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| | US Market | | The major U.S. index futures are pointing to a nearly flat opening on Tuesday, with sentiment reflecting nervousness amid the release of mixed earnings data and weak regional manufacturing data. The results of the New York Federal Reserve's survey, which give the first peek into manufacturing activity for the month, showed a notably slower rate of expansion in February. The recent strength in the market is likely to render the mood cautious, given the uncertain economic fundamentals. Traders may also focus on the results of a homebuilder confidence survey due to be released shortly after the markets open.
U.S. stocks persisted with their upward momentum in the week ended February 14th amid monetary policy optimism and encouraging corporate tidings.
Last Monday, the major U.S. averages moved about in a lackluster manner amid a lack of any major trading catalysts before closing higher. The averages added to their gains on Tuesday, ending notably higher after Fed Chair Janet Yellen suggested in her Congressional testimony that the central bank will toe in line with former Chairman Ben Bernanke's policy. Stocks slowed down on Wednesday despite positive global cues, including strong Chinese trade data, before closing mixed.
Ignoring a weak start on Thursday, the averages took comfort from positive corporate earnings and hopes of easy monetary policy in the wake of weak data on jobless claims. The averages ended the session notably higher. With economic data coming in mixed, the major averages once again launched into a strong rally on Friday, ending the week with solid gains.
For the week ended February 14th, The Dow Industrials and the S&P 500 Index added 2.28 percent and 2.32 percent, respectively, while the Nasdaq Composite Index added 2.86 percent.
Among the sector indexes, the NYSE Arca Gold Bugs Index rallied over 11 percent for the week and the NYSE Arca Biotechnology Index and the Philadelphia Semiconductor Index added over 4 percent each. While The Dow Jones Utility Index rose 3.11 percent, the NYSE Arca Oil Index, the Philadelphia Housing Sector Index and the NYSE Arca Securities Broker/Dealer Index moved up over 2 percent each.
Last week, The Dow Industrials rallied strongly and has now embarked on strong route to recovery to reclaim its all time high. Immediate support for the index is around its 50-day MA (currently at 16,097). The index has further support around 16,072, 16,005, its 21-day MA (currently at 15,925), 15,907 and its 100-day MA (currently at 15,822). On the upside, the index has resistances around 16,202, 16,300, 16,373 and 16,430. |
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| | US Economic Reports |  | | CADUSD | Oil | Gold | Allbanc |  |  |  |  | | Please click on the images to view our interactive charts | | | Manufacturing and housing data are expected to be in focus in the unfolding holiday-shortened week. Traders are likely to closely focus on the results of the manufacturing survey for February by the New York Federal Reserve and the Philadelphia Federal Reserve, Markit's manufacturing purchasing managers' index for the U.S., the results of the National Association of Home Builders' housing market index for February, the Commerce Department's housing starts report for January, the National Association of Realtors' existing home sales report for January, the jobless claims report and the minutes of the January FOMC meeting.
The Labor Department's consumer prices report for January, the Conference Board's leading economic indicators index for January and some Fed speeches round up the economic events of the week.
The New York Federal Reserve reported that its business conditions index measuring manufacturing activity in the New York region declined 8 points to 4.5 in February, signaling a notable slowdown in manufacturing expansion. Economists expected a more modest decline to 8.5.
The new orders index fell to about 0 and the shipments index retreated 13 points to 2.1. The employment indexes remained little changed. Meanwhile, the 6-month outlook index rose to 39, suggesting fairly strong optimism about future business conditions.
The Treasury will release data on the flows of financial instruments into and out of the U.S. at 9 am ET.
The National Association of Home Builders is scheduled to release the results of its housing market index at 10 am ET. The consensus estimates call for the index to have remained unchanged at 56 in February.
The housing market index fell a point to 56 in January. The present sales conditions index and the sales expectations index also edged down slightly and the index measuring prospective buyer traffic declined 3 points to 40, the lowest level since June. |
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| | Stocks in Focus | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Coca-Cola reported fourth quarter adjusted earnings that were in line with estimates. Revenues fell modestly and were slightly shy of estimates. The company tightened its 2014 earnings per share guidance range.
Medtronic's third quarter adjusted earnings also met estimates and its revenues were ahead of estimates.
Confirming reports, Actavis announced a deal to buy Forest Labs (FRX) for about $25 billion in cash and stock.
Parkway Properties reported fourth quarter adjusted funds from operations of 31 cents per share on revenues of $76.04 million. For 2014, the company expects adjusted funds from operations of $1.27-$1.35 per share. The results exceeded estimates, while the guidance was lukewarm.
Alcoa announced that it will permanently close its Point Henry aluminum smelter and two rolling mills in Australia. The company noted that it will incur a non-cash charge of 22-25 cents per share on an after tax basis towards the closure, with 60 percent of the charges due to be recorded in the first quarter, and cash costs of $160 million in 2014.
