06.11.15 Friday Morning

It’s been a busy week, with a sour, rather than ‘Super’ Thursday from the Bank of England, a Janet Yellen testimony containing a few comments the markets didn’t want to hear and, of course, non-farm Friday!

UK
Once again the FTSE has struggled to break 6400, with a brief foray above that level on Wednesday eventually coming to nothing. An overall positive set of PMIs, with super strong manufacturing (treated with a healthy dollop of scepticism by analysts) and services figures joined by a slightly weaker construction survey. All in all this created a positive environment for the FTSE, one that, with an unusually robust performance from its mining stocks, allowed the index to hit 6460 mid-week.

However, those same mining stocks soon abandoned their gains in the second half of the week, with a not-so-super Thursday from the Bank of England compounding the FTSE’s floundering. Somewhat as expected Ian McCafferty remained lone hawk in the MPC; more damaging was the dour tone the central bank struck, cutting forecasts for 2015 and 2015 after stating that the ‘outlook for global growth has weakened since the August Inflation Report’ whilst warning that inflation would likely remain below 1% until the second half of next year. Immediately the pound began to fall and, though initially pleased, the FTSE soon followed.

So, with under limp week under its belt what has the FTSE got to look forward took as we get further into November? Well, after a quiet start to next week Tuesday’s inflation and Wednesday’s industrial production figures from China will likely have a knock on effect for the index’s commodity stocks. Also on Wednesday is the UK’s own jobs report, something that has arguably become less important from the market’s point of view given how far-off a rate-hike now seems.

US
Like the FTSE the Dow got off to a strong start to the week, with conflicting Markit and ISM manufacturing PMIs and worse than expected factory orders leaving the Dow Jones achingly (i.e. 20 points) away from the 18000 mark it abandoned in July. However, a decent ADP non-farm figure, a super-charged ISM services survey and, most importantly, comments from Janet Yellen that claimed a December lift-off is still a ‘live possibility’ took the index away from its psychologically significant level with the non-farm jobs report still to come.

Things take a while to get going for the US markets next week. Labour market conditions on Monday and import prices on Tuesday are followed by a Veterans Day holiday on Wednesday. Thursday and Friday are far busier, with the release of the JOLTS job openings data and unemployment claims on the former and retails sales, PPI and preliminary UoM consumer sentiment figures on the latter.

Eurozone
The attention was largely off the Eurozone this week; not that it prevented the region from having its own mini-dramas. Overall there were impressive manufacturing and services PMIs from the monetary union, but with German issues in both (especially the latter). The biggest news came from the latest twist in the Volkswagen scandal, with the car giant’s admittance that it had seen carbon dioxide emissions ‘irregularities’ in 800,000 vehicles weighing on both the stock and the DAX itself. Upgraded EU economic growth forecasts for the region on Thursday then helped both the CAC touch 5000 and the DAX edge 65 points away from the 11000 mark; however, by the of the day the indices had fallen away from these highs.

The region should carry a bit more clout next week; Eurogroup and ECOFIN meetings on Monday and Tuesday respectively are joined by French and Italian industrial production data, whilst Wednesday sees a speech from Mario Draghi. Thursday and Friday are the biggies; the former brings with it the latest inflation figures for France and Germany, whilst the latter sees GDP for the Eurozone’s members and the region as a whole.

Stock of the week: Facebook Inc

In a stark comparison to the struggling Twitter social-media old-hand Facebook seems to have found an inexhaustible stream of new friends. With the company now hitting 1.1 billion users a day on average, Facebook impressed investors with a better than expected 41% increase in Q3 revenue to $4.5 billion and an eye-catching 72% rise in mobile advertising revenue to $3.3 billion (gradually becoming the go-to metric for judging the company’s performance) helping the stock to brand new all-time highs of $110.65. And whilst it couldn’t quite sustain this surge, Facebook still sits at a respectable $108.67.

 

(Source: IT-Finance.com 06/11/2015)

Economic Diary, 9^th to 13^th November

 

Monday 9^th November

All Day – EUR Eurogroup Meetings

7.00am – EUR German Trade Balance

3.00pm – USD Labor Market Conditions Index m/m

 

Tuesday 10^th November

All Day – EUR ECOFIN Meetings

1.30am – CNY CPI y/y

1.30am – CNY PPI y/y

7.45am – EUR French Industrial Production m/m

9.00am – EUR Italian Industrial Production m/m

9.00am – GBP Inflation Report Hearings

1.30pm – USD Import Prices m/m

 

Wednesday 11^th November

All Day – EUR French Bank Holiday

All Day – USD Bank Holiday

5.30am – CNY Industrial Production y/y

5.30am – CNY Fixed Asset Investment ytd/y

9.30am – GBP Average Earnings Index 3m/y

9.30am – GBP Claimant Count Change

9.30am – GBP Unemployment Rate

10.30am – GBP BoE Carney Speaks

1.15pm – EUR ECB President Draghi Speaks

 

Thursday 12^th November

7.00am – EUR German Final CPI m/m

7.45am – EUR French CPI m/m

10.00am – EUR Industrial Production m/m

1.30pm – USD Unemployment Claims

3.00pm – USD JOLTS Job Openings

3.15pm – USD FOMC Member Evans Speaks

4.00pm – USD Crude Oil Inventories

5.15pm – USD FOMC Member Dudley Speaks

 

Friday 13^th November

6.30am – EUR French Prelim GDP q/q

7.30am – EUR German Prelim GDP q/q

7.45am – EUR French Prelim Non-Farm Payrolls q/q

9.00am – EUR Italian Prelim GDP q/q

9.30am – GBP Construction Output m/m

10.00am – EUR Flash GDP q/q

10.00am – EUR Trade Balance

1.30pm – USD Core Retail Sales m/m

1.30pm – USD Retail Sales m/m

1.30pm – USD PPI m/m

1.30pm – USD Core PPI m/m

3.00pm – USD Prelim UoM Consumer Sentiment

 

Earnings releases, 9^th to 13^th November

 

Monday 9^th November

Lonmin PLC – Full Year 2015 Earnings Release

Aggreko PLC – Q3 2015 Earnings Release

 

Tuesday 10^th November

ITV PLC – Q3 2015 Earnings Release

UBM PLC – Trading Update

National Grid PLC – Half Year 2016 Earnings Release

Aveva Group PLC – Half Year 2015 Earnings Release

 

Wednesday 11^th November

TalkTalk Telecom Group PLC – Half Year 2016 Earnings Release

Barratt Developments PLC – Trading Statement

 

Thursday 12^th November

FirstGroup PLC – Q3 2016 Trading Statement

Halfords Group PLC – Half Year 2015/16 Earnings Release

J Sainsbury PLC – Half Year 2015/16 Earnings Release

SABMiller PLC – Half Year 2016 Earnings Release

Burberry Group PLC – Interim 2016 Statement

 

Friday 13^th November

Auto Trader PLC – 2016 Interim Results