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Markets and Rates - July 11, 12 (3th comment today)


Markets and Rates - July 11, 12.




Markets and Rates - July 11, 12 (3th comment today)









MARKETS
08:45 A.M

ETX Capital calls the FTSE 100 down 33 points, the DAX lower by 30 points and the CAC-40 down 20 points.

European markets are in for a downbeat start today, tracking losses in US and Asian markets overnight. A series of poor corporate earnings from the US yesterday have overshadowed latest efforts by EU finance ministers to shore up Spain and its toxic banking system. Despite reporting decent 2Q results late Monday, Alcoa shares fell on Wall Street yesterday, while Applied Materials slid 2.7% after cutting its fiscal-year profit and sales projections. Results so far have set the tone for a grim earnings season, but more importantly, have reinforced recent fears about slowing global growth. Today, much of the focus will be on the latest Fed meeting minutes, out after the European open. Last month, the Fed opted to expand “Operation Twist”, dashing the markets hopes for more QE. Today, we will get a chance to understand what went on behind the scenes at the Fed, and if the central bank will follow other major peers and turn aggressive on policies.

Ishaq Siddiqi - Market Strategist - ETX Capital - www.etxcapital.com

09:30 A.M

European equity markets are trading moderately lower this morning on the back of weaker markets in the US and China overnight with investors being especially concerned that in the US the tech sector might not be having completely priced in a decline in earnings momentum. With the economic data schedule once again on the light side today and still no news out from the German constitutional court trading is expect to remain range-bound with markets still remaining vulnerable to the downside as uncertainty regarding the ESM and a continuing dire economic picture across Europe keeps potential buyers on the sidelines, at least for now.

In the US the picture is similar, main focus will be on the FOMC meeting minutes being released this evening providing hopefully some insight on just how far away the Fed is from implementing QE3. With the earnings season not shifting into a higher gear until Friday when JPMorgan and Wells Fargo are expected to release their figures further price adjustments and continuing pressure on some stocks can’t be ruled out.

Markus Huber - Head of German HNW Trading - ETX Capital - www.etxcapital.com

12:00 PM

Regional markets are again in a downbeat mood today with clients holding back from building positions after the 2Q US earnings season kicked off on a sour note yesterday, fuelling worries about slowing global growth. The poor showing from US corporates does not bode well for the rest of the season, prompting markets to scale back recent earnings estimates. Worse still, deterioration in US earnings tend be somewhat of a precursor of what is likely to come from European counterparts.

The first half of this year has seen the US economy growing, albeit rather slowly, but European growth contracting further. With that in mind, poor US earnings not only suggest that major American corporates are under increased pressure, but indicate that we need to brace ourselves for a dismal 2Q reporting season here in Europe. Indeed, today shares in luxury retailer Burberry slumped following a poor sales update. Although a slowdown in sales at Burberry did not come as a huge surprise given the sustained weakness in consumer sentiment across key regions over the past year, the uncertainties over the company’s prospects in FY13 are really rocking the stock right now.

As such, the outlook for sales growth does not only appear bleak for Burberry, but across the luxury brands industry with the market worries about the outlook for major European luxury brands, LVMH and Luxottica. Luxury brands are considered as somewhat traditionally defensive retailers, appealing mostly to high-income customers. Today’s report from Burberry suggests those that live the high life are starting to feel pressure on their checker wallets and purses.

In the ‘periphery’, Spain’s IBEX-35 registered gains and the country’s bond yields eased off highs reached earlier this week after PM Mariano Rajoy unveiled austerity measures. Rajoy said the country’s economic situation is ‘extraordinarily serious’ and that Spain is in the second-deepest recession ever, with 2013 economic growth expected be close to zero. Although austerity will be painful for the country, it is certainly positive that Spain has decided to take further measures in terms of savings and additional tax revenues. There is now but a little more hope that Spain will start to recover given that the budget deficit measures are under control even.

All eyes are now on the Fed’s meeting minutes, due after the European trade. Attention will also be on US earnings with Marriott International and Texas Industries reporting results in the afternoon. US stock futures are currently higher, indicating a firmer start on Wall Street after yesterday’s losses. ETX Capital sees the DJIA up around 30 points and the S&P 500 up 3 points.

Ishaq Siddiqi - Market Strategist - ETX Capital - www.etxcapital.com

05:00 PM

Heading into the European close, price-action across regional markets has been lacklustre at best, as participants wait for the Fed’s meeting minutes which are the next catalyst. 2Q US earnings continued to disappoint today, with chipmaker AMD today following peer Applied Materials yesterday by reporting a grim set of numbers and painting a depressing outlook for profits. In Europe, earnings from UK fashion retailer Burberry underwhelmed the market too, with the group seeing a slowdown in sales growth. The stock slumped, weighing on the FTSE 100.

Worrying noises from corporates have really sapped the markets enthusiasm today -even a modest narrowing of US trade deficit was unable to help stocks drive higher. Instead, clients have moved to the sidelines ahead of the Fed’s minutes.

Dovish minutes could give risk assets such as stocks and the euro a short-term boost. Last month, the central bank opted to extend Operation Twist, but said the door is open for more QE if needed. Markets will now dissect the minutes to see what sort of tone the Fed uses and if more QE is warranted. However, it would require further deterioration in US data than currently seen before the Fed acts with additional stimulus.

Like we saw with last month’s nonfarm payrolls, the numbers missed expectations, but were not bad enough to require action by the central bank. Today’s minutes should offer some colour on QE, helping markets temporarily. But ultimately, global growth concerns and worries about the euro zone debt crisis will continue to dominate market sentiment, threatening upside momentum for the remainder of this week.

Ishaq Siddiqi - Market Strategist - ETX Capital - www.etxcapital.com


RATES

Tableau de bord financier - Financial Dashboard

Cotations, indices et taux. Mise à jour quotidienne par Finyear.
Quotations, indices and rates. Updated daily by Finyear.

Link : http://www.finyear.com/Tableau-de-bord-financier-Financial-Dashboard_a15066.html

Mercredi 11 Juillet 2012
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