Good morning,

Markets are called to open flat this morning. This is what's happening today:

  • G-20 finance ministers and central bankers ended talks in Moscow on Feb. 16 pledging not to “target our exchange rates for competitive purposes,” without singling out Japan. The yen tumbled almost 14 percent against the dollar in three months in response to Prime Minister Shinzo Abe stimulus policies;
  • Japan’s Nikkei 225 climbed the most in more than a week, with exporters Toyota Motor Corp. and Nintendo Corp. rising more than 1.4%;
  • Draghi briefs European parliament;
  • Netherlands, France sell bills.

Companies in Europe reporting results today: Carlsberg, TNT Express, Bertrandt

Earning season is coming to an end as today only three companies report results in Europe. There is a feel good sentiment in the market after teh G-20 finance ministers decided not to do anything about exchange rates in the markets and let competition decide the strength or weakness of a currency. The Japanese markets are up 2% this morning as investors put risk back on the table. The fact that the G-20 are not going to intervene and put limits on how much the Yen can devalue against a basket of currencies is seen as a positive by the market.

Apart from this exchange rate story, postive news also came out of emerging markets. Sales at Chinese shops and restaurants monitored by the Ministry of Commerce increased 14.7% in the Feb. 9 to Feb. 15 period from the year-earlier break. Travel agencies handled more than 4 million tourists visiting overseas, a 14% gain on last year, with Thailand, South Korea and Hong Kong among the hottest destinations, according to the National Tourism Administration.

Moving on, the following is a comment by JP Morgan on whether they think investors are shifting out of bonds and into equities, 'JPM expects industry asset reallocation from fixed income/cash into equity over time, but isn't sure if the current move is the start of a long trend (they prefer to see a couple more months of data, at least before gaining confidence in this). Mgmt's best guess is that there could be a slow/steady multi-year rotation rather than a sharp switch.'

Deutsche Bank increased their price target on JP Morgan to $53/share. This is what they have to say about the company, 'We are positive given: 1) likely additional expense savings from efficiency initiatives ahead, 2) declining mortgage-related costs, 3) strongest leverage among the money centers to a consumer recovery, 4) solid capital and building quickly, and 5) diverse revenue streams/products with leading market share. Given these, we think the risk/reward is compelling vs. peers. BUY.'

For more information on JP Morgan or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli