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| | US Market | | The major U.S. index futures are pointing to a lower opening on Friday, with sentiment reflecting defensive stance of traders, as the major averages trade in overbought territory. With fourth quarter GDP growth now downwardly revised roughly in line with expectations, the market focus is likely to rest on the results of a regional manufacturing survey and consumer sentiment and pending home sales data due to be released shortly after the markets open. Notwithstanding monetary policy optimism, weak numbers may generate some weakness in the markets going into the weekend.
U.S. stocks extended their advance on Thursday, moving further into overbought territory amid Federal Reserve Chair Janet Yellen's testimony to the Senate and the release of mixed economic data. The major averages opened little changed and showed some volatility in early trading. Subsequently, the averages advanced until late afternoon trading and moved roughly sideways thereafter before closing moderately higher.
The Dow Industrials ended up 74.24 points or 0.46 percent at 16,273, the S&P 500 Index closed 9.13 points or 0.49 percent higher at 1,854 and the Nasdaq Composite Index ended at 4,319, up 26.87 points or 0.63 percent.
Twenty-two of the thirty Dow components closed higher and one stock ended unchanged, while the remaining seven stocks retreated. Boeing , Goldman Sachs , 3M Co. , Microsoft and Verizon were among the biggest gainers of the session.
On the economic front, The Commerce Department reported that durable goods orders fell 1 percent month-over-month in January. Excluding transportation, orders were up 1.1 percent. The core component that excludes non-defense capital goods orders, excluding aircraft, was up 1.7 percent. However, shipments of this category of goods that are plugged into GDP calculations were down 0.8 percent. Vehicle/parts, electrical equipment, machinery and primary metal orders all declined, while orders for computers/electronics and fabricated metals improved.
The Labor Department said jobless claims rose to 348,000 in the week ended February 22nd from 334,000 in the previous week. The four-week average remained unchanged at 338,000. Continuing claims calculated with a week's lag rose 8,000 to 2.964 mil. in the week ended February 15th.
Notwithstanding the 14-day relative strength index remaining above 80, which suggests overbought levels, The Dow Industrials continued to climb on Thursday. If the momentum is sustained, the index could take a shot at its near term resistance around 16,372. Further resistances lie around the 16,464 and 16,534 levels. On the downside, the index is likely to be solidly supported by its 50-day MA currently at 16,141. Other support levels for the index are 16,029, its 21-day MA currently at 15,913 and 15,741. |
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| | US Economic Reports |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | With consumer spending increasing at a notably slower than previously estimated rate, The Commerce Department released a report showing that the U.S. economy grew by much less than initially indicated in the fourth quarter of 2013.
The report showed that gross domestic product increased by 2.4 percent in the fourth quarter, reflecting a notable downward revision from the 3.2 percent growth originally reported. Economists had expected the pace of GDP growth to be downwardly revised to 2.5 percent. The Commerce Department said the slower growth primarily reflected downward revisions to consumer spending, private inventory investment, exports, and state and local government spending.
MNI Indicators is due to release its Chicago business barometer for February at 9:45 am ET. The consensus estimates call for a decline in the index to 56.4 from 59.6 in January.
The Chicago business barometer fell 1.2 points to 59.6 in January, reflecting a slowdown in the expansion of the region's manufacturing sector. The employment index slipped 5.1 points to 49.2. However, the production, new orders and order backlogs indexes showed month-over-month improvement.
Reuters and the University of Michigan are scheduled to release the final estimate of their U.S. consumer sentiment index for February at 9:55 am ET. Economists expect a small upward revision to the index to 81.5 from the preliminary estimate of 81.2.
The National Association of Realtors is due to release its pending home sales index for January at 10 am ET. Economists estimate a 2.3 percent increase in the pending home sales index following an 8.7 percent drop in December. Pending home sales fell 8.7 percent month-over-month in December, with the index dropping to the lowest level since October 2011. Annually, pending home sales were down 8.8 percent. Pending home sales fell in each of the four geographic regions. The weakness stemmed mainly from adverse weather conditions.
Of the Fed speeches, Federal Reserve Governor Jeremy Stein and Minneapolis Fed President Narayana Kocherlakota are due to participate in a panel discussing monetary policy and financial stability in New York at 10:15 am ET. Chicago Federal Reserve President Charles Evans and Philadelphia Federal Reserve President Charles Plosser will also be on a panel discussing communications and unconventional monetary policy in New York at 1:30 pm ET. |
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| | Stocks in Focus | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Gap reported fourth quarter earnings of 68 cents per share on net sales of $4.58 bil. The earnings exceeded estimates, while the revenues were slightly below estimates. The company's 2014 earnings guidance was also weak.
Salesforce.com reported fourth quarter non-GAAP earnings of 7 cents per share on revenues of $1.15 bil. For fiscal 2015, the company expects non-GAAP earnings of 48-50 cents per share on revenues of $5.25 bil. to $5.30 bil. The results exceeded estimates and the guidance was positive. The company also announced that its CFO Graham Smith will retire in March 2015.
