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Good morning,

Markets are called to open flat this morning. A busy day in the markets today. Here's what's happening:

  • FOMC meeting in the US;
  • US data today is forecast to show US economic growth slowed to 1.1% on an annualized basis in Q412;
  • Analysts are predicting that US employers added 161,000 workers to payrolls in January after a 155,000 December increase;
  • The yen weakened 0.2% to 90.94 per dollar, taking its January loss to 4.6%. That would be a fourth monthly decline, the longest losing streak since 2008;
  • Amazon's Q412 sales increased 22% to $21.3bln. The company's operating margin in North America widened to 5% from 2.9% a year easrlier;

Companies in Europe reporting results today: Roche, Nordea Bank, Hennes & Mauritz, Swedbank, Zardoya, Ipsen, Zooplus, Imperial Tobacco, Antofagasta, Polymetal, F&C, United Utilities, Renishaw, NCC, Scania, SKF, Uniball-Rodamco, STMicroelectronics, Fiat, Coloplast

Companies in the US reporting results today: Boeing, Align Technology, Electronic Arts, Tractor Supply, Las Vegas Sands, JDS Uniphase, Qualcomm, Facebook, Fusion-io

Another busy day for the markets and alot of reporting so it is understandable that futures point towards a flat start. The markets are expecting for the FOMC meeting in the US to see if the Federal Reseve will adust the quantitative easing taking place in the US. Don't forget that earlier on this year there was a worry that the Fed will cut quantitiative easing in 2013. Other important data coming out of the US is the payroll numbers. This will give an indication if more hiring is taking place and analysts will predict how this will effect the unemployment rate.

Amazon reported results yesterday and the share price increased by 9% after hours. Amazon reported gains in sales and North American operating margin as it benefited from investments in warehouses and a jump in holiday shopping. rose as much as 12% in extended trading. Chief Executive Officer Jeff Bezos is pumping money into new warehouses, seeking to draw consumers away from malls with Amazon’s two-day delivery and massive selection. The company added 20 shipment hubs last year alone. The wider margins show that investment is starting to pay off, and is helping Amazon grab a bigger share of the record $42.3 billion in online