ETX Capital Daily Market Bite, 19th June, 2013; Stocks Pick Up The Pace Before Fed Meeting
June 19, 2013 9:56 am
June 19th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
Steady start for European share markets Wednesday morning despite respectable gains on Wall Street overnight. Volatility runs high as markets await the FOMC rate announcement and press conference over the central bank’s stance on monetary policy measures. Asian markets were mixed with shares in Chinese and South Korean stocks slipping but Japanese stocks advancing as the yen rose overnight. Heading into this FOMC meeting, investors this week have scaled back expectations of an immediate unwinding of stimulus by the Fed, hopeful that the patchy run of data from the US economy will prevent a reduction in asset purchases in the near term. Traders are hopeful the Fed will shed some light on a timeframe of reducing the pace of QE and downplay the markets’ over-reaction since May 22. In FX markets, the US dollar is weaker against rivals, mostly on volatility while the euro is at $1.34. Core government bonds in the UK and Germany have ticked up while commodity prices have stabilised. In Europe, we have little from the euro zone in terms of economic data so much of the focus will be on the Bank of England meeting minutes and Germany’s auction to sell 10-year bunds. In corporate news- Alcatel-Lucent shares have shot up over 3% after impressing investors with a strategy review which involves a EUR1billion restructuring plan of the company in order to rework its balance sheet and slim down operates, all in a drive to return the company to profitability. This is the vision of new CEO Michel Combes who is attempting to turn a page in Alcatel’s difficult recent past. Combes has been in the job for three-months and is determined to succeed where his predecessor Ben Verwaayen failed in turning the company around. This new strategy however does involve job cuts of up to 10,000. In the retail sector, unsurprisingly, H&M reported a damp set of H1 results which show profits and sales are down from the same period in the prior year. Despite strong sales in Asia, the company’s overall sales figures were hit by the weather conditions in Europe together with stiff competition from the likes of Inditex and online retailer ASOS.
June 19th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
Steady start for European share markets Wednesday morning despite respectable gains on Wall Street overnight. Volatility runs high as markets await the FOMC rate announcement and press conference over the central bank’s stance on monetary policy measures. Asian markets were mixed with shares in Chinese and South Korean stocks slipping but Japanese stocks advancing as the yen rose overnight.
Heading into this FOMC meeting, investors this week have scaled back expectations of an immediate unwinding of stimulus by the Fed, hopeful that the patchy run of data from the US economy will prevent a reduction in asset purchases in the near term. Traders are hopeful the Fed will shed some light on a timeframe of reducing the pace of QE and downplay the markets’ over-reaction since May 22.
In FX markets, the US dollar is weaker against rivals, mostly on volatility while the euro is at $1.34. Core government bonds in the UK and Germany have ticked up while commodity prices have stabilised. In Europe, we have little from the euro zone in terms of economic data so much of the focus will be on the Bank of England meeting minutes and Germany’s auction to sell 10-year bunds.
In corporate news- Alcatel-Lucent shares have shot up over 3% after impressing investors with a strategy review which involves a EUR1billion restructuring plan of the company in order to rework its balance sheet and slim down operates, all in a drive to return the company to profitability. This is the vision of new CEO Michel Combes who is attempting to turn a page in Alcatel’s difficult recent past. Combes has been in the job for three-months and is determined to succeed where his predecessor Ben Verwaayen failed in turning the company around. This new strategy however does involve job cuts of up to 10,000. In the retail sector, unsurprisingly, H&M reported a damp set of H1 results which show profits and sales are down from the same period in the prior year. Despite strong sales in Asia, the company’s overall sales figures were hit by the weather conditions in Europe together with stiff competition from the likes of Inditex and online retailer ASOS.
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