Weekly Trading Update
21.02.14 Friday Morning
Kicking off the week with a US bank holiday, investors had little guidance as American markets were closed throughout the day and economic data was very thin, resulting in European indices set to open flat, however this surprisingly quickly changed. By mid Monday afternoon, the bulls had come out in force driving the FTSE 100 up over 70 points led by property sector constituents such as Hammerson in which its share price rocketed over 4% after the retail property owner reported a rise in full year profits. Leading onto Asian markets, the lack of macro-economic data and American market closure didn’t provide a catalyst for any direction and therefore investors were keen to focus on the Bank of Japan meeting.
The Bank of Japan revealed they are to boost its lending programme whilst continuing to maintain its purchases in order to challenge the high deflation for the region. The Nikkei took well to the results of the meeting, extending its gains and therefore having a knock-on effect to European markets on Tuesday morning.
European markets got particularly volatile during midweek trading as inflation dropped below the target of 2% to 1.9% - the first time since November 2008 and was mainly due to the drop in cost of cultural activities. The inflation drop will no doubt support the Bank of England’s argument to keep interest rates at the same levels for the time being. On top of the inflation figures, German ZEW Economic Sentiment was worse than expected and fell to 55.7, down from 61.7 in January. With all this data released, markets got volatile throughout the day however the FTSE 100 managed to shrug off the worse than expects CPI figure and continued its gains until the close.
EUR/USD rallied throughout the week and it seemed like it could be heading for new highs, however the direction quickly turned on Thursday morning sharply losing all of its gains that it has made over the week. When the minutes from the Federal Reserve’s policy meeting in January were released on Wednesday, the dollar rebounded against the Euro to claw back it’s loses from the beginning of the week.
Looking at Gold, the precious metal looked to continue its rally at the start of the week however with 5 days full of influential figures and spikes up and down, the metal seems to be coming to the end of the week at a similar price to Monday.
Global markets took a hit on Thursday after China HSBC manufacturing PMI was released throughout the night. The figure came in worse than expected at 48.3, significantly lower than consensus of 49.5. The Hang Seng and the Nikkei were all trading down after the data was released.
One big announcement of the week was the surprise that Facebook are set to purchase mobile messaging giant Whatsapp Inc. for a staggering sum of $19bn. The fee is set to be paid by $4bn cash, $12bn in stock and $3bn in restricted shares.
Leading into Friday, the FTSE 100 rallied to its highest level since September 2000 gaining momentum from Vodaphone after the telecommunications company rose over 2.3%.
Stock of the week – BAE Systems PLC
Shares in BAE Systems plummeted 10% on Thursday after the defence giant reported that pretax profits for the year dropped from £1.2bn to £442m – a fall over of 82%. Earlier in the week, Germany cancelled its huge order of Typhoon jets.
Open (Monday)
6670.8
Close (Thursday)
6803.5
Change
1.98%
High
6812.3
Low
6716
Open (Monday)
16187
Close (Thursday)
16117.5
Change
-0.42%
High
16228.5
Low
15974.5
Open (Monday)
1323.85
Close (Thursday)
1314.35
Change
-0.71%
High
1339.95
Low
1307.65
Open (Monday)
1.6763
Close (Thursday)
1.6657
Change
-0.63%
High
1.6821
Low
1.6664
Monday:
• EUR – German Ifo Business Climate @ 09:00
• EUR – CPI y/y @ 10:00
• EUR – Core CPI y/y @ 10:00
Tuesday:
• GBP – Inflation Report Hearings @ 10:00
• GBP – CBI Realized Sales @ 11:00
• EUR – EU Economic Forecasts @ 12:45
• USD – CB Consumer Confidence @ 15:00
Wednesday:
• GBP – Second Estimate GDP q/q @ 09:30
• USD – New Home Sales @ 15:00
• NZD – Trade Balance @ 21:45
Thursday:
• USD – Core Durable Goods Orders m/m @ 13:30
• USD – Unemployment Claims @ 13:30
Friday:
• EUR – CPI Flash Estimate y/y @ 10:00
• CAD – GDP m/m @ 13:30
• USD – Prelim GDP q/q @ 13:30
• USD – Pending Home Sales m/m @ 15:00
• GBP – BOE Gov Carney Speaks @ 15:30
Earnings:
Monday:
• HSBC – Full Year 2013 Earnings
• All Leisure Group – 2013 Prelim Earnings
• Bunzl – Q4 Earnings
Tuesday:
• Ladbrokes – 2013 Prelim Earnings
• Provident Financial – Full Year Earnings
• Seadrill Partners – Q3 Earnings
• Capital & Countries Properties – Full Year Earnings
• Croda International – 2013 Prelim Earnings
Wednesday:
• Direct Line Insurance – 2013 Prelim Earnings
• CSR PLC – Q4 Earnings
• International Personal Finance – Full Year Earnings
• The Quarto Group – 2013 Prelim Earnings
• Avington PLC – 2013 Interim Earnings
• Microgen PLC – 2013 Prelim Earnings
• Restaurant Group – 2013 Prelim Earnings
• EKF Diagnostic Holdings – 2013 Prelim Earnings
• SERGO PLC - Full Year Earnings
Thursday:
• Derwent London – 2013 Prelim Earnings
• RSA Insurance Group - 2013 Prelim Earnings
• Kazakhmys PLC - 2013 Prelim Earnings
• Standard Life - 2013 Prelim Earnings
• Redrow PLC – 2014 Interim Earnings
• Domino’s Pizza Group - 2013 Prelim Earnings
• Man Group PLC - 2013 Prelim Earnings
• Capita PLC – Full Year Earnings
• Lavendon Group - 2013 Prelim Earnings
• Spirent Communications - 2013 Prelim Earnings
• Chemring Group - 2013 Prelim Earnings
• Promethean World - 2013 Prelim Earnings
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