European Stocks expected to open slightly up as we all wait for the Fed’s announcement.
US equities finished higher on Tuesday with the S&P, Dow and Russell all up for a third straight session. Discussion in the press and among economists continued to revolve around the likelihood of a smaller than initially expected reduction in asset purchases. The market largely ignored the continued pickup in concerns surrounding the looming fiscal battles in Washington. There were some mixed takeaways from the September homebuilder sentiment data, though housing stocks largely outperformed. Retail was another standout despite expectations for a lackluster holiday season.
Asian markets were mixed, with Japanese shares making large gains while the Kospi and the Hang Seng were slightly lower.
Today: We’ll watch what the Italian senate will do with Berlusconi or what will Berlusconi say in his video… BoE minutes; US Housing starts and FOMC pace of bonds purchases (20:00).
• Inditex First-Half Profit Beats Estimates as Sales Increase (+1%)
• Siemens Said to Name SAP’s Snabe to Supervisory Board
• Ferrexpo Buys 14.4% Strategic Stake in Ferrous For $80m
• SNB Evolves Franc Ceiling Rationale as Euro Risks Recede
• BOE Assesses Housing Bubble Risk as Aid Criticized
• Banks Face Fines for Breaching Benchmark Safeguards in EU Plan
• Peugeot Said to Consider Stake Sale to Dongfeng Motor in China
• Danone, Novartis Units Probe Claims China Staff Paid Doctors
• Telecom Italia Investor Mediobanca Devalues Stake as Exit Looms
• RBS May Decide on Branch Sale This Week, Daily Telegraph Says
• Audi Resumes Brazil Car Output in Expansion Bid to Beat BMW
• Prada Falls in Hong Kong After 1H Net Misses Estimates
• Lanxess CEO’s EU100m Cost Squeeze Spans Bonuses, Jobs
Your Ultimate Guide To The Most Anticipated Fed Announcement In Years. www.businessinsider.com/fomc-preview-september-2013-2013-9. I wish I could steal the countdown clock.
Breakdown of some banks estimates :
– Barc: $15bn taper in UST + Taper to Finish by March 2014.
– BNP: No Taper at Sept meeting.
– BoA: No Taper + December more likely for announcing beginning of taper (Chance of a $10bn in UST is possible)
– CBK: 50/50 taper – if tapering then $10bn in UST with possibility of dovish language/change of forward guidance language
– Citi: $10bn UST taper + dovish language + Taper to finish by mid 2014.
– CS: $20bn taper ($10bn in UST, $10bn in MBS)
– DB: $15bn ($10bn in UST, $5bn in MBS)
– Goldman’s: $10bn in UST with upside risks to $15bn.
– HSBC: $15bn taper ($10bn for UST and $5bn for MBS)
– JPM: $10bn Taper in UST
– MS: Cautiously expect $10bn USD in UST + the Fed to firm up its forward guidance language
– Nom: $10bn Taper in UST.
– RBS: $20bn ($10bn in UST, $10bn in MBS)
– Soc Gen: $10bn Taper in UST
– Stand Chart: $10bn taper in UST + dovish message on rates
– UBS: $10bn Taper ($5bn in UST, $5bn in MBS)
Average expectations of this list is $11bn.
US median household incomes remained lower in 2012 than in 1989, according to new census data. “The figures will also add to pressure from the left for Barack Obama to appoint Janet Yellen – widely regarded as one of the policy makers most concerned about high unemployment – as the next Fed chair.” (Financial Times)
EU proposals for Libor et al to be unveiled today: “[B]enchmarks that are deemed to be “critical” would be overseen by a college of national supervisors led by the Paris-based European Securities and Markets Authority, which would have the authority to mediate disputes with binding decisions”. (Wall Street Journal)
Europe: Construction (GS, Morgan) Mapping the 5-year outlook: Increasing focus on cash re-deployment
We map the construction outlook out to 2017. We continue to see a slow recovery in Europe and note structural support in EMs varies. Cash management will be key for materials, while contractors should lag. Key changes: Buzzi and Bilfinger to CL Buy. And Vinci cut to Neutral.
BILFINGER RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN
BUZZI UNICEM RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN
CRH RAISED TO HOLD VS SELL AT BERENBERG
GO-AHEAD RAISED TO BUY VS NEUTRAL AT CITI
HEIDELBERGCEMEN RAISED TO BUY VS SELL AT GOLDMAN
HOCHTIEF CUT TO NEUTRAL VS BUY AT GOLDMAN
JULIUS BAER RATED NEW HOLD AT SOCGEN, PT EU45
LAFARGE CUT TO NEUTRAL VS BUY AT GOLDMAN
NATIONAL EXPRESS CUT TO NEUTRAL VS BUY AT CITI
NOKIA RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
NOVOLIPETSK STEEL RAISED TO HOLD VS SELL AT SOCGEN
NRG ENERGY CUT TO NEUTRAL VS BUY AT GOLDMAN
TAURON RAISED TO BUY VS HOLD AT DEUTSCHE BANK
TOPDANMARK RAISED TO NEUTRAL VS SELL AT GOLDMAN
TURKIYE VAKIFLAR BANKASI RAISED TO NEUTRAL VS SELL AT GOLDMAN
VINCI CUT TO NEUTRAL VS BUY AT GOLDMAN
Nikkei 225 up +230.21 (+1.61%) at 14,542
Topix up +13.62 (+1.15%) at 1,195
Hang Seng down -74.68 (-0.32%) at 23,106
S&P 500 up +7.16 (+0.42%) at 1,705
DJIA up +34.95 (+0.23%) at 15,530
Nasdaq up +27.85 (+0.75%) at 3,746
Eurofirst 300 down -5.79 (-0.46%) at 1,253
FTSE100 down -52.69 (-0.80%) at 6,570
CAC 40 down -6.71 (-0.16%) at 4,146
Dax down -16.05 (-0.19%) at 8,597
€/$ 1.34 (1.34)
$/¥ 99.23 (99.11)
£/$ 1.59 (1.59)
Brent Crude (ICE) down -0.20 at 107.99
Light Crude (Nymex) up +0.22 at 105.64
100 Oz Gold (Comex) down -12.20 at 1,297
Copper (Comex) down -0.01 at 3.22
10-year government bond yields (%)
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.02bps at 91.24bp
Markit iTraxx Europe -0.27bps at 94.03bp
Markit iTraxx Xover -1.2bps at 376.47bp
Sources: FT, Bloomberg, Markit