23.01.15 Friday Morning

Europe
After a quiet start to the week, the big ECB QE decision came on Thursday and Draghi didn’t disappoint. He announced asset purchases of €60 billion a month until September 2016, starting in March, with these purchases will be based on national central banks’ share in ECB capital. After the initial excitement sent the markets into a flurry, the Eurozone indices settled into big gains that continued from Thursday’s close into Friday morning. The euro, on the other hand, plummeted against the dollar in a move reminiscent of the yen following the Bank of Japan’s QE decision.

Despite the wave of bullish sentiment coating the Eurozone markets at the moment, another potential crisis looms as Greece goes to the polls on Sunday, with a victory for anti-austerity, anti-bailout party Syriza looking increasingly likely. The rise and rise of Syriza has fuelled talk of a ‘Grexit’; regardless of the accuracy of these claims, if Alexis Tspiras’ party win the Eurozone is in for more than a few headaches. On top of this comes a fraught Italian presidential election on Thursday, with PM Renzi caught between trying to appease his own party and Berlusconi’s opposition. Investors may want to enjoy the current Eurozone peace while they can, as next week looks set to bring more fireworks.

UK
Amidst the Eurozone-mess that plagued the markets, the FTSE was a beacon of strength as it built on the gains made at the end of last week. Unemployment is now at its lowest since 2008, and for much of the week its mining and energy stocks recovered some of their losses. However, Friday saw a flat open as these sectors began to regress; reinvigorated retail figures helped stall the losses, but the FTSE isn’t enjoying the grand end to the week it was expecting.

There was also an interesting nugget of information from the Bank of England earlier in the week. The BoE seems to be abandoning raising interest rates for now, as the 2 hawks that had held out for a raise abandoned this vote after the UK’s disappointing inflation figures. Next week is a quiet one for the UK, with preliminary GDP figures the only truly significant figure for the FTSE. However, with the Eurozone standing on the edge of its latest precipice, the UK index is likely to be embroiled in the volatility that is likely to arise.

US
It was a quiet week for the US, as a holiday on Monday was followed by stagnant housing data being for a bearish start to the week. However a positive unemployment claims figure alongside the bullish sentiment emanating from the Eurozone led the US markets to reverse their slump and post gains as the week went on. Next week sees the return of a packed schedule for the USA, with core durable orders, CB consumer confidence, alongside the potential for an interesting FOMC statement and advance GDP data.

Commodities
Oil managed to stabilise this week, as Brent Crude hovering between $48-49 per barrel, and managed to weather an extraordinarily high US crude oil inventories. It was also boosted by the death of Saudi Arabian King Abdullah with hopes of a change of regime bringing a change of oil policy. Gold spent the week following the euro and Eurozone wherever they went, constantly popping its head above the $1300 per ounce parapet but struggling to significantly burst through this resistance level.

Stock of the week: Netflix Inc
After a big fall following missed subscription targets in October, investors were tentative before its Q4 2014 earnings release on Tuesday. However, this announcement brought the news of impressive international subscription growth, and more plans to expand aboard, causing share prices to leap 19% in one day to $404.30, continuing to rise as the week went on, reaching $428.12 by Thursday.

 

(Source: IT-Finance.com)

Economic Diary, 26^th-30^th January 2015:

 

Monday 26^th January

9.00am – EUR German Ifo Business Climate

9.30am – GBP BBA Mortgage Approvals

All Day – EUR Eurogroup Meetings

 

Tuesday 27^th January

9.30am – GBP Prelim GDP q/q

All Day – EUR ECOFIN Meetings

1.30pm – USD Core Durable Goods Orders m/m

1.30pm – USD Durable Goods Orders m/m

3.00pm – USD CB Consumer Confidence

3.00pm – USD New Home Sales

 

Wednesday 28^th January

Tentative – EUR German Retail Sales

Tentative – GBP Nationwide HPI m/m

7.00am – EUR Gfk German Consumer Climate

3.30pm – USD Crude Oil Inventories

7.00pm – USD FOMC Statement

7.00pm – USD Federal Funds Rate

11.50pm – JPY Retail Sales y/y

 

Thursday 29^th January

All Day – EUR German Prelim CPI m/m

8.55am – EUR German Unemployment Change

9.00am – EUR M3 Money Supply y/y

9.00am – EUR Private Loans y/y

11.00am – GBP CBI Realised Sales

1.30pm – USD Unemployment Claims

3.00pm – USD Pending Home Sales m/m

11.30pm – JPY Household Spending y/y

11.30pm – JPY Tokyo Core CPI y/y

11.50pm – JPY Prelim Industrial Production m/m

 

Friday 30^th January

7.45am – EUR French Consumer Spending m/m

8.00am – EUR Spanish Flash CPI y/y

8.00am – EUR Spanish Flash GDP q/q

10.00am – EUR CPI Flash Estimate y/y

10.00am – EUR Core CPI Flash Estimate y/y

10.00am – EUR Unemployment Rate

1.30pm – USD Advance GDP q/q

1.30pm – USD Employment Cost Index q/q

2.45pm – USD Chicago PMI

3.00pm – USD Revised UoM Consumer Sentiment

 

Earnings releases, 26^th-30^th January 2015:

 

Monday 26^th January

Microsoft Corp – Q2 2015 Earnings Release

Texas Instruments Inc – Q4 2014 Earnings Release

AVEVA Group PLC – Interim Management Statement

Cranswick PLC – Q3 2014 Trading Statement Release

 

Tuesday 27^th January

Pfizer Inc – Q4 2014 Earnings Release

Procter & Gamble Co – Q2 2015 Earnings Release

Electronic Arts Inc – Q3 2015 Earnings Release

Apple Inc – Q1 2015 Earnings Release

Yahoo Inc – Q4 2014 Earnings Release

Foxtons Group PLC – Trading Statement Release

easyJet PLC – Q1 2015 Interim Management Statement Release

 

Wednesday 28^th January

Boeing Co – Q4 2014 Earnings Release

Facebook Inc – Q4 2014 Earnings Release

The Sage Group PLC – Q1 2015 Trading Statement Release

 

Thursday 29^th January

Alibaba Group – Q4 2014 Earnings Release

Amazon.com Inc – Q4 2014 Earnings Release

Google Inc – Q4 2014 Earnings Release

 

Friday 30^th January

BT Group PLC – Q3 2014/14 Earnings Release

Chevron Corp – Q4 2014 Earnings Release

Mastercard Inc – Q4 & Full Year Earnings Release

Mattel Inc – Q4 2014 Earnings Release