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Michael Jarman
Intraday volatility on the S&P 500 "requires caution", according to Michael Jarman from H20 Markets in London. He gives his views on Burberry and looks ahead to key levels over the next few days.
Article / 28 January 2013 at 7:01 GMT

Market Preview: US durable goods orders, pending home sales eyed

SaxoBankUK SaxoBankUK
Saxo Capital Markets UK
United Kingdom

Forex Overnight: USD trading mostly higher
Currency Intraday
The USD is trading mostly higher against its major peers this morning. Markets are keeping a tab on US durable goods orders and pending home sales data due later today. Additionally, the Federal Reserve’s (Fed) monetary policy meeting and US fourth quarter Gross Domestic Product (GDP) data due later this week are expected to hold market interest. At 6 am GMT, the EUR has risen 0.1 percent versus the USD to trade at USD 1.3463 while the GBP has declined 0.4 percent versus the USD to trade at USD 1.5761.

The JPY has weakened 0.2 percent and 0.1 percent against the EUR and the USD, respectively. Earlier this morning, the Japanese government lowered its economic growth forecast for the current year.

UK Stocks: Likely to open in positive territory
FTSE 100
The FTSE 100 is expected to open 8 points in the green.

No major economic releases are scheduled for today.

SThree (STHR), Porvair (PRV), Amino Technologies (AMO) and Filtronic (FTC) are scheduled to report their results today.

BP (BP/) has indicated that it is reconsidering its plans to drill for oil and gas in Libya following a terrorist attack on its gas production plant in neighbouring Algeria.

easyJet (EZJ) has stated that its Chairman, Michael Rake, is set to resign from his position later this year.

The Mail on Sunday has reported that Admiral (ADM) might acquire law firm, Lyons Davidson.

The Financial Times has reported that two directors of Bumi (BUMI) have indicated that they do not support Nathaniel
Rothschild’s plans to take back control of the company.

Asia: Trading mostly firmer
Nikkei 225
Asian markets are trading mostly higher this morning taking cues from Friday’s gains on Wall Street.

In Japan, Fanuc Corporation (6954) has slumped after it reported a drop in its nine months profit and lowered its full year operating profit outlook. Advantest Corporation (6857) has slid amid reports that the company would miss its operating profit forecast due to few orders from Apple. On the upside, Sony Corporation (6758) has surged after a broker upgraded its rating on the stock to “Buy” from “Neutral”. Takeda Pharmaceutical (4502) has advanced after it received an approval for its diabetes drug from the US Food and Drug Administration. At 6 am GMT, the Nikkei 225 has declined 0.7 percent to trade at 10,853.1.

In China, Citic Securities (600030) has advanced amid reports that the Chinese regulator would increase the number of stocks allowed for margin trading and short selling from 31 January 2013. Dongfeng Automobile (600006) has registered gains following reports that it is planning a joint venture with Volvo AB. In Hong Kong, China Resources Land (1109), HSBC Holdings (5) and Wharf Holdings (4) are trading higher. In South Korea, Korea Exchange Bank (004940) has advanced after its parent, Hana Financial Group (086790), stated that it would seek 100.0 percent of the former through a share swap.

US Stocks: Futures trading higher
S&P 500
At 6 am GMT, S&P 500 futures are trading 1.2 points stronger.

Key economic indicators slated for release today include Durable Goods Orders, Durable Goods Orders excluding Transportation, Dallas Fed Manufacturing Activity and Pending Home Sales.

Caterpillar (CAT), VMware (VMW), Biogen Idec (BIIB), Yahoo! Inc. (YHOO), Roper Industries (ROP), PulteGroup (PHM), Plum Creek Timber (PCL), Celanese Corporation (CE), BMC Software (BMC) and Illumina (ILMN) are scheduled to report their results later today.

Salesforce.com (CRM) rose 2.9 percent in the after hours trading session on Friday amid reports that it would seek shareholders approval for a 4-for-1 stock split at its annual investor meeting slated in March 2013. Transocean (RIG) advanced 2.5 percent after one of its investors increased his stake in the company and recommended the company to declare a dividend of USD 4.0 per share. On the downside, Oshkosh Corporation (OSK), Liberty Interactive (LVNTA) and KBR Inc. (KBR) reversed their regular session gains and slumped 5.6 percent, 5.0 percent and 4.1 percent, respectively. Amongst the other major laggards, MGIC Investment (MTG) and Skullcandy Inc. (SKUL) declined 6.3 percent and 5.9 percent, respectively.

In the regular trading session on Friday, the S&P 500 index advanced 0.5 percent and closed above the 1,500 level for the first time since 2007, as investor sentiment was boosted following buoyant corporate results. Procter & Gamble (PG) surged 4.0 percent after it reported upbeat second quarter results and raised its 2013 outlook. KLA-Tencor (KLAC) jumped 8.4 percent after its customer, Samsung Electronics, maintained its capital spending plan for 2013. Starbucks (SBUX) advanced 4.1 percent after it reported better-than-anticipated same-store sales for the first quarter. Upbeat fourth quarter results led Halliburton (HAL) and Honeywell International (HON) to climb 5.1 percent and 0.1 percent, respectively. On the other hand, Hasbro (HAS) slid 3.0 percent after the company stated that it plans to cut around 10.0 percent of its workforce following downbeat 2012 results and a bleak 2013 outlook.

