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Big Pharma Earnings and more PMI reports in focus as Europe returns to trading

UK and European traders have returned from their long weekend in a relatively good mood with indices climbing. Athens is leading the way with a 3.0% gain after the government reached a technical deal with the EU on reforms to unlock more bailout funds. The FTSE is up 0.4% boosted by stronger than expected UK manufacturing PMI while continental countries were in line with expectations. 

In North America, today, the focus is back on earnings while macro traders await tomorrow’s FOMC statement. Results continue to come in positive led by big drug companies. Pfizer and Merck both beat the street while Merck also raised guidance. Big energy results were mixed with EnCana posting huge numbers while ConocoPhillips posted a surprise loss. Cummins and MasterCard continued runs of strong reports from Financials and Industrials. Apple results are due after the close today which could mark a turning point for the NASDAQ. Dow and S&P futures are steady indicating  

In currency trading, gold has stabilized at a lower level, digesting yesterday’s selloff. GBP and EUR are both up slightly. CAD is bouncing back a bit with crude oil rebounding. Yesterday’s slide on the return of Libya’s biggest oil field to production appears to have quickly run its course. Energy traders’ focus has shifted back to this month’s OPEC meeting and the potential for production cuts to be extended. Meanwhile, reports indicate Russia is close to reaching its production cut targets and apparently is open to talking about an extension.  

Corporate News

EnCana        $0.11 vs street $0.03, cash flow $278M vs street $102M

ConocoPhillips        ($0.02) vs street $0.02

Merck            $0.88 vs street $0.83, raises full year guidance to $3.76-$3.88

Pfizer            $0.69 vs street $0.67

MasterCard        $1.01 vs street $0.95

Cummins         $2.26 vs street $1.81

Coach             $0.46 vs street $0.44

Economic News

Significant announcements released overnight include:

Australia cash rate            1.50% no change as expected

China Caixin manufacturing PMI        50.3 vs street 51.3
Japan service PMI            52.2 vs previous 52.9

UK manufacturing PMI            57.3 vs street 54.0
Germany manufacturing PMI        58.2 as expected
France manufacturing PMI        55.1 as expected
Italy manufacturing PMI            56.2 vs street 56.0

Italy unemployment rate            11.7% vs street 11.5%

Upcoming significant economic announcements include:

There are no major announcements scheduled for North America on Tuesday

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