31.12.15 Thursday Morning

Despite a promising surge on Tuesday, that rally ended up being rather deceptive, the final (abbreviated) week of 2015 ending not with a bang but a whimper.

UK
The FTSE lagged other stocks on that super-charged Tuesday due to the drag provided by both its commodities and supermarket sectors (see below), even if it did eventually manage to post solid, 3 week high hitting, growth led by a flood-boosted and record property price lifted housing sector. Yet the inescapable weight of its commodity stocks soon spoilt both Wednesday and Thursday (with Brent Crude lingering perilously close to its 11 year lows), leaving the FTSE to approach the end of 2015 around 5% lower than where it started.

Investors and indices alike will be hoping for a resumption of normal service next week, and 2016 certainly does start with a deluge of data. Manufacturing, construction and services PMIs fill out Monday, Tuesday and Wednesday respectively, with the latest UK trade balance figure being released on Thursday. Coming in the early hours of next Saturday morning, China’s industrial production figures may also be of note to the commodity driven FTSE.

US
Though they crept higher on Tuesday, the general malaise that appeared on Wednesday and Thursday (following a growth-warning from the IMF’s Christine Lagarde) left the US markets facing a slog to get to the end of the year. A better than expected, but still growing, goods trade deficit and a higher than anticipated consumer confidence figure on Tuesday was joined by a far weaker than forecast pending home sales number on Wednesday (with jobless claims and Chicago PMI still to come). Yet none of this managed to capture the imaginations of investors, leaving the Dow Jones to finish the year over 1% lower than it was at the start of 2015.

Like in the UK the US markets see manufacturing and services PMIs (both Markit and ISM) on Monday and Wednesday respectively, alongside the usual jobless claims and, most importantly, the first non-farm jobs report of the New Year.

Eurozone
As it has done for much of 2015, the Eurozone saw super surges and pitiful plunges this week, the DAX especially alternating between being the best and worst performing index. Unlike the FTSE and the Dow, the German and French indices are still up on the year, by around 10% each; yet that figure could have been much higher, issues with Greece, China, Volkswagen and US interest rate uncertainty all causing the region’s indices to fall away from their April highs.

The Eurozone sees the same kind of figures as its US and UK peers next week, with manufacturing and services data at the start of the year, the region-wide unemployment rate and retail sales on Thursday and the French and German industrial production and trade balance data on Friday.

Stock of the week: Ocado Group PLC
Amazon’s announcement on Tuesday that it intends to substantially expand its grocery delivery service Pantry in the New Year could spell trouble for Ocado going forwards, something investors seem acutely aware of if the company’s stock price is anything to go by, the stock falling by around 13.5% across the 3 days of this abbreviated week. Whilst the likes of Tesco and Sainsbury’s have their brick and mortar stores as their bread and butter, Ocado’s online-only nature means it could easily be undercut by a faster, cheaper rival, something Amazon has shown it is more than capable of in the multiple sectors it now dominates.

(Source: IT-Finance.com 31/12/2015)

Economic Diary, 4^th to 9^th January 2016

 

Monday 4^th January

1.45m – CNY Caixin Manufacturing PMI

8.15am – EUR Spanish Manufacturing PMI

8.45am – EUR Italian Manufacturing PMI

8.50am – EUR French Final Manufacturing PMI

8.55am – EUR German Final Manufacturing PMI

9.00am – EUR Final Manufacturing PMI

9.30am – GBP Manufacturing PMI

9.30am – GBP Net Lending to Individuals m/m

2.45pm – USD Final Manufacturing PMI

3.00pm – USD ISM Manufacturing PMI

 

Tuesday 5^th January

8.00am – EUR Spanish Unemployment Change

8.55am – EUR German Unemployment Change

9.30am – GBP Construction PMI

10.00am – EUR CPI Flash Estimate y/y

10.00am – EUR Core CPI Flash Estimate y/y

 

Wednesday 6^th January

1.45m – CNY Caixin Services PMI

8.15am – EUR Spanish Services PMI

8.45am – EUR Italian Services PMI

8.50am – EUR French Final Services PMI

8.55am – EUR German Final Services PMI

9.00am – EUR Final Services PMI

9.30am – GBP Services PMI

1.15pm – USD ADP Non-Farm Employment Change

1.30pm – USD Trade Balance

2.45pm – USD Final Services PMI

3.00pm – USD ISM Non-Manufacturing PMI

3.00pm – USD Factory Orders m/m

7.00pm – USD FOMC Meeting Minutes

 

Thursday 7^th January

7.00am – EUR German Factory Orders m/m

10.00am – EUR Unemployment Rate

10.00am – EUR Retail Sales m/m

1.30pm – USD Unemployment Claims

 

Friday 8^th January

7.00am – EUR German Industrial Production m/m

7.00am – EUR German Trade Balance

7.45am – EUR French Industrial Production m/m

7.45am – EUR French Trade Balance

9.30am – GBP Trade Balance

1.30pm – USD Average Hourly Earnings m/m

1.30pm – USD Non-Farm Employment Change

1.30pm – USD Unemployment Rate

 

Saturday 9^th January

1.30am – CNY CPI y/y

1.30am – CNY PPI y/y

 

Earnings releases, 4^th to 8^th January 2016

 

Monday 4^th January

N/A

 

Tuesday 5^th January

N/A

 

Wednesday 6^th January

N/A

 

Thursday 7^th January

N/A

 

Friday 8^th January

N/A