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Early Morning Call: FTSE 100 down as Halifax house price index falls

European indices opened today’s session in the red as the UK Halifax house price index fell by 0.4% in October.

 

 Jeremy Naylor | Writer, London | Publication date: Monday 07 November 2022 

Equity market overview

Better than forecast job creations in the US gave a boost to equity markets.

The S&P 500 ended Friday’s session up 1.36%. Nonetheless, the three benchmarks posted weekly losses. Tech stocks recorded the worst performances, sending the Nasdaq lower 5.7% on the week.

In the Asia Pacific region, equity markets followed the US's lead.

For the first time since May 2020, China exports and imports simultaneously fell last month. Exports unexpectedly declined by 0.3% from a year earlier, after a 5.7% gain in September, and well below analysts' expectations for a 4.3% increase. It was the worst performance since May 2020. Imports declined 0.7% from a 0.3% gain in September, below a forecast 0.1% increase.

The overall trade figures resulted in a trade surplus of $85.15 billion, missing a forecast of $95.95 billion.

European indices open today’s session in the red.

In the UK, the Halifax house price index fell by 0.4% in October month-over-month (MoM). Year-on-year (YoY), the house price index increased by 8.3%, its lowest annual increase since December 2021.

Earnings

Ryanair posted its largest ever after-tax profit for the first half (H1) of its financial year. Europe's largest airline by passenger numbers earned €1.371bn in the period, missing however estimates of €1.385bn. Ryanair said it was hopeful it could deliver an after-tax profit of between €1 billion and €1.2 billion for the year to March 31.

On Sunday, Apple signalled that a significant production cut at a plant in China hit by Covid will impact its iPhone 14 shipments, while reiterating that demand for its latest phones remained strong.

But earlier this morning, Bloomberg News reported that Apple expects to produce at least three million fewer iPhone 14 handsets than originally planned, due to softer demand for some iPhone 14 models.

According to the Wall Street Journal, Meta Platforms is planning to begin large-scale layoffs this week. Thousands of employees will be affected. Meta CEO, Mark Zuckerberg, had already warned: "In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organisation than we are today.”

Currently, Meta Platforms employs over 83,000 people worldwide.

Lyft is set to report earnings after the market close. Analysts expect earnings of eight cents per share on revenue of $1.06 billion. During the same quarter a year ago, the company posted earnings of five cents per share on revenue of $862.68 million. Investors will focus particularly on the number of active users.

Lyft enjoyed a strong rebound in the first and second quarters and ended the second quarter (Q2) with 19.86 million active riders, generating an active revenue of $49.89 per active rider.

Tomorrow, Walt Disney is expected to report earnings of 59 cents per share on revenue of $21.38bn. Disney shares have been underperforming recently. The stock is down some 44% from its 52-week high. Investors are wary of the stock because of the slowdown in consumer spending.

The market will be focused on the performance of Disney+, especially after strong third quarter (Q3) earnings from Netflix. Current company expectations at Disney are of between 230 and 260 million subscribers by the end of 2024. The company has now just over 152 million subscribers, which means that it will have to make substantial investments if it wants to reach that two-year target, which could really weigh on its profits.

On Wednesday, Beyond Meat is forecast to post a loss of $1.14 per share, on revenue of just over $98m, to be compared with a loss of 87 cents per share on revenue of $106.43 million for the same quarter a year ago. The stock has lost 80% of its value so far this year.

Another stock that has lost a lot of ground this year is WeWork. The group is expected to post earnings on Thursday. Analysts expect a loss per share of 53 cents, on revenue of $824m. The stock trades at $2.60, from over $9 at the beginning of the year.

 

 

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Charting the Markets: 7 November

FTSE 100, DAX and S&P 500 holding on to recent gains. EUR/USD and USD/JPY consolidate while EUR/GBP advances. And gold, Brent crude and lumber could decline after recent gains.

 

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Market data to trade on Tuesday: UK retail sales; Disney earnings

With pressure mounting for UK consumers, overnight we have the British Retail Consortium publish its latest retail sales monitor. IGTV’s Jeremy Naylor looks at GBP/USD.

Then its earnings from Associated British Foods, Persimmon, and later in the day, Walt Disney. Disney trades all-sessions on the IG platform.

 

 

 

 

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Today’s coverage:

 

Markets generally little moved ahead of the US mid-term elections

Indices: Europe mixed at recent highs while UKX down for 2nd day

FX: USD up for 1st day in 3 but the move is not indicating any change in direction

Equities: Earnings – ABF PSN AVV MUV2 DPW DIS. RNO says I will double its optg margin. LYFT shares fell 11% on poor Q3  

Commods: Gold and oil continues to consolidate at recent highs

 

 

 

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Early Morning Call: dollar basket steady ahead of mid-term elections, CPI

Markets are generally little moved ahead of the US mid-term elections and CPI data.

 Jeremy Naylor | Writer, London | Publication date: Tuesday 08 November 2022 

Equity market overview

Equity markets in the Asia-Pacific region mostly rose overnight, following the lead of yesterday’s US session. European stocks also closed mostly higher yesterday, but opened today’s session in the red.

