Article / 31 January 2013 at 7:32 GMT

Market Preview: US Q4 GDP contracts; German CPI eyed

Saxo Capital Markets UK
United Kingdom

Forex Overnight: USD trading mostly lower
The USD is trading lower against most of its major peers this morning after the US Federal Reserve (Fed) in its latest monetary policy meeting indicated to continue with its current monetary easing stance. Additionally, data released yesterday indicated that the US economy surprisingly contracted in the fourth quarter of 2012. Meanwhile, traders are keeping an eye on German Consumer Price Index (CPI) and US initial jobless claims data due later today. At 6 am GMT, the EUR and the GBP have risen 0.2 percent each versus the USD to trade at USD 1.3582 and USD 1.5818, respectively.

The JPY has strengthened 0.2 percent and 0.1 percent against the USD and the EUR, respectively. Data indicated that industrial production in Japan rose less-than-expected in December.

The AUD has weakened 0.1 percent versus the USD even after data showed a rise in Australia’s new home sales in December.

UK Stocks: Expected to open in negative territory
The FTSE 100 is likely to open 18 points in the red.

Nationwide House Prices is the key economic indicator scheduled for release today.

Royal Dutch Shell (RDSA), Diageo (DGE), AstraZeneca (AZN), Hiwave Technologies (HIW), British Sky Broadcasting Group (BSY), Rank Group (RNK), Haynes Publishing Group (HYNS) and Angle (AGL) are scheduled to report their results today.

Bloomberg has reported that prosecutors have urged a US federal judge to approve a USD 1.9 billion settlement on HSBC Holdings (HSBA) for its failure to prevent a money laundering case.

Rio Tinto (RIO) has stated that its Oyu Tolgoi project in Mongolia is on track and is expected to reach commercial production in the first half of 2013.

According to Reuters, Barclays (BARC), Morgan Stanley and JPMorgan Chase & Co have been chosen as joint book runners by Quintiles Transnational for a planned initial public offering.

Asia: Trading in the red
Asian markets are trading lower this morning after data indicated that the US economy unexpectedly shrank in the fourth quarter.

In Japan, Nintendo (7974) has slid after it warned of a probable loss for the second straight year, citing slower sales of the Wii U console. Canon (7751) has registered losses after it reported a decline in its fourth quarter profit. Toyota Motor (7203) has declined after it announced to recall 1.3 million vehicles for faulty air bags and defective wipers. On the upside, Sumitomo Mitsui Financial (8316) has added value after it posted upbeat net income for the nine-month period. At 6 am GMT, the Nikkei 225 has retreated 0.6 percent to trade at 11,049.0.

In Hong Kong, Cnooc (883) has dropped after it offered a lower-than-anticipated production estimate for 2013. However, China Unicom Hong Kong (762) has gained value after it provided a better-than-expected 2012 profit outlook. In China, property sector stocks, China Vanke (000002) and Poly Real Estate (600048) have edged down amid speculation that a potential imposition of property taxes might hamper demand. In South Korea, LG Electronics (066570) has lost value after it reported a worst-than-forecast fourth quarter net loss. S-Oil (010950) has slumped after it posted a sharp decline in its operating profit for the December quarter.

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

Key economic indicators scheduled for release today include Initial & Continuing Jobless Claims, Personal Income & Spending, Core Personal Consumption Expenditure and Chicago Purchasing Managers’ Index (PMI).

United Parcel Service (UPS), Occidental Petroleum (OXY), Altria Group (MO), Mastercard (MA), Colgate-Palmolive (CL), Enterprise Products Partners (EPD), Dow Chemical (DOW), Dominion Resources (D), Viacom (VIAB) and Time Warner Cable (TWC) are scheduled to report their results later today.

