European market's flat as investors await delayed payroll's numbers
European benchmark’s have remained hesitant this morning, keeping close to breakeven across the board as investors ready themselves for a backlog of economic data starting with September payrolls today.
Given the drought of data during the debt ceiling saga, it would seem plausible that we will see some volatility over today’s number. However, given the figures are 3 weeks late, and the gravity of what has happened in the interim, it is likely to have a muted impact.
More importantly, it is highly unlikely that we will be able to draw many conclusions on the all-important taper timescale from the numbers. In fact it could be December or into 2014 before we see payroll numbers that might reflect any potential backlash from the shutdown, and that coupled with the change of guard at the Fed helm and the new debt deadline would suggest we are unlikely to get any real clarity until next year.
Today’s sell off would indicate that the strong results posted by Arm holdings this morning were firmly priced in by the market, with the stock surging over 30% in 2013. Q3 revenues climbed 27% to £184 million, with new licensing also giving room for optimism with a record 48 licenses from 24 firms, 11 being new customers. The contracts are evidence of ARM’s status as a premier high efficiency performance chipmaker, which has been further cemented as Apple employ ARM’s 64 bit technology in their phone 5S, with many other smartphone producers indicating they are not far from following suit.
BHP Billiton has increased iron ore production targets for 2014, further evidence of the big miners strategy after Rio Tinto reported record iron ore output for Q3 earlier this month. The numbers continue the trend towards increasing output and cutting costs, as the heavyweight miners attempt to offset pressure on revenue’s from weaker commodity prices. Petroleum output also hit record highs for the quarter.
A 34% hike in Q3 profits saw GKN stock offered higher this morning, as strong numbers from auto and aerospace offset poor demand from industrial and military divisions. Another stock in high demand was Reckit Benckiser, soaring 5% in early trade after reporting a 5% increase in comparable quarterly revenue. The firm has also alerted investors to a “change in strategy” at its Pharmaceuticals unit, which will likely mean a possible sale of its heroin addiction drug Suboxone, as revenue’s are hampered by increased competition. An early estimate from Bank of America Merril Lynch values the firm unit at around £2 bln, with the firm due to update shareholders on the matter in 2014.
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