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Daily US Opening News And Market Re-Cap: October 14

Tyler Durden's picture




 

From RanSquawk

  • S&P downgraded the long-term sovereign rating of Spain by one notch to AA- from AA with a negative outlook
  • Fitch placed five major European commercial banks – namely, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank and Societe Generale - on credit watch negative
  • Strong corporate earnings from Google boosted appetite for risk during the European session
  • The French/German 10-year government bond yield spread widened to a record level on concerns surrounding the impact of an EFSF leveraging on the French sovereign ratings
  • Market participants keep a close eye on the outcome of the confidence vote in the Italian Parliament. In latest news, according to ANSA, Berlusconi has enough votes to win the confidence vote

Market Re-Cap

Overnight S&P downgraded the long-term sovereign rating of Spain by one notch, whereas Fitch placed five major European commercial banks on credit watch negative, which resulted in the financials sector to underperform its European peers. However, as the session progressed, appetite for risk strengthened as the market focused on the G20 finance ministers' meeting, while the technology sector outperformed following strong corporate earnings results from Google. Basic materials and oil & gas sectors also moved higher as the USD-Index weakened. Bund futures came off their earlier highs and ventured into negative territory as equities gained strength, whereas most Eurozone 10-year government bond yield spreads narrowed. However, the French/German spread widened to a record level on concerns surrounding the impact of an EFSF leveraging on the French sovereign ratings. In the forex market, weakness in the USD-Index provided support to EUR/USD, GBP/USD and commodity-linked currencies.

Moving into the North American open, markets look ahead to key economic data from the US in the form of retail sales, business inventories and the University of Michigan Confidence report. In fixed income, another Fed's Outright Treasury Coupon Purchase operation in the maturity range of Nov'19-Aug'21, with a purchase target of USD 4.25-5bln is scheduled. Market participants will also keep a close eye on the Eurozone debt situation as well as result of the confidence vote in the Italian Parliament.

Asian Headlines

•    Chinese CPI (Sep) Y/Y 6.1% vs. Exp. 6.1% (Prev. 6.2%)
•    Chinese PPI (Sep) Y/Y 6.5% vs. Exp. 6.9% (Prev. 7.3%) (RTRS)

US Headlines:

Fed’s balance sheet was unchanged from last week at USD 2.843trl in the week ending October 12th. Also, foreign central banks’ overall holdings of US marketable securities at the Fed fell USD 16.4bln in the week ended October 12th to stand at USD 3.402trl. (RTRS)

EU and UK Headlines:

In highlights from ECB’s Trichet’s interview with FT London: The ECB, itself, has reached the limits of what it can do, Mr Trichet argues. If Greece is pushed into default, the central bank would no longer be able to accept its governments bonds as collateral from Greek banks seeking its life-saving liquidity. But he makes clear that the ECB will not act as a “lender of last resort” to governments. (Full interview – FT)

•    Eurozone CPI (Sep) Y/Y 3.0% vs. Exp. 3.0% (Prev. 3.0%) (RTRS)

EQUITIES

Overnight S&P downgraded the long-term sovereign rating of Spain by one notch, whereas Fitch placed five major European commercial banks on credit watch negative, which resulted in the financials sector to underperform its European peers. However, as the session progressed, appetite for risk strengthened as the market focused on the G20 finance ministers' meeting, while the technology sector outperformed following strong corporate earnings results from Google. Basic materials and oil & gas sectors also moved higher as the USD-Index weakened. In equity specific news, SAP shares moved higher after posting positive third quarter preliminary results, however Infineon shares fell around 8% after co. provided lacklustre update on its outlook. Moving into the North American open, most European indices are trading in positive territory, with oil & gas and technology as the best performing sectors.

**US Corporate Earnings**

Google – Co.’s Q3 adjusted EPS USD 9.72 vs. Exp. USD 8.76, and Q3 revenue USD 9.72bln vs. Exp. USD 7.23bln. Co. said Q3 average cost-per-click rose 5% vs. year ago and Q3 sites revenue was USD 6.74bln. (RTRS)

FX

Weakness in the USD-Index provided support to EUR/USD, GBP/USD and commodity-linked currencies. Elsewhere, AUD came under some pressure overnight after Goldman said that the RBA may cut rates by 50 basis points by the end of the year, however the currency recovered during the European session as risk-appetite gathered pace.

COMMMODITIES

WTI and Brent crude futures traded in solid positive territory during the European morning session with optimism heading into the G20 meeting giving a boost to sentiment.

Oil & Gas News:

•    Russian oil pipeline operator Transneft has suspended crude transport through the East Siberia-Pacific Ocean line towards China and the export terminal of Kozmino on the Pacific Ocean after an earthquake near East Siberia's Skovorodino, according to company spokesman Igor Dyomin.

Geopolitical News:

•    UN rights head said there is a risk of Syrian 'civil war'. The international community urged taking immediate action as UN's estimated death toll since protests began exceeds 3,000.

 

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Fri, 10/14/2011 - 08:31 | 1772917 mossme89
mossme89's picture

Essentially all you need to know is that everything is bullish, everything is fine. Buy buy buy, consume consume consume, obey. If you do not consume, you are a worthless human being.

 

Move along sheep, you are wasting valuable shopping time. Baaaahhhh!!!!

Fri, 10/14/2011 - 09:12 | 1773049 Zedge Hero
Zedge Hero's picture

Occupy Dame Street in Dublin, Ireland.  Also a preview of the largest global soldarity movement on Saturday to date.

http://www.youtube.com/user/zedgehero

World Revolution News- "It's the United Banking Cartel versus us, not me versus you, for we are the many, and they are the few."

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