Weekly Trading Update
04.07.14 Friday Morning
Asian markets made modest gains ahead of a data heavy week, particularly from the US where investors are hoping to see further evidence of economic recovery. Optimism about the developing situation in the Middle East allowed crude futures to fall as speculators appeared confident supply from the area was not at risk. Emerging markets made gains, with the MSCI Index looking to make its biggest quarterly advance since September 2012.
German retail sales failed to meet expectations but this was soon shaken off with a well-performing Dax. The pound strengthened against the dollar, with GBP reaching $1.71 into the afternoon, ignoring potential USD strength after US pending home sales received the largest increase since 2010.
Positive Chinese manufacturing PMI data gave Asian equities a boost in Tuesday morning trading. The weakness of the dollar continued overnight, trading close to seven-week lows, helping to boost gold to hit a two-and-a-half-month high. European markets made gains on Tuesday despite increasing German unemployment signalling a slowdown in Europe’s largest economy. The eurodollar was unchanged on the news, but the pound added to the previous day’s progress, reaching a high of $1.7166 against the dollar.
Going into Wednesday, Asian stocks continued to do well after a series of positive data announcements in Europe and the US. European markets opened cautiously positive in the run up to a talk from the Fed Chair, Janet Yellen, in the afternoon. Her talk confirmed the Federal Reserve had no plans to increase rates in response to increasingly risky behaviour by players in the markets, exploiting on-going ultra-loose monetary policy from central banks. ADP Non-Farm Employment figures in the US showed the labour market performing better than expected, giving the dollar a boost. Gold continued to be an indicator of market sentiment, falling on the news to $1,320/oz.
The signs of improvement in the US and Yellen’s assertions that interest rate rises were not due anytime soon caused Asian markets to drift lower overnight. Metals also fell before the release of BLS Non-Farm Employment figures, expected to confirm the strong results from the day before. The report showed 288 thousand jobs were added in the world’s largest economy in the previous month, far exceeding the expected change of 214K. The good news was anticipated and in part priced in but the markets still experienced a boost, the Dow Jones closed up 90 points on the previous day. Asian markets also reacted positively to the news from the US with all indices showing growth as investors bought into equities, demonstrating an increased appetite for risk and confidence in the continued recovery of the world economy.
Stock of the Week – Blinkx Plc
Online media platform Blinkx crashed 46% on Wednesday after the company issued an earnings warning, citing lower than forecast demand in the past three months. The trading update attributed the poor performance to industry-wide problems of efficiency and effectiveness in internet advertising. The company also blamed the problems on the lingering effects of a disparaging blog written by a Harvard Professor in January. The blog accused the firm of deceiving advertisers and levying charges for advertising not delivered. Blinkx denied the allegations but claims they have been detrimental to business. Shares in the company are now down around 80% on where they were before the blog was published.
Open (Monday)
6761.7
Close (Thursday)
6862.2
Change
1.49%
High
6867.5
Low
6730.6
Open (Monday)
16836.5
Close (Thursday)
17059.5
Change
1.32%
High
17075.5
Low
16802.5
Open (Monday)
1315.45
Close (Thursday)
1320.85
Change
0.41%
High
1333.15
Low
1310.65
Open (Monday)
1.7018
Close (Thursday)
1.7153
Change
0.79%
High
1.7176
Low
1.7009
Monday 7 July
7:00 EUR German Industrial Production
9:30 EUR Sentix Investor Confidence
Tuesday 8 July
7:00 EUR German Trade Balance
9:30 GBP Manufacturing Production
GBP Industrial Production
3:00 GBP NIESR GDP Estimate
6:45 USD FOMC Member Kocherlakota Speaks
Wed 9 July
3:30 USD Crude Oil Inventories
7:00 USD FOMC Meeting Minutes
7:01 USD 10-y Bond Auction
Thursday 10 July
9:00 EUR ECB Monthly Bulletin
12:00 GBP Asset Purchase Facility
GBP Official Bank Rate
GBP MPC Rate Statement
1:30 USD Unemployment Claims
3:00 USD Wholesale Inventories
Fri 11 July
7:00 EUR German Final CPI
Next Week’s Earnings
Tuesday 8 July
SHI.L SIG PLC (Construction Products) Half Year Trading Statement Release
Wednesday 9 July
UKM.L UK Mail Group PLC (Delivery Services) Q1 Interim Management Statement
BOK.L Booker Group PLC (Food Wholesaler) Q1 Interim Management Statement Release
GFRD.L Galliford Try PLC (Housebuilder) Full Year Trading Update
JDW.L J D Wetherspoon PLC (UK Pubs) Q4 Interim Management Statement
ALAPH.L Alliance Pharma PLC (Pharmaceuticals) Trading Update
Thursday 10 July
ASHM.L Ashmore Group PLC (Investment Manager) Q4 Assets Under Management Statement
LWB.L Low & Bonar PLC (Technical Textiles) Half Year 2014 Earnings Release
BRBY.L Burberry Group PLC (Luxury Fashion) Q1 Interim Management Statement & Trading Update
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