Apollo Global Management said it has completed its previously announced acquisition of CEC Entertainment .
Analogic Devices , DryShips , Fluor , La-Z-Boy , Panera Bread , Photronics , SM Energy and Terex (TEX) are among the companies due to release their quarterly results after the close of trading.
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| | European Market | | Ignoring a positive open, European stocks squandered their gains in early trading. However, since then the averages have turned mixed. The mood remained cautious ahead of a couple of market moving reports from the U.S. and amid the release of weak German investor sentiment reading.
In corporate news, Dutch package delivery company TNT Express reversed to a profit in its fourth quarter, although it cautioned of volatile trading conditions. Air Liquide reported net profit of 1.64 billion euros for 2013, up a currency adjusted 5.5 percent from a year earlier.
On the economic front, the Zew Institute reported that its index measuring German investor confidence weakened to 55.7 in February from 61.7 in January. The index was expected to decline slightly to 61.5. Nevertheless, the index was well above its historical average of 24.5.
A report released by the U.K. Office for National Statistics showed that the U.K. annual inflation unexpectedly fell to 1.9 percent in January from 2 percent in December. Economists expected a stable inflation rate for the month. Producer price inflation also eased in January, with the output price inflation easing to 0.9 percent from 1 percent, while input prices fell 3.1 percent.
The current account surplus of the eurozone decreased in December, according to data released by the European Central Bank, as the trade surplus fell and the current transfer deficit widened.
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| | Asian Markets | | | | USDCAD | USDEUR | USDGBP | USDJPY |  |  |  |  | | Please click on the images to view our interactive charts | |
Most Asian markets advanced, with the exception of the Chinese and Malaysian markets. Support for the markets came from the Bank of Japan's decision to expand its lending.
Japan's Nikkei 225 average opened higher and moved sideways till the afternoon. Thereafter, the average advanced steadily before closing up 450.13 points or 3.13 percent at 14,843. The market witnessed broad based strength following the Bank of Japan's monetary policy announcement, which served to weaken the yen.
Australia's All Ordinaries moved in a volatile manner and was seen moving back and forth across the unchanged line throughout the session before closing 7.40 points or 0.14 percent higher at 5,402. Material stocks advanced notably in reaction to the weakening of the dollar and the financial results of BHP Billiton, which reported higher profits, helped by its cost cut programs despite weak pricing impacting revenue growth. Financial stocks also gained some ground.
Hong Kong's Hang Seng Index closed at 22,588, up 51.78 points or 0.23 percent, while China's Shanghai Composite Index lost 16.35 points or 0.77 percent before closing at 2,119. The weakness in China came after the People's Bank of China drained 48 billion yuan from the financial system by issuing 14-day bond repurchase agreements for the first time since June.
On the economic front, the Bank of Japan decided to double the scale of its bank lending facility, while keeping the monetary easing plan unchanged. The central bank also maintained its upbeat outlook on the economy. At the end of the two-day meeting, the Policy Board, led by Governor Haruhiko Kuroda, decided to double the scale of the bank lending scheme, allowing commercial banks to borrow from the central bank at cheaper rates, upto amounts twice as much as the net increase in their lending. The ceiling of the bank's fund-provisioning under the 'Growth Supporting Funding Facility' was raised to 7 trillion yen from 3.5 trillion yen. The expiration of these schemes, which was due in March, has been extended by one year.
A report released by the Chinese Ministry of Commerce showed that foreign direct investment in China rose notably in January, with the FDI rising 16.1 percent year-over-year following a 3.3 percent increase in December.
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| | Currency and Commodities Markets | | Crude Oil futures are rising $1.07 to $101.37 a barrel after adding $0.42 or 0.42 percent to $100.30 a barrel in the week ended February 14th. Last Monday, Oil rose modestly despite the lackluster equity market sentiment. The commodity pulled back slightly on Tuesday.
Notwithstanding the release of weak retail sales data, Oil rose moderately on Wednesday. The commodity edged down on Thursday and pulled back by a modest margin yet again on Friday by a modest margin, although it ended the week higher.
Gold futures, which rallied $55.70 or 4.41 percent to $1,318.60 an ounce in the previous week, are currently slipping $0.30 to $1,318.30 an ounce. Gold glittered for most of last week following the weakening of the dollar.
Among currencies, the dollar extended its declines against the euro, declining 0.53 percent in the week ended February 14th to $1.3707. The dollar also eased 0.37 against the yen during the week to 101.92 yen. The dollar suffered last week due to the release of some weak data on retail sales and industrial production. Meanwhile, the euro was supported by better than expected euro area GDP data.
The U.S. dollar is currently-trading at 102.46 yen and is valued at $1.3745 versus the euro.
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