24.12.15 Thursday Morning

Whilst it has largely been a quiet week of pre-Christmas trading, one of 2015’s defining issues reared its ugly head, Brent Crude falling to an 11 year low on Monday. However, with the commodity rebounding as the week went on the markets did get to enjoy a brief, if substantial, Santa rally.

US
The US markets arguably had the busiest week, with a slightly better than expected (if still downgraded) final third quarter GDP figure, coming in at 2% against the 2.1% previous reading, joined by solid durable goods orders, a decent core PCE price index figure and a growing revised UoM consumer sentiment number. By and large the Dow Jones has been in the green this week (even if December will still go down as one of the year’s worst months), nearing 17600 after plunging to 17100 last Friday.

Understandably next week is going to be just as quiet, even if the US is doing its best to liven things up by offering goods trade balance and consumer confidence figures on Tuesday, pending home sales on Wednesday and jobless claims and the Chicago PMI on Thursday.

UK
Despite being troubled by oil’s decline on Monday, and enduring weak public sector net borrowing, current account and, most importantly, final third quarter GDP (coming in at 0.4% against an anticipated 0.5%) figures, the FTSE has been one of, if not the, week’s best performer. On Wednesday especially the UK index really got into the Christmas spirit, surging by over 2% to hit a 2 week high of around 6250.

There isn’t a lot on offer between the long Christmas weekend and the New Year celebrations, bar Tuesday’s nationwide HPI; however, with the oil price still precarious, and the latest set of Chinese manufacturing and non-manufacturing PMIs arriving at the end of the week, the FTSE will likely have a few commodity conundrums to tide it over until proper trading resumes at the start of January.

Eurozone
Perhaps the biggest news of the week came from the Eurozone; Spain’s election results at the weekend, in scenes endemic of much of the region, saw the country’s political landscape effectively jump from a 2 party to a 4 party system. The rise of Podemos and Ciudandanos means the country is looking at a Frankenstein’s monster of a coalition, their election issues playing out like the Greek saga in a minor key. Yet the Eurozone indices largely ignored the week’s uncertainty (barring a wobbly Tuesday), joining the rest of the world in a rather robust rebound throughout Wednesday.

As is the trend the Eurozone is offering up a measly selection of data next week, only Wednesday’s Spanish inflation figures (perhaps gaining prominence due to the election issues) and the M3 money supply of interest to investors.

Stock of the week: Game Digital PLC
It wasn’t all Christmas cheer this week; Game Digital plunged a whopping 38% on Wednesday alone after announcing its revenue fell 6.7% (to £466.8 million) for the 21 weeks to mid-December, causing the company to forecast half year underlying earnings of £30 million compared to £43 million a year before. The spectre of Amazon loomed over Game Digital’s profit warning, a warning that could be the first of many in a retail sector that is constantly feeling the pressure from the online giant. Falling a further 3% on Thursday, Game Digital is now at a current trading price of £1.22 (IT-Finance.com, 24/12/2015).

 

(Source: IT-Finance.com 24/12/2015)

Economic Diary, 28^th December 2015 to 1^st January 2016

 

Monday 28^th December

N/A

 

Tuesday 29^th December

1.30pm – USD Goods Trade Balance

3.00pm – USD CB Consumer Confidence

 

Wednesday 30^th December

7.00am – GBP Nationwide HPI m/m

8.00am – EUR Spanish Flash CPI y/y

9.00am – EUR M3 Money Supply y/y

3.00pm – USD Pending Home Sales

3.30pm – USD Crude Oil Inventories

 

Thursday 31^st December

All Day – JPY Bank Holiday

All Day – EUR German Bank Holiday

1.30pm – USD Unemployment Claims

2.45pm – USD Chicago PMI

 

Friday 1^st January

1.00am – CNY Manufacturing PMI

1.00am – CNY Non-Manufacturing PMI

 

Earnings releases, 28^th December 2015 to 1^st January 2016

 

Monday 28^th December

N/A

 

Tuesday 29^th December

N/A

 

Wednesday 30^th December

N/A

 

Thursday 31^st December

N/A

 

Friday 1^st January

N/A