World Daily Markets Bulletin.

ADVFN III World Daily Markets Bulletin

Daily world financial news Monday, 21 October 2013

US Market

The major U.S. index futures are pointing to a slightly higher opening on Monday, with sentiment evenly poised, as traders await the next catalysts. Earnings news of the day has been mixed. With the federal government re-opening, delayed economic releases will start coming out. Traders are likely to focus on these economic data to gauge the economy's strength, as traders cling onto hopes that the Fed will delay the withdrawal of stimulus. U.S. stocks advanced solidly in the week ended October 18th, as lawmakers finally agreed to end the impasse just before the debt ceiling deadline. The relief generated buying interest in the markets, sending stocks higher. Last Monday, the averages advanced for the third straight session amid indications that lawmakers will clinch a deal to prevent a debt default. With no deal yet reached on Tuesday, the averages retreated sharply. A soft regional manufacturing reading and mixed earnings also weighed on the averages. Stocks rallied sharply on Wednesday, as the October 17th deadline for the debt ceiling drew close and traders remained hopeful that a deal would be worked out. The averages all ended up over 1 percent, The deal optimism helped markets overlook some disappointing earnings and soft jobless claims and consequently, the averages advanced on Thursday. Optimistic earnings reports and positive Chinese GDP data generated strong buying interest in the markets on Friday, sending the major averages higher for the third straight session. For the week, the Dow Industrials and the S&P 500 Index added 1.07 percent and 2.42 percent, respectively, while the Nasdaq Composite Index rose 3.23 percent. Among the sector indexes, the NYSE Arca Gold Bugs Index rallied 6.64 percent for the week, while the NYSE Arca Airline Index, the NYSE Arca Biotechnology Index and the KBW Bank Index all ended up over 3 percent. Additionally, the NYSE Arca Oil Index, the Dow Jones Transportation Average and the NYSE Arca Securities Broker Dealer Index advanced over 2 percent each.

US Economic Reports

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With the federal government re-opening following last week's compromise agreement, the focus shifts back to Main Street. Housing and job market reports are likely to predominate proceedings in the unfolding week. The spotlight is likely to be on the National Association of Realtors' existing home sales report for September, the Commerce Department's new home sales report for September, the durable goods orders report for September, the final consumer sentiment reading based on a survey by Reuters and the University of Michigan, the weekly jobless report and the Labor Department's non-farm payrolls report for September that was delayed due to the federal government shutdown. The Federal House Finance Agency's house price index for August, the results of Markit's manufacturing survey for September and announcements concerning next week's treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week. The Chicago Federal Reserve is scheduled to release its national activity index that measures overall economic activity and inflationary pressure at 8:30 am ET. The National Association of Realtors will release its existing home sales data for September at 10 am ET. The consensus estimates call for existing home sales to come in at a seasonally adjusted annual rate of 5.30 million units compared to 5.480 million units in August. Existing home sales came in at a seasonally adjusted annual rate of 5.48 million units in August, the highest level since February 2007. Single-family as well as co-operatives sales increased during the month. Inventories measured in terms of months of supply fell to 4.9 from 5. At the same time, the median price of an existing home climbed 14.7 percent year-over-year. First time homebuyers accounted for 28 percent of the total sales. The Energy Information Administration is due to release its petroleum status report for the week ended October 11th at 10:30 am ET. Crude oil stockpiles rose by 6.8 million barrels to 370.5 million barrels in the week ended October 4th. Inventories were above the upper bound of the average range for this time of the year. Gasoline inventories edged up by 0.1 million barrels and were at the top of the average range. Meanwhile, distillate stockpiles fell by 3.1 million barrels and remained near the lower limit of the average range. Refinery capacity utilization averaged 89.4 percent over the four weeks ended October 4th compared to 91.1 percent over the four weeks ended September 27th.

Stocks in Focus

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McDonald's Corp. is falling over 1 percent to $93.60. The company's third quarter profit improved from the year ago period and topped Street view. Total revenues missed Street view by a whisker. Global comparable sales increased 0.9 percent during the quarter. The company expects global comparable sales performance to be in-line with recent quarterly trends, whilst restaurant margin percentages likely to drop at a level relatively similar to first quarter results. Halliburton reported better than expected third quarter earnings, while its revenues were shy of estimates. United States Steel said it estimates a total goodwill impairment of about $1.8 billion for its North American flat-rolled and Texas Operations reporting units in the third quarter of 2013. The company noted that the impairment will be a non-cash charge and will be reflected in its Form 10-Q for the third quarter of 2013. Crown Castle said it has agreed to acquire rights to about 9,700 AT&T towers for $4.85 billion in cash. The agreement allows Crown Castle to lease and operate the AT&T towers for a weighted average term of about 28 years. The company also secures the option to purchase the towers at the end of the respective lease terms for aggregate option payments of about $4.2 billion, which if exercised would primarily be between 2032 and 2048. Discover Financial Services, Forward Air , Illumina , Netflix , Rent-A-Center , Sonic , Texas Instruments , Tuesday Morning , Vmware , Volterra Semiconductor and Zions Bancorp. are among the companies due to release their quarterly results after the close of trading.

