Retail earnings drive risk | Calamatta Cuschieri

Tuesday brought some risk back into markets which started off the weak on a soft note. A composite purchasing manager’s index, or PMI showed that economic activity in the Eurozone rose to a near 6-year high, reinforcing the belief that the recovery – and with it, inflation – is becoming broader-based, to quote Mario Draghi. Most bourses in Europe ended in the green, with the DAX outperforming its peers by adding 1.18%. The FTSE 100 fell, dragged mostly by banks with HSBC falling 6.5% on weaker than expected earnings.

In the US, strong earnings from retail giants such as Wal-Mart, Macy’s and Home Depot pushed stocks to new record highs as confidence in the American economy grew. San Francisco Fed President John Williams expressed the view that it ‘might make sense’ to raise rates next March given how the US economy is performing. Philadelphia Fed President Patrick Harker echoed Williams’ statement, saying that a March move is not “off the table”.

The minutes of the latest US Federal Reserve meeting are due to be released today and should prove crucial in determining whether the upcoming March meeting is indeed ‘live’.

A reprieve for Toshiba

Toshiba shares soared as much as 22% yesterday, as the plans to sell its memory chip business were well received by the market. The price action looked very much like a short squeeze, with volumes roughly 3-day the monthly average. Data compiled by Markit show shorts on Toshiba were at their highest since June. The intraday move was the highest on record according to Bloomberg.

Verizon lowered its offer for Yahoo by $350 million after the former internet giant disclosed it was the target of two severe cyber-attacks in 2013 and 2014

Verizon lowered its offer for Yahoo by $350 million after the former internet giant disclosed it was the target of two severe cyber-attacks in 2013 and 2014, the former being the biggest hack to date with over 1 billion accounts compromised. The deal for Yahoo’s core assets is now valued at $4.48 billion.

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.