British businesses are meanwhile facing a difficult Christmas season according to the latest consumer data. British Retail Consortium (BRC) said earlier this morning that spending at major stores rose by 1.6% in October on an annual basis, slowing from 2.2% in September.

Also, a Barclaycard survey released between 21 and 24 October said that 48% of people plan to spend less this Christmas.

In Australia, Westpac consumer sentiment slid to 78 in November from 83.7 the previous month, as rising interest rates and inflation weigh on households. Measures of family finances compared with a year ago fell 3.4%, while outlook for finances over the next 12 months tumbled 11.2%.

Also in Australia, the NAB business confidence index fell five points to zero in October 2022, marking the lowest reading since a negative print in December 2021.

In New Zealand, Adrian Orr has been reappointed governer of the Reserve Bank of New Zealand (RBNZ) for another five-year term, after a unanimous recommendation from the RBNZ's board.

Associated British Foods recorded a 22% increase in revenue to £17Bln. Total sales at Primark rose 43% to £7.7Bln. Adjusted operating profit up 42% to £1.44Bln. The group however reiterated its forecast for a drop in profit in its current year due to higher energy and currency costs and consumers' declining disposable income.

Earnings

Watch out for Deutsche Post at the open in Frankfurt. The German Logistics group raised its 2022 EBIT forecast to around €8.4 billion from around €8bn previously "in response to the continuing positive business and earnings performance in the DHL divisions".

Deutsche Post posted a net income of €1.23bn, and revenue of over €24bn in the third quarter (Q3), beating expectations of €22.4bn.

Munich Re posted a 44% rise in net profit in the third quarter, to €527 million, to be compared with the €366m a year ago when storm claims also dented results. Munich Re says it "firmly" sticks to its full-year (FY) earnings target.

French carmaker Renault plans to roughly double its operating margin in coming years as it embarks on a deep overhaul to split its electric vehicle (EV) and legacy combustion engine businesses and take on outside investors.

Renault and Chinese carmaker Geely announced this morning a preliminary agreement to launch a new, equally held joint venture that will supply gasoline engines and hybrid technology.

Meanwhile complex talks with partner Nissan Motor Co continue about new investment in an electric vehicle venture.

In the US, Lyft fell as much at 13% in extended trading yesterday evening, after the company said it expected current quarter revenue to come below Wall Street expectations. For the third quarter Lyft reported earnings of 11 cents per share, higher than the six cents expected. Revenue came broadly in line with forecasts at $1.05.

Meanwhile, revenue per active rider climbed to a record high of $51.88, up 4% from the previous quarter and an increase of 14% year-over-year (YoY). That blew past analysts' expectations of $49.40. But the number of active users increased by 7.2% to 20.3 million, missing estimates of 21.3 million.

For the fourth quarter, the company expects revenue between $1.15bn and $1.17bn, while analysts expect $1.17bn.

Walt Disney is scheduled to publish its quarterly earnings tonight. Analysts expect earnings of 59 cents per share, on revenue of $21.38bn. The market will be focused on Disney+ performance. Current company expectations at Disney are of between 230 and 260 million subscribers by the end of 2024.

The company has now just over 152 million subscribers, which means that it will have to make substantial investments if it wants to reach that two-year target, which could really weigh on its profits. Disney shares have been underperforming recently. The stock is down some 44% from its 52-week high.

 

 

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Charting the Markets: 8 November

FTSE, DAX and Dow at risk of another bearish reversal. Dollar weakness pushes down USD/JPY and allows EUR/USD and GBP/USD to hold on to gains. And Brent crude oil, gold and US natural gas rallies pause amid US midterm elections.

 

 

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Market data to trade on Wednesday: China CPI; MKS, ITV earnings

With inflation data remaining key, Wednesday brings both CPI and PPI data out in China. IGTV’s Jeremy Naylor looks at USD/CNH.

Then earnings include first half numbers at Marks & Spencer (MKS) and ITV (ITV) in the UK, and US all-sessions stock Beyond Meat (BYND) on its third quarter.

 

 

 

 

 

 

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Today’s coverage:

 

Indices: Global mkts rallied on Tuesday, amid US mid-term elections, but techs hold back the enthusiasm. Europe to open mixed

FX: USD falls after slower US Redbook retail sales data brings about another wave of hope Fed may now peddle back – EURUSD nears 2mth high well over parity

Commods: Drop in USD helping a rise in precious metals - also helped by slump in cryptos on crypto ‘liquidity crunch’ reports. Oil down as EIA cuts oil demand forecast as inventories rise

Equities: Earnings – ITV MKS JDW AV TW. Last night DIS fell 7.5% on fiscal Q4. TSLA 18mth low as Musk sells around $4bln of stock

 

 

 

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Early Morning Call: USD at 2-month low ahead of mid-term election results, CPI

USD falls after slower US Redbook retail sales data brings about another wave of hope the Federal Reserve may peddle back.

