an all-time high of £4.20 back in February.

(Source: IT-Finance.com 20/11/2015)

Economic Diary, 23^rd to 27^th November 2015

 

Monday 23^rd November

All Day – JPY Bank Holiday

8.00am – EUR French Flash Manufacturing PMI

8.00am – EUR French Flash Services PMI

8.30am – EUR German Flash Manufacturing PMI

8.30am – EUR German Flash Services PMI

9.00am – EUR Flash Manufacturing PMI

9.00am – EUR Flash Services PMI

2.45pm – USD Flash Manufacturing PMI

3.00pm – USD Existing Home Sales

 

Tuesday 24^th November

7.00am – EUR German Final GDP q/q

9.00am – EUR German Ifo Business Climate

9.00am – GBP Inflation Report Hearings

11.00am – GBP CBI Realized Sales

1.30pm – USD Prelim GDP q/q

1.30pm – USD Goods Trade Balance

3.00pm – USD CB Consumer Confidence

 

Wednesday 25^th November

12.30pm – GBP Autumn Forecast Statement

1.30pm – USD Core Durable Goods Orders m/m

1.30pm – USD Durable Goods Orders m/m

1.30pm – USD Unemployment Claims

1.30pm – USD Core PCE Price Index m/m

1.30pm – USD Personal Spending m/m

1.30pm – USD Personal Income

2.45pm – USD Flash Services PMI

3.00pm – USD New Home Sales

3.00pm – USD Revised UoM Consumer Sentiment

3.30pm – USD Crude Oil Inventories

 

Thursday 26^th November

All Day – USD Bank Holiday

9.00am – EUR M3 Money Supply y/y

10.30am – GBP BoE Gov Carney Speaks

12.00pm – EUR Gfk German Consumer Climate

11.30pm – JPY Tokyo Core CPI y/y

 

Friday 27^th November

7.00am – EUR German Import Prices m/m

7.45am – EUR French Consumer Spending m/m

8.00am – EUR Spanish Flash CPI y/y

9.30am – GBP Second Estimate GDP q/q

9.30am – GBP Prelim Business Investment q/q

11.00am – EUR ECB Financial Stability Review

 

Earnings releases, 23^rd to 27^th November 2015

 

Monday 23^rd November

MITIE Group PLC – Half Year 2015 Earnings Release

 

Tuesday 24^th November

Tiffany & Co – Q3 2015 Earnings Release

Compass Group PLC – Full Year 2015 Earnings Release

Telecom Plus PLC – Half Year 2015 Earnings Release

Pets at Home Group PLC – Half Year 2016 Earnings Release

Drax Group PLC – Trading Statement

 

Wednesday 25^th November

Thomas Cook Group PLC – Full Year 2015 Earnings Release

Betfair Group PLC – Half Year 2016 Earnings Release

Britvic PLC – Full Year 2015 Earnings Release

 

Thursday 26^th November

Marston’s PLC – Full Year 2015 Preliminary Results

 

Friday 27^th November

Pennon Group PLC – Half Year 2015/16 Earnings Release