27.10.2014 - Corporate reporting of American corporations support indexes
The US stock market continued the growth on positive corporate reports of Microsoft and Procter&Gamble. Data on new home sales, which rose up to 467 thousand, also supported sentiment despite that the data for the previous month have been revised from 504 thousand to 466 thousand. Today the course of trading may be influenced by the data on the service PMI (13:45 GMT) and pending sales in the secondary market (14:00 GMT). The central event of this week will be the statement of the Fed on monetary policy on Wednesday, as well as the release of data for GDP growth in the United States on Thursday. We maintain a medium-term negative outlook on the US indexes.
European stock markets ended the last trading session of the week down in connection with the rumors that the 25 European banks did not pass the stress tests of the ECB. This information was confirmed by 13 banks need 2 weeks to approve plans to increase capital. UK GDP growth in Q3 rose by 0.7%, in line with analysts' forecasts. Today, investors were disappointed by the data on the business confidence index in Germany, which fell to 103.2 in October, compared to the forecast of 104.6. In the UK, will be released the statistics on the balance of retail sales (11:00 GMT). We expect a further decline in European stock indexes and keep the medium-term negative outlook.
Markets in the Asia-Pacific region showed different dynamics. Thus, the Japanese index continued to the growth on improved sentiment in the United States. We recall that 79% of the companies of the S&P500 index that have reported, showed earnings growth better than analysts' expectations. China has announced lower forecast of GDP growth in 2015 to 7.3%. The Australian stock market is under the pressure of concerns about growth in China and lower prices for iron ore and other export products, which negatively affects the trade balance of the country. Tomorrow we should pay attention on retail sales in Japan. We maintain a medium-term negative outlook on the index in the region.