30.01.15 Friday Morning

Europe
Much like last week’s ECB QE reveal, the Eurozone has dominated the news as Syriza swept to election victory in Greece. The Eurozone indices have risen and fallen with each piece of information that has come out of the country, with a combative cabinet solidifying the idea that Syriza are ready to push their own agenda, regardless of how this lines up with the rest of the region. A string of meetings with key members of the European financial elite has so far yielded mere pleasantries, but with trouble brewing over Greece the country’s reluctance to impose new sanctions on Russia, this looks set to be a hotspot for instability in the coming months.

Elsewhere in the Eurozone, Germany saw inflation fall for the first time in 5 years with the region as a whole also suffering an inflation drop, whilst the Italian government failed to elect a new president. There was more mixed news as German retail sales decline, was countered by a decrease in the Italian unemployment rate, and increases in Spanish CPI and GDP. Next week will likely see more controversy from Greece as finance minister Yanis Varoufakis meets with George Osborne; the region also sees a flurry of manufacturing and services PMI data, overall retail sales and German factory orders.

UK
The FTSE saw a familiar week as it rose and fell on the back of its energy and mining stocks. Ominous announcements from Afren and Royal Dutch Shell as the week went on dragged the energy sector down as a whole, whilst mining stocks like KAZ Minerals and Antofagasta continued to struggle. The was joined by mixed GDP data for the UK; whilst the overall figure was the best since 2007, GDP still fell in the fourth quarter, which isn’t exactly a sign of health for 2015.

Next week sees important manufacturing, construction and services PMI, another likely uneventful official bank rate release and UK trade balance. More important for the FTSE will be the performance of oil and copper, as it is its stocks related to these commodities that have given the UK index such a headache this week.

US
A frustrating earnings season combined with a hawkish statement from the Fed and a fall in durable goods orders meant that the US markets had a pretty dismal end to January. A poor release from Microsoft and missed targets for Google and Alibaba sat aside Amazon growing sales and an astonishing, and record breaking, announcement from Apple. As investors were increasingly disappointed with these US giants, many blamed the stronger dollar affecting their international business for the weak earnings season. This led many to hope the Fed would address this issue; instead Yellen reaffirmed that the Fed could be patient with its interest rate raise decision, stating that it could take 6 months at least before it reconsiders a hike.

Average GDP data on Friday afternoon is set to make or break the US markets’ end to the month, as it looks ahead to next week’s ISM manufacturing and non-manufacturing PMI, factory orders, trade balance, unemployment claims and the all-important non-farm employment change. January has seen a consistent stream of dismal data from the USA; investors will be hoping for the country to reverse this slump and start February in style.

Commodities
Oil had a relatively stable week, with Brent Crude fluctuating between $48 and $49 per barrel; it even managed to sidestep a US crude oil inventories that came in at 8 million barrels, 2 million below last week’s figure. Copper suffered three days of decline in the middle of the week, and is hovering close to the 6 year lows it saw in the middle of January; gold is in a similar position to its metallic peer, as it struggles in the face of a strong dollar and a volatile euro in a post-ECB QE world.

Oil will have to endure another US crude oil inventories figure it if wants to continue this week’s relative stability, whilst copper appears to be emulating the black stuff by constantly posting declines after choppy days of trading and gold will continue to look at the performance of the dollar for its own price guidance.

Stock of the week: Apple Inc
In a less than impressive earnings season, Apple posted insane iPhone sales figures due to enormous success in China. Sales of 74.5 million units, which equates to 34,000 iPhones an hour, 24 hours a day for 3 months, Apple posted the largest net income of any public company for a fourth quarter ever, a feat made all the sweeter due to the way Apple’s rivals are currently floundering. This led the stocks to $119.20, near its highest price since the 7-1 stock split in June 2014.

(Source: IT-Finance.com)

Economic Diary, 2^nd to 6^th February 2015

 

Monday 2^nd February

1.45am CNY HSBC Final Manufacturing PMI

7.00am – CHF Trade Balance

8.00am – EUR Spanish Unemployment Change

8.15am – EUR Spanish Manufacturing PMI

8.45am – EUR Italian Manufacturing PMI

9.00am – EUR Final Manufacturing PMI

9.30am – GBP Manufacturing PMI

1.30pm – USD Core PCE Price Index m/m

1.30pm – USD Personal Spending m/m

3.00pm – USD ISM Manufacturing PMI

 

Tuesday 3^rd February

Tentative – GBP Halifax HPI m/m

9.30am – GBP Construction PMI

3.00pm – USD Factory Orders m/m

 

Wednesday 4^th February

1.30am – JPY Average Cash Earnings y/y

1.45am – CNY HSBC Services PMI

8.15am – EUR Spanish Services PMI

8.45am – EUR Italian Services PMI

9.30am – GBP Services PMI

10.00am – EUR Retail Sales

1.15pm – USD ADP Non-Farm Employment Change

3.00pm – USD ISM Non-Manufacturing PMI

3.30pm – USD Crude Oil Inventories

 

Thursday 5^th February

7.00am – EUR German Factory Orders m/m

12.00pm – GBP Official Bank Rate

12.00pm – GBP Asset Purchase Facility

1.30pm – USD Trade Balance

1.30pm – USD Unemployment Claims

1.30pm – USD Prelim Non-Farm Productivity q/q

 

Friday 6^th February

7.00am – German Industrial Production m/m

8.15am – CHF Retail Sales y/y

1.30pm – USD Non-Farm Employment Change

1.30pm – USD Unemployment Rate

 

Earnings releases, 2^nd to 6^th February 2015

 

Monday 2^nd February

Exxon Mobil Corp – Q4 2014 Earnings Release

Gladstone Capital Corp – Q1 2015 Earnings Release

American Financial Group Inc – Q4 2014 Earnings Release

 

Tuesday 3^rd February

Ford Motor Co – January 2015 Sales Release

New York Times Co – Q4 2014 Earnings Release

Universal Corp – Q3 2015 Earnings Release

Chipotle Mexican Grill Inc – Q4 2014 Earnings Release

TalkTalk Telecom Group PLC – Q3 2014 Interim Management Statement Release

BP PLC – Q4 2014 Earnings Release

 

Wednesday 4^th February

General Motors Co – Q4 2014 Earnings Release

Vision Sciences Inc – Q3 2015 Earnings Release

Daily Mail and General Trust PLC – Trading Update Release

GW Pharmaceuticals PLC – Q1 2015 Earnings Release

GlaxoSmithKline PLC – Q4 2014 Earnings Release

 

Thursday 5^th February

Activision Blizzard Inc – Q4 2014 Earnings Release

Astrazeneca PLC – Q4 2014 Earnings Release

Dunkin’ Brands Group INC – Q4 2014 Earnings Release

Yelp Inc – Q4 2014 Earnings Release

 

Friday 6^th February

Aon PLC – Q4 2014 Earnings Release