24.12.14 Wednesday Morning

US
In this abbreviated trading week, the US markets still managed an astonishing feat. The Dow Jones finally crossing the 18000 level after the final US GDP for the quarter came in at 5%, much higher than expected. This meant the USA could ignore poor core durable goods orders to see in Christmas on new record highs.

With this likely to cause the Fed to raise interest rates in the New Year, the USA has a busier week than most next week, with CB consumer confidence, ISM manufacturing PMI, unemployment claims and Chicago PMI to be released. It will be back to reality, with the likelihood for no Santa rally, so it remains to be seen whether the US markets can weather these figures and still maintain their record levels.

Oil
Oil spent much of the week on a minor rebound, prompted by positive data like the US GDP figures. However, whilst in the short-term Brent Crude oil managed to hang onto its $60 per barrel support level, it was dealt a long-term blow by OPEC. The Saudi Arabian oil minister claimed that OPEC would not cut production even if oil fell as low as $20 per barrel. With the Saudis running OPEC like their own private club, these comments point to more doom and gloom for oil in the New Year.

UK
It was a mixed (brief) week for the FTSE, as Tuesday saw very disappointing current account figures, and a GDP number that hints at some retracement. This meant that the UK index couldn’t bask in the glow of the Dow’s record run like many of the worldwide markets. However, Christmas Eve saw the FTSE rebound on the back of rumours that US company Stryker Corp was going to acquire UK medical-device maker Smith & Nephew. With the UK’s only significant economic figure next week being manufacturing PMI, the FTSE will be reliant on the USA and oil to ensure it has a good start to 2015.

Europe
Europe was relatively barren in terms of economic data this week; however, there was still big news from Greece and Russia. The latter saw the Greek parliament fail to elect presidential candidate Stavros Dimas to office, as it looks more and more likely Greece will have to go through a general election proper. And in Putin’s Russia, mid-level creditor Trust Bank was the first casualty of the looming Russian economic crisis, as the bank had to be bailed out to the tune of 30 billion roubles. With only a few figures next week, Europe, like the FTSE, will be looking elsewhere for bullish sentiment.

Stock of the week: Walgreen Co.
The USA’s biggest drug retailing chain Walgreens announced its Q1 2015 earnings release on Tuesday, and beat analysts’ forecasts to see earnings of $809 million and $0.85 EPS. These figures came after a big year for the company, with the departure of tis CEO after months after the announcement of a merger with the UK’s Alliance Boots. This earnings release saw share prices grow 3.04% from $75.05 to $76.53.

Economic Diary, 29^th December 2014 to 2^nd January 2015:

 

Monday 29^nd December:

Tentative – EUR Italian 10-yr Bond Auction

29^th-2^nd – EUR German Retail Sales m/m

 

Tuesday 30^th December:

8.00am – EUR Spanish Flash CPI y/y

9.00am – EUR M3 Money Supply y/y

9.00am – EUR Private Loans y/y

3.00pm – USD CB Consumer Confidence

 

Wednesday 31^st December:

1.30pm – USD Unemployment Claims

2.45pm – USD Chicago PMI

3.00pm – USD Pending Home Sales m/m

3.30pm – USD Crude Oil Inventories

 

Thursday 1^st January:

1.00am – CNY Manufacturing PMI

 

Friday 2^nd January:

1.45am – CNY HSBC Final Manufacturing PMI

8.00am – EUR Spanish Unemployment Change

8.15am – EUR Spanish Manufacturing PMI

8.45am – EUR Italian Manufacturing PMI

9.30am – GBP Manufacturing PMI

9.30am – GBP Net Lending to Individuals m/m

3.00pm – USD ISM Manufacturing PMI

 

Earnings releases, 29^th December 2014 to 2^nd January 2015:

 

Monday 29^nd December:

British Assets Trust PLC

 

Tuesday 30^th December:

N/A

 

Wednesday 31^st December:

UniVision Engineering Ltd

 

Thursday 1^st January:

Lindsay Corp

 

Friday 2^nd January:

N/A