Daily Market Update

Daily Market Update

Daily Market Update World markets lower as oil hits new lows; China data disappoints
Oil prices crashed through the 5-year-low barrier overnight setting up a poor day’s trading for Asian shares. The price of Brent crude hit $59.63 in early London trade; the lowest since mid-2009. Asian markets were also weakened by data showing disappointing manufacturing output in China and closed with losses except for the ever-optimistic Shanghai index closing higher on expectation of government stimulus. In Europe the losses in energy sector shares have been softened by gains in the telecoms industry as UK giant BT announced talks with mobile operator EE which could lead to a $19.6 billion takeover of the cellular network.  However Europe’s major markets continue to be mixed. Meanwhile in Russia, interest rates were raised to 17 per cent from 10.5 per cent as Moscow tries to deal with high inflation and low growth. US stock futures are mixed; oil is lower; gold is lower.
 
Today’s data
The Fed’s monetary policy meeting begins.
ICSC-Goldman Store Sales at 7.45am ET
Housing Starts at 8.30am ET
PMI Manufacturing Flash at 9.45am ET
Alpha Network and Navistar are among those reporting today.
 
Economist Bill Gross says structural growth will drop next year
With oil prices even lower this morning economist Bill Gross says he thinks it will be difficult for prices to stabilise and is predicting that its effect on the US economy will be a drop in growth to around 2 per cent or less. He also questioned whether the Fed will want to raise interest rates if inflation is slowing.
 
Obamacare customers get more time to pay
Those with health insurance premiums under the Affordable Care Act will have longer to pay their January premiums the insurance industry has announced. With millions of renewals together with new customers to deal with the industry trade body America’s Health Insurance Plans is set to announce the period of grace today in a bid to ease pressure on the processes involved in getting premiums from government and state run markets to the insurers.
 
Ford shares drop 5 per cent after downgrade
Ford saw 5 per cent wiped off its share price yesterday, making it one of the worst performers in the S&P 500. The drop followed a downgrade by an analyst from Deutsche Bank who noted that the new F-150 which uses less fuel due to its aluminium build may suffer as fuel saving is less of a selling point with lower gas prices.
 
Airlines carrying extra bags… of cash
US airlines charged almost $1 billion in baggage fees in the last quarter according to data from the Department of Transportation. Passengers paid the 27 airlines a total of $960 million, a rise of around per cent from the same period in 2013. Fares brought in $34 billion but costs in the industry are high with $11 billion spent on fuel and $10 billion on labor.