Stock Market Update 5 April 2013

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Stock Markets: 05 April 2013

European equities are set to open flat as traders brace themselves for today's US jobs data.

Markets started the week on a fairly positive footing, shrugging off quite a few pieces of weak economic data. However, Wednesday's disappointing ADP payrolls figure is a possible forewarning for today's big number.

Not surprisingly, the ADP data has dented trader's resilience to the fact that the recent run of bad data points to trouble ahead.

Yes, the ADP and BLS jobs figures are US centric. However, it is the belief that the American recovery will drag along the rest of the global economy with it that has enabled other regions to shrug off their own domestic plight.

Therefore traders are highly conscious that any weakness in the US is likely to be exaggerated in Europe and Asia.

Despite a higher than estimated rise in the US jobless claims figures, the Dow Jones managed to rebound 39 points yesterday to finish at 14,598.5.

It was probably the reiteration of the ongoing ECB and BoE monetary stimulus that kept the US investors rather optimistic. Funnily enough, in Europe the picture was different where the FTSE 100 closed down 1.20% at 6,344.

Later today, the US employment report is anticipated to show an increase of about 200,000 jobs.

Stock Markets: 04 April 2013

European equities are set to open mixed as overnight declines in the US and Asia weigh on the markets. Although hopes of dovish comments from the BoE and ECB have given market sentiment some buoyancy.

Stock markets were fairly muted during the morning session yesterday. However the sharply lower than expected ADP Non-Farm payrolls started the selling in the afternoon. Shortly afterwards the ISM Non Manufacturing data also came in weak and that added to the bearish sentiment.

After the European close, US markets continued to sell off right up until the final bell and that weakness was felt overnight in Asia.

Nevertheless, today has central bankers dominating the agenda and we have just seen the BoJ's Kuroda manage to gain a broad agreement to engage in another 'quantitative easing forever' type policy.

Before the rest of the central bankers speak, we are expecting UK and European Services PMI data, which is expected to show a slight weakening.

This morning we also have interest rate announcements from the BoE and ECB. Both rates are expected to remain on hold.

Traders will be on alert to Mario Draghi's press conference as this is his first since the Cyprus crisis ignited. As usual, investors will be looking for hints of an upcoming rate change.

Shortly after, FOMC Member Evans and Chairman Bernanke will also be speaking and are expected to maintain their highly dovish stance.

A set of weaker than estimated economic data in the US, quite rare these days, undoubtedly sparked a sharp selloff in the equity markets yesterday.

ADP non-farm employment numbers, often an indicator for Friday's employment report, showed an increase of 158,000 jobs when a rise of 200,000 was expected. The numbers promptly sent the Dow Jones 101 points down to 14,563.

Stock Markets: 03 April 2013

European equities are set to ease slightly on the open following yesterday's impressive gains.

A small amount of buyer hesitation is seen at today's start as equity indices perch on recent highs. Yesterday's gains were a testament to the ability of the bulls to force markets to shrug off bad news and focus on the far fewer pieces on positive data.

Weak manufacturing PMI's and a record high in Eurozone unemployment were cast aside as a rebound in US Factory Orders fed the bullish sentiment.

With no significant macro developments overnight, today's economic data looks set to be the decider of sentiment. It will probably be the US ADP Employment and ISM Non-Manufacturing data that fuels the online spread betting markets.

The Dow Jones pushed to a new all-time record high yesterday. The move was largely on the back of ongoing signs that the US economy is recovering, albeit at a slow pace.

US factory orders were boosted by an increase in demand for transportation and in turn sent the Dow 94 points up to 14,668.

Meanwhile, the debt crisis in Europe seems to have eased a notch, although many consider the Cyprus issue far from over.

Stock Markets: 02 April 2013

As traders return from the long weekend and shake off the holiday, we have seen a little weakness on the open. The weakness has followed some poor economic data from the US last night.

For once though, no European traumas have been unleashed over the weekend. However, some telling economic data from the region may stir up sentiment later on.

Unemployment is set to make yet another all time record high today in another sign that the Eurozone is failing to pull itself out of a deepening recession.

Nevertheless, any negativity may be muted as traders will look to this week's ECB meeting for some dovish comments to prop things up.

Stock Markets: 28 March 2013

What's the point in opening a bank if you can't get your money out?

As Cypriot banks prepare to reopen today there are likely to be long queues formed outside the doors and some very angry depositors attempting to get their money out.

However the limits and capital controls mean the banks will be leaving customers with little more than enough to let them get by for a few days.

Having been closed for almost two weeks the banks are due to open in a couple of hours time. In reality, it looks like there were few people camping outside overnight to get to the front of the queue. At the moment, the only people who seem to be outside the banks are journalists.

The capital controls mean that there's little point in queuing as depositors would only be able to withdraw a few hundred euros.

Whilst the focus of the financial spread betting markets has been on Cyprus, it has meant that people have almost forgotten the fact that Italy remains a real worry and doesn't have a proper functioning government yet.

The Eurozone debt crisis has by no means been put to bed. It is set to run and run for as long as political will power continues to battle economic fundamentals.

The ongoing concerns took the shine off US equities yesterday as the Dow Jones fell 30 points to 14,525. Things weren't help by weaker than expected pending home sales figures in the US.

Nevertheless, there are still plenty of investors worried about the aftermath of the Cyprus bailout. At the same time, the Good Friday bank holiday might have sent some traders to the sidelines after squaring their positions.

This has rubbed off on European stock markets this morning and the FTSE 100 has commenced trading in the red but only by a handful of points. The tussle between the bulls and bears continues. One thing's for sure and that's that the upside seems to remain a struggle for now.

Stock Markets: 27 March 2013

Despite the wider macro risks, yesterday saw US markets stage another impressive recovery.

After Cyprus managed to stay in the Eurozone by promising to restructure its problem banks, investors felt it was back to normal for the US economy.

Better-than-expected reports for the housing sector and durable goods orders reignited optimism that the world's biggest economy is on the right track.

Consequently, the Dow continued its rally, gaining a hundred points to close at 14,559.

Also see today's feature, Flat-Lining Economy is Better than the Alternative.

Stock Markets: 26 March 2013

No market comment today, however please see the update to our feature, The Cyprus Banking and Bailout Crisis - Part 5.

Stock Markets: 25 March 2013

On Friday, US equities shrugged off concerns over the banking crisis in Cyprus to rally, with the Dow Jones ending the week on a high by adding 90 points to 14,510.

US investors got everything they needed last week; reassurance from the Fed over their bond buying, ongoing signs of economic recovery and a European threat that has been rather contained so far.

At the time of writing, we are calling the Dow to open 50 points higher this afternoon at 14,560.

This morning, the FTSE is up some 40 points at 6435, catching any clients who went into the weekend with short positions slightly off guard.

Today will be exceptionally quiet on the economic data front meaning that, other than the Cyprus issue, there's unlikely to be too much to move the market.

Also see The Cyprus Banking and Bailout Crisis - Part 4.

By Simon Denham, 5 April 2013

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