Markets update: Big data leads the charge

Markets | Tue 31 Oct | Author – Business & Finance

Earnings season continues, with big names such as Facebook, Tesla, Kraft Heinz, Apple and Shell all reporting this week, writes Ian Slattery.

Ian Slattery Zurich investments

Ian Slattery

US GDP data for Q3 came in at 3% on Friday, with the figure ahead of most forecasts. The US economy has now registered 3% growth in back-to-back quarters for the first time since 2014. Last week also saw the House of Representatives following the Senate in passing a budget resolution, which could help with tax reform proposals.

The ECB announced an extension of its QE programme through to the end of 2018. Although the announcement was not out of line with expectations, the market perceived the language used to be ‘dovish’ which pushed the euro lower versus the dollar.

The global index in euro terms was up 1.7% last week, helped by a weaker euro which enhanced returns for Irish investors.

It was also a week of ‘Big Tech’ earnings announcements, with Microsoft, Intel, Google and Amazon all beating expectations. However, other sectors saw mixed results which led to choppy trading on the S&P 500.

The global index in euro terms was up 1.7% last week, helped by a weaker euro which enhanced returns for Irish investors. Gold fell by 0.5% as a more ‘risk-on’ sentiment permeated markets, although it remains up over 10.5% this year. Copper fell 2%, but also remains well up in 2017 (+23.3%).

Oil was helped by comments from Saudi Arabia in relation to production cuts, closing up 4.7% at $53.9/barrel. The influential US ten-year bond yield moved to 2.41% from 2.38%, whilst the German equivalent stood at 0.38% from 0.45% a week ago.

The EUR/USD rate closed at 1.16 whilst EUR/GBP was at 0.88.

THE WEEK AHEAD

Tuesday 24th October – Friday 3rd November

Earnings season continues, with big names such as Facebook, Tesla, Kraft Heinz, Apple and Shell all reporting this week.

Wednesday 1st November

No change in policy is expected when the Fed FOMC meets to discuss interest rates, with the focus on whether we will see a rate rise in December.

Thursday 2nd November

The Bank of England meets, where the market has put a 90% probability on the first rate rise since 2007.

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