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November 6, 2014
European Central Bank meeting in focus
Besides various corporate earnings reports, financial markets will focus on
the European Central Bank’s (ECB) monetary policy announcement. The
majority of analysts anticipates that it is (yet) unlikely that the central bank
will further expand its asset purchase program. However, ECB President
Mario Draghi will probably keep the door open to include buying corporate
debt as part of the central bank’s efforts to support the ailing Eurozone
economy. In the U.S., ADP reported a stronger-than-expected gain in private payrolls in October, delivering a positive sign for the eagerly anticipated labor market report on Friday. Growth in the U.S. services sector slowed
in October according to the latest ISM survey. The Non-Manufacturing Purchasing Manager’s Index declined more than expected to 57.1 from 58.6.
Stock markets in Tokyo took a breather after the rally of the last days, while
the U.S. indices closed higher on positive corporate news, like Mondelez.
Indices
Current Previous
Day (%)
MSCI World
1'706.51
0.49
Dow Jones
17'484.53
0.58
2'023.57
0.57
Nasdaq 100
4'153.27
-0.07
Nikkei 225
16'792.48
-0.86
SMI
8'843.17
1.44
SLI
1'308.89
1.51
Euro Stoxx 50
3'091.54
1.89
336.36
1.66
DAX
9'315.48
1.63
FTSE 100
6'539.14
1.32
Equity – Adidas confirmed outlook after profit beats estimates
Adidas surprised slightly positive in Q3 after a series of negative messages.
The outlook was confirmed following a higher-than-expected operating
profit. Barry Callebaut once again presented a solid annual result and
confirmed its outlook. A surprise is the proposed change of CEO Steinemann at the end of FY2014 /15 to the board. Zurich Insurance reported
operating profit of USD 3.83bn (+7%) and net income of USD 3.04bn
(+3%), slightly below expectations. The insurer makes progresses, but the
environment remains challenging (e.g. low interest rates). Generali and
Munich Re also reported Q3 figurers below expectations, but the German
insurance raised its adj. profit target. Deutsche Telekom and Swisscom
reported 3Q results that beat expectations and confirmed their full-year
outlook. Adecco achieved organic growth in Q3 of +4% and confirmed
targets for 2015.
Indices Emerging Markets
Current
Previous
Day (%)
MSCI Emerging Markets
998.44
-0.86
MSCI EM Asia
459.78
-0.68
MSCI EM Eastern Europe
156.07
-1.98
3'077.92
-0.52
53'698.42
-1.26
1'144.11
-0.87
8'338.30
0.17
Fixed Income – Inflation in Russia accelerates
The inflation rate in Russia rose to 8.3%, the highest since July 2011. The
increase was driven by the ruble’s plunge to record lows and rising food
prices following President Putin’s ban of a range of import goods. The ruble
is the world’s worst-performing currency during the past three months (18% versus the USD). Last week, the Russian central bank unexpectedly
raised its key rate to 9.5%, tightening policy for the fourth time this year.
The inflation rate will remain higher than 8% through Q1 2015, and a further tightening in the near future cannot be ruled out, the central bank
said. Energy group Gazprom, which was not sanctioned by Western countries, tapped capital markets as the first Russian corporation post the announcement of the sanctions. The USD-denominated 1-year not came with
a yield of 4.45% and a size of USD 700m. Meanwhile, the Polish central
bank surprised markets, keeping its key rate a 2% unchanged on an improved economic outlook.
Returns
S&P 500
Euro Stoxx 600
MSCI EM Latin America
Brazil IBOVESPA
Russian Depositary Index
NIFTY Index
Hang Seng Index
23'699.39
0.02
HFRX Global HF Index
1'218.17
-0.38
LPX50 Listed PE TR (EUR)
1'501.23
1.13
260.86
-0.09
Current
Previous
Day (%)
US Treasury Bonds 10Y (USD)
2.33
-0.69
German Bund 10Y (EUR)
0.83
-0.24
Swiss Government 10Y (CHF)
0.46
-0.22
United Kingdom 10Y (GBP)
2.26
1.44
Japan 10Y (JPY)
0.47
0.64
3 month LIBOR (USD)
0.23
0
3 month LIBOR (EUR)
0.06
-1.17
3 month LIBOR (CHF)
0.01
-26.67
Global IG Corporate Spread
1.15
0
Global HY Corporate Spread
4.15
-0.58
EM Hard Currency Gov. Spread
2.89
0.47
BBG NA REITS
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Earnings calendar
Date
06.11.