European Market

European stocks opened mostly higher but have turned mixed since then, as traders digested domestic earnings and looked ahead to some key economic data from the U.S. over the course of the week. The French CAC 40 Index and the German DAX Index are trading lower, while the U.K. FTSE 100 Index is holding above the unchanged line amid some volatility. In corporate news, Philips reported third quarter net income that nearly tripled from the year-ago period. Dutch paint maker Akzo Nobel reported third quarter profits that were in line estimates. German software giant SAP said its third quarter profit, excluding items, rose 5 percent year-over-year, but its software license sales declined. The company maintained its full year operating profit guidance. On the economic front, a survey by Rightmove showed that U.K. house prices rebounded in October after two consecutive months of declines, as prices in London hit a new record high after summer recess. The average property asking price in the U.K. rose 2.8 percent month-over-month in October as prices returned to a growth trend with the onset of autumn. Annually, prices increased 3.8 percent in October following the 4.5 percent gain in September. German producer prices declined for the second consecutive month in September, according to a report released by German Federal Statistical Office. German producer prices fell by 0.5 percent year-over-year in September, the same in pace as in August. Economists expected a steeper 0.7 percent drop.

Asian Markets

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The Asian markets advanced, buoyed by hopes that the Fed will not trim its bond purchase program. The Chinese market led the way higher, and the Japanese and New Zealand markets also recorded solid gains. Japan's Nikkei 225 average opened higher and rose sharply in early trading. After paring some of its gains over the course of the morning, the index rose steadily in the afternoon, closing 132.03 points or 0.91 percent higher at 3-week high 14,694. A majority of stocks advanced, with Toho Zinc, Hokuetsu Kishu Paper, JTEKT, Marui, NSK, SoftBank and Tokyu Fudosan leading the gains. On the other hand, electric machinery makers came under selling pressure. Australia's All Ordinaries opened higher and rallied strongly in early trading. Thereafter, the index moved roughly sideways before closing up 30.50 points or 0.57 percent at 5,352. Most sectors advanced, with the exception of defensive telecom, real estate, healthcare and utility stocks. Material, consumer staple, energy and financial stocks were among the best performers of the session. Hong Kong's Hang Seng Index closed at 23,438, up 98.05 points or 0.42 percent, and China's Shanghai Composite Index ended 35.46 points or 1.62 percent higher at 2,229 after the Chinese Cabinet reiterated its confidence in meeting this year's growth targets. On the economic front, a report released by Japan's Ministry of Finance showed that Japan's trade deficit came in at 932.1 billion Yen compared to expectations for a deficit of 918.6 billion yen. Exports rose 11.5 percent year-over-year, slower than the 16.5 percent increase in imports. Revised estimates released by Japan's Cabinet Office showed that its leading economic indicators index fell to 106.8 in August from 107.9 in July, an upward from revision from the preliminary estimate of 106.5.

Currency and Commodities Markets

Crude oil futures are sliding $1.21 to $99.90 a barrel after declining $1.21 or 1.19 percent to $100.81 a barrel in the week ended October 18th. Last Monday, oil rebounded moderately amid lingering deal hopes following the previous week's more than 3 percent retreat. The commodity dipped back by over $1-a-barrel on Tuesday on the back of wavering deal hopes. Oil rallied over $1-a-barrel on Wednesday, with traders conviction over the deal being done lifting sentiment towards the commodity. Oil declined by over $1.50-a-barrel on Thursday only to rise modestly on Friday, closing the week lower. Gold futures, which rallied $29.20 or 2.30 percent to $1,314.60 an ounce in the previous week, are currently climbing $3.90 to $1,318.50 an ounce. The U.S. dollar weakened against the euro and the Yen in the week ended October 18th, as risk appetite improved and hopes that the Fed will not withdraw its monetary policy stimulus in the wake of the fiscal developments gained ground. The dollar fell 1.06 percent against the euro before ending at $1.3687 and it lost 0.87 percent against the Yen to 97.72 yen. The U.S. dollar is currently-trading at 98.20 Yen and is valued at $1.3664.