Article / 26 June 2014 at 6:12 GMT

Market Preview: Markets to open higher on positive Wall Street cues

Saxo Capital Markets UK
United Kingdom

  • Most currencies gaining against USD
  • Jobless and income data to offset GDP fall
  • DAX and CAC to open in the green

Forex Overnight: USD trading mostly lower

Currencies Intraday








Source: Bloomberg

The USD is trading weaker against most of its major counterparts this morning. Against the backdrop of yesterday’s dismal economic data, traders will look forward to today’s personal income and spending reports for further cues to the country’s economic health. Additionally, US initial jobless claims data will attract market attention which is anticipated to show a slight decline in the number of first time unemployment benefit claims in the previous week. A couple of speeches from US policymakers will also be tracked for cues to the US Federal Reserve’s policy stance. In the UK, traders will focus on the Bank of England’s (BoE) financial stability report and the speech of its governor, Mark Carney. At 05:00 GMT, the EUR and the GBP have advanced marginally against the USD to trade at USD 1.3632 and USD 1.6988, respectively.

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


UK Stocks: Expected to open firmer
FTSE 100









Source: Bloomberg

The FTSE 100 is likely to open 15 to 18 points in the green.

Key economic indicators scheduled for release today include GfK Consumer Confidence Index and Hometrack Housing Survey. Meanwhile, investors will also keep a tab on a Financial Stability Report due later in the day.

DS Smith (SMDS), Dixons Retail (DXNS), Carphone Warehouse Group (CPW) and Photo-Me International (PHTM) are scheduled to report their results today.

An advisory panel to the US Food and Drug Administration has asked AstraZeneca (AZN) to submit further clinical data before its experimental ovarian cancer drug, olaparib, is approved. Panel members have also expressed concerns about a possible increased risk of secondary cancers in patients receiving the treatment.

According to Reuters, Vodafone Group (VOD) is poised to receive unconditional clearance from European Union antitrust regulators for its proposed EUR 7.2 billion takeover of Spain’s largest cable operator, Ono.

The New York Attorney General has filed a securities fraud lawsuit against Barclays (BARC) for misrepresenting the safety of its US based alternative trading system and giving an unfair edge to its US high-frequency trading clients.


Asia: Trading mostly in positive territory
Nikkei 225









Source: Bloomberg

Asian markets are trading mostly higher this morning, mirroring overnight gains on Wall Street.

In Japan, Rakuten (4755) advanced following a report that the company and AirAsia Bhd are in discussions to invest in a Japanese budget airline. Yahoo Japan (4689) gained after stating that it would acquire credit and financial operations of KC Card Company. However, Dainippon Screen Manufacturing (7735) slid after a broker initiated coverage on the stock with an “underperform” rating. At 05:00 GMT, the Nikkei 225 index advanced 0.2 percent to trade at 15,291.8.

In South Korea, blue-chip stocks, Kia Motors (000270) and LG Electronics (066570) registered gains. On the flipside, Korea Electric Power (015760) retreated after the Korean government yesterday stated that it would keep energy prices on hold until later this year. In Hong Kong, Luk Fook Holdings International (590) jumped after reporting a rise in its full-year profit. Wynn Macau (1128) and Sands China (1928) climbed, pacing gains among the casino sector stocks. In China, Zhejiang China Light & Textile Industrial City Group (600790), Zhejiang Guangsha (600052) and Henan Lingrui Pharmaceutical (600285) soared, featuring among the major gainers on the Shanghai Stock Exchange Composite index.


US Stocks: Futures trading higher
S&P 500









Source: Bloomberg

At 05:00 GMT, S&P 500 futures are trading 0.9 points firmer.

Key economic indicators scheduled for release today include Initial and Continuing Jobless Claims, Personal Income and Spending, Personal Consumption Expenditure Core and Kansas City Federal Reserve Manufacturing Activity Index.

Nike (NKE), Accenture (ACN), ConAgra Foods (CAG), McCormick & Company (MKC) and Lennar (LEN) are scheduled to announce their results today.

In the after-hours trading session yesterday, dismal first-quarter results and a downbeat second-quarter earnings outlook led Bed Bath & Beyond (BBBY) to decline 7.1 percent. Herman Miller (MLHR) dropped 5.8 percent following lower-than-expected fourth-quarter revenue and a weak first-quarter earnings guidance. H.B. Fuller (FUL) lost 3.5 percent after the company cut its full-year earnings outlook. On the upside, Iron Mountain (IRM) soared 23.2 percent after it received an approval from the Internal Revenue Service to convert the company to a real-estate investment trust. Uni-Pixel (UNXL) surged 19.9 percent after announcing that it achieved a roll-to-roll pilot production for its InTouch sensor film.

Yesterday, the S&P 500 index advanced 0.5 percent in the regular trading session, despite disappointing US Gross Domestic Product and durable goods orders data. Monsanto (MON) climbed 5.1 percent after the company posted better-than-expected third-quarter earnings and raised the lower end of its full-year earnings outlook. Additionally, the company announced a USD 10 billion share buyback programme. Schlumberger (SLB) rallied 6.4 percent after the company issued upbeat long-term profit guidance. CBS (CBS) jumped 6.2 percent after the US Supreme Court ruled in favour of broadcasters, stating that Aereo, a start-up Internet company, is violating broadcaster rights. Google (GOOG) added 2.5 percent. The company introduced a smartwatch and AndroidTV during its annual developers’ conference. Bristol-Myers Squibb (BMY) gained 3 percent following positive results from the late-stage clinical trial of its Nivolumab antibody. On the downside, energy sector stocks, Valero Energy (VLO), Marathon Petroleum (MPC) and Phillips 66 (PSX) retreated 8.3 percent, 6.3 percent and 4.2 percent, respectively, after the US Commerce Department opened the door for more crude exports. General Mills (GIS) dropped 3.6 percent after the company’s fourth-quarter sales and net profit missed market expectations.