European Stocks: Expected to open firmer
EU Stoxx 50
The DAX and the CAC are likely to open 25 points and 10 points in positive territory, respectively.

Eurozone M3 Money Supply & Private Loans, German Import Price Index, Italian Consumer Confidence Index & Wage Inflation are the key economic indicators scheduled for release today.

Telefonica SA (TEF)
is slated to report its results later today.

In an interview with SonntagsZeitung, Martin Senn, the CEO of Zurich Insurance Group AG (ZURN), has stated that the company’s dividend policy remains unchanged despite estimated damage claims of around USD 700.0 million from US Hurricane Sandy.

Reuters has reported that Credit Suisse Group AG (CSGN) might have to pay USD 2.0 billion for the fraud that occurred a decade ago at National Century Financial Enterprises.

Brazilian weekly magazine, Veja, has reported that Portugal Telecom SGPS SA (PTC) is in negotiations with Brazil-based, Oi SA, to buy its stake for around USD 985.0 million.

Bank of Italy has approved a bailout request of EUR 3.9 billion from Banca Monte dei Paschi di Siena SpA (BMPS).

Reuters has reported that European Aeronautic Defence and Space Company NV (EAD) has appointed Anne Lauvergeon, as its first chairwoman.

Macro Update
House prices in the UK remain flat
According to the Hometrack housing survey, on a monthly basis, house prices in the UK have remained flat in January compared to a 0.1 percent decline recorded in the previous month.

Japan’s Abe urges BoJ for bolder action
Shinzo Abe, the Prime Minister of Japan, has urged the Bank of Japan (BoJ) to hit the inflation target as soon as possible thereby pressuring the central bank to stick to its words for bolder action to overcome deflation.

Japan expects upbeat economic growth in 2013-14
Japan’s Cabinet has projected that the nation’s real GDP might grow 2.5 percent in fiscal year 2013-14, higher than the earlier estimate of a 1.7 percent rise. However, the government has lowered its real GDP growth forecast for the current year to 1.0 percent from the previous projection of 2.2 percent growth.

Industrial profits in China rise
On a year-on-year basis, profits earned by industrial companies in China have climbed 17.3 percent in December compared to a 22.8 percent rise reported last month.

China’s central bank to monitor Japan’s monetary policy, indicates Yi Gang
Yi Gang, the Deputy Governor of China's central bank, has indicated that the central bank would closely watch effects of Japan’s ultra loose monetary stance on the world economy, particularly the emerging markets and has warned that competitive devaluation would generate uncertainties in financial markets.

Japan’s Akira Amari defends the central bank’s fiscal and monetary policy stance
At the World Economic Forum’s annual meeting in Davos, Akira Amari, the Economy Minister of Japan, has stated that the nation’s economic policy is aimed at defeating deflation and not at weakening the Yen.

Corporate service prices in Japan decline
On an annual basis, the corporate service price index in Japan has declined 0.4 percent in December compared to a downwardly revised 0.5 percent fall reported in the earlier month.

New Zealand’s services sector activity deteriorates
The performance of services index in New Zealand has dropped to a reading of 51.5 in December compared to a revised reading of 54.2 recorded in November.

South Korea’s consumer confidence unexpectedly rises
The consumer sentiment index in South Korea has climbed to a reading of 102.0 in January, the highest level in eight months and compared to a reading of 99.0 posted in December.

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous

Frequency

UK

0:01

Hometrack Housing Survey (YoY) (Jan)

Low

 -0.30%*

-0.30%

Monthly

Germany

7:00

Import Price Index (YoY) (Dec)

Low

0.90%

1.10%

Monthly

Eurozone

9:00

M3 Money Supply s.a. (YoY) (Dec)

Low

3.90%

3.80%

Monthly

Eurozone

9:00

Private loans (YoY) (Dec)

Low

-

-0.80%

Monthly

Italy

9:00

Consumer Confidence Index s.a. (Jan)

Low

86.00

85.70

Monthly

Italy

10:00

Wage Inflation (YoY) (Dec)

Low

-

1.60%

Monthly

US

13:30

Durable Goods Orders (Dec)

High

2.00%

0.70%

Monthly

US

13:30

Durable Goods Orders Ex Transportation (Dec)

Medium

0.80%

1.60%

Monthly

US

15:00

Pending Home Sales (YoY) (Dec)

Medium

-

8.90%

Monthly

US

15:30

Dallas Fed Manufacturing Activity (Jan)

Low

-

6.80

Monthly

China

-

Leading Index (Dec)

Medium

-

100.21

Monthly


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

Corporate Calendar

Country

Company Name

Index

Announcement

UK

Aveva Group Plc

FTSE All Share

Trading

UK

Mitie Group Plc

FTSE All Share

Trading

UK

SThree Plc

FTSE All Share

Final

US

Biogen Idec Inc.

S&P 500

Q4 Earnings Release

US

BMC Software Inc.

S&P 500

Q3 Earnings Release

US

Caterpillar Inc.

S&P 500

Q4 Earnings Release

US

Plum Creek Timber Company Inc.

S&P 500

Q4 Earnings Release

US

Roper Industries Inc.

S&P 500

Q4 Earnings Release

US

Yahoo! Inc.

S&P 500

Q4 Earnings Release

US

Zions Bancorp

S&P 500

Q4 Earnings Release

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