-Investors waiting on US employment report
-Eurozone manufacturing sectors slightly above consensus, but in contration
-Alcatel plunges after reporting Q3 losses
-Beiersdorf lifts revenue outlook
-Rumors that Deutsche Telekom to cut dividend
FTSE Mibtel 30: -0.60%
Ibex 35: +0.50%
Stoxx 600: +0.16%
After yesterday's 1 per cent rise, European equities on the average decide to take a breather and trade flat with a mixed balance while waiting for the latest monthly employment report Stateside to come out at 12:30 London time.
Yesterday's better-than-expected US labor market data (weekly initial claims and the ADP employment change) already gave the European benchmarks a leg up, but it seems even the bulls prefer to wait for a confirmation from the "official" data before making another move.
Also of interest, in today's Financial Times James Mackintosh tells readers that recent market moves -gains led by cyclicals- show that there is quite a bit of optimism regarding economic growth. In his opinion, however, that is only justified if one believes that central banks have more ammunition left in their armouries -or not- as Governor King has recently suggested.
Other considerations to be taken into account by the shortest-term investors and traders are that the last two months of the year are usually amongst the best for equities and the still relatively "bearish" sentiment (as a contrarian indicator) of small investors, according to the latest weekly survey data out from AAII.
Alcatel burns a hole in investors´ pockets
Company earnings continue to cause scares on the Old Continent. Today, Alcatel Lucent plunges almost 7% on the Cac 40 after reporting that it swung to losses in the third quarter. According to Bloomberg data, out of the 164 Eurostoxx 600 companies that have reported earnings, only 54% have managed to beat consensus. Yet there are those positive reports at least and today we see the maker of Nivea Beiersdorf jump 6% after increasing annual revenue forecast.
Unfortunately for the bulls, its fellow Dax 30 member Deutsche Telekom plummets almost 3% after the German business daily Handelsblatt reported that the company is considering slashing its dividend by up to a third from 2013 onwards.
By sectors, the best performance in the DJ Stoxx 600 is now to be seen by companies in the following industrial groups: Basic Resources (+1.31%), Automobiles & Parts (+1.14%) and Industrial Goods & Services (+1.06%). Meanwhile, Telecommunications (-0.88%), Utilities (-0.76%) and Health Care (-0.60%) lead the decliners.
Eurozone PMI slightly ahead of forecasts
While waiting for the US macro data (apart from the Employment Report, we'll also see the New York ISM and factory orders), we've had a barrage of manufacturing sector come out from the Eurozone. In general terms, both the individual countries and the sector as a whole narrowly beat forecasts. However, it should be noted that all of the readings remained below 50, implying a contraction in the sector.
The Markit Eurozone purchasing managers index for the month of October
has come in 45.4, versus last month´s reading of 46.1 (Consensus: 45.3).
The Markit German purchasing managers index for the month of October
has come in 46, versus last month´s reading of 47.4 (Consensus: 45.7).
The Markit French purchasing managers index for the month of October
has come in 43.7, versus last month´s reading of 42.7 (Consensus: 43.5).
Single currency dropping towards technical support ahead of data
The euro/dollar is now down by 0.48% to 1.2885.
Brent crude futures are off by 0.14% to $109.40.