 Jeremy Naylor | Writer, London | Publication date: Wednesday 09 November 2022 

Forex

US indices ended yesterday's session higher. The currency market is, meanwhile, little changed this morning as markets await US mid-term elections results.

The US dollar fell to a near two-month low yesterday afternoon as the US Redbook index rose at its slowest pace since March 2021. The Redbook is a weekly index that measures same-store sales growth.

Yesterday it rose by 7.6% during the first week of November, following a 9.7% increase the previous week. That fall of the greenback sent gold above $1,700 for the first time since October 7.

Equity market overview

Overnight, equity markets were mixed in the Asia-Pacific region.

Mainland indices in Hong Kong and China underperformed as China's consumer price index (CPI) rose by 2.1% in October year-on-year (YoY), after 2.8% in September, and missing market expectations of 2.4%.

Producer price index (PPI) fell 1.3% YoY, reversing from a 0.9% gain a month earlier. That number reflects a fall in commodity prices, against sharply higher levels a year ago. A drop of 1.5% YoY was expected.

In the UK, the FTSE 100 opens today’s session lower. Marks & Spencer posted a profit before tax of £205.5 million, to be compared with £269.4m a year ago. The British retailer reiterated its full-year (FY) forecast.

ITV says in its trading update for the third quarter (Q3) that total revenue rose by 6%. ITV studio revenue increased by 16%, growing ahead of the market.

Taylor Wimpey says that the cancellation rate for the second half of the year to date is 24%, with a year-to-date cancellation rate of 18%.

Elsewhere in Europe, Commerzbank this morning posted a net profit of €195m in the third quarter, down 52%. This is, however ,higher than the €116m expected by analysts.

Ahold Delhaize posted better-than-expected earnings for the third quarter and raised its annual outlook for the second time this year.

And Adidas reported a net income from continuing operations of €66m in the third quarter. The group now expects net income of around €250m, taking into account the end of its partnership with Kanye West.

Yesterday evening, Walt Disney shares fell 6% in after-hours trading, after earnings and revenue fell short of expectations. The group posted earnings of 30 cents per chare, missing consensus of 59 cents. Revenue came at $20.15 billion, lower than the $21.38bn anticipated by analysts.

Disney, however, saw strong streaming growth for its Disney+ platform. Disney+ total subscriptions were 164.2 million versus 160.45 million expected.

Disney CEO, Bob Chapek, also said in the earnings release that Disney+ will achieve profitability in fiscal 2024. The direct-to-consumer division lost $1.47 billion during the most recent quarter. It also reported a 10% drop in domestic average revenue per user (ARPU) to $6.10.

Commodities

Oil prices dropped yesterday afternoon, after the EIA released its 2023 demand growth forecast. It now expects an increase of 1.16 million barrels per day increase YoY, that is 320,000 barrels lower than its previous estimate.

The latest API report shows that crude oil inventories rose by 5.6 million barrels last week. Gasoline stocks also rose by 2.6 million barrels while distillates stocks fell by 1.8 million barrels.

 

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Charting the Markets: 9 November

FTSE 100, DAX 40 and S&P 500 await US midterm election results and CPI. And gold rally continues but oil and natural gas drop back.

 

 

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Market data to trade on Thursday: US CPI; AZN earnings

The US will post its consumer price inflation data at 1:30pm UK time in what some regard as the major pivot point of the week’s economic releases.

IGTV’s Jeremy Naylor says it will have the potential to move the market. Outside of this there’s UK earnings from AztraZeneca (AZN), WHSmith and Haleon.

 

 

 

 

 

 

 

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For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

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Today’s coverage:

 

Indices: European mkts expected down as global losses from yesterday continued as tech stocks took the biggest hit

FX: Watching USD ahead of US CPI data out today  

Equities: Earnings – AZN HLN SMWH ALV DTE ARRJ. COIN down 10% hitting support after crypto losses

Commods: Cryptos on a technical bounce after another big slump yesterday. Bitcoin 2yr lows almost exactly a year after record high of $68,900 as Binance walked away from possible FTX deal. Gold back up over 1700, oil holding 2 days of losses breaking below rising support. Lumber testing support

 

 

 

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Early Morning Call: Nasdaq Composite hard-hit as Binance/FTX deal collapses

Markets are being shaken by the collapse of the Binance/FTX deal, with tech stocks among the worst performers.

 Jeremy Naylor | Writer, London | Publication date: Thursday 10 November 2022 

Equity market overview

APAC equity markets fell overnight, following the lead set by US indices yesterday.

Tech stocks are among the worst performers in both regions. The Nasdaq Composite ended 2.48% lower, and Hong Kong’s Hang Seng lead the losses in Asia.

Markets are being shaken by the collapse of the Binance/FTX deal. Yesterday the WSJ said that Binance was interested in merging with another top crypto exchange, FTX, then reports said Binance was walking away.

Binance chief executive, Changpeng Zhao, said the near collapse of FTX has "severely shaken" confidence in the crypto industry and will trigger tougher scrutiny by regulators. FTX CEO, Sam Bankman-Fried, told employees he was exploring all options for his firm, saying his goals were to protect customers and to provide any help he could for staff and investors. He also told investors that FTX received numerous withdrawal requests from customers and needed funding of up to $8 billion.

