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Markets are called to open flat this morning in Europe. This is what's happening today:
Chinese manufacturing expanded in January, validating the nation’s reluctance to add to policy stimulus amid increasing inflation concern. The Purchasing Managers’ Index was 50.4 in January compared with 50.6 in December 2012. A separate gauge from HSBC Holdings Plc and Markit Economics covering fewer businesses rose to a two-year high of 52.3 from 51.5. Readings above 50 indicate expansion.
In the US its all about US payroll data out in the US. Economists are predicting the US to have added 150-170,000 new jobs in January. The US added 155,000 in December. The unemployment rate is expected to remain at the 7.8% level. Despite the negative growth rate we got in the US for the fourth quarter of 2012, the Standard & Poor’s 500 Index returned 5.2% in January in the strongest start to a year since 1997, leading global stocks higher and beating bonds, commodities and currencies.
Global equities rallied to a 20-month high this week after China’s expansion accelerated for the first time in two years and an index of US leading indicators rose the most in three months. While the U.S. economy shrank in the fourth quarter, economists at JPMorgan and Morgan Stanley say the country will bounce back in the current quarter. The Federal Reserve signaled Jan. 30 it will maintain its stimulus program to sustain growth.
A company I am following closely at the moment is Qualcomm. Qualcomm is the largest seller of semiconductors for mobile phones. The company reported second-quarter sales and profit forecast that exceeded analysts’ estimates, helped by strong sales of smartphones that run on its technology. The rising use of Internet-ready handsets that run on fast fourth-generation networks lifts sales of Qualcomm’s chips. It also boosts revenue from licenses for mobile technology, which generates the bulk of profit. The forecast reflects growth in developing markets and brisk demand from first-time smartphone buyers. Emerging markets in general are going to be strong. Qualcomm rose 3.9% to $66.02 at the close in New York. The stock climbed 13% in 2012, equal to the gain in the Standard & Poor’s 500 Index.
Barclays are overweight on the stock with a price target of $77/share.
For more information on Qualcomm or other stocks or bonds, contact our offices on 25688688.
Good day and happy trading!
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