A week that started with great enthusiasm is finishing on a more subdued note. Having touched new all-time highs yesterday, index futures for the Dow and S&P along with the FTSE are down marginally. Continental indices are giving back more of the week's gains with the Dax and CAC down about 0.6% as the terrorist attack in France weighs on sentiment a bit.
Asia Pacific markets finished the week stronger with the Nikkei up 0.7% and the Hang Seng up 0.5%. Better than expected GDP, retail sales and industrial production helped to maintain support for stocks. Positives from good China data haven't carried through to commodities however, with WTI Crude Oil falling 0.6% and copper holding steady.
There's a lot of news due this morning which could move the markets. UK construction data for the last two months was not as bad as feared or as bad as previously reported, helping Sterling continue its recovery. .
It's a big day for US bank earnings. Building on yesterday's positive surprise from JPMorgan, Citigroup has posted a big positive surprise. US Bancorp and PNC Bank have beaten the street as well this morning while Wells Fargo met expectations.
There's also a lot of US economic data due headlined by retail sales and consumer prices. Fed speakers this week have been suggesting they are in no hurry to raise rates again, but with wage pressures starting to increase, any signs of rising inflation could change that tune. At the moment it looks like the Fed would prefer to hold off on a decision until at least December after the US election. Meanwhile retail sales could indicate the strength of the US consumer economy which could influence earnings expectations.
Corporate News
Citigroup $1.24 vs street $1.10
Wells Fargo $1.01 as expected
US Bancorp $0.83 vs street $0.80
PNC Bank $1.82 vs street $1.75
Economic News
China Q2 GDP 6.7% vs street 6.6%
China industrial production 6.2% vs street 5.9%
China retail sales 10.6% vs street 9.9%
China M2 money supply 11.8% vs street 11.4%
China new yuan loans 1,380B vs street 1,000B
UK construction output (1.9%) vs street (3.5%), previous revised up to (0.6%) from (3.7%)
Eurozone trade balance €24.6B vs street €25.0B
Eurozone consumer prices 0.1% as expected
Eurozone core CPI 0.9% as expected
NZ REINZ house sales 6.0% vs previous 13.6%
Singapore retail sales 1.4% vs street 1.9%
Singapore retail ex auto (3.3%) vs street (3.4%)
Upcoming significant economic announcements include:
8:00 am EDT BoE Carney speaks in Canada on climate change
8:30 am EDT Canada manufacturing sales street (0.8%)
9:00 am EDT Canada existing home sales previous (2.8%)
8:30 am EDT US retail sales street 0.1% vs previous 0.5%
8:30 am EDT US retail ex auto street 0.4%
8:30 am EDT US consumer prices street 1.1%
8:30 am EDT US core CPI street 2.2%
8:30 am EDT US real average weekly earnings previous 1.1%
8:30 am EDT US Empire manufacturing street 5.00
9:15 am EDT US industrial production street 0.3% vs previous (0.4%)
9:15 am EDT US manufacturing production street 0.3%
10:00 am EDT US consumer sentiment street 93.3
1:00 pm EDT US Baker Hughes drill rig count previous 440
1:00 pm EDT FOMC William speaking
1:15 pm EDT FOMC Kashkari and Bullard speaking
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Colin Cieszynski