18.09.15 Friday Morning

US
Focus this week was firmly on Thursday’s Fed statement, labelled the one of the most important announcements from the central bank for the past few years. Not that there wasn’t a few things to get out of the way first; falling retail sales, a dismal Empire State manufacturing index, a 5-month low industrial production figure, a 25 month low Philly Fed manufacturing figure and, most importantly, a negative inflation number all pointed to rates remaining the same for the time being, and helped the Dow lift to a 4 week high in the process.

Yet as Yellen and co confirmed most analysts’ expectations of no rate hike, the Dow Jones didn’t soar as its past reactions to lift-off delaying data would have suggested. Instead the US index was a reddish shade of flat, with investors perturbed by the continual lack of clarity from the central bank, with Thursday’s statement providing no real guidance on when the Fed will finally raise rates.

Though next week lacks the anchoring focus of this week’s Fed statement, there are a few figures that could help shed like on the central bank’s future movements. Flash manufacturing and services PMIs are certainly second tier data, but core durable goods orders and, more importantly, the final GDP figure for the second quarter, could provide investors a bit of insight into why the Fed acted(or, more accurately, didn’t act) like it did this Thursday.

UK
Whilst much of the market-wide focus was on the Fed, the UK still had plenty of its own data for the FTSE to deal with this week. Inflation unsurprisingly remained at zero, the 4 month of the year to display complete stagnation; the UK’s jobs report, however, was far more positive, with wage growth at a 6 year high of 2.9% and unemployment falling to 5.5%. It was enough, in fact, for many analysts to start discussing the likelihood of a Bank of England rate hike, despite mixed comments from MPC members themselves in the inflation report on Wednesday. This all helped push the FTSE to around 6200, effectively a 4 week high, only for the index to lose some ground following Thursday’s Fed statement.

The final full week of September looks a bit duller for the UK data-wise, with public sector net borrowing the only figure of any real note, meaning it is likely the FTSE will be at the mercy of larger market forces next week.

Eurozone
The Eurozone was roughly the same as the FTSE this week, largely focus on the Fed but with a few key pieces of its own data thrown in for good measure. Sharp declines in the German and region-wide ZEW economic sentiment figures reflected the chaotic nature of August, whilst a lower than expected Eurozone inflation figure got investors excited about the need for some new ECB QE. Yet post-Fed statement the euro grew against the dollar, damaging the DAX and CAC despite the further suggestions that this could lead Draghi to put his hand in his (well, the ECB’s) pocket once again.

The Greek election on Sunday, with Syriza and New Democracy neck and neck in the polls, could produce a bit of excitement for the Eurozone markets on Monday, before the mid-week parade of flash manufacturing and services PMIs provides investors with the latest chance to assess the health of the region.

China
And what of China, the current thorn lodged firmly in the side of the markets? Well, fixed asset investment rose by a 15 year low at the start of the week, joined by another limp industrial production figure. This caused the usual markets jitters at the start of the week, only for the Fed focus to cause Western eyes to turn away from the troubles in China. That could all change next week, however, with the latest Caixin flash manufacturing figure likely to throw light back on the stuttering and spluttering Chinese economy.

Stock of the week: SABMiller PLC
They say you should never mix your drinks; it looks like that practice, however, could be perfect for SABMiller, which surged over 20% on Wednesday to hit a 4 month high of £36.45 as it was confirmed that alcoholic beverage behemoth Anheuser –Busch InBev had approached the company about a potential £160 billion tie-up. Whilst nothing may come of the talks, the prospect of SAB’s Pilsner Urquell, Tyskie, Peroni and Grolsch joining Budweiser, Stella Artois and Corona at AB InBev has investors very excited indeed.

(Source: IT-Finance.com 18/09/2015)

Economic Diary, 21^st to 25^th September

 

Monday 21^st September

All Day – JPY Bank Holiday

3.00pm – USD Existing Home Sales

6.00pm – USD FOMC Member Lacker Speaks

 

Tuesday 22^nd September

All Day – JPY Bank Holiday

9.30am – GBP Public Sector Net Borrowing

2.00pm – USD HPI m/m

3.00pm – EUR Consumer Confidence

11.30pm – USD FOMC Member Lockhart Speaks

 

Wednesday 23^rd September

All Day – JPY Bank Holiday

2.45am – CNY Caixin Flash Manufacturing PMI

8.00am – EUR French Flash Manufacturing PMI

8.00am – EUR French Flash Services PMI

8.30am – EUR German Flash Manufacturing PMI

8.30am – EUR German Flash Services PMI

9.00am – EUR Flash Manufacturing PMI

9.00am – EUR Flash Services PMI

2.00pm – EUR ECB President Draghi Speaks

2.45pm – USD Flash Manufacturing PMI

3.30pm – USD Crude Oil Inventories

5.30pm – USD FOMC Member Lockhart Speaks

 

Thursday 24^th September

7.00am – EUR Gfk German Consumer Climate

9.00am – EUR German Ifo Business Climate

10.15am – EUR Targeted LTRO

1.30pm – USD Core Durable Goods Orders m/m

1.30pm – USD Unemployment Claims

1.30pm – USD Durable Goods Orders m/m

3.00pm – USD New Home Sales

10.00pm – USD Fed Chair Yellen Speaks

 

Friday 25^th September

12.30am – JPY Tokyo Core CPI y/y

8.00am – EUR German Buba President Weidmann Speaks

9.00am – EUR M3 Money Supply y/y

1.30pm – USD Final GDP q/q

2.45pm – USD Flash Services PMI

3.00pm – USD Revised UoM Consumer Sentiment

 

Earnings releases,  21^st to 25^th September

 

Monday 21^st September

French Connection Group PLC – Half Year 2015 Earnings Release

 

Tuesday 22^nd September

Carnival PLC/Corp – Q3 2015 Earnings Release

Card Factory PLC – Interim Results Statement

AG Barr PLC – Half Year 2015 Earnings Release

Darden Restaurants Inc – Q1 2016 Earnings Release

 

Wednesday 23^rd September

Smiths Group PLC – Full Year 2015 Earnings Release

 

Thursday 24^th September

Nike Inc – Q1 2016 Earnings Release
Accenture PLC – Q4 2015 Earnings Release
Thomas Cook Group PLC - Pre-close Trading Statement 

 

Friday 25^th September

BlackBerry Ltd – Q2 2016 Earnings Release