Solid economic data provides support

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October 24, 2014
Solid economic data provides support
Indices
Current Previous
Day (%)
MSCI World
1659.97
0.77
Dow Jones
16677.9
1.32
S&P 500
1950.82
1.23
Nasdaq 100
4012.27
1.59
Nikkei 225
15279.83
0.93
SMI
8546.08
0.47
SLI
1266.16
0.56
Euro Stoxx 50
3044.3
1.19
Euro Stoxx 600
328.26
0.66
DAX
9047.31
1.2
FTSE 100
6419.15
0.3
Equity – Microsoft better than its competitors
Microsoft reported a clearly better-than-expected Q1 result (EPS of 54 cents
vs. consensus of 48 cents). The software company continues to profit from
strong demand for smartphones, tablets and cloud services. Microsoft
showed a better performance than its peer group. Shares of Amazon.com
dropped as much as 13% after market closed, following a higher-thananticipated loss. The world’s biggest chemical maker BASF lowered its 2015
targets as a delayed European recovery cuts demand for basic and specialty
chemicals. In Q3, adjusted Ebit of EUR 1.84bn (+9%) exceeded the EUR
1.76bn consensus, but was held back by a decline in Agricultural Solutions
business. 3M posted Q3 earnings per share of USD 1.98, two cents better
than expected and slightly increased its guidance. Yesterday, shares advanced as much as 6.5%.
Indices Emerging Markets
Current
Previous
Day (%)
MSCI Emerging Markets
981.75
-0.54
MSCI EM Asia
453.56
-0.25
MSCI EM Eastern Europe
155.25
-0.75
MSCI EM Latin America
2973.02
-2.14
50713.26
-3.24
1109.68
-1.35
Fixed Income – In anticipation of ECB banking stress test
Bond market yield increased somewhat in yesterday’s trading as Eurozone
aggregate Flash-PMIs indicated an increase rather than a slowdown in economic activity. For the European Central Bank (ECB), success as the Euroarea’s most powerful financial supervisor could begin this weekend with a
few failures. On Oct. 26, stress test results will show which of the currency
bloc’s 130 biggest banks fell short in the ECB’s year-long examination of
both, their asset strength and ability to withstand economic turbulence.
After two previous stress tests run by the European Banking Authority
didn’t reveal problems at lenders that later failed, the ECB has staked its
reputation on getting this exercise right. As ECB President Mario Draghi has
said, banks need to fail to prove the losses of the past have been dealt
with.
Returns
Relatively strong economic data from the U.S. and the Eurozone as well as
Microsoft’s solid earnings report ensured a positive sentiment on Wall
Street and supported equity markets in Asia. The U.S. leading indicators
signaled a stronger-than-expected growth trend, climbing 0.8% in September (consensus +0.7%, previous month +/-0%) and the Eurozone purchasing manager’s index (PMI) came in better-than-expected. Markit’s
Composite PMI climbed to 52.2 in October from 52.0 a month earlier, signaling that the Euro-area economy at least did not weaken further in October. Economists had anticipated a drop to 51.5. The PMI for Germany
showed manufacturing in the region’s largest economy rebounded from
last month’s contraction, while the French measure deteriorated further.
European stock markets will probably open with a friendly tone, given the
gains in Asia and North America.
Brazil IBOVESPA
Russian Depositary Index
NIFTY Index
8014.55
0.23
23292.78
-0.17
HFRX Global HF Index
1213.27
-0.16
LPX50 Listed PE TR (EUR)
1444.51
-0.02
253.86
0.83
Current
Previous
Day (%)
US Treasury Bonds 10Y (USD)
2.25
-1.1
German Bund 10Y (EUR)
0.89
-1.89
Swiss Government 10Y (CHF)
0.46
1.77
United Kingdom 10Y (GBP)
2.24
1.36
Japan 10Y (JPY)
0.47
-1.46
3 month LIBOR (USD)
0.23
0.34
3 month LIBOR (EUR)
0.06
1.16
3 month LIBOR (CHF)
0.01
-8.33
Global IG Corporate Spread
1.15
0
Global HY Corporate Spread
4.26
-1.27
EM Hard Currency Gov. Spread
2.97
-1.06
Hang Seng Index
BBG NA REITS
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Earnings calendar
Date
24.10.
24.10.
