Daily Market Update

Daily Market Update

Daily Market Update Poor data from China and Europe dampen trading
New figures released today show that business activity in the Eurozone was weaker this month, and that’s before the effects of the Russia-Ukraine crisis bites. Despite the news there have been some gains due to optimism after yesterday’s Federal Reserve indications on interest rates. Data from China is also disappointing as manufacturing output has hit a three month low. Asian markets have ended mostly down although Japan saw gains. US stock futures are edging higher.

Today’s data
US jobless claims will be announced at 8.30am ET
Existing home sales data release due at 10am ET.
Earnings reports due from Dollar Tree before the bell and Gap after the close.

The markets wait for Jackson Hole
The Jackson Hole Economic Policy Symposium brings together policymakers and the financial industry from today, Fed chair Janet Yellen will make a keynote speech tomorrow. After yesterday’s release of the minutes of the latest policy meeting, which suggested interest rates could rise sooner than predicted, markets are anticipating Yellen’s speech. Although economic data shows some positive trends there are still cautious notes on the global economy and how issues in the Eurozone and China could impact the US growth.

Bank of America announcement may be today
The BoA settlement with the Justice Department could be announced today. Forecasters are suggesting that the touted $17 billion settlement, which would be the biggest in history, may not be that large, certainly not in cash terms. There is likely to be around $7 billion in consumer aid with the rest being penalties or legal settlements. As this two have different implications for tax purposes, even a $17 billion figure could be a lot less if some is deductible. Read the full story.

G20 expected to push risk back to banks
The G20 summit of the world’s richest nations is expected to agree that banks should carry the risk from financial crisis rather than taxpayers. When officials meet in November they are likely to decide that banks should issue bonds to raise more capital that can be used as emergency rescue funds. Despite concerns that the bonds needed would be too large there is now consensus that the plan can be achieved in a bid to end the concept of ‘too big to fail’. Banks are likely to be allowed to have lower value bonds if they can show that they have structures that could be smoothly wound-up in the event of their failure. Read the full story.