Cryptocurrencies bounced back this morning. Yesterday’s sell-off took Bitcoin to a new two-year low.

Forex

The US dollar meanwhile, steadied after mid-term election results.

Currency traders are now waiting for inflation data. Consumer price index (CPI) is expected to rise by 8% in October year-on-year (YoY), after 8.2% the previous month. Core CPI is forecast to increase by 6.5%, after 6.6% on September.

Weekly jobless claims should report 220,000 new claimants.

Earnings

Elsewhere on the equity market, AstraZeneca raised its full-year (FY) earnings forecast after earnings and revenue beat expectations in the third quarter (Q3).

Former GSK consumer health arm Haleon also raised its sales growth forecast after posting a 16.1% jump in revenue in the third quarter.

Elsewhere in Europe, German insurer Allianz posted a better-than-expected 17% rise in third quarter net profit yesterday evening. Revenue however missed expectations. It came in €34.8bn, while analysts had forecast €37nn. In terms of outlook, Allianz sees its 2022 operating profit in the upper half of its previously stated range of €12.4bn to €14.4bn.

Separately, the company announced a €1 billion share buyback programme, which would start in the middle of November and conclude by the end of next year at the latest.

Deutsche Telekom reported an 80% rise in adjusted net profit to €2.4bn. The telecoms operator plans to increase its dividend to €0.70 per share from €0.64 in 2021. It also raised its full-year guidance, partly helped by the US dollar's appreciation, partly by an increase of the number of its US T-mobile customers.

ArcelorMittal also reported higher-than-expected third quarter earnings. The world's second largest steelmaker's EBITDA came at $2.7 billion. This was less than half the previous year's figure, but higher than the average forecast in a company poll of $2.34 billion.

Yesterday after the US market close, Beyond Meat slumped to a new record low as the company reported a wider-than-expected loss for its third quarter as demand for its meat substitutes tumbled.

The group posted a loss of $1.60 per share. Analysts had expected a smaller loss of $1.14. Revenue reached $82.5million, lower than the $98.1m expected.

 

 

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Charting the Markets: 10 November

FTSE 100 and DAX move higher while S&P 500 struggles. EUR/USD and USD/JPY await US inflation data while EUR/GBP continues to rise. And gold, Brent crude and lumber heading lower as dollar starts to strengthen.

 

 

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Market data to trade on Friday: Japan PPI; UK GDP

With little or no corporate data to watch it will be an opportunity to look at USD/JPY around Japanese producer prices out overnight.

Then with the UK widely expected to go into a recession at the end of the year, we’re also looking at UK growth data for the third quarter and FTSE 250.

 

 

 

 

 

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For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK.

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Today’s coverage:

 

Biggest equity mkt rally in 2yrs as US inflation comes in weaker than expected and China cuts covid quarantine period for travellers

Indices: Europe expected to open up after Thursday’s climb

FX: USD worst day in more than a decade to 3mth lows and building the short position. USDJPY best chart although USD down across the board. Watching GBP ahead of GDP data at 7am  

Commods: Entire USD priced commodity complex is up. Copper near 5mth high. Bitcoin also rose yesterday but is down today on worries about the total collapse of FTX

Equities: Looking at a risk event for next week around NVDA earnings – chart looking positive…but what about the fundamentals

 

 

 

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Early Morning Call: USD drops after CPI data as global equity markets rally

Equity markets see biggest rally in two years as US inflation comes in weaker than expected and China cuts Covid quarantine period for travellers.

 

 Jeremy Naylor | Writer, London | Publication date: Friday 11 November 2022 

Equity market overview

Equity markets continue to feel the effects of lower-than-expected US CPI data published yesterday afternoon.

Consumer price index in the US rose by 7.7% in October year-on-year (YoY), cooling from September’s 8.2% gains, and lower than the 8% expected by economists. Core CPI rose by 6.3% YoY, missing consensus of a 6.5% increase.

This lower-than-expected print supports the case of a slowdown in the pace of Federal Reserve (Fed) rate hikes. Market participants are now predicting a 71.5% chance of a 50 basis-point hike at the Fed’s next meeting in mid-December.

US indices yesterday saw their biggest rally in two years. Dow Jones rose by 3.7% and the S&P 500 by 5.54%. Tech stocks reacted the most to the CPI release, sending the Nasdaq Composite 7.35% higher, its best performance since March 2020.

In Europe, the DAX benefited the most from the CPI-induced rally, closing 3.51% higher.

Overnight, Asia-Pacific indices posted strong gains, led by the tech stock-heavy Hang Seng index.

Elsewhere on the equity market, Redrow says that value of net reservations in the first 18 weeks of the financial year is down 19% YoY. The group estimates build cost inflation of around 7% in FY 2023, which will have an impact on its operating margin: 18% expected for the full year, compared to 19.2% in the previous year.

Richemont posted a net loss of €760 million in the first half (H1), after the luxury group had to set aside €2.7 billion following its part exit from online fashion retailer YOOX Net-A-Porter.

