Daily Market Review - July 31, 2013 European shares mixed ahead of euro zone unemployment and Fed meeting Investors throughout Europe are unsure of the direction of which way the share market could rally early morning leading up to a big day of economic data. What has been a strong week for the economic calendar this week continues today with Germany kicking things off releasing their unemployment rate and change at 0855 GMT+1. Following this at 10am GMT+1 the European countries will release their Consumer Price Index CPI. The will be heavily watched as the ECB (European Central Bank) as well as the BoE and US Fed are all set to make a decision on interest rates this week as well as give policy statements on their current monetary policies. CPI is the leading indicator for a countries inflation rate and an inflation too low or too high could mean a potential in interest. Tuesday saw a number of interesting figures come out of the euro zone as Spain reported their eighth consecutive quarter where GDP showed contraction. Although the 0.1 percent contraction was lower than the previous of 0.5 percent, it still shows that the struggling economy can’t seem to break the streak of recession. In addition consumer confidence out of Europe came in line with expectations at 17.4. The day saw weakness in the GBP currency as investors awaited policy meetings about the future of their current easing. US awaits results of Fed two-day policy meeting It was an interesting trading session on Tuesday as the US Federal Open Market Committee began their two-day policy meeting. Traders and investors remained cautious as a sign for a decision as to whether either the US aggressive bond buying program could taper or who will be Ben Bernanke successor. Both the S&P 500 and Dow Jones barely changed and closed near flat line levels while the NASDAQ crawled up to a fresh 12-year high pushed up by strong tech stocks. One of these has been Facebook which is now back to near IPO levels. US consumer confidence fell on Tuesday to 80.3 after analysts were expecting a result of 81.5. The USD saw weakness throughout the trading session. On Wednesday the first of pivotal three pieces of economic data is the ADP employment change, which is considered a strong indicator of how the much anticipated Nonfarm Payrolls will come out as on Friday. Currently analysts are expecting figures which are lower than previous indicating a drop in new job in the private sector. The second is US GDP. This is a very much looked at number to see which direction the US economy is heading and although analysts are expecting expansion, the number is slower than previous. Lastly eyes will be waiting for results of the Fed policy meeting which should make it a very interesting day for traders and investors. Stocks show why they are strong for investor talk The stock market both in the US and across the Atlantic have been raising eyebrows lately as both earning reports and strong movements have been seen in many of the equities on Tuesday and start of Wednesday. Early Wednesday morning BNP Paribas, one of Frances largest banks reported their second quarter earnings. The report was a 4.7 percent drop in Q2 net profit 1.76 billion euros which was above expectations of 1.6 billion euros. This follows Barclays after they lost 6% on Tuesday following not only a poor earnings result which showed a fall in profits, but also having to raise almost 6 billion pounds in order to meet a bigger than expected rights issue. In lighter news, social media giant Facebook has crept back up to IPO levels where initial investors, if they are still holding their shares are nearly back to break even. The company share price rose 6.15% to close just under $38 a share. The share has been climbing back very strong in recent weeks and investors are now curious where it will go from here. One of the main reasons for this is the new and innovative products such as gaming which are being announced as part of their product range. Apple has also moved well on Tuesday to be seen above $450 a share for the first time in a month which is also up about 14% for July.
Posted on: Wed, 31 Jul 2013 11:15:34 +0000
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