AM Analysis
The Nikkei fell overnight for the first time in three days
The Nikkei fell overnight for the first time in three days as important US economic data released later today led to investors being cautious. Depending on the outcome of today’s economic data release, analysts believe the Nikkei could rebound through the current resistance of 15,000.
Weaker than expected Australian economic data was also released throughout the night which revealed 3700 jobs were lost last month, a 6% unemployment rate. The worst-than-expected data sent the AUD plummeting against its major counterparts.
Global indices are currently trading down, with some major FTSE 100 constituents posting sharp drops in their share price. Tate & Lyle are currently leading the FTSE 100 fallers after the ingredients provider posted a profit warning, leading to the company’s share price falling over 17% during early morning trading. Similarly, Rolls-Royce has dropped over 11% after the engineering group revealed their revenue is set to be flat – the first time in 10 years.
Looking towards the day ahead, investors will be cautiously awaiting the economic data from across the pond with Core Retail Sales, Retail Sales and Unemployment Claims figures due for release at 1.30pm GMT.
– Sam Fox
PM Analysis
European shares snap a winning streak
European shares snap a winning streak, dragged lower following a number of disappointing updates from blue-chip companies. Rolls-Royce and Tate & Lyle battled for the worse FTSE 100 decliner, with shares in RR dropping 16 percent after it emerged US and European spending cuts would halt profit growth in 2014. Tate & Lyle dropped 15 percent after the sweetener-maker warned on profits, blaming weak sales in developed markets. Shares in Nestle also dropped 2.1 percent after it released a warning that it may undershoot its long-term growth targets again this year due to weakening demand from emerging markets.
A report from the US Commerce Department released today showed that retail sales fell by 0.4% last month. The figure, with many expecting a 0.3% increase adds to further negativity today with retail sales making up 2/3 of the US GDP. Unemployment Claims also performed marginally worse than expected with claims increasing 8,000 since last week.
US futures are indicating a 100 point lower open as investors digest the latest economic releases and corporate earnings. Cisco Systems and Whole Foods dropped 4% and 9% during pre-market trading following a miss in earnings whilst Time Warner Cable was up 11% after Comcast Corp agreed to acquire the cable company for $45.2bn.
– Lee Mumford
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