Market Commentary: Markets Open Up - Hurray for Bad News

October 22nd, 2013
in Gary's blogging, market open, syndication

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Opening Market Commentary For 10-22-2013

Premarkets were up and the markets opened the same way because in the current bizarro world of the fed's money printing threat of tapering - bad employment news is good news for the markets. The manipulated markets prefer artificial stimulus to real growth.

And the BLS's job report was "not good" suggesting the Federal Reserve is unlikely to lower the pace of its asset purchases in the coming months.

Follow up:

Gary is off this morning, and the market open comes from our syndication partner

European stocks remained mixed to lower on Tuesday, as investors remained cautious ahead of a highly anticipated U.S. employment report, to be released later in the trading session.

During European afternoon trade, the EURO STOXX 50 edged up 0.08%, France’s CAC 40 rose 0.20%, while Germany’s DAX 30 added 0.07%.

Markets were jittery amid concerns over the negative impact of the 16-day U.S. government shutdown on the already fragile economic recovery.

Fears over a drag on growth fuelled expectations that the Federal Reserve would delay plans to start tapering its stimulus program until at least the start of next year.

Investors were awaiting the September nonfarm payrolls report, which had been originally scheduled for release on October 4, to help assess the timing for a reduction in the Fed’s bond purchasing program.

Financial stocks were mixed, as BNP Paribas added 0.19% and Societe Generale slid 0.32% in France, while Germany's Deutsche Bank declined 0.57%.

Among peripheral lenders, Spanish banks Banco Santander and BBVA dropped 0.44% and 0.51% respectively, while Italy's Intesa Sanpaolo edged up 0.19%.

Elsewhere, Novartis gained 1.18% as the Swiss drugmaker raised its forecast for the second time this year after a generic competitor to one of its biggest-selling medicines failed to appear.

Dutch phone operator Royal KPN also continued to trend higher, up 1.93%, even as the company reported a third-quarter loss on an impairment charge in Germany and as competition in its home market intensified.

In London, commodity-heavy FTSE 100 edged up 0.26%, supported by gains in the mining sector.

Shares in Rio Tinto rose 0.17% and Glencore Xstrata gained 0.45%, while BHP Billiton surged 3.26%.

Meanwhile, financial stocks were mixed. The Royal Bank of Scotland climbed 0.75% and Lloyds Baking advanced 0.71%, while Barclays and HSBC Holdings inched down 0.03% and 0.08% respectively.

U.S. stocks opened higher on Tuesday, as the release of disappointing U.S. employment data added to expectations that the Federal Reserve will postpone the tapering of its stimulus program.

During early U.S. trade, the Dow Jones Industrial Average added 0.16%, the S&P 500 index rose 0.32%, while the Nasdaq Composite index gained 0.45%.

The Department of Labor said the U.S. economy added 148,000 in September, well below expectations for an increase of 180,000.

The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.

The jobs report was released 18 days behind schedule due to disruption caused by the recent U.S. government shutdown.

Apple rallied 1.22% as the company was scheduled to hold a highly-anticipated product launch on Tuesday, where it was expected to unveil new versions of its full-sized iPad and iPad Mini just before the holiday season.

Also in the tech sector, Texas Instruments plummeted 1.93% after the company forecast sales and profit that may fall short of analysts’ estimates as some customers cut orders ahead of an anticipated slowdown in demand for their products.

RadioShack saw shares dive 10.80% following reports the consumer-electronics seller received commitments for USD835 million in new financing, replacing its existing USD625 million credit facilities.

In earnings news, DuPont topped expectations, supported by strong solar panel sales and other products. Still, shares slipped 0.12%.

United Technologies was also on the downside, falling 0.14%, after it edged past earnings estimates by a penny a share, while revenue fell short of projections.

Other stocks likely to be in focus included Travelers, Amgen and Broadcom, scheduled to report quarterly earnings later in the day.

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 gained 0.38%, France’s CAC 40 rose 0.32%, Germany's DAX climbed 0.76%, while Britain's FTSE 100 advanced 0.52%.

During the Asian trading session, Hong Kong's Hang Seng Index slid 0.52%, while Japan’s Nikkei 225 Index edged up 0.13%.

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Written by Gary


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