EVENTS & FINANCIAL NEWS 05-02-2014

Market Comment

US indices rebounded on Tuesday led by shares in the Consumer Services, Automobiles & Components and Consumer Durables & Apparel sectors. The S&P 500 (1755.2) remains below its 20d moving average (1813.8 - negative slope) and its 50d moving average (1811 - negative slope).

European markets are expected to start on a flat note.

Foreign Exchange

US Dollar rose against most of its major counterparts on Tuesday. On the US economic data front, factory orders dropped 1.5% MoM (-1.8% expected) in December after a downwardly revised 1.5% gain the previous month.

The Euro was mixed against its major counterparts. Euro zone PPI Index was up by 0.2% in December, as expected, after a 0.1% decline the month before.

The Australian Dollar jumped against its major counterparts. The Reserve Bank of Australia (RBA) adopted a more neutral stance. Governor Glenn Stevens who previously qualified the AussiE level as uncomfortably high" said Australian dollar's decline "will assist in achieving balanced growth"

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was up $0.9 to $97.36. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59).

Gold was down $2.8 to $1254.9. The precious metal was above its 20D MA (@ $1249) and above its 50D MA (@ $1235).

Copper Future (MAR 14) on Comex was up 1.1c to 319.4c/lb. The contract was below its 20D MA (@ 330.62c) and below its 50D MA (@ 326.76c). The 14d RSI below 30 (27.54) indicates Copper Future (MAR 14) contract was oversold. In Europe, the London Metal Exchange reported its copper inventories decreased 600 tons to 313275 tons.

UK Market News

Imperial Tobacco Group announced the appointment of Karen Witts, currently group finance director of Kingfisher Plc, as a non-executive director.

Hargreaves Lansdown reported 1H results: "The Group achieved a profit before tax of £104.1M, an 11% increase compared to H1 2013, consequent to increased levels of AUA (Assets Under Administration). (...) A lower rate of corporation tax meant that the diluted EPS increased by comparatively more than the profit before tax measure, with a 13% increase from 15.0p to 17.0p per share. (...) Continued growth with record revenue (up 13% to £158.4M) (...) Total net business inflows for the 6 months of £2.80B, up 70% (H1 2013: £1.65B) (...) Total assets under administration of £43.4B (up 43% on 31 December 2012 and 19% on 30 June 2013) (...) The Board has declared an interim dividend of 7.0p per share (H1 2013: 6.3p).

British Land said it has agreed to purchase £41M of additional units in Hercules Unit Trust (HUT) at £613 per unit (3.8% below latest NAV) as part of a scheduled pre-emption process. The Co added: "British Land has also submitted an application to Schroder Property Managers (Jersey) Ltd, the manager of HUT, to acquire up to £35M of further units in HUT which have been tendered as part of this process."
Homeserve Plc announced: "HomeServe expects its adjusted profit before tax for the year ending 31 March 2014 to be in line with market expectations."

European Markets

BMW is in advanced talks with Mexico's government on building a $1.5B car factory in the country, reported Dow Jones citing unnamed government officials.

Adidas has filed a patent-infringement lawsuit in the US against Under Armour Inc, according to Dow Jones.

Heidelberger Druckmaschinen said 3Q net income plunged to E7M from E14M in the previous year and adjusted EBITDA was down E36M from E38M on sales of E588M, down 14.4%. 9-month net loss narrowed to E40M from E94M a year earlier. On the outlook the Co said: "The outlook for the 2013/2014 financial year and the aim of generating a consolidated net profit remain unchanged. (...) the Co expects sales volumes for the year as a whole to be around 10% lower than in the previous year."

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EVENTS & FINANCIAL NEWS 04-02-2014

Market Comment

US indices slumped on Monday pressured by shares in the Telecommunication Services, Consumer Durables & Apparel and Insurance sectors. The S&P 500 (1741.89) remains below its 20d moving average (1817.4 - negative slope) and its 50d moving average (1811.5 - negative slope).

European markets are expected to open on a negative note.

Foreign Exchange

US Dollar was mixed against most of its major counterparts on Monday. On the US economic data front, ISM Manufacturing dropped to 51.3 (56.0 expected) in January from 56.5 the previous month. Construction spending rose 0.1% MoM (flat expected) in December after a downwardly revised 0.8% gain the prior month.

The Euro was firm against its major counterparts. In Europe, euro zone PMI manufacturing was 54 in January in final estimation, vs 53.9 in prior one and 52.7 the month before. In Germany, PMI manufacturing advanced to 56.5 in January in final estimation vs 56.3 in prior one and 54.3 in December.

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was down $0.8 to $96.68. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59).

Gold was up $12.3 to $1256.9. The precious metal was above its 20D MA (@ $1248) and above its 50D MA (@ $1234).