Qualcomm (QCOM) climbed 6.2 percent in the after hours trading session yesterday after it reported upbeat first quarter results and hiked its 2013 outlook. JDS Uniphase (JDSU) soared 14.8 percent on the back of better-than-expected second quarter results. Upbeat fourth quarter revenue led Las Vegas Sands (LVS) to surge 5.2 percent. Fortinet (FTNT) and Citrix Systems (CTXS) rallied 15.6 percent and 11.1 percent, respectively, after they posted buoyant fourth quarter results and provided strong 2013 revenue outlooks. On the downside, a wider-than-forecast first quarter loss and dismal full-year earnings guidance led Concur Technologies (CNQR) to slump 6.3 percent. Facebook (FB) dropped 3.4 percent despite reporting better-than-expected fourth quarter results. Downbeat quarterly results and a bleak 2013 revenue guidance led Fusion-io (FIO) and Electronic Arts (EA) to tumble 18.0 percent and 1.5 percent, respectively.

Yesterday, the S&P 500 index declined 0.4 percent in the regular trading session after data indicated that the US economy unexpectedly contracted in the fourth quarter of 2012. Market sentiment was further dented after the US central bank stated that growth in economic activity has paused in recent months. Peabody Energy (BTU) and Fossil (FOSL) dropped 6.4 percent and 2.4 percent, respectively, following broker downgrades. Downbeat fourth quarter results led MeadWestvaco (MWV) to decline 4.0 percent. On the other side, Amazon.com (AMZN) soared 4.8 percent after it reported a significant increase in its fourth quarter sales and operating income. Boeing (BA) rose 1.3 percent after it posted upbeat fourth quarter earnings per share and stated that its 2013 focus would be to correct 787 Dreamliner’s battery problems. Phillips 66 (PSX) advanced 1.5 percent after it reported better-than-expected fourth quarter earnings per share and stated it plans to expand its share buyback programme by USD 1.0 billion and expects to boost its annual dividend.

European Stocks: Likely to open weak
The DAX and the CAC are expected to open 24 points and 10 points in the red, respectively.

Eurozone & German CPI, German Unemployment Change, German & Greece Retail Sales, French, Italian & Spanish Producer Price Index and Spanish Current Account Balance & Harmonised CPI are the key economic indicators scheduled for release today.

Banco Santander SA (SAM), LVMH SA (MC), Deutsche Bank AG (DBK), Infineon Technologies AG (IFX), Klepierre (LI) and Banco Espanol de Credito SA (BTO) are scheduled to announce their results later today.

The Financial Times has reported that Daimler AG (DAI) plans to cut 2,100 jobs including 1,300 in North America at its commercial-vehicles unit to improve profitability.

Reuters has reported that UniCredit SpA (UCG) has completed its sale of a 9.1 percent stake in Poland-based Bank Pekao SA for around EUR 890.0 million.

Macro Update
Fed holds key interest rate; maintains its aggressive monetary policy stance
The Fed has maintained its key interest rate in the range of 0.0 to 0.25 percent. The Federal Open Market Committee has indicated that the central bank would continue purchasing USD 85.0 billion a month in treasury bonds and mortgage-backed securities until it sees a “substantial” improvement in the labour market. The Fed also noted that economic activity has “paused in recent months” due to weather-related disruptions and other transitory factors.

Consumer sentiment in the UK improves

The GfK consumer confidence index in the UK has climbed to a reading of -26.0 in January compared to a reading of -29.0 reported in December.

Central bank would further ease monetary policy, if required, says BoJ’s Yamaguchi

Hirohide Yamaguchi, the Deputy Governor of the Bank of Japan (BoJ), has indicated that the central bank would pursue further monetary easing, if required.

Japan’s industrial output rises less-than-expected

On a seasonally adjusted monthly basis, industrial production in Japan has climbed 2.5 percent in December, less than market expectations and compared to a 1.4 percent decline posted in the earlier month.

Labour cash earnings in Japan decline

On an annual basis, labour cash earnings in Japan have dropped 1.4 percent in December compared to a 0.8 percent fall recorded in the previous month.

RBNZ holds benchmark interest rate

The Reserve Bank of New Zealand (RBNZ) has kept its key interest rate unchanged at 2.50 percent, in line with market expectations.

