Global Markets Overview – 4/15/14
By Evan Lucas, IG Markets Strategist | April 15, 2014 9:28 AM EST
Thin trade, earnings and conflict
Surprise earnings from Citigroup have certainly managed to snap the S&P out of its downward trend. The S&P registered its worst week since January last week, but snapped back on Citi earnings and better-than-expected retails sale.
Citigroup fined $30m for leaking Apple research to SAC and T Rowe Price (Reuters).
The bank saw better-than-anticipated revenue streams from its fixed income, commodities and currencies divisions, as well as its equities division; these managed to offset the softer banking revenues as net interest margins contracted slightly and saw lending margins go with it. What was clear is that Citi's numbers were in stark contrast to JPMorgan's on Friday, which were well below expectations. The Citi numbers do give the market some slight optimism to the remaining US banks due to report, which could surprise to the upside.
Overnight trade was in the green, with Europe and the US completely overriding the future markets calls. However, trade was light and there was a heavy amount of selling into the close which erased as much as half of the gains in the case of the NASDAQ. Be aware that with Easter approaching, light trade is expected to continue, which will make for choppy trade.
US earnings season hits full pace from tonight, with more than 150 companies due to report by Thursday; any minor miss in earning expectations from the likes of Yahoo!, Intel, General Electric, Google, Coca Cola, AMEX, Bank of America, Morgan Stanley or Goldman Sachs could be another catalyst for a leg down on Wall street.
What is also interesting from overnight trade is that the Ukrainian situation was ignored in large. However, it is a conflict waiting to ignite; gold on the open of Asian trade yesterday jumped up $10 on the events from the weekend and has remained elevated for the remainder of global trade.
The biggest development is interim president Oleksandr Turchynov who has announced that the country will vote on a national referendum to turn the republic into a federation. This is a massive change in tact from the Ukrainian side as this is the vote that Russia has been pushing for and it has the prospect of dividing the country straight down the middle. The ethnic Ukrainian west and the ethnic Russia east continue to taunt each other with political vitriol which could see a clear divide.
The questions become does eastern Ukraine vote for annexation like Crimea and join the Russian Federation, or does it vote to join the new Ukrainian Federation and somehow get the Russian ethic population to accept this?
In short, further conflict in the country is a certainty; gold, the EUR, the DAX, the ruble and the Micex will move on flare-ups and are the markets to watch as this story hits the front pages once more.
Ahead of the Australian Open
The only major news to come out of Asia today will be the release of the RBA minutes. I am not expecting a lot from the minutes; the April statement was basically a carbon copy of the March statement with a very neutral stand.
The minutes are unlikely to create a stir, but the market will be searching for any inferred comments or meanings as to how the board is seeing the move in the AUD. It certainly isn't going to be pleased with a dollar above 94 cents, but its willingness to move on the currency looks very unlikely.
So, after making a near six-year intraday on April 10 of 5503.5, the market has given up 144.6 points in just three trading days - the ASX is due for a bounce; the question is, will it be a dead cat bounce or supported move? We are currently calling the ASX up 19 points on the 10am bell (AEST) to 5378 as Easter approaches.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- From Fat To Fit: Celebrities Who Were Overweight Before They Became The Beauties That They Are
- Kendall Jenner Could Be Next Victoria's Secret Angel [PHOTOS]
- Pope Francis: World War III Has Started On Piecemeal
- Champions League Results: Barcelona Barely Escapes With A Win, Chelsea Fails To Hold On To The Lead [PHOTOS]
Join the Conversation
- Unidentified Benefactor Offers $30M Reward For Identity Of MH 17 Bombers; MAS Criticises Kiwi Author For Suggesting MH 370 Pilot Plotted Death Of Passengers & Crew
- Australian Stock Market Report – Midday September 19, 2014
- Australian Stock Market Report – Afternoon September 18, 2014
- Australian Stock Market Report – Midday September 18, 2014
- Australian Stock Market Report – Morning September 19, 2014
- Google Nexus 6 Release Date on Q4 2014 Confirmed by T-Mobile Featuring Wi-Fi Calling
- 2 Reasons Nexus 6 Release Date is Worth the Wait: Android L Data Encryption & Material Design
- Samsung Galaxy Note 4 vs. BlackBerry Passport — Specifications, Features, Release Date And Price Showdown
- 3 Signs Apple iPhone 6 Could be in Short Supply Following its Sept 19 Release Date
- Australia Actively Rallying Support For International Coalition Against ISIS
- iOS 8 Jailbreak Release Update: Pangu Devs Will Outrace Evad3rs in Rollout of iPhone 6, iPad Unlocker
- Micromax Canvas A1 Vs Spice Dream Uno Vs Karbonn Sparkle V: A Choice On Which Android Is The Best