Market Preview - 23 October 2012; Focus on EU consumer confidence

Forex Overnight: EUR trading almost flat
The EUR is trading almost unchanged against the major currencies this morning. The Eurozone consumer confidence data slated for release today is expected to show a marginal improvement for October. Meanwhile, Moody’s Investors Service lowered its credit rating on Catalonia and four other Spanish regions. At 5 am GMT, the EUR is trading almost flat against the USD and the GBP at USD 1.3058 and GBP 0.8154, respectively.

The JPY has strengthened 0.1 percent each against the USD and the EUR.

The AUD has gained marginally against the USD. Data released earlier indicated that the leading economic index in Australia declined in August.

UK Stocks: Likely to open higher
The FTSE 100 is expected to open 10 to 11 points in the green.

Nationwide Housing Prices and BBA Loans for House Purchase are the key economic indicators scheduled for release today.

ARM Holdings, Whitbread and Development Securities are scheduled to report their results later today.

The Financial Times has reported that a group of BAE Systems shareholders have demanded the resignation of Dick Olver, the Chairman and Sir Peter Mason, the senior independent Director, following the failure of its proposed GBP 28.0 billion merger with EADS.

J Sainsbury has announced that it has signed a partnership with Guy’s and St Thomas’ NHS Foundation Trust to take over the management of the facilities.

Asia: Trading mostly in the red
Asian markets are trading mostly lower this morning.

In Japan, Kansai Electric Power has lost value amid reports that it would not pay its previously forecast annual dividend. GS Yuasa Corporation has slumped after it trimmed its full year earnings outlook. Power sector stocks, Chubu Electric Power and Tohoku Electric Power have declined. On the flipside, Komatsu has gained value after it stated that it would buy Log Max AB. Export sector stocks, Fanuc, Nikon and Panasonic are trading higher. At 5 am GMT, the Nikkei 225 has dropped 0.1 percent to trade at 9,000.5.

In China, Shenzhen Hongtao Decoration Company has edged lower after it slashed its earnings forecast for the full year. On the other hand, Air China has advanced after it cancelled its plans for a private share placement. Dongfeng Motor Group is trading higher after it stated that it would produce advanced dual-clutch transmissions with Germany's Getrag Group. In South Korea, POSCO has declined after Standard & Poor’s lowered its credit rating on the company. Hyundai Heavy Industries has lost value after it announced that it would conduct its first ever “voluntary retirement” programme. On the upside, LG Display has advanced amid optimism over Apple’s probable launch of a new smaller version of iPad today. Markets in Hong Kong are closed on account of a public holiday.

US Stocks: Futures trading lower
At 5 am GMT, S&P 500 futures are trading 1.6 points in negative territory.

Richmond Federal Reserve Manufacturing Index is the key economic indicator scheduled for release today.

United Technologies, United Parcel Service, Amgen, 3M Company, Gilead Sciences, Facebook, EI du Pont de Nemours & Company, VMware, Illinois Tool Works, Reynolds American and Xerox are scheduled to announce their results today.

Yahoo! Inc. climbed 4.6 percent in the after hours trading session yesterday after it reported better-than-expected third quarter results. Nielsen Holdings reversed its regular session losses and ended 6.2 percent higher in the after hours trading session. Zions Bancorporation gained 0.8 percent after it reported upbeat third quarter results. On the contrary, a cut to its fourth quarter forecast led Texas Instruments 0.3 percent lower. Western Digital slumped 6.3 percent on the back of a downbeat second quarter outlook. Rent-A-Center slid 5.7 percent after its third quarter revenue trailed market expectations. Veeco Instruments declined 4.6 percent on dismal third quarter revenue and a bleak outlook for its fourth quarter. Swift Transportation retreated 2.2 percent after it posted lower-than-forecast third quarter results.

Yesterday, the S&P 500 index ended almost flat in the regular trading session. Caterpillar gained 1.5 percent after it posted better-than-expected third quarter earnings. Apple advanced 4.0 percent ahead of the expected launch of a new smaller version of iPad today. Peabody Energy rallied 11.8 percent after its third quarter results surpassed market consensus and it raised the lower end of its full year sales outlook. On the downside, Monster Beverage plunged 14.2 percent after the US Food and Drug Administration stated that it is investigating five deaths that might be associated with the company’s energy drink. VF Corporation retreated 4.4 percent after it reported lower-than-expected third quarter revenue. SunTrust Banks and Freeport-McMoRan Copper & Gold slid 3.4 percent and 1.5 percent, respectively, following downbeat third quarter earnings.  

European Stocks: Expected to open firmer
The DAX and the CAC are likely to open 15 to 16 points and 10 to 11 points in the green, respectively.

Eurozone Consumer Confidence Index and French Business Climate Index are the key economic indicators scheduled for release today.

Schindler Holding Limited, Koninklijke KPN NV, Norsk Hydro ASA, Alfa Laval AB, STMicroelectronics NV, Stora Enso Oyj and Axfood AB are slated to release their results today.

Bloomberg has reported that Cesar Gueikian, the global head of UBS AG’s special-situations group, has stepped down from the company.

BMW AG has confirmed that its plans to set up a new EUR 200.0 million plant in Brazil and commence production there from 2014.

Michelin has reported better-than-expected third quarter revenues citing robust demand for specialty tires. Additionally, the company has confirmed its financial guidance for the full year.

Macro Update
Australian leading economic index drops
The Conference Board’s leading economic index in Australia has declined 0.8 percent M-o-M in August compared to a flat reading recorded in July.

Australia’s economy is softening, says Ridout
Heather Ridout, the board member of the Reserve Bank of Australia (RBA), has stated that the nation’s economic growth might witness a slowdown and has projected a further rise in the nation’s unemployment rate.

South Korean economic growth slows
The Bank of Korea has reported that the Gross Domestic Product in South Korea likely grew 1.8 percent Y-o-Y in the third quarter of 2012 compared to a 2.3 percent growth rate recorded in the second quarter.

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