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Market Update - 27/10/16

Thursday, October 27, 2016

Disclaimer: This is an informal commentary by one of our Market Analysts. It should not be taken as investment advice and is made available only on that basis.
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US: The S&P closed -0.17%, -0.23% from the London close, on volumes +7% vs. the 30 day average. U.S. Equities bounced  on mixed earnings with healthcare and technology shares dragging the market lower while financial and industrials companies pulled it up. A sales miss from Edwards Lifesciences, and disappointing forecast from Apple hit Nasdaq hard, while Boeing help push the DOW into positive territory, +0.17%, on strong a strong quarterly report. According to Bloomberg this margin of outperformance of INDU to SPX to NDX has only occurred 4% of the time. SPX opened down -0.5%, but rallied back to unchanged as oil rallied on lower supply data. Oil lost its momentum and fully reversed its reversal closing down -1.6%. US 10Y Yield gained +4bps to 1.79%, while US dollar depreciated slightly vs. a basket of its major peers, DXY -0.1%.

After close Groupon announced that is going to buy rival LivingSocial , market did not like deal, called GRPN down 11%, Living Social once valued at $6bn, purchase price now not material.

Nokia numbers beat estimates, networks 2% light but better than whisper post Ericsson.

Deutsche Bank trades +1% on numbers, better: global markets better, FICC +13% yoy, Equities -5% yoy. Market still nervous on daily headlines.

Permanent TSB - announced the sale of the residual £2.29bn of UK mortgages (CHL) which it was required to dispose of as part of its EC restructuring plan. The price achieved on the transaction is 85p with a capital net impact of €333m or 1.3% of FL CET 1. The transaction will close by year end 2016.

C&C Group - H1 EBIT in line, margins +40bps yoy, volume  in core brands, Ireland stable but Scotland challenging – Davy revising FY 2017 EBIT forecast down by 6% to €98m

All markets remain open.

Barclays  said profit rose 35% in the third quarter as revenue from fixed-income trading surged to the highest in more than two years.

Global banks will probably lose their current legal rights to provide services in the European Union after Brexit, the U.K.’s trade minister said in the most detailed outline yet of the government’s thinking.

Bank of Ireland announces their Q3 IMS for tomorrow, earlier than expected.

Nomura Holdings  second-quarter profit jumped 31% as trading income almost doubled, making up for a slump in its retail brokerage business.

Bloomberg carries an article on multifactor ETFs, as they grow in popularity.

Snapchat will seek to raise as much as $4 billion in its planned initial public offering. The IPO could value Snapchat at about $25 billion to $35 billion No final decision has been made and the size of the IPO may change,. The valuation could reach as much as $40 billion.

Telefonica has put off a potential sale of shares in its O2 U.K. mobile-phone unit until after year-end, citing the country’s vote to leave the European Union and its impact on markets.

Samsung results earlier, display and chip businesses cushioned the blow due to Note 7 crisis.

GE abandons plans to take over SLM Solutions in Germany after failing to win enough support.

Numbers from a range of companies today: VW, Telefonica, BBVA, ABB….

Europe lower, trades – 30 BPs.