New home sales in Australia rise

The Housing Industry Association has reported that, on a monthly basis, new home sales in Australia have increased 6.2 percent in December compared to a downwardly revised 3.0 percent rise recorded in the previous month.

Australia’s private sector credit increases more-than-expected

Private sector credit in Australia has advanced 3.6 percent Y-o-Y in December, higher than market forecasts and compared to a 3.5 percent rise reported last month.

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous

Frequency

UK

0:01

GfK Consumer Confidence Survey (Jan)

Medium

 -26.00*

-29.00

Monthly

Japan

1:30

Labour Cash Earnings (YoY) (Dec)

Medium

 -1.40%*

-0.80%

Monthly

Japan

4:00

Vehicle Production (YoY) (Dec)

Medium

-17.20%*

-8.40%

Monthly

Japan

5:00

Housing Starts (YoY) (Dec)

Medium

10.00%*

10.30%

Monthly

Japan

5:00

Construction Orders (YoY) (Dec)

Low

4.80%*

-2.10%

Monthly

UK

7:00

Nationwide House Prices n.s.a. (YoY) (Jan)

Medium

-0.30%

-1.00%

Monthly

Germany

7:00

Retail Sales (YoY) (Dec)

Medium

-1.50%

-0.90%

Monthly

France

7:45

Consumer Spending (MoM) (Dec)

Low

0.20%

0.20%

Monthly

France

7:45

Producer Prices (MoM) (Dec)

Low

-0.10%

-0.50%

Monthly

Spain

8:00

HICP, Prelim (YoY) (Jan)

Low

3.10%

3.00%

Monthly

Eurozone

8:30

EU Foreign Ministers Hold Meeting in Brussels

Low

-

-

-

Germany

8:55

Unemployment Change (Jan)

High

8.00 K

3.00 K

Monthly

Italy

9:00

Producer Price Index (YoY) (Dec)

Low

2.00%

2.20%

Monthly

Spain

9:00

Current Account Balance (Nov)

Low

-

EUR 0.90 bn

Monthly

Eurozone

10:00

Consumer Price Index, Prelim (YoY) (Jan)

Medium

-

2.20%

Monthly

Greece

10:00

Retail Sales (YoY) (Nov)

Low

-

-17.10%

Monthly

Germany

13:00

Consumer Price Index. Prelim (YoY) (Jan)

High

2.00%

2.10%

Monthly

US

13:30

Personal Spending (MoM) (Dec)

Medium

0.30%

0.40%

Monthly

US

13:30

Personal Income (MoM) (Dec)

Medium

0.80%

0.60%

Monthly

US

13:30

Initial Jobless Claims (26 Jan)

Medium

350.00 K

330.00 K

Weekly

US

13:30

Continuing Jobless Claims (19 Jan)

Medium

3171.00 K

3157.00 K

Weekly

US

13:30

Personal Consumption Expenditure Deflator (YoY) (Dec)

Low

1.40%

1.40%

Monthly

US

13:30

Personal Consumption Expenditure Core (YoY) (Dec)

Low

1.40%

1.50%

Monthly

Canada

13:30

Gross Domestic Product (YoY) (Nov)

High

1.40%

1.10%

Monthly

US

14:45

Chicago Purchasing Managers' Index (Jan)

Low

50.50

50.00

Monthly

Japan

23:30

Jobless Rate (Dec)

Medium

4.10%

4.10%

Monthly

Japan

23:30

Household Spending (YoY) (Dec)

Medium

-0.20%

0.20%

Monthly

Japan

-

Bank of Japan Deputy Governor Yamaguchi Speaks

Medium

-

-

-


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

Corporate Calendar

Country

Company Name

Index

Announcement

UK

AstraZeneca Plc

FTSE All Share

Final

UK

Babcock International Group Plc

FTSE All Share

Trading

UK

Brewin Dolphin Holdings Plc

FTSE All Share

Trading

UK

British Sky Broadcasting Group Plc

FTSE All Share

Interim

UK

Diageo Plc

FTSE All Share

Interim

UK

Enterprise Inns Plc

FTSE All Share

Trading

UK

Euromoney Institutional Investor Plc

FTSE All Share

Trading

UK

Gem Diamonds Ltd.

