Market commentary: US data in the spotlight

Equity markets traded higher yesterday and their US counterparts closed flat as jobless claims data showed a rise in applications for unemployment aid.

Stock Index Futures are indicating a flat open, as the market will today await the announcement of the second reading of the US fourth quarter GDP figures. US GDP figures grew by 3.9 per cent in the third quarter and analysts expect GDP growth for the fourth quarter in the region of 2.1 per cent.

Out of the United States, analysts will also be awaiting Personal consumption figures and pending home sales. University of Michigan sentiment data and the Chicago Purchasing Manager figure are also due today.

One of Britain’s largest lenders, Lloyds Banking Group plc reported net income to the tune of 1.5 billion pounds compared with an 838 million pound loss one year before. The good result came short of analysts’ expectations as they were expecting a 1.8 billion pound average in net income. Lloyds announced its long time coming dividend of 0.75 pence a share, as it was limited by its bail out conditions that was imposed on the bank.

On the political front, Greece continues to be in the news as the nation may get their four month extension of their bailout approved by the German lawmakers. If this goes ahead, this would have been achieved after a turbulent negotiation process. 

Next week is very data intensive as Berkshire Hathaway who is led by Warren Buffet releases the company’s results. On the earning front, Adidas, Barclays, Carrefour, Glencore and Standard Chartered all report next week.

We will also be looking at important announcements from the world’s main central banks. The Fed is expected to release results of its latest bank stress tests. The main aim of these tests is to determine whether large banks have any capital to weather certain economic condition.

On Thursday, the ECB is scheduled to meet in Nicosia, Cyprus and analysts will then be keen to follow the Press conference by the President of the Central Bank. More particularly, analysts will be listening closely to the speech of President Draghi at which he may reveal further details of the central bank’s bond buying program.

The Bank of England Monetary Policy meeting is also scheduled to meet next week. Inflation for the UK has recently slowed to below the Bank’s target but it is highly anticipated that rates will be kept at their lowest level of 0.5%.  Governer Mark Carney had said that the next likely move in the rate will come in the form of an increase.

This article was issued by Mr. Darin Pace Treasury Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt . The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.