23rd April - Economic and Global Market Review
Global Market Data as of 23rd April 2014
FTSE 100 6,681.76 (+0.85%) Dax 9,600.09 (2.02%)
CAC 40 4,484.21 (+1.18%) BEL 20 3,145.54 (+1.06%)
Madrid IBEX 10,437.80 (+1.41%) Zurich SMI 8,461.30 (+1.03%)
Moscow MCIEX 1,336.81 (-0.59%) Sydney ASX 5,498.70 (+0.58%)
Nikkei 225 14,503.36 (+0.80%) Hang Seng 22,536.62 (0.85%)
Shang SSE Comp 2,072.83 (+0.34%)
Dow Jones 16,514.37 (+0.40%) NASDAQ 4,161.46 (+0.97%)
S&P 500 1,879.55 (+0.41%)
European markets returned yesterday after the long weekend and continued their run of late last week. The majority European indexes posted strong gains and held the momentum carried by the US and their positive earnings reports.
Preliminary data out of HSBC showed that the Chinese PMI contracted again for the fourth month in a row. At 48.3 it was still better than Marches figures but still showed a slowdown in manufacturing bolstering claims that the Chinese economy is still struggling to prove it is returning to stability. Also of concern to investors was the news earlier in the week that the Japanese trade deficit had quadrupled to over ¥1.45tn, 4 times the ¥3.5bn last reported. The rise in energy imports was seen as the main culprit with an increase in LPG up almost 8% but with a cost increase of 18%.
As stated, Europe was in positive territory on its return yesterday. Spurred on by good earnings reports and several announcements by pharmaceutical companies confirming that some large scale mergers and acquisitions could be on the cards, in the very near future. GlaxoSmithKline and Novartis are in talks to trade off some of their core businesses. GSK will purchase Novartis's vaccines program, minus the flu division for $7.1bn and Novartis will get GSK cancer drugs business for $16bn. In a separate deal Lilly has agreed the purchase of Novartis's animal health division for $5.4bn. This was seen as both companies looking forward and concentrating on their core businesses. Further rumors helped push the market and the mill spread news that AstraZeneca and Pfizer were also in talks. Weak data out of China held back the open in Europe and markets were slightly down at the start of trading despite positive EU data showing that manufacturing was indeed on the increase.
In the US, Earnings Season continues to drive the markets as all three of the major indexes posted 6 day winning streaks. With a whole host of S&P 500 companies reporting better than expected earnings the NASDAQ, DOW and S&P all ended up in the green. Yesterday saw some poor data on existing homes yet today it is expected that New Homes data should be more positive after construction managed to return to normality after the bleak weather the US saw over winter. There are some big hitters reporting today and no doubt the markets will be keen to see what the score is. Ones to watch will be Apple Inc, The Boeing Company and Qualcomm Inc.
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