FTSE All Share

Trading

UK

Great Portland Estates Plc

FTSE All Share

Trading

UK

Investec Plc

FTSE All Share

Trading

UK

Mitchells & Butlers Plc

FTSE All Share

Trading

UK

Rank Group Plc

FTSE All Share

Interim

UK

Royal Dutch Shell Plc

FTSE All Share

Final

UK

SSE Plc

FTSE All Share

Trading

France

LVMH Moet Hennessy Louis Vuitton SA

CAC 40, Eurostoxx 50

Q4 Earnings Release

Germany

Deutsche Bank AG

DAX 30

Final

Germany

Infineon Technologies AG

DAX 30

Q1 Earnings Release

Spain

Banco Santander SA

Eurostoxx 50, IBEX 35

Final

US

Aetna Inc.

S&P 500

Q4 Earnings Release

US

Altria Group Inc.

S&P 500

Q4 Earnings Release

US

AutoNation Inc.

S&P 500

Q4 Earnings Release

US

Ball Corp.

S&P 500

Q4 Earnings Release

US

Bemis Company Inc.

S&P 500

Q4 Earnings Release

US

C R Bard Inc.

S&P 500

Q4 Earnings Release

US

Cameron International Corp.

S&P 500

Q4 Earnings Release

US

Chubb Corp.

S&P 500

Q4 Earnings Release

US

Colgate-Palmolive Co.

S&P 500

Q4 Earnings Release

US

CONSOL Energy Inc.

S&P 500

Q4 Earnings Release

US

Dominion Resources Inc.

S&P 500

Q4 Earnings Release

US

Dow Chemical Co.

S&P 500

Q4 Earnings Release

US

Eastman Chemical Co.

S&P 500

Q4 Earnings Release

US

Harman International Industries Inc.

S&P 500

Q2 Earnings Release

US

Helmerich & Payne Inc.

S&P 500

Q1 Earnings Release

US

Invesco Ltd.

S&P 500

Q4 Earnings Release

US

MasterCard Inc.

S&P 500

Q4 Earnings Release

US

McKesson Corp.

S&P 500

Q3 Earnings Release

US

Mead Johnson Nutrition Co.

S&P 500

Q4 Earnings Release

US

NASDAQ OMX Group Inc.

S&P 500

Q4 Earnings Release

US

Occidental Petroleum Corp.

S&P 500

Q4 Earnings Release

US

PACCAR Inc.

S&P 500

Q4 Earnings Release

US

PerkinElmer Inc.

S&P 500

Q4 Earnings Release

US

Pitney Bowes Inc.

S&P 500

Q4 Earnings Release

US

Principal Financial Group Inc.

S&P 500

Q4 Earnings Release

US

PulteGroup Inc.

S&P 500

Q4 Earnings Release

US

Ryder System Inc.

S&P 500

Q4 Earnings Release

US

Sherwin-Williams Co.

S&P 500

Q4 Earnings Release

US

The Hershey Co.

S&P 500

Q4 Earnings Release

US

Thermo Fisher Scientific Inc.

S&P 500

Q4 Earnings Release

US

Time Warner Cable Inc.

S&P 500

Q4 Earnings Release

US

United Parcel Service Inc.

S&P 500

Q4 Earnings Release

US

Viacom Inc.

S&P 500

Q1 Earnings Release

US

Whirlpool Corp.

S&P 500

Q4 Earnings Release

US

Wynn Resorts Ltd.

S&P 500

Q4 Earnings Release

US

Xcel Energy Inc.

S&P 500

Q4 Earnings Release

US

Zimmer Holdings Inc.

S&P 500

Q4 Earnings Release

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