06.11.
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06.11.
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06.11.
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2014
Ctry
AT
GB
DE
DE
US
FR
DE
DE
CH
AT
CH
Forex
Company
ANDRITZ AG
ASTRAZENECA PLC
BEIERSDORF AG
COMMERZBANK AG
WALT DISNEY CO/THE
SOCIETE GENERALE SA
HEIDELBERGCEMENT AG
KLOECKNER & CO SE
NOBEL BIOCARE HOLDING AG-REG
OMV AG
TRANSOCEAN LTD
Period
Q3
Q3
Q3
Q3
Q4
Q3
Q3
Q3
Q3
Q3
Q3
Consensus EPS
2.33
4.5
2.5
0.51
4.31
3.89
3.79
0.26
0.43
3.15
4.52
Economic data calendar
Date
06.11.
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
06.11.
2014
2014
CET
08:00
10:30
10:30
13:00
13:00
13:45
13:45
13:45
14:30
14:30
14:30
Ctry
DE
GB
GB
GB
GB
EU
EU
EU
US
US
US
Current
Previous
Day (%)
1.2524
1.2039
0.9612
1.5373
1.5993
114.37
7.7527
1.2917
6.1131
8.54
9.2131
0.3043
-0.0174
0.2913
0.1886
0.1064
0.2361
-0.0129
0.1548
0.0229
-0.1792
-0.1389
Current
Previous
Day (%)
78.79
83.01
1'144.83
15.37
1'208.99
76
117.93
529.25
3'165.29
116.30
953.88
0.14
0.7
0.38
0.21
0.37
-0.15
-0.91
0.46
-1.42
-0.01
-0.3
EUR/USD
EUR/CHF
USD/CHF
GBP/CHF
GBP/USD
USD/JPY
USD/HKD
USD/SGD
USD/CNY
EUR/NOK
EUR/SEK
Commodities
Indicator
Factory Orders (y/y)
Industrial Production (m/m)
Industrial Production (y/y)
Bank of England Asset Purchase
Bank of England Bank Rate
ECB Deposit Facility Rate
ECB Marginal Lending Facility
ECB Main Refinancing Rate
Unit Labor Costs
Initial Jobless Claims (thousands)
Non-farm Productivity (q/q)
Period
Sep
Sep
Sep
Nov
Nov
Nov
Nov
Nov
3Q P
Nov 1
3Q P
Cons
-0.8
0.5
1.6
38
0.5
-0.2
0.3
0.05
0.56
284.
1.4
Prev.
-1
0
2.5
38
0.5
-0.2
0.3
0.05
-0.1
29
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Oil Future Nymex WTI (USD)
Oil Future Brent (USD)
Gold-ounce (USD)
Silver-ounce (USD)
Platinum (USD)
Palladium (USD)
JOC Industrial Metals Index
S&P
(USD)GSCI Index Spot Indx
Rogers Int. Commodity Index
BBG Commodity Index
Rogers Agriculture TR Index
Topics LGT looks at
Topics
Description
Publication Type
Regulatory impacts on banks
The consequences of the upcoming ECB stress test and the changing regu- Investment Idea
latory environment as well as resulting investment possibilities are disResearch publication
cussed.
20.10.2014
Profiting on strong USD
Transatlantic divergences benefit the USD as the U.S. and Europe drift
apart economically and on monetary policy. Selected companies could
benefit from these developments.
16.10.2014
Elections in Brazil
The uncertainties of the outcome of the heads up between president
Investment Idea
Rousseff and her contender Neves offer asymmetric investment opportuni- The Beacon
ties.
14.10.2014
Gold
Call writing strategy on gold offers value in a gold market with support
stemming from physical demand out of China and India and the absence
of a save haven scenario.
Investment Focus
03.10.2014
Market overview
Analysis of the broader macro-economic and financial arena as wells as
important trends and relevant developments of the financial markets.
Investorama
19.09.2014
Investment Focus
published
For further information, please contact your LGT relationship manager.
Impressum
Published by: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8022 Zuerich
Editorial: Alessandro Fezzi, +41 44 250 78 59, email: lgt.navigator@lgt.com
Authors Equities: Georg Ruzicka, Andreas Riedel, Dr. Tilman Dumrese
Authors Fixed Income: Maurice Jiszda, Daniel Rotzer, CFA
Sources: Bloomberg, LGT Bank (Switzerland) Ltd.
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