Mixed market moves indicate indecision; Good earnings for Twitter but no takeover
19:00, 26 October 2016
· By CMC Markets
Trading across global markets is very mixed today indicating indecision and uncertainty among investors.
Despite another round of generally positive earnings overnight, led by strong results from Tesla Motors and Texas Instruments, US indices are only marginally higher, while the FTSE and Dax are marginally lower.
Currency markets are also mixed on overnight news. GBP has strengthened a bit with UK Q3 GDP exceeding expectations. Oil sensitive currencies like CAD and NOK have rebounded a bit with Oil stabilizing overnight even though WTI remains under $50.00. NOK and SEK are heading in opposite directions after Norges Bank held its benchmark rate at 0.50% while Sweden’s Riksbank held its rate at (0.50%) but suggested it could keep its rate negative for longer.
It looks like the Belgians have finally gotten their act together and are prepared to sign on to the CETA trade agreement between the EU and Canada. This may have some influence here but it's more important for the EU to show that it can actually get a deal done with anybody with US talks dragging on and Brexit talks looming next year. It's unclear at this time if PM Trudeau will still be heading to Europe to sign off on the deal or not.
Action in defensive havens appears particularly perplexing. Gold has turned upward in recent days tracking an uptick in the polls for Donald Trump suggesting some political risk concerns starting to build. However, were not seeing broad movement into defensive currencies as JPY continues to retreat.
It's been a big week for mergers and that focus is firmly on the technology sector today. Qualcomm has agreed to purchase NXP Semiconductors for $47 Billion in cash already. Twitter reported earnings this morning and did not announce a takeover bid as some had speculated with the company being shopped around lately.
Twitter did announce EPS of $0.13 above the $0.09 the street had expected. The struggling social media announced it is cutting its workforce by 9%. This announcement looks like Twitter may be primping itself in the hope of attracting a better bid perhaps later today, perhaps in the coming weeks. The longer we go without a bid, however, the more likely the company may continue on alone. Twitter shares have popped upward in premarket trading.
There's a lot more news on the way today in US markets with durable goods orders due before the open plus earnings from Google and Amazon.com due after the close.
Twitter $0.13 vs street $0.09, sales $615M vs street $605M no takeover bid, company to lay off 9% of its staff
Ford $0.26 vs street $0.20
Tesla Motors $0.71 e items, sales $2.3B vs street $2.2B, production 25,000+ vehicles confirms deliveries of 50,000 vehicles in the second half
Texas Instruments $0.94 vs street $0.86, 32% dividend increase
Sweden interest rate (0.50%) no change expected
Norway interest rate 0.50% no change expected
UK Q3 GDP over year 2.3% vs street 2.1%
US Q3 GDP over quarter 0.5% vs street 0.3% and previous 0.7%
NZ trade balance ($1.4B) vs street ($1.1B)
China industrial profits 7.7% vs previous 19.5%
Upcoming significant economic announcements include:
8:30 am EDT US durable goods orders street 0.0%
8:30 am EDT US durables ex transport street 0.2%
8:30 am EDT US capital goods nondef ex air street (0.1%)
8:30 am EDT US jobless claims street 255K
10:00 am EDT US pending home sales street 4.0%
10:30 am EDT US natural gas storage street 74 BCF
11:00 am EDT US KC Fed street 3 vs previous 6
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