Weekly Trading Update
24.10.14 Friday Morning
With global markets left shaken from the horrid sell-off over the last couple of weeks, positivity has crept into the markets, recovering some of the steep losses. Last week we saw the Dow Jones hit lows not seen since February this year. However, markets have tiptoed throughout the week, recovering over 800 points from the lows. Volatility still remained, with global markets yo-yoing throughout the week. Overall sentiment has been improved as we dig deeper into the earnings season and as economic data impressed.
The week started on a back foot after a late rally in Wall Street last week was seen as over optimistic. European futures were seen deep into the red with the DAX dropping triple figures. The negativity filtered through into Tuesday after it emerged the Chinese economy grew at the slowest pace in five years in the third quarter as it battled a slumping real-estate market. Despite the poor result, the data did slightly beat expectations, rising to 7.3% over the 7.2% expectation. However, markets soon recovered, receiving support ahead of the US open. Technology shares were in the limelight after Apple Inc beat on top and bottom line estimates. Apple posted a 16 percent jump in iPhone sales and strongest growth in Mac computers in years. Shares of Apple Inc. rose 1.3 percent to about $101.10 in after-hours trading. However, sales of the iPad slid for a third straight quarter, adding to worries a gradual decline in tablet demand worldwide could slow Apple’s growth.
US earnings towards the end of the week also helped positivity after Caterpillar, 3M and Boston Scientific Corp all exceeded analysts’ estimates. Despite the positivity, supermarkets were once again under selling pressure on Thursday after Tesco reported a 92 percent fall in profits. They reported a bigger than expected gap in its finances after finding accounting mistakes had gone back further than initially anticipated. This has led to the chairman, Sir Richard Broadbent, standing down after the mishap. Shares in Tesco are looking to finish the week at 169p, down 3.5 percent over the week. Shares in Amazon.com, who reported after the close on Thursday, plunged over 10% during after-hours trading in New York after posting a third-quarterly loss of $347m, up significantly from a $41m loss reported last year. The latest earnings have shown the limitations of Chief Executive Jeff Bezos’s strategy of spending big to fuel growth.
The Ebola outbreak continues to play on investors’ minds, especially on Friday after it emerged a doctor in New York has tested positive for the Ebola virus after returning from treating patients in West Africa. Investors continued to remain cautious on the news and have started to analyse how much this could affect sentiment if it continues to spiral out of control. The report, which came out early hours Friday morning, sent the Dow Jones over 70 points lower. However, at the time of writing, markets have recovered of their lows as we approach the US open.
The euro was under selling pressure this week after initially starting the week at 1.2760 and has since dropped to 1.2620. The negativity comes against the dollar after a report shows the European Central Bank was looking at buying corporate bonds as soon as December in its efforts to revive the stagnating eurozone economy. This weekend’s stress tests are also playing on investors’ minds which are to be released by the European Banking Authority on Sunday. The results, released at noon in Frankfurt, will clarify to investors which of the currency bloc’s 130 biggest banks fell short in the European Central Bank’s year-long examination of their asset strength and ability to withstand another crisis.
Stock of the week – Apple
After reporting better than expected earnings on Tuesday, Apple continued to advance, printing fresh highs of £105.40 on Friday. Apple posted a 16 percent jump in iPhone sales and strongest growth in Mac computers in years. They reported fourth-quarter earnings of $8.47bn, a 13 percent rise from the same period a year earlier.
Open (Monday)
6327.2
Close (Thursday)
6404
Change
1.2%
High
6428.8
Low
6227.7
Open (Monday )
16489
Close (Thursday)
16701.5
Change
1.3%
High
16767.5
Low
16245
Open (Monday)
1236.25
Close (Thursday)
1230.05
Change
-0.5%
High
1255.35
Low
1266.45
Open (Monday)
1.6086
Close (Thursday)
1230.05
Change
0.35%
High
1.6185
Low
1.59952
Economic Calander
Monday
10.00 EUR – German Info Business Climate
Tuesday
13.30 USD –Core Durable Goods Orders m/m
15.00 USD - CB Consumer Confidence
Wednesday
NZD – ANZ Business Confidence
19.00 USD – FOMC Statement
19.00 USD – Federal Funds rate
21.00 NZD – Official Cash Rate
Thursday
All day EUR – German prelim CPI m/m
13.30 USD – Unemployment claims
14.00 USD – Fed Yellen Speaks
Friday
JPY – MP statement
11.00 EUR – CPI Flash estimate
13.30 CAD – GDP m/m
Earnings Calander
Monday
- Pearson – Interim Management statement
Tuesday
- Standard Chartered – interim management statement
- BG Group – earnings calendar
- BP – earnings calendar
- Lloyds banking group – interim management statement
Wednesday
- Standard life – interim management statement
- Next – interim management statement
Thursday
- Aviva – interim management statement
- Barclays – interim management statement
- Cairn energy - interim management statement
- Kazakhmys - interim management statement
- Smith & Nephew - interim management statement
Friday
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