If we remove the impact of the write-down, the owner of Cartier increased its profit by 40% to €2.1 billion. Sales increased by 24% to €9.67 billion, partly helped by a recovery in the Asia-Pacific region.

ASML Holding yesterday afternoon announced a €12bn share buyback programme to run through 2025. In the announcement ahead of today’s investors' day, the company said it expects revenue of €30bn to €40bn by 2025, up from a previous estimate of €24bn to €30bn.

Reuters is meanwhile reporting that troubled crypto exchange FTX is scrambling to raise about $9.4bn from investors and rivals. It comes as chief executive, Sam Bankman-Fried urgently seeks to save the business that has been buffeted by a rush of customer withdrawals.

Forex

The US dollar had its worst day since 2009. The dollar basket fell to its lowest level since the end of August.

Precious metals naturally benefited from the fall of he greenback. Gold rose to a two-and-half-month high and is on track to post its best weekly performance since July 2020. Silver rose to a five-month high, and platinum to an eight-month high. Copper hit a near-five-month high on hopes that dollar weakness would boost the metal's demand.

Macro overview

In Japan, producer price index (PPI) rose 9.1% in October from a year earlier. The rise was slower than a record 10.2% jump in September but exceeded a median market forecast for an 8.8% gain.

The UK economy shrank by 0.2% quarter-over-quarter (QoQ) in the third quarter (Q3), better than the -0.5% expected by economists. Industrial production fell by 3.1% in September YoY, compared to expectations of -4.3% YoY.

Later this afternoon, the University of Michigan consumer sentiment is expected to fall to 59.5 in November, from 59.9 the previous month. This would be the first decline after four straight months of gains.

 

 

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Charting the Markets: 11 November

FTSE, DAX and Nasdaq surge in the wake of the US CPI release. EUR/USD, GBP/USD, and AUD/USD rebound on lower US inflation. And commodity prices recover as dollar weakens.

 

 

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Early Morning Call: USD steady as Fed not 'softening' fight against inflation

Federal Reserve board member, Christopher Waller, says last week's CPI print was "just a data point" and in no way proof that inflation is slowing.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Monday 14 November 2022 

Indices overview

Indices in Europe are set to open in positive territory this morning, after what has been a mixed session in the Asia Pacific region. The Nikkei and ASX 200 lost ground, while the Hang Seng rally continues after two weeks of strong gains.

US indices posted substantial weekly gains, boosted by softer-than-expected US CPI data, while the US Dollar Basket lost 3.6% in two sessions.

Yesterday Federal Reserve (Fed) board member, Christopher Waller, said that last week's CPI print was "just a data point" and in no way proof that inflation is slowing. If Waller admitted that the Fed could now start thinking about slowing the pace of its hikes, he reiterated that the central bank was not softening its fight against inflation.

Macro indicators

In terms of macroeconomic indicators, at 10:00 we expect the latest eurozone industrial production data. Economists expect the index to rise by 0.3% for the month of September compared to August, and a gain of 3% compared to September last year.

The pound will be tested throughout the week. Jobs data is scheduled to be released tomorrow. But more importantly, currency traders are gearing up for Wednesday’s consumer price index (CPI). Economists forecast a new four-decade high of 10.6% in October year-on-year (YoY), after 10.1% the previous month.

On Thursday the Chancellor of the Exchequer will present his Autunm fiscal statement. And on Friday, we await retail sales for the month of October.

Earnings

A few big corporate names report earnings this week in the UK, starting tomorrow with Vodafone and Imperial Brands, followed on Thursday by International Distribution Services and Burberry.

In the US, it was announced on Friday afternoon that Estee Lauder has entered exclusive talks to buy Tom Ford for $2.8 billion, beating out competition. Earlier this month, French luxury group Kering was also in discussions to acquire Tom Ford. Estee Lauder stock rose on the news as investors believe the transaction will help the group strengthen its position in the luxury business.

This week, retailers are taking centre stage. Walmart reports its quarterly earnings tomorrow at lunchtime. Analysts forecast earnings of $1.31 per share, which represents a 9.7% decline on the same quarter a year ago. Revenue is expected to rise by some 5% to $147.18nn year-on-year.

Also expected this week, Home Depot tomorrow and Target on Wednesday.

Some big names in the tech sector report this week as well. NVIDIA is set to post earnings per share (EPS) of 70 cents on Wednesday after the closing bell. Revenue is forecast at $5.8bn. Last week NVIDIA was among the best performing on the US market. On Monday, investors welcomed the announcement that the group is now offering a new advanced chip in China that meets recent export control rules. And on Thursday, NVIDIA shares rose in excess if 15% after the release of lower-than-expected US CPI data.

Cisco is also expected to report on Wednesday evening.

Commodities

Oil prices are little changed this morning.

Last Friday a Baker Hughes survey showed that the total rig count rose by nine to 779, entirely accountable to the number of rigs in operation, up from 613 to 622. The number of producing gas rigs remained at 157.

