IFC Markets - Analytics

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    Markets cautious about this week’s economic news

    This week markets feel pressure from traders anticipating the further US earnings data and the ECB meeting on Thursday.

    On Tuesday the US stock market was mixed on the released economic data. The US September Building Permits declined, the reading being lower than forecasted and sliding down 5.0% month-over-month while new-home construction increased more than expected in September hitting the second-highest level in 8 years. The US October crude oil stockpiles exceeded twofold the estimates, according to the US API. The dollar was flat with US Dollar index, a measure of the dollar strength against a basket of six major currencies, sliding down by 0.11% to 94.94. S&P 500 index declined slightly by 0.14% with 7 out of 10 its sectors being in the black: telecommunications services were leading the growth ( 0.8%) and healthcare companies were bottom performers (-0.9%). Dow Jones Industrial Average index closed 0.08% lower. Dover Corp of industrial machinery increased 6.6%, Range Resources Corp added 4%, United Technologies Corp climbed 3.9%, Apple Inc. went up by 1.8%. The companies that dragged the US market down on Tuesday were Micron Technology Inc. (-10.8%), Western Digital Corp. (-7.0%), Mallinckrodt Plc. (-5.25%), Pfizer Inc. (-1.45%). Neus Therapeutic Inc. stocks, Nasdaq component, fell 32.9% hitting fresh all-time low. Harley-Davidson Inc. stocks plunged 13.9% reaching their 52-week low after cutting its full-year shipment outlook. IBM Corp. stocks fell 5.8% reaching their 3-year low after the company reported a bigger-than-expected drop in quarterly revenue and reduced its full-year profit forecast. Today at 12:00 CET the US mortgage applications percentage change in 2014 was released, the reading climbed to 11.8% from -27.6%. Today at 15:30 CET the Bank of Canada rate decision will be announced, the rate is expected to remain unchanged at 0.5%. Today at 15:30 CET various US oil inventories data will be released.

    European stocks were on decline on Tuesday having hit the 5-week high the day before. The fall was caused by the energy and mining stocks extending losses on weak economic data from China. Both pan-European FTSEurofirst 300 index and Euro STOXX 50 index closed about 0.5% lower. Traders were booking profits after the gains of previous trading days as no economic data signaled the possible continuation of growth. The EUR/USD pair was on the increase on Tuesday showing growth of 0.15%. Actelion stocks edged up 3.8% and SAP climbed 0.9% on the news on better-than-expected full-year financial results. UniCredit bank added 2.7% on comments about possible asset sale reports. Energy stocks were suffering losses yesterday, especially BP and Total energy suppliers. Today at 10:00 CET the September eurozone government debt/GDP ratio was released, it increased 0.1% to 92.1%.

    Nikkei index added 1.9% overnight. USD/JPY was on the rise ( 0.31%). Today at 00:50 CET the Japanese merchandise trade balance for September was released, its deficit managed to contract but less than expected.

    West Texas Intermediate oil futures for December lost 0.28% to reach $46.15 a barrel. Brent December futures added 0.19% to $48.70 a barrel.

    Gold futures for December climbed 0.35% to $1,176.9 a troy ounce. On Tuesday mining stocks declined for the second straight day on the news that economic growth in Q3 in China – the world leader in metal consumption – was the slowest since 2008.


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