Thursday, January 30, 2014

EVENTS & FINANCIAL NEWS...

Market Comment

US indices dropped on Wednesday pressured by shares in the Food, Beverage & Tobacco, Retailing and Consumer Services sectors. The Federal Reserve has decided to reduce the pace of monthly asset purchases to $65B in February from $75B in January. Also, the Fed said "economic activity picked up in recent quarters" and "Labor market indicators were mixed but on balance showed further improvement". The S&P 500 (1774.2) remains below its 20d moving average (1827.1 - negative slope) and its 50d moving average (1812.7 - negative slope).

European markets are expected to start on a negative note.

Foreign Exchange

US Dollar was mixed against most of its major counterparts on Wednesday. On the US economic data front, MBA Mortgage applications for the week ended January 24th fell 0.2% (+4.7% prior). Finally, the Federal Reserve has decided to reduce the pace of monthly asset purchases to $65B in February from $75B in January. Also, the Fed said "economic activity picked up in recent quarters" and "Labor market indicators were mixed but on balance showed further improvement".

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was about flat to $97.32. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59). The US Department of Energy reported that, for the week ended 24 January, crude oil inventories increased 6421k barrels compared to the previous week.

Gold was up $11.2 to $1268.1. The precious metal was above its 20D MA (@ $1246) and above its 50D MA (@ $1234).

Copper Future (MAR 14) on Comex was down 1.2c to 324.1c/lb. The contract was below its 20D MA (@ 330.62c) and below its 50D MA (@ 326.76c). In Europe, the London Metal Exchange reported its copper inventories decreased 3775 tons to 318800 tons.

UK Market News

Royal Dutch Shell announced 4Q and FY results: "Royal Dutch Shell's 4Q2013 earnings, on a current cost of supplies (CCS) basis, were $2.2B compared with $7.4B in the same quarter a year ago. FY2013 CCS earnings were $16.7B compared with $27.2B in 2012. (...) Compared with 4Q2012, CCS earnings excluding identified items were impacted by higher depreciation, increased exploration expenses, lower upstream volumes and weak industry conditions in downstream oil products. (...) A 4Q2013 dividend has been announced of $0.45 per ordinary share and $0.90 per American Depositary Share (ADS), an increase of 5% compared with 4Q2012." The Co's new Shell CEO Ben van Beurden commented: "Our overall strategy remains robust, but 2014 will be a year where we are changing emphasis, to improve our returns and cash flow performance (...) The landscape the company had expected has changed. Factors such as the worsening security situation in Nigeria in 2013, and delays to non-operated projects in several other countries, have altered the outlook. (...) The company will increase the pace of asset sales, which are expected to be $15B for 2014-15 combined in Upstream and Downstream. (...) Capital spending will be reduced. In 2013, this totalled $46B, including $8B of acquisitions. In 2014, Shell expects total capital spending of around $37B, including $2B of previously announced acquisitions."

European Markets

ECB: Publication of the Euro area Bank Lending Survey (10am CET)

Infineon Technologies said 1Q net income of E87M vs E19M in the previous year on revenue of E984M, up 16%. The Co said: "2Q revenue is forecast to rise by a mid single digit percentage, (...) For the 2014 fiscal year, based on an assumed exchange rate of the US dollar against the euro of 1.35, Infineon continues to forecast an increase in revenue of between 7% and 11% compared to the previous year."

QIAGEN posted 4Q adjusted net income up 6% YoY to $88M (EPS up to $0.36 from $0.34) on adjusted net sales of $363M, up 5% (+5% at constant exchange rates). FY13 adjusted net income rose 6% to $275M (EPS up to $1.14 from $1.08). On the outlook for 2014 the Co said: "For the full year, adjusted net sales are expected to rise approximately 4-5% CER, (...) Adjusted diluted earnings per share (EPS) are expected to rise to approximately $1.07-1.09 CER for full-year 2014 compared to $1.02 per share in 2013 (...) For 1Q2014, adjusted net sales are expected to rise about 4-5% CER, and for $0.21-0.22 per share of adjusted diluted EPS compared to $0.20 per share in the year-ago quarter."

Deutsche Lufthansa will start flying Airbus A380 superjumbo jets on routes to India later this year, according to the Co's CEO interviewed by Reuters.

Construction & Materials: Hochtief (-1.88% to E59.44) reached a new 3-month relative low against the Dax.

Financial Services: Deutsche Boerse (-1.27% to E56.64) closed at a 3-month relative low against the Dax.

Health Care: Merck KGaA (-1.68% to E116.7) reached a new 3-month relative low against the Dax.

Personal & Household Goods: Adidas (-1.16% to E84.6) reached a new 3-month relative low against the Dax.

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