Copper Future (MAR 14) on Comex was down 2c to 317.65c/lb. The contract was below its 20D MA (@ 330.62c) and below its 50D MA (@ 326.76c). The 14d RSI below 30 (27.53) indicates Copper Future (MAR 14) contract was oversold. In Europe, the London Metal Exchange reported its copper inventories decreased 650 tons to 313875 tons.

UK Market News

BP announced results: "Underlying replacement cost profit for 4Q was $2.8B, compared with $3.9B for 4Q2012. Full-year underlying replacement cost profit was $13.4B for 2013, compared with $17.1B for 2012. Compared with the same periods in 2012, both 4Q and full year 2013 underlying results were affected by: the significant impact of BP's major divestment programme; weaker refining margins; and higher depreciation and exploration write-offs as the group brought new projects online and increased its investment in exploration. The impacts of these were partially offset by strong growth in underlying oil and gas production, particularly from key regions such as the North Sea, Angola and Gulf of Mexico. 4Q's result also benefitted from higher earnings from Rosneft than reported from TNK-BP in 4Q2012. (...) BP announced a dividend for 4Q of 9.5 cents per share, to be paid in March, 5.6% higher than the 4Q dividend last year. (...) The cumulative pre-tax charge for the Gulf of Mexico oil spill was $42.7B at the end of 2013, having increased by $0.2B in 4Q to reflect an increase in the provision for legal costs, and ongoing Gulf Coast Restoration Organisation costs."

European Markets

ECB: Publication of the MFI interest rate statistics (10am CET); Publication of the Consolidated Financial Statement of the Eurosystem (3pm CET)

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EVENTS & FINANCIAL NEWS...

Market Comment

US indices dropped on Friday pressured by shares in the Retailing, Automobiles & Components and Banks sectors. The S&P 500 (1782.59) remains below its 20d moving average (1821.9 - negative slope) and its 50d moving average (1812.4 - negative slope).

European markets are expected to start on a flat note.

Foreign Exchange

US Dollar rose against most of its major counterparts on Friday. On the US economic data front, personal income was flat MoM in December (+0.1% expected) while personal spending rose 0.4% MoM (+0.2% expected) in December. Finally, University of Michigan Confidence index for January rose to 81.2 (81 expected) from 80.4 in December.

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was down $0.7 to $97.55. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59).

Gold was about flat to $1244.2. The precious metal was below its 20D MA (@ $1247) and above its 50D MA (@ $1234).

Copper Future (MAR 14) on Comex was down 3.2c to 319.4c/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 1675 tons to 314525 tons.

UK Market News

Ireland: The Investec Manufacturing PMI Ireland was at 52.8 in January vs 53.5 in December. The report pointed out: "Business conditions in the Irish manufacturing sector continued to improve in January as output, new orders and employment all increased again. However, there were some signs of an easing in momentum at the start of the year as production growth slowed to the weakest in five months and firms lowered their purchasing activity."

European Markets

ECB: Hearing of Sabine Lautenschläger at "Exchange of views with the European Parliament, ECON Committee, as candidate for the Vice-Chair of the SSM" in Strasbourg, France.

Commerzbank is negotiating the sale of a E4B portfolio of Spanish property loans to private equity firms Apollo and Cerberus, according to German weekly magazine WirtschaftsWoche.

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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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EVENTS & FINANCIAL NEWS...

Market Comment

US indices rebounded on Tuesday led by shares in the Pharmaceuticals, Biotechnology & Life Sciences, Insurance and Software & Services sectors. The S&P 500 (1792.5) remains below its 20d moving average (1830.4 - negative slope) and its 50d moving average (1813 - positive slope). Watch today's FOMC rate decision.

European markets are expected to start on a positive note.

Foreign Exchange

US Dollar was mixed against most of its major counterparts on Tuesday. On the US economic data front, durable goods orders fell 4.3% in December (+1.8% expected), the Conference Board's consumer confidence index rose to 80.7 in January from 77.5 in December (78 expected) while the Richmond Fed Manufacturing index fell to 12 in January (13 expected) from 12 the previous month.

Commodities

After the close of Wall Street, WTI Crude Future (MAR 14) was up $1.5 to $97.23. The contract was below its 20D MA (@ $98.29) and above its 50D MA (@ $96.59).

Gold was down $2.8 to $1254.3. The precious metal was above its 20D MA (@ $1243) and above its 50D MA (@ $1234).

Copper Future (MAR 14) on Comex was about flat to 325.25c/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 2825 tons to 322575 tons.

UK Market News

Shell said it has agreed to sell a 23% interest in the Parque das Conchas (BC-10) project offshore Brazil to Qatar Petroleum International for appx. $1B. The Co added: "Shell will continue to operate BC-10 with a 50% working interest and retains a significant upstream presence in Brazil. In addition to the recent entry into the Libra oil discovery, Shell is currently operating two floating, production, storage and offloading (FPSO) vessels in Brazil's offshore - the Espírito Santo at Parque das Conchas and the Fluminense at the Bijupira/Salema fields."