Europe Stocks: Likely to open in the green 
EU Stoxx 50









Source: Bloomberg

The DAX and the CAC are expected to open 23 to 24  points and five to seven points higher, respectively.

French Consumer Confidence is the key economic indicator scheduled for release today. Additionally, investors will keep a tab on the European Council Meeting commencing today.

Hornbach Holding AG (HBH3), Hornbach Baumarkt AG (HBM), Gesco AG (GSC1), EuropaCorp (ECP) and Carlo Gavazzi Holding AG (GAV) are scheduled to report their results today.

Dieter Zetsche, the chief executive officer of Daimler AG (DAI), has stated that it would add a “Shooting Brake” variant to its family of CLA compact cars which would be built in its factory in Hungary and go on sale in 2015.

Reuters has reported that BNP Paribas SA (BNP) is likely to face a one-year ban on converting foreign currencies to US dollars on behalf of its clients in some businesses.

Bankia SA (BKIA) has appointed Jose Sevilla as its chief operating officer who would be reporting to the chairman, Jose Ignacio Goirigolzarri.

Roland Koch, the chief executive officer of Bilfinger SE (GBF), in an interview at Bloomberg’s Frankfurt office, has stated that the company’s future acquisitions would largely be in its industrial services and power plant maintenance business segments.


Macro Update

Job vacancies in Australia rise at a slower pace

On a seasonally adjusted sequential basis, job vacancies in Australia have increased 2.5 percent in the three months ended May compared to a revised 2.8 percent rise posted in the three months ended February.


Economic Calendar
Country

GMT

Economic Indicator

Relevance

Consensus

Previous

Frequency

Germany

06:00

Bundesbank's Weidmann Briefs Lawmakers in Closed Session

Low

-

-

-

France

06:45

Consumer Confidence (Jun)

Low

85.00

85.00

Monthly

UK

09:30

Financial Stability Report

Medium

-

-

-

UK

09:30

BOE's Carney Speaks in London on Financial Stability Report

High

-

-

-

US

12:30

Personal Income (MoM) (May)

Medium

0.40%

0.30%

Monthly

US

12:30

Continuing Jobless Claims (14-Jun)

Low

2570.00 K

2561.00 K

Weekly

US

12:30

Personal Consumption Expenditure Deflator (MoM) (May)

Low

0.30%

0.20%

Monthly

US

12:30

Personal Consumption Expenditure Deflator (YoY) (May)

Low

1.80%

1.60%

Monthly

US

12:30

Personal Consumption Expenditure Core (YoY) (May)

Medium

1.50%

1.40%

Monthly

US

12:30

Fed's Lacker Speaks on Economic Growth in Lynchburg, Virginia

Low

-

-

-

US

12:30

Initial Jobless Claims (21-Jun)

Medium

311.00 K

312.00 K

Weekly

US

12:30

Personal Spending (May)

Medium

0.40%

-0.10%

Monthly

US

12:30

Personal Consumption Expenditure Core (MoM) (May)

Medium

0.20%

0.20%

Monthly

US

15:00

Kansas City Fed Manufacturing Activity (Jun)

Low

11.00

10.00

Monthly

US

17:05

Fed's Bullard Speaks on Monetary Policy in New York

Low

-

-

-

UK

23:01

Hometrack Housing Survey (YoY) (Jun)

Low

-

6.10%

Monthly

UK

23:01

Hometrack Housing Survey (MoM) (Jun)

Low

-

0.50%

Monthly

UK

23:05

Gfk Consumer Confidence (Jun)

Medium

2.00

0.00

Monthly

Japan

23:30

National CPI Ex Food, Energy (YoY) (May)

Medium

2.20%

2.30%

Monthly

Japan

23:30

Unemployment Rate (May)

Medium

3.60%

3.60%

Monthly

Japan

23:30

National CPI Ex-Fresh Food (YoY) (May)

Medium

3.40%

3.20%

Monthly

Japan

23:30

Household Spending (YoY) (May)

Medium

-2.10%

-4.60%

Monthly

Japan

23:30

Tokyo Consumer Price Index (YoY) (Jun)

Low

3.10%

3.10%

Monthly

Japan

23:30

Job-To-Applicant Ratio (May)

Low

1.08

1.08

Monthly

Japan

23:30

National Consumer Price Index (YoY) (May)

Medium

3.70%

3.40%

Monthly

Japan

23:50

Retail Trade s.a (MoM) (May)

Low

2.80%

-13.70%

Monthly

Japan

23:50

Retail Trade (YoY) (May)

Medium

-2.00%

-4.40%

Monthly

Japan

23:50

Large Retailer's Sales (May)

Medium

-2.50%

-6.80%

Monthly

Eurozone

-

European Council Meeting

High

-

-

-


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


Corporate Calendar

Country

Company Name

Index

Announcement

UK

Carphone Warehouse Group Plc

FTSE All Share

Prelim

UK

Dixons Retail Plc

FTSE All Share

Final

UK

DS Smith Plc

FTSE All Share

Final

UK

John Wood Group Plc

FTSE All Share

Trading

UK

Photo-Me International Plc

FTSE All Share

Final

UK

Safestore Holdings Plc

FTSE All Share

Interim

UK

Standard Chartered Plc

FTSE All Share

Trading

US

Accenture Plc

S&P 500

Q3 Earnings Release

US

ConAgra Foods Inc.

S&P 500

Q4 Earnings Release

US

Lennar Corp.

S&P 500

Q2 Earnings Release

US

McCormick & Company Inc.

S&P 500

Q2 Earnings Release

US

Nike Inc.

S&P 500

Q4 Earnings Release


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