-S&P and Moody´s keep negative outlook on US debt
-Spanish unemployment fell in December
-Periphery debt markets stable
FTSE Mibtel 30: -0.41%
Ibex 35: -1.11%
Stoxx 600: 0.21%
The main European equity benchmarks were still trading lower on the day at the mid-point of the session, as was the single currency, although periphery bond markets were relatively stable.
That following yesterday´s large move up on Wall Street and after some rather downbeat commentary out of the main ratings agencies as regards the fiscal pact agreement, reached on Tuesday, Stateside.
The most influential of those, Standard&Poor´s (S&P), last night indicated that its outlook on the United State´s sovereign debt remained unchanged, as the fiscal pact did not alter the medium-term outlook for the country´s debt dynamics. Nevertheless, the risk of recession has fallen to between 10% and 15%, from between the 15% to 20% it had previously warned of. Any estimate over 20% is often considered to be 'too high' already for economists.
Perhaps underlining the difficulty - particularly from a political point of view - for some countries to maintain austerity in a sustained manner, Portuguese Prime Minister Anibal Cavaco called for urgent action to halt the "recessionary spiral", warning Europe's leaders that the current course had become "socially unsustainable," The Telegraph reports today.
Yet whether in the United States or in the Eurozone periphery (but particularly in the former), there may yet be alternatives left such as lowering entitlements and transfers in favour of lower taxes for lower income individuals and families and small businesses, for example, even if combined with somewhat higher taxes for the highest earners, with revenue from the latter directed towards investment instead of government spending.
M&A still grabbing headlines
French building materials group St.Gobain acquired American Fluoroseal Corporation, a US based manufacturer of fluoropolymer bags formedical use. No financial details were given.
Aerospace group Zodiac purchased Innovative Power Solutions, a US-based maker of aircraft electricity systems, without giving financial details of the deal, Reuters reports.
From a sector stand-point the best performance now on the DJ Stoxx 600 was to be seen in the following sectors: Health care: 1.04%, Financial services (0.76%) and personal goods (0.66%).
Unemployment fell in Spain
The number of Spanish unemployed fell by 59.100 in December, well below the 50,300 person increase forecast by the consensus.
German unemployment increased by 3,000 persons in December (Consensus: 10,000), although the unemployment rate remained unchanged at 6.9%.
Slight drop in crude futures
The euro/dollar is edging lower by 0.31% to the 1.31 dollar
mark. Of interest, analysts at Commerzbank were this morning calling attention to bearish divergences on weekly charts.
Front month crude futures are now falling by 0.450 dollars to the 111.96 dollar level on the ICE.