Monday found the US and Europe diverging somewhat as traders on either side of the Atlantic focusing on different factors. The Dax and FTSE sold off Monday with the German index completing a head and shoulders top. Recent gains by the Euro and Sterling have had a negative impact on the shares of exporters, similar to the relationship between JPY and the Nikkei. Talk of collusion among German automakers also dragged on the Dax.
US indices held steady through much of the day with Financials and technology outperforming while telecom and utilites underperformed. Gold and USD levelled off consolidating recent moves in the absence of major economic news with traders waiting for Wednesday’s FOMC statement. There are a ton of large cap companies ad sector leaders reporting earnings this week so we may see more of a focus on individual stocks. After the close, Google released a positive report, beating the street by a wide margin on earnings while meeting expectations on sales.
Crude oil bounced back after vibes from a meeting of OPEC and non-OPEC countries in Russia eased concerns about overproduction. Saudi Arabia indicated it plans to export 6.6mmbbl/day 1 million less than a year ago. Meanwhile, it became clear that Nigeria is unlikely to exceed its 1.8 mmbbl/day production target and Libya is likely to have difficulty getting and staying above 1 mmbbl/day.
Meanwhile, shares of driller Halliburton fell 4.1%. Although the company beat the street on earnings, management indicated demand growth for oilfield services has slowed. A number of Big Oil companies in North America are set to report results this week. Company comments may give a stronger indication of where exploration and capital spending are trending and could also impact trading in oil and energy shares.
Google/Alphabet$5.01 vs street $4.44
Significant announcements released overnight include:
US flash manufacturing PMI53.2 vs street 52.2
US flash service PMI54.2 as expected
US existing home sales5.523M vs street 5.58M
Germany flash manufacturing PMI56.8 vs street 57.2
Germany flash service PMI53.5 vs street 54.3
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
9:00 am BSTGermany IFO business climatestreet 114.9
9:00 am BSTGermany IFO expectationsstreet 106.5
9:00 am BSTGermany IFO current assessmentstreet 123.8
11:00 am BSTUK CBI business optimismstreet 0
11:00 am BSTUK CBI total ordersstreet 12 vs previous 16
11:00 am BSTUK CBI selling pricesstreet 20 vs previous 23
10:00 am EDTUS consumer confidencestreet 116.5
10:00 am EDTUS Richmond Fedstreet 7
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