Mentor Graphics reported fourth quarter non-GAAP earnings of 92 cents per share on revenues of $401 mil. For 2014, the company estimates non-GAAP earnings of $1.75 per share on revenues of $1.237 bil. The results exceeded estimates and the guidance was strong. The company's board also announced an 11 percent increase to its dividend.
Sotheby's reported fourth quarter net income of $1.30 per share on revenues of $339.20 mil. The results trailed expectations. Meanwhile, activist investor Daniel Loeb's hedge fund Third Point has launched a proxy fight at Sotheby's by nominating three candidates, including Loeb, to stand for election to Sotheby's board of directors at the company's 2014 annual meeting.
Ross Stores reported fourth quarter earnings that came in line, while its revenues were slightly shy of estimates. The company issued weak guidance for the first quarter and the full year.
Deckers Outdoor reported fourth quarter earnings of $4.04 per share on sales of $736 mil. For 2014, the company expects revenue growth of 10 percent and earnings per share growth of 8 percent, while for the first quarter, the company estimates a loss of 16 cents per share on 6 percent revenue growth. The results exceeded estimates but the guidance was weak.
Monster Beverage reported fourth quarter net income of 44 cents per share on net sales of $540.85 mil. The earnings missed estimates, while the revenues were ahead of estimates.
Jos. A. Clothiers revealed through a letter to Men's Wearhouse CEO Douglas Ewert that its board has rejected the latter's $63.50 per share takeover offer as inadequate. However, the company said its board has authorized it to meet with Men's Wearhouse to establish a process to negotiate the highest price Men's Wearhouse is prepared to pay.
Universal Health reported fourth quarter adjusted net income of $1.03 per share on revenues of $1.80 bil. For 2014, the company estimates earnings of $4.80 to $5.10 on revenues of $7.89 bil to $7.94 bil. The results trailed expectations and the guidance was negative.
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| | European Market | | After showing some volatility in early trading, European stocks have turned mixed.
On the economic front, the Federal Statistical Office reported that German retail sales rose 2.5 percent month-over-month in January, reversing the 2 percent decline in December. Economists had expected a 1 percent gain.
Separate reports from the region showed that French consumer spending unexpectedly declined in January and producer prices also unexpectedly fell. The results of a survey by GfK showed that U.K. consumer confidence remained static at depressed levels in February, although the confidence level was in line with estimates.
In corporate news, Bayer reported a 24 percent increase in its fourth-quarter net income to 455 mil. euros from 366 mil. euros last year. The U.K.'s Old Mutual reported a 15 percent increase in its 203 profits, helped by strong sales growth.
At the same time, Pearson reported a decline in its 2013 earnings and also forecast weakness in 2014, blaming it on its U.S. education units. IAG, the parent company of British Airways, reversed to a profit in 2013. |
| | Asian Markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | | | The major Asian markets closed mixed yet again despite the positive lead from Wall Street overnight. Anxiety concerning a pullback served to keep sentiment subdued. The Australian and Japanese markets declined, while most other major markets advanced. A raft of economic data released from Japan confirmed the building momentum in the domestic economy.
Japan's Nikkei 225 average was found languishing below the unchanged line for much of the session before closing 82.04 points or 0.55 percent lower at 14,841. Export stocks moved to the downside, pressured by the yen's strength, while defensive stocks found some buying interest.
Australia's All Ordinaries opened higher and spiked sharply in early trading but gave back most of its gains immediately after. The index moved nervously around the unchanged line till the mid-session before seeing strength again. The index pulled back yet again in late afternoon trading and languished in the red thereafter before ending down 5.60 points or 0.10 percent at 5,415. A majority of stocks declined, although material, healthcare and utility stocks advanced modestly.
Hong Kong's Hang Seng Index closed at 22,837, up 8.78 points or 0.04 percent, and China's Shanghai Composite Index ended 8.95 points or 0.44 percent higher at 2,056.
On the economic front, a report released by Japan's Ministry of Economy, Trade and Industry showed that industrial production in Japan rose 4 percent month-over-month in January following a 0.8 percent increase in December. Economists estimated a 2.8 percent increase. A separate report showed that Japanese retail sales rose 4.4 percent year-over-year in January, also exceeding forecasts for a 3.8 percent increase.
Japan's Ministry of Internal Affairs and Communication reported that core consumer prices in Japan rose 1.4 percent year-over-year in January, the same pace as in the previous month and matching economists' estimates.
A separate report showed that average household spending in Japan climbed a better than expected 1.1 percent year-over-year in January, while the average of monthly income per household eased 0.6 percent. Meanwhile, the jobless rate in Japan came in at 3.7 percent in January, the same rate as in December and in line with estimates. |
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| | Currency and Commodities Markets | | Crude Oil futures are slipping $0.35 to $102.05 a barrel after falling $0.19 to $102.40 a barrel on Thursday. Gold futures are currently edging down $0.60 to $1,331.20 an ounce. In the previous session, Gold rise $3.80 to $1,331.80an ounce.
Among currencies, the U.S. dollar is trading at 101.93 yen compared to the 102.23 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3809 compared to yesterday's $1.3710.
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