05.09.14 Friday Morning

Disappointing non-farm payrolls figures from across the pond saw markets suffer a negative end to the week as the US posted 142,000 jobs last month – far below the expected figure of 225,000. Despite the news, the Dow Jones managed to keep above the 17,000 level but the S&P stayed below 2000. The FTSE, which hit 14-year highs of 6,904 on Thursday after the ECB surprisingly cut interest rates, fell back below 6,830 before recovering ground.

The main talking point of the week was in regard to those ECB announcements of interest rates, buying of assets and the ECB president’s post announcements conference. ECB president Mario Draghi stunned the markets by announcing a reduction in interest rates from the predicted 0.15% to 0.05% along with a trillion-euro asset buying spree in the form of asset backed securities. The reductions in interest rates cause a lack of confidence amongst investors over the growth of the european Markets.

Investors saw the euro tumble against the dollar as growth predictions were also lowered during the conference creating a longer term view of the struggling European Union. The week had started relatively flat as Labor Day in the U.S closed their financial markets, the FTSE 100 and DAX being the major movers in the market. To start the week, UK manufacturing data was published showing a slowdown in activity within the sector falling to a 14 month low of 52.5.

These poor results were replicated by the fall of the FTSE 100. Asian shares advanced throughout the week regaining losses, both the Hang Seng and Nikkei rising 0.92% and 0.76% respectively by Wednesday. This was down to investors gaining confidence over the emerging markets as Japan’s central bank called for a more hawkish approached than what analysts believed were going to be the case. A more hawkish approach creates a larger significance of using interest rates to reduce inflation, in turn allowing investors to have a future view of the country’s growth and consequently the yen gaining on the dollar towards the end of the week.

The Dow Jones declined on Tuesday despite construction spending being double the expected increase of 0.9%. The Dow had a variable week hitting a low of 17031.5 with a poor economic optimism report however Dow Jones reached a high of 17163.5 a spread of 132 points over the week. Furthermore, energy shares took the brunt of the decline following the ECB bank’s new stimulus measures. Mid-week European stocks traded off intraday highs following Vladimir Putin’s confusing message, calling for a ceasefire between Russia and Ukraine.

The initial call for a ‘ceasefire’ announced to the markets created a stir between investors as they bombed into European stocks. However, as the misunderstood information came out to unveil that Russia actually denied any actual truce, stocks began to fall from their initial gains throughout the day.

Services PMI came out showing that the service sector had expanded by more than analysts expected up to 60.5, 1.9 up on expectations. Gold began the week with a decline but rallied as all in cost of producing an ounce of gold dropped by 23%, the world’s biggest gold producers including Canada’s Barrick Gold crop showing this trend in its cost figures. However over the week gold has slumped down to 1266 on Friday morning down from 1289 open price on Monday.

Stock of the Week - Vodafone - High 213.29

Vodafone took a large rise mid-week from a low of 205.65, up 3.7%, a very surprising rise for such a big FTSE 100 company. The increase was due to speculation of a takeover from Japanese mobile carrier SoftBank Corp.

Economic Diary

Monday
CNY – Trade Balance
CAD – Building permits @ 8.30am
AUD  - NAB Business Confidence @ 9.30pm

 Tuesday

GBP – BoE Gov Carney Speaks @ 4.30am            
GBP – Manufacturing Production  @ 4.30am
 

Wednesday
GBP – Inflation Report Hearings @ 9.45am
AUD – Employment Change @ 9.30pmAUD – Unemployment Rate @ 9.30pm
CNY – CPI y/y 

Thursday
USD – Unemployment Claims @ 8.30am

Friday

JPY – BOJ Gov Kuroda Speaks @ 2.05am
USD – Core Retail Sales @ 8.30am
USD Retail sales @ 8.30am
USD – Prelim UoM Consumer Sentiment  @ 9.55am
 

The Week Ahead 

TUESDAY, 9 SEP 2014

WTB.L - Whitbread PLC
Whitbread PLC Trading Statement Release

ISG.L - ISG PLC
Full Year 2013 ISG PLC Earnings Release

ABCA.L - Abcam PLC
Full Year 2013 Abcam PLC Earnings Release

CPW.L - Dixons Carphone PLC
Q1 2014/2015 Dixons Carphone PLC Trading Statement

WEDNESDAY, 10 SEP 2014

KGF.L - Kingfisher PLC
Interim 2014 Kingfisher plc Earnings Release

BDEV.L - Barratt Developments PLC
Preliminary 2013/2014 Barratt Developments PLC Earnings Release

AMSU.L - Advanced Medical Solutions Group PLC
Half Year 2014 Advanced Medical Solutions Group PLC Earnings Release

MCB.L - McBride PLC
Full Year 2014 McBride PLC Earnings Release

ALAPH.L - Alliance Pharma PLC
Half Year 2014 Alliance Pharma PLC Earnings Release

MANU.N - Manchester United PLC
Q4 & FY 2014 Manchester United PLC Earnings Release

THURSDAY, 11 SEP 2014

MRW.L - WM Morrison Supermarkets PLC
Half Year 2014 WM Morrison Supermarkets PLC Earnings Release

OCDO.L - Ocado Group PLC
Q3 2014 Ocado Group PLC Interim Management Statement Release

DNLM.L - Dunelm Group PLC
Full Year 2014 Dunelm Group PLC Earnings Release

ASHM.L - Ashmore Group PLC
Full Year 2014 Ashmore Group PLC Earnings Release

NXT.L - Next PLC
Half Year 2014 Next PLC Earnings Release

KESA.L - Darty PLC
Q1 2014/2015 Darty PLC Interim Management Statement

HOME.L - Home Retail Group PLC
Q2 2014/2015 Home Retail Group PLC Trading Statement