 

 

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Charting the Markets: 14 November

FTSE 100, DAX and S&P 500 looking to build on recent gains. EUR/USD and USD/JPY to consolidate last week’s strong gains while EUR/GBP range trades. And gold pushes higher, while Brent crude and natural gas fade recent gains.

 

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Market data to trade on Tuesday: Japan & eurozone GDP; VOD, WMT earnings

With rates going up almost all around the world fears are that GDP will start to contract. This may not come to pass in Japan, but the eurozone may start to see weak data.

IGTV’s Jeremy Naylor looks at the Nikkei and the DAX. On the corporate agenda, Vodafone (VOD) and Walmart (WMT) top the list.

 

 

 

 

 

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Early Morning Call: equity markets hesitant as DAX enters bull market

European equity markets aren't showing any real direction after the German DAX entered bull market territory.

 

 Joshua Mahony | Senior Market Analyst, London | Publication date: Tuesday 15 November 2022

Equity market overview

European equity markets aren't showing any real direction this morning.

Yesterday, the German DAX entered the bull market, rising 20% from its September lows. In the last few hours, a series of comments from central bankers around the world all point in a same direction: the normalisation of rate hikes.

Yesterday, Federal Reserve (Fed) vice chair, Lael Brainard echoed Fed governor Christopher Waller's comment this weekend that interest rates need to keep rising to battle inflation, although potentially at a slower pace. Slowing the pace of hikes was also a scenario mentioned by French central bank governor, Francois Villeroy de Galhau, in a speech at a business conference in Japan: "We are clearly approaching what I would call the 'normalisation range' which can be estimated at around 2%. We should reach this level by December. Beyond this level, we will probably continue to raise rates, but we may do so in a more flexible and possibly less rapid manner. Jumbo rate hikes will not become a new habit."

As for the Reserve Bank of Australia (RBA) minutes published overnight, the bank is ready is open to all scenarios: it could either go back to larger hikes or mark a pause. The RBA has already been slowing the pace of its rate hikes, having raised its interest rates by ‘only’ 25 basis points at its last two meetings.

Major economic news

In China, three main indicators missed expectations overnight, showing that the recovery of the world's second economy is slowing. Industrial production rose 5% in October from a year earlier, missing expectations for a 5.2% gain, and slowing from the 6.3% growth seen in September.

Retail sales fell for the first time since May, dropping 0.5% against expectations for a 1.0% rise, and after a 2.5% gain in September. Fixed asset investment expanded 5.8% in the first 10 months of the year, versus expectations for a 5.9%.

In Japan, the economy unexpectedly shrank by 0.3% in the third quarter (Q3) compared to the second, missing market consensus of 0.3% growth. This was the first GDP contraction since Q3 2021. Private consumption, which makes up more than half of the Japanese economy, grew 0.3%, slowing sharply from the previous period's 1.2% gain.

In the UK, the unemployment rate rose to 3.6% in September, while October's claimant count came in at 3.300, after 25.500 the previous month.

Elsewhere in Europe, Germany ZEW economic sentiment is expected to rise to -50 in November which would be a five-month high for the index. In October, the index pointed at 59.2, a slight improvement on the 14-year low set in September.

Also at 10am, we'll get the second estimate of eurozone's second quarter GDP growth rate. Economists anticipate the euro area economy to have expanded by 0.2% during the third quarter.

In the US at 1.30pm producer price index for the month of October is expected. Expectations are for 8.3% year-on-year (YoY).

Also at 1.30pm we expect the NY Empire State manufacturing index and at 9.30pm the API crude oil inventories.

Earnings

Elsewhere on the equity markets, Vodafone's operating profit increased by 12.2% in the first half (H1). Revenue rose by 2% to €22.9 billion. The mobile phone operator downgraded its full-year (FY) free cash flow forecast by €200 million, and warned that earnings will come in towards the bottom if its guidance range.

Imperial Brands' operating profit fell by 14.7% in 2022 to £2.68bn. Reported revenue fell by 0.7% reflecting a negative impact of a weaker euro.

In the US Walmart and Home Depot start a busy week in terms of retail sector earnings. Analysts expect Walmart to post earnings of $1.31 per share, which represents a 9.7% decline on the same quarter a year ago. Revenue is expected to rise by some 5% to $147.18bn year-on-year. Investors will be particularly attentive to the level of stocks. Last quarter Walmart inventories rose nearly 26%.

Home Depot also is facing inventories issues, up 35% last quarter. The group is also expected to report earnings at lunch time. Analysts forecast earnings of $4.12 per share on revenue of $37.92bn.

 

 

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Charting the Markets: 15 November

FTSE, DAX and Nasdaq look set to head higher after recent push through resistance. EUR/USD, GBP/USD move up while USD/JPY remains stuck below 100-day SMA. And Brent crude and natural gas under pressure while gold surge continues.

 

 

 

 

16 Candlestick Patterns Every Trader Should Know | IG US

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Market data to trade on Wednesday: UK CPI; EIA crude oil inventories; NVIDIA earnings

UK inflation data kicks off the day, with the pace of price increases expected to pick up year-on-year. Meanwhile, oil will be in focus around the weekly EIA crude inventory figures in the US.

