Corporate earnings boost markets

Global stocks were mostly positive on Tuesday. In Europe spirits were lifted on progress in the Greek debt talks and better corporate results. The stock market in Athens outperformed and reached its yearly high on reports that Eurozone finance ministers are willing to offer some debt relief to Greece. Danish jeweler Pandora rocketed 11% after strong sales numbers. Natixis and Unicredit fell after declines in net income and core capital, but Credit Suisse rose after a smaller-than-expected loss.

Shares in the Swiss bank rose as much as 6.4% after CEO Thiam said planned cost cuts and unwanted asset wind downs are proceeding at a faster-than-expected pace. The rally was also helped by a reported loss of CHF 302 million which was 12% smaller than expected. Switzerland’s second-largest lender had posted a profit of CHF 1.05 billion just a year earlier.

In the US stocks were broadly higher on the back of a late morning rally in financials, whilst higher commodity prices also boosted energy and industrial stocks. Amazon reached an all-time high in excess of $700 after one analyst set a $1,000 price target on the stock. Gap was the biggest loser after another quarter-on-quarter decline in sales, the fifth one in a row. Allergan reported better-than-expected revenue and earnings, prompting a 5% rally in the price of its shares. The maker of Botox also announced a share buyback program of as much as $10 billion following its failed union with Pfizer. The company said it expects to execute about half of that amount by the end of the year, subject to favourable market conditions.

Oil rose as supply concerns outweighed oversupply concerns, and the yen retreated for the second day in a row after comments from Japanese officials warned the Bank of Japan could intervene if the yen continues to experience a strong rise.

And after last week’s slightly lower-than-expected payroll figures, data from the US showed job openings increased to an eight-month high in March. The hiring rate fell slightly, suggesting employers are having a harder time finding the right people for the job. Even so, the overall data continues to show a gradual tightening of the labour market. It is highly unlikely that the strong job market alone will drive the Federal Reserve to raise interest rates at a faster pace than currently expected, due fears about economic growth and low inflation.

Brexit Business Vote Tightens

According to one survey, the ‘Leave’ campaign in the UK is getting some more support from an unlikely sector – business. To date, most “senior” business people were more inclined to vote ‘Remain’, citing fears about trade arrangements, the impact on London as a financial hub and fears for small-to-medium enterprises. ‘Leave’ campaigners are mostly concerned with immigration.

But the poll figures, whilst still an overall positive for the ‘Remain’ supporters are showing an increase from 30% to 37% for the ‘Leave’ campaigners. In contrast, support for the ‘Remain’ vote declined to 54% from 60% in February.

Pour me a Bud, err I mean an America

Patriotism is going to be major theme this summer in the US. Memorial Day (which is technically spring, but hey), Independence Day, team USA will be competing (and probably winning a hefty haul of medals) in the Summer Olympics, the Presidential elections and – last but not least – a cold can of Budweiser. Except that from the 23rd of May to November 8th you won’t be able to buy a Budweiser, because brewer Anheuser-Busch InBev wants to change its name to ‘America’. The new temporary label would also include lyrics from the US national anthem and phrases such as “Land of the Free” and “Home of the Brave”.

This article was issued by Andrew Martinelli, Trader 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 Investment Services Ltd. has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.