European shares set to open lower as G20 goes under way European equities are set to open lower on Friday as the leaders of the G20 (group of 20 nations) meet in Moscow. All the major indices including the FTSE 100, DAX and CAC are all poised for a downward at current levels. Investors are somewhat sceptical ahead of the G20 leaders meeting in Moscow to discuss how to tackle market volatility, unemployment and a slow economic recovery. It has been mentioned that Europe’s current growth is too weak to drive job creation and it is critical to take steps to bolster private hiring. It is apparent that the US is once again a clear leader of strength in the world economy as economic data continues to improve with in the global powerhouse. Friday is expected to see great volatility and momentum push into the European stock markets with discussions taking place in Moscow. Key trading assets to look out for are the UK, DAX and French stock indices. More record highs in US markets after Bernanke’s speech, earnings and better employment The Dow and S&P 500 set record high again on Thursday after investors saw positivity from Fed chairman Ben Bernanke’s testimony to congress as well as continuous upbeat Q2 earnings. Ben Bernanke re-iterated that the current monetary policy will be left highly accommodative even as the central bank starts to look at when to begin tapering off the current QE policy. The Dow Jones rallied just shy of 80 points to finish at 15,548 climbing above its all time high set in May. The S&P 500 also topped previous highs after gaining 8.46 points to close at 1689. This recent push in the S&P 500 has created more history as it resulted in the stock index reaching a value of over $15 trillion for the first time ever. In economic news, US weekly jobless claims have dropped to its lowest level in 4 months by 24,000 to sit at 334,000 beating expectations. A continuation in better than expected job figures could have a strong influence in a quicker turn to taper off the current US quantitative easing program based on the future outlook by Ben Bernanke. Investors are expected to be more and more cautious of good economic data out of the United States. As a result of better economic recovery, ratings giant Moody’s has raised its outlook on the US to stable from a previous negative status and has affirmed the countries triple-A sovereign rating. Disappointment sets in for tech stocks As earnings season continues for US companies, we witnessed a bit of a turn from the currently strong results as tech giants Microsoft and Google both reported disappointing results for their Q2 profits and earnings. While the banking sector with the likes of JP Morgan, Goldman Sachs and Citigroup all reporting solid results, Microsoft and Google have let the technology sector down after results were released after the market closed on Thursday. Google missed on both earnings and revenue in its second quarter and analysts said the closely watched cost-per-click metric continues to decline. Google shares fell nearly 8% in after hours trading and currently sit at a little over 4% down pre-market (Friday 0700 GMT+1). Google’s reported profits were $9.56 per share missing expectation from $10.80 and a revenue of $14.11 Billion. Microsoft posted earnings of $0.66 per share after analysts expected earnings to sit at $0.75 a share missing targets completely. Revenue figures came in at $19.9 Billion. Microsoft shares fell more than 5% in after hours trading and currently trading at more than 6% lower during pre-market trading (Friday 0700 GMT+1). Google and Microsoft will make for very interesting trading once the US market opens today.
Posted on: Fri, 19 Jul 2013 09:47:04 +0000
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