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Finance Update – A New Horizon?

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Asia – Japan shows hopes

Asian markets are decidedly green this morning led by the Nikkei with a 2.12% gain followed closely by the Shenzhen Composite.

As post-election tensions wind down, the safe-haven yen continues to follow the trend, losing 0.3% overnight. Foreign stock investments as October drew to a close contracted by ¥212.7 bn while household spending in September contracted by 10.2% – half a per cent better than expected but still considerably worse than the month before, and the nation’s leading economic index added 4 points to land at 92 in September.

Europe – Euro data shaky

European indices closed mixed last week – the FTSE up 0.07% and the Dax down 0.7%.

The Euro continues weakly after September retail sales showed a 2.2% increase, half the month before. Industrial production in Germany expanded by 1.6% MoM in September – missing expectations by a per cent, while the nation’s trade surplus expanded to €17.8 bn in September, missing expectations by 0.4bn. France on Friday marked a €2 bn reduction in its trade deficit to €5.75 bn in September.

The Pound on Thursday added 200 pips after the Bank of England Thursday added £150 bn to its assets purchase facility, tempered slightly by Markit’s 3-point loss in its construction PMI and continuing slightly bullish since then. October House prices also missed the mark, Friday, increasing by a mere 0.3% MoM – a fifth less than in September.

Americas – Jeopardy ahead

Reeling from the untimely death of Alex Trebek, US index futures are cheerfully bullish this morning after closing down Friday.

The dollar continues south after Jobless Claims in the last week of October continued contracting but not as quickly as desired. Non-farm Payrolls decreased to 638K, half the feared contraction, while earnings slowed their increase by a tick to 4.5% in October; but unemployment is currently down a per cent to a pleasing 6.9%.

The situation in Canada is slightly worse, unemployment only decreasing by a tenth to 8.9% but participation rising by a fifth.

Corporate – McDonald’s reporting

As the week ended, AstraZeneca (+1%) missed quarterly earnings by 13% with revenues at $6.6 bn – as expected. Alibaba (+2.98%) earned $2.65 per share – 60 c higher than expected – on revenues of $22.8 bn – up 30% QoQ. Lufthansa (-4%) reported a €3.12 loss per share on revenues of €2.66 bn, and Viacom (-6.36%) reported revenues of $6.1 bn – down 12% YoY offering earnings of 91c per share.

Earnings reports will be in today from Infineon and McDonald’s. Mastercard will be paying dividends.

Events

09:30 AM GMT EU Sentix Invetor Confidence
10:35 AM GMT UK BoE Gov Bailey speech. BRC Retail Sales at 0:01 AM (+1)
09:45 PM GMT NZ Credit Card Retail Sales
00:30 AM GMT (+1) Australia NAB Business Confidence
01:30 AM GMT (+1) China CPIs

Analysis

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