Market Preview: Consumer sentiment in focus

• US house data under scrutiny
  
• Asia tracking Wall St losses
• China bad loans on the rise
  

Source: Bloomberg

The EUR is trading mixed against its major counterparts this morning. With a light macroeconomic calendar today, Eurozone trade balance data is expected to attract modest market attention. Across the Atlantic, traders will keep an eye on the preliminary Reuters/Michigan consumer sentiment index data which is anticipated to show an improvement in consumer morale in the world’s largest economy in May. Additionally, investors will track US building permits and housing starts reports for further cues on the nation’s housing market. Market participants will also focus on the speech of US Federal Reserve policymaker James Bullard for his views on the Fed’s monetary policy stance. At 05:00 GMT, the EUR hds advanced marginally against the USD and the GBP to trade at USD 1.3716 and GBP 0.8168, respectively.

UK Stocks: Likely to open mostly unchanged












Source: Bloomberg

The FTSE 100 is expected to open two points lower to two points higher.

No key economic indicators are scheduled for release today.

Grainger (GRI) and Coca-Cola HBC AG (CCH) are scheduled to report results today.

Andrew Miller, the chairman of the UK’s parliament science committee, has again raised questions about Pfizer’s potential takeover of AstraZeneca (AZN), citing a lack of satisfaction in Pfizer’s promises and the UK government’s ability to implement them.

Reuters has reported that Barclays (BARC) plans to issue at least USD 1 billion of new convertible bonds in order to adjust its capital structure to improve its capital and leverage ratios to meet new regulations.

Balfour Beatty (BBY) has stated that it had found no evidence of bribery or corruption against its three suspended managers in an investigation into suspected inappropriate activity relating to a GBP 480 million contract awarded by National Grid (NG/).

Asia: Trading mostly in negative territory












Source: Bloomberg

Asian markets are trading mostly in the red this morning tracking overnight losses on Wall Street.

In Japan, Japan Display (6740) tumbled after forecasting full-year net profit below market estimates. Exporters, Honda Motor (7267), Canon (7751) and Toyota Motor (7203) slipped as the yen strengthened against its major counterparts. On the upside, Sumco Corporation (3436) jumped after the company raised its six-month net-income outlook. At 05:00 GMT, the Nikkei 225 index declined 1.9 percent to trade at 14,028.3.

In South Korea, NCSoft Corporation (036570) retreated following lower-than-expected first-quarter net income.
In Hong Kong, Sunac China Holdings (1918) lost value after the company indicated that it plans to acquire a stake in Greentown China Holdings (3900). Johnson Electric Holdings (179) plunged after its full-year profit missed market consensus. CITIC Pacific (267) also dropped. The company stated that it had raised USD 5.1 billion to help fund a purchase of some USD 36 billion in assets from its state-owned parent company. In China, markets are trading in the red after a report showed that the nation’s bad loans jumped the most since 2005. Fujian Dongbai Group (600693), Changchun Department Jituan Store (600856) and Ningbo Shanshan (600884) registered losses.

US Stocks: Futures trading lower












Source: Bloomberg

At 05:00 GMT, S&P 500 futures were trading 0.4 points weaker.

Key economic indicators scheduled for release today include Reuters/Michigan Consumer Sentiment Index, Housing Starts and Building Permits.

Constellium NV (CSTM), Canadian Solar (CSIQ), Park Electrochemical (PKE), Tsakos Energy Navigation (TNP) and Saratoga Resources (SARA) are scheduled to announce results today.

In the after-hours trading session yesterday, J.C. Penney (JCP) soared 18.3 per cent following better-than-expected first-quarter results. A higher-than-expected first-quarter net income led Nordstrom (JWN) to surge 10.9 per cent. Applied Materials (AMAT) gained 1.7 per cent after the company swung to a second-quarter net profit. Encouraging first-quarter results led Autodesk (ADSK) to jump 4.8 per cent. On the flipside, World Wrestling Entertainment (WWE), DISH Network (DISH) and IsoRay (ISR) tumbled 23.7 per cent, 12.1 per cent and 7.2 per cent, respectively.

Yesterday, the S&P 500 index declined 0.9 per cent in the regular trading session after disappointing earnings from Wal-Mart Stores and mixed domestic macroeconomic releases. Bristol-Myers Squibb (BMY) and Urban Outfitters (URBN) retreated 6.1 percent and 3.6 percent respectively, after brokers lowered their ratings on these stocks. Weaker-than-expected first-quarter results and dismal second-quarter earnings guidance led Wal-Mart Stores (WMT) to drop 2.4 per cent. 

Kohl's Corporation (KSS) declined 3.4 per cent after the company posted first-quarter results that trailed market consensus. However, the company backed its full-year earnings guidance. Micron Technology (MU) lost 3.7 per cent, extending the previous session’s decline sparked by a report indicating that the company lost its position as the world’s number two dynamic random access memory (DRAM) chip producer in the first quarter of 2014 to SK Hynix. General Motors (GM) shed 1.7 per cent after the company announced that it is recalling an additional 2.7 million vehicles. On the upside, Cisco Systems (CSCO) climbed six per cent after the company reported stronger-than-expected third-quarter results and provided an upbeat revenue outlook for the current quarter.

Europe Stocks:  Expected to open in the green












Source: Bloomberg

The DAX and the CAC are likely to open two to four points and seven to nine points higher, respectively.

Key economic indicators scheduled for release today include Eurozone and Italian Trade Balance, French Non-farm Payrolls and Eurozone New Car Registrations.

Altice SA (ATC), TUI AG (TUI1), Club Mediterranee SA (CU), Parrot SA (PARRO), GC Rieber Shipping ASA (RISH) and Tiscali SpA (TIS) are scheduled to report results today.

Reuters has reported that SAP AG (SAP) is mulling slashing between 1,500 and 2,500 jobs as the implementation of cloud computing would require the company to deploy fewer onsite staff.

Orange SA (ORA) and Bouygues SA (EN) have confirmed a report by Les Echos that the two companies are in discussions about a possible partnership, with the former considering acquiring the latter’s Telecom unit, Bouygues Telecom.

Media reports have indicated that Credit Suisse Group AG (CSGN) is expected to plead guilty and pay more than USD 2.5 billion to settle a potential tax evasion probe with US regulatory authorities.

Macro Update
Small businesses boosting the US job market, indicates Yellen
The US Federal Reserve chairwoman, Janet Yellen, has indicated that small businesses in the US have spurred the economic recovery in the nation and remained a key driver in curbing down the unemployment level to its current low. She did not make any comment on the monetary policy outlook.

Japan’s industrial production rises more than the preliminary estimate
On an annual basis, industrial production in Japan has increased 7.4 per cent in March, more than the preliminary estimate of a 7 per cent rise and compared to a 7 per cent increase recorded in the previous month.

China’s FDI climbs
On an annual basis, actual foreign direct investment (FDI) in China has climbed 3.4 per cent in April compared to a 1.5 per cent decline posted in the previous month.

China’s business sentiment improves
The MNI business sentiment index in China has advanced to a reading of 53.7 in May from a reading of 51.1 reported in April.

Economic Calendar

See today's events updated in real-time in our Financial Calendar on TradingFloor.com

Corporate Calendar