Friday, 24 October 2014

Markets | 24/10/2014 | EUR levy news in an awkward timing, and Home Sales data shortly after the bell for possible direction

Europe has started the final session of the week on something of a choppy note with buyers remaining sidelined as more data is awaited. We did seem some further crumbs of comfort in the better than expected German consumer confidence reading this morning but many will be left eyeing the UK GDP print as being instrumental certainly in dictating where the FTSE goes next. There’s also this news of an additional EUR2.1bn levy being applied to the UK by the EU and the timing here is somewhat awkward – any UK decision to split from Brussels is seen as being potentially damaging for economies on both sides, and shocks like this really don’t serve to help the outlook.
There was another warning bell sounded with regard to the Chinese economy overnight as property prices in the country posted their first year-on-year fall. Although the response on indices in both Shanghai and Hong Kong was relatively muted, this is the latest worrying signal to come out of the country and the market will now be left waiting to see if further stimulus measures are on the cards in an attempt to shore up the situation. The Nikkei was the best regional performer with another slug of Yen weakness helping here.
The situation on Wall Street is gradually becoming more bullish as Europe turns positive in early trade, but even so futures are just pointing to the most modest of rises at the open. We do have some home sales data due shortly after the bell so this could provide some further direction, but the main indices have all come a long way this week, something that could temper the appetite for further gains. Earnings season continues apace with Ford and UPS – the latter a good barometer of global business – both reporting before the open but for now we’re calling the DOW up 12 at 16690 and the S&P unchanged at 1951.  

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