Finally, Nvidia becomes one of the last big-name stocks to post earnings, with the stock up some 50% from its 2022 low.

 

 

 

 

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Today’s coverage:

 

Indices: Europe expected mixed at the open as NATO wary on alleged missile in Poland. Asia mostly up apart from China on more data showing an economic slowdown  

FX: EURUSD spiked above 200 day SMA 1st time in 17mths as USD after US PPI fell. Watching GBP ahead of UK inflation data. USDCNH first gain in 7 days as China new home prices biggest fall in 7yrs

Equities: Earnings SGE BLND NVDA  

Commods: Gold highest in 3mths on that USD move  

 

 

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Early Morning Call: UK CPI hits new 40-year high

UK inflation has hit a new 40-year high which will be a fresh blow to families battling the rising cost of living.

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 16 November 2022 

Equity market overview

US equity markets ended the session higher yesterday, boosted by reassuring earnings in the retail sector. The US dollar fell to a new three-month low at the publication of US producer price index (PPI). Factory gate price rose 8% year-on-year (YoY), lower than the 8.3% forecast, and the slowest pace since June 2021.

Core PPI was flat month-on-month (MoM), the lowest since November 2020. This latest data reinforced hopes of a Federal Reserve (Fed) slowdown. If the battle against inflation is not over, some Fed policymakers are now considering raising interest rates at a slower pace.

However, the latest central banker to express his opinion was Atlanta Federal Reserve president, Raphael Bostic, who sees little evidence that the US central bank's aggressive monetary policy tightening is slowing inflation. Bostic did not indicate if he favoured slowing the pace of future rate increases.

On Monday, Fed vice chair, Lael Brainard echoed comments by Fed governor, Christopher Waller that interest rates need to keep rising to battle inflation, although potentially at a slower pace.

Overnight however, APAC indices didn’t relay the US performance, as concerns grew about an escalation of the war in Ukraine. In China, new home prices saw their biggest fall in seven years. Average new home prices in China's 70 major cities dropped by 1.6% YoY in October. It was the sixth straight month of decreases in new home prices, and the fastest fall since August 2015.

In Europe, indices opened the session lower. In the UK, inflation has hit a new 40-year high. These are October numbers and will be a fresh blow to families battling the rising cost of living. Food and non-alcoholic beverage prices rose by 16.4% in the 12 months to October 2022, up from 14.6% in September 2022. Energy bills rose in October despite the government's decision to cap the annual amount paid by the average household at £2,500. That's the highest since September 1977 according to this data today.

The rise was anticipated by the Bank of England (BoE) in its latest quarterly monetary policy report. Threadneedle Street said inflation would remain high and only fall back towards 10% in the first three months of 2023.

Macroeconomic indicators

In the US, traders await a few macroeconomic indicators. At 1.30pm, retail sales are expected to rise by 1% in October MoM. Later at 2.15pm, industrial production is forecast to rise by 0.2% in October MOM. And at 3pm, business inventories are expected to increase by 0.5% in September MoM.

Corporate calendar

On the corporate front, British Land reported a fall in valuations of its assets and slid into a half-year (H1) loss, as aggressive interest rate hikes to tackle inflation and deepening recession worries are weighing on the sector’s tentative recovery.

The group posted a loss after tax of £34 million. Net Tangible Assets, a key measure that reflects the value of its buildings, fell 4.4%.

On Tuesday, its bigger peer Landsec said it would slow the pace of its re-investment after reporting a first-half loss.

Premier Foods said adjusted profit before tax is up 11.9% and maintained its margins in line with prior year.

Sage Group's revenue rose by 5% to £1.95 billion, EBITDA wasup 3% to £468mn, with EBITDA margins down 20 basis points to 24%.

NVIDIA is set to post earnings per share (EPS) of 70 cents on Wednesday after the closing bell. Revenue is forecast at $5.8bn. Last week NVIDIA was among the best performing on the US market. On Monday, the market welcomed the announcement that the group is now offering a new advanced chip in China that meets recent export control rules. And on Thursday, NVIDIA shares rose in excess if 15% after the release of lower-than-expected US CPI data.

Other US earnings include Cisco. Analysts anticipate earnings of 84 cents per share, on revenue of $13.29bn.

Target is expected to report earnings of $2.16 per share, on revenue of $26.38bn. Yesterday was a good day for the retail sector after reports from Walmart and Home Depot.

Walmart shares rose by 6% after the group raised its outlook and announced a $20bn share buyback plan, an announcement that supported the whole sector. Target ended the session up 3.3%.

 

 

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Charting the Markets: 16 November

FTSE 100, DAX 40 and S&P 500 remain bid despite stronger-than-expected UK inflation data. EUR/USD, GBP/USD and AUD/USD continue to grind higher. And gold at 3-month high, while oil rallies, but natural gas falls back.

 

16 Candlestick Patterns Every Trader Should Know | IG US

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Market data to trade on Thursday: IDS earnings; UK budget

The pivot trade on Thursday is likely to be around the UK economy.

