18.12.15 Friday Morning

Global indices rose and fell on a potent mixture of pre-Fed jitters and commodity swings in the first half of the week, before the central bank’s unsurprising, but still welcomed, decision to raise interest rates saw a surge on Wednesday evening and much of Thursday. Yet with a quiet Friday bookending the week commodity concerns began to rule the roost once again…

US
Of course the US markets drew most of the focus this weekend, Wednesday’s momentous rate hike decision (which saw the Fed reinstate a 0.25% rate, lifting away from zero for the first time in nearly 8 years, with the promise of a ‘gradual’ increase going forwards) surrounded by solid inflation figures, better than expected building permits and housing starts, limp industrial production and manufacturing PMI data and a steady jobless claims number.

Not only did Yellen raise rates, but the Fed chair exhibited a confidence in the US economy that buoyed the markets even further, taking the Dow Jones to post-17800 highs during Thursday. However, an oil wobble (a regular occurrence in the past fortnight) on Thursday evening helped take the Dow away from its 2 week peak, pushing it back to the 17350-ish level it started out at on Monday.

Next week, of course, is Christmas, and with it a brief moment of respite for (soon to be) turkey-stuffed traders. Yet there is still a few things of note before things shutdown, even if in a post-rate hike world the US markets are arguably lacking a key narrative; Tuesday sees the final Q3 GDP reading (alongside the existing home sales number) whilst Wednesday sees a flurry of durable goods orders personal spending and new home sales figures, the core PCE price index and the revised UoM consumer sentiment data, before the abbreviated week comes to a close with the latest jobless claims on Thursday.

UK
The FTSE has had a tumultuous time of it this week; hitting a 3 year low on Monday following latest Brent Crude collapse the UK index then managed to climb back above the 6100 mark following Tuesday’s positive inflation data, Wednesday’s rate-hike boost (a day that also saw a sharp drop in wage growth countered by a near decade low, 5.2% unemployment rate) and Thursday’s super-charged retail sales. Yet commodity fears began to blight the index as Thursday turned into Friday, the FTSE threatening to fall back below 6100 as the week began to wrap up.

Like in the US next (Xmas-abbreviated) week still has a couple of pieces of key data for the UK, namely the final third quarter GDP figure on Wednesday (joined by the latest current account number); beyond that growth figure the UK sees CBI realized sales on Monday and the public sector net borrowing on Tuesday.

Eurozone
Like the rest of the global indices the Eurozone was in thrall to two masters this week; falling commodities and the interest rate raising Federal Reserve. Unlike their UK and US peers, however, the DAX and CAC managed to largely hold onto their gains (well, until Friday’s fall at least), aided by strong industrial production data on Monday, a better than forecast German ZEW economic sentiment figure (gradually bouncing back from its VW-inspired lows) alongside a weaker than anticipated (if still recovering) Eurozone-wide number, and improving region-wide inflation data (perhaps proving Draghi right in the not-increasing-QE stakes).

Next week sees a limited selection of data for the Eurozone, including consumer confidence figures, German import prices and the latest Italian inflation number on Monday, the Gfk German consumer confidence figure on Tuesday and the French consumer spending and Italian retail sales numbers on Wednesday, before a set of bank holidays on Thursday brings things to an early close.

Stock of the week: SuperGroup PLC
After a bearish note from Liberum Capital sent the stock nearly 7% lower on Tuesday, SuperGroup saw a swift comeback on Wednesday, surging 10% (to briefly cross £17 for the first time since April 2014) following a much better than forecast 54% jump in first half pre-tax profit to £19.3 million, spurred on by a 17.2% increase in like-for-like sales. Given how far the stock rose on Wednesday SuperGroup likely would have been in line for fresh all-time highs if it wasn’t for that investor-spooking Liberum note at the start of the week. SuperGroup sits at a current trading price of £16.75 (IT-Finance.com, 18/12/2015).

(Source: IT-Finance.com 18/12/2015)

Economic Diary, 21^st to 25^th December 2015

 

Monday 21^st December

11.00am – EUR German Buba Monthly Report

11.00am – GBP CBI Realized Sales

3.00pm – EUR Consumer Confidence

 

Tuesday 22^nd December

12.05am – GBP Gfk Consumer Confidence

7.00am – EUR Gfk German Consumer Climate

9.30am – GBP Public Sector Net Borrowing

1.30pm – USD Final GDP q/q

3.00pm – USD Existing Home Sales

 

Wednesday 23^rd December

All Day – JPY Bank Holiday

7.45am – EUR French Consumer Spending m/m

9.30am – GBP Current Account

9.30am – GBP Final GDP q/q

10.00am – EUR Italian Retail Sales m/m

1.30pm – USD Core Durable Goods Orders m/m

1.30pm – USD Durable Goods Orders m/m

1.30pm – USD Core PCE Price Index m/m

1.30pm – USD Personal Spending m/m

3.00pm – USD New Home Sales

3.00pm – USD Revised UoM Consumer Sentiment

3.30pm – USD Crude Oil Inventories

 

Thursday 24^th December

All Day – EUR German Bank Holiday

1.30pm – USD Unemployment Claims

11.30pm – JPY Household Spending y/y

11.30pm – JPY Tokyo Core CPI y/y

 

Friday 25^th December

N/A

 

Earnings releases, 21^st to 25^th December 2015

 

Monday 21^st December

N/A

 

Tuesday 22^nd December

Nike Inc – Q2 2016 Earnings Release

 

Wednesday 23^rd December

N/A

 

Thursday 24^th December

N/A

 

Friday 25^th December

N/A