2014
24.10.
2014
24.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
28.10.
2014
28.10.
2014
28.10.
2014
28.10.
2014
2014
Ctry
US
SE
US
US
US
DE
US
US
GB
DE
US
Forex
Company
BRISTOL-MYERS SQUIBB CO
ERICSSON LM-B SHS
MOODY'S CORP
PROCTER & GAMBLE CO/THE
AMGEN INC
DEUTSCHE BOERSE AG
MERCK & CO. INC.
AFLAC INC
BP PLC
CELESIO AG
DU PONT (E.I.) DE NEMOURS
Period Consensus EPS
Q3
1.78
Q3
4.62
Q3
4.04
Q1
4.41
Q3
8.41
Q3
3.62
Q3
3.47
Q3
6.17
Q3
0.74
Q3
1.24
Q3
40
Economic data calendar
Date
24.10.
24.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
27.10.
2014
2014
CET
08:00
12:00
10:00
10:00
10:00
10:00
14:45
14:45
15:00
15:00
-
Ctry
DE
IT
EU
DE
DE
DE
US
US
US
US
DE
Indicator
GfK Consumer Confidence
Consumer Confidence
ECB M3 Annual Growth Rate
Ifo Business Climate
IFO Current Situation
IFO Expectations
Markit Composite PMI
Markit Services PMI
Pending Home Sales (m/m)
Pending Home Sales (y/y)
Retail Sales (y/y)
Period Cons
Nov
8.1
Oct 100.8
Sep
Oct 104.6
Oct
0
Oct
0
Oct P
Oct P
0
Sep 0.63
Sep
0
Sep
0
Prev.
8.5
10
20
104.7
110.5
99.3
59
58.9
-1.04
-4.06
1.5
Current
Previous
Day (%)
1.2659
1.2065
0.953
1.5288
1.6041
107
7.7578
1.2762
6.1197
8.3254
9.1908
0.1028
0.0149
0.1154
0.0458
0.0686
0.2871
-0.0064
0.0705
0
-0.0889
-0.1208
Commodities
Current
Previous
Day (%)
Oil Future Nymex WTI (USD)
Oil Future Brent (USD)
Gold-ounce (USD)
Silver-ounce (USD)
Platinum (USD)
Palladium (USD)
JOC Industrial Metals Index
S&P
(USD)GSCI Index Spot Indx
Rogers Int. Commodity Index
BBG Commodity Index
Rogers Agriculture TR Index
81.72
86.63
1231.22
17.25
1254.25
782.75
116.73
541.93
3189.07
117.23
957.37
-0.45
-0.23
-0.05
0.31
-0.14
0.37
0.22
1.3
-0.7
-0.01
0.89
EUR/USD
EUR/CHF
USD/CHF
GBP/CHF
GBP/USD
USD/JPY
USD/HKD
USD/SGD
USD/CNY
EUR/NOK
EUR/SEK
Topics LGT looks at
Topics
Description
Regulatory impacts on banks
The consequences of the upcoming ECB stress test and the changing reguInvestment Idea
latory environment as well as resulting investment possibilities are disResearch publication
cussed.
20.10.2014
Profiting on strong USD
Transatlantic divergences benefit the USD as the U.S. and Europe drift
apart economically and on monetary policy. Selected companies could
benefit from these developments.
16.10.2014
Elections in Brazil
The uncertainties of the outcome of the heads up between president
Investment Idea
Rousseff and her contender Neves offer asymmetric investment opportuniThe Beacon
ties.
14.10.2014
Gold
Call writing strategy on gold offers value in a gold market with support
stemming from physical demand out of China and India and the absence
of a save haven scenario.
Investment Focus
03.10.2014
Investorama
19.09.2014
Market overview
Analysis of the broader macro-economic and financial arena as wells as
important trends and relevant developments of the financial markets.
Publication Type
Investment Focus
published
For further information, please contact your LGT relationship manager.
Impressum
Published by: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8022 Zuerich
Editorial: Alessandro Fezzi, +41 44 250 78 59, email: [email protected]
Authors Equities: Georg Ruzicka, Andreas Riedel, Dr. Tilman Dumrese
Authors Fixed Income: Maurice Jiszda, Daniel Rotzer, CFA
Sources: Bloomberg, LGT Bank (Switzerland) Ltd.
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