IGTV’s Jeremy Naylor looks at the domestically focused FTSE 250 mid-cap index as the area to watch out for as the Chancellor of the Exchequer, Jeremy Hunt speaks in the Commons on Thursday. GBP/USD will be another area to monitor.

Outside of this International Distributions Services (IDS), formerly Royal Mail, is on the corporate agenda.

 

 

 

 

 

 

 

look ahead Thursday.PNG

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Today’s coverage:

 

Indices: Global mkts down, Europe expected to open slightly softer  

FX: EURUSD continues to be capped at 200day SMA. Watching GBP ahead of UK fiscal statement

Equities: Earnings: BRBY IDS MTO SIE. TKA warns of a significant drop in sales coming. SIE good fiscal Q4. Last night Q3 at NVDA stk down 1.6% & CSCO up 3.3%

Commods: Gold down for 2nd day. Brent closing in on $90  support

 

 

 

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Early Morning Call: watching GBP and FTSE 250 ahead of UK Autumn budget

In the UK, the market awaits the Chancellor of the Exchequer’s Autumn Statement at midday. Jeremy Hunt is expected to unveil widespread spending cuts and tax rises.

 Jeremy Naylor | Writer, London | Publication date: Thursday 17 November 2022 

Indices overview

Indices in the Asia-Pacific region mostly fell overnight, following the lead of US equity markets. Hong Kong’s Hang Seng was the worst performer in the region, dragged down by its technology sector.

In Japan, trade deficit widened to ¥2.16 trillion in October, from ¥2.09tn the previous month. Economists had anticipated a deficit of ¥1.61tn. This was the 15th straight month of deficits, and the longest stretch since 2015, as imports rose more than expected, by 53.5% year-on-year (YoY), while exports rose by a much softer 25.3%.

The Australian S&P/ASX 200 outperformed the region, as the unemployment rate unexpectedly fell to 3.4% in October from 3.5% the previous month. Economists has forecast a rise to 3.6%. Employment increased by 32,200 to a new record high of 13.62 million, as full-time employment gained 47,100 while part-time employment fell by 14,900.

A modest rebound is expected in Europe, after major indices posted declines in yesterday’s session. In the UK, the market awaits the Chancellor of the Exchequer’s Autumn Statement at midday. Jeremy Hunt is expected to unveil widespread spending cuts and tax rises.

Earnings

Royal Mail’s parent company International Distribution Services posted an operating loss of £163 million, or revenue of £5.83bn, down from just over £6bn a year ago.

Burberry says quarterly sales rose by 11%, and operating profit rises 6% to £238mn.

Thyssenkrupp warned this morning it sees 2022-23 sales falling significantly, dragged down by an expected normalisation of prices for steel and materials as well as higher energy costs. ThyssenKrupp also expects adjusted operating profit to more than halve to a high triple-digit million euro amount at best, down from €2.1 billion.

For the fourth quarter, ThyssenKrupp posted an increase in sales of 12%, but EBIT is down 31% and order intake fell by 27%. The group says it will propose a dividend of 0.15 euros per share for the past financial year, which would mark the first payout in four years, on the back of the past strong price increases for steel and materials.

Siemens posted fourth quarter (Q4) industrial profit of €3.16bn, up 38%, beating forecasts for €2.79bn. Sales increased 18% to €20.57bn, higher than the €19.13bn forecast, while orders during the period rose to a better than expected €21.82bn. The group expects revenues to grow by 6% to 9% during its 2023 fiscal year.

Yesterday evening, NVIDIA shares fell by around 2.5% in extended hours, after the group posted mixed third quarter (Q3) earnings. The chip designer posted earnings of 58 cents per share. Analysts had expected EPS of 70 cents. Revenue in the third quarter rose 31% from a year ago, to $5.93bn, beating consensus, thanks to a strong demand in its data centre business.

However, NVIDIA's gaming business, a segment that once drove its revenue, was hit by weak consumer demand. Revenue was down 51% from a year ago. Investors were also disappointed by the group's guidance. NVIDIA forecasts current- uarter revenue at $6bn, plus or minus 2%, versus expectation of $6.09bn.

Cisco shares rose by nearly 3% yesterday evening, after the group raised its revenue and profit forecast. Excluding items, Cisco earned 86 cents per share, two cents above expectation. Cisco revenue also beat expectations, coming at $13.60bn.

The group now expects annual revenue growth of 4.5% to 6.5%, and adjusted earnings between $3.51 and $3.58. It previously forecast revenue growth of 4% to 6% for the year and earnings of $3.49 to $3.56, excluding items.

The company also announced it is parting with about 5% of its workforce. The restructuring plan will begin in the second quarter of fiscal year 2023.

Commodities

On the commodity market, Brent and WTI are trading lower this morning, as geopolitical tensions ease, while the rising number of Covid cases in China, the world’s largest crude importer, reignited demand concerns.

EIA inventories showed yesterday a decline in crude oil stocks of 5.4 million barrels. Gasoline stocks rose by 2.2 million barrels and distillate stocks decreased by 900,000 barrels.

 

 

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