Antofagasta posted a 4Q production report: "Record year of copper production of 721,200 tonnes (+1.6% YoY); Group copper production in Q4 2013 was 182,900 tonnes, a 4.9% increase compared with the previous quarter as a result of strong performance across all the operations; Group gold production was 63,300 ounces in Q4 2013, a 6.4% decrease on Q3 as a result of lower gold production at Esperanza; 2013 full year gold production was 293,800 ounces compared with 299,900 ounces in 2012, reflecting lower production at Esperanza in 2013 due to lower grade, partially offset by higher throughput (...) Molybdenum production at Los Pelambres was 9,000 tonnes in 2013 compared with 12,200 tonnes in 2012 (...) Group production in 2014 is expected to be appx. 700,000 tonnes of copper, 270,000 ounces of gold and 7,500 tonnes of molybdenum."

European Markets

ECB: Publication of the Monetary developments in the euro area (10am CET); Publication of the National balance sheet of euro area monetary financial institutions, excluding the Eurosystem (10am CET)

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Gold to tank in 2014: Goldman Sachs...

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Bad news for "gold-bugs"—bullion's current beginning-of-the-year rally will not only lose steam, but prices could drop sharply by the end of 2014, according to Goldman Sachs' Jeffrey Currie.

Currie, Goldman's head of commodities research, told CNBC on Monday he had an end-of-year price target of $1,050 per ounce for gold, a 16 percent drop based from current prices of $1,251. The main culprit? Economic recovery.

"Our view there really is driven by the expectation of the U.S. economy reaching escape velocity," Curie said on "Essentially when you think about a short on gold ... it's essentially just a bet on a substantial recovery in the U.S. economy."

  Gold prices ballooned in the years since the 2008 financial crisis, driving prices to record highs thanks to ultra-low interest rates from the Federal Reserve's economic stimulus programs. Prices dropped last year amid fears the Fed would scale down those programs earlier than expected, but a weaker-than-expected December employment report re-ignited interest in gold last week.


Currie said gold still worked as a hedge against inflation; he just doesn't see any strong inflationary pressures in the next few years. He said once the economic recovery picks up more momentum, inflation would follow and gold may become attractive again. Gold's early 2014 rally won't last, he said.

"I get it all the time—'Why are you bearish on gold when you expect the U.S. economy to recover?'" Currie said. "You have to think about it in different phases of the business cycle."

Other commodities Currie expects to underperform include beans and copper. Currie remains unwilling to make a big bet against oil because of disruptions in Libya and Iran. Investors continued to move away from commodity-intensive emerging markets and into developed economies, a trend that affects most commodities outside gold, he said.

"They're all driven by the same theme, rotation away from emerging markets and toward developed markets," Currie told CNBC.

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News Source: www.cnbc.com

Gold Slightly Higher, Aided By Overnight Physical Buying...

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U.S. gold futures are modestly higher early Friday after physical buying continued in overseas activity, traders said. The metal is up for the second straight day to start 2014, after getting a lift Thursday from buying related to rebalancing, softer equities, physical demand and a continuation of short covering that began hours before trade ended in 2013.

As of 8:07 a.m. EST, gold for February delivery was $3.90, or 0.3%, higher to $1,229.10 per ounce on the Comex division of the New York Mercantile Exchange. March silver was nearly flat, dipping 0.8 cent to $20.12.

“So far, we’re seeing a bit of interest on the physical front,” said Afshin Nabavi, head of trading with MKS (Switzerland) SA. “When the market Tuesday went (nearly to) $1,180, a lot of physical buying came out of the woodwork. We continue to see some interest.

“And, of course, the market is more short than long. So every time we hit an important resistance point, some stop buying comes into the market.”

Another trader suggested some nervous shorts might be starting to cover positions in anticipation of buying ahead of Chinese New Year celebrations that start at the end of the month.
Gold hit a two-week high on Thursday, then extend it Friday. The February contract peaked at $1,238.30 an ounce, its most muscular level since Dec. 18.

Janet Mirasola, managing director of metals for Wells Fargo, said gold is bucking a trend in which many markets area were softer overnight – including Asian equities and base metals. Gold is showing “a glimmer of its old ‘safe haven’ self,” she said.

Technically, February gold has moved back above the 20-day average of $1,123.40 and put in some distance above the 10-day average of $1,208.50. The 50-day average lies at $1,261.80.

A key event Friday, Mirasola said, will be speaking appearances by a number of Federal Reserve officials at American Economic Association event in Philadelphia. The lineup will include Philadelphia Fed President Charles Plosser at 12:45 p.m., Fed governor Jeremy Stein at 1:15 and Fed Chairman Ben Bernanke at 2:30. More Fed speakers are scheduled for over the weekend.

Otherwise, the only U.S. economic data on the calendar Friday are motor-vehicle sales.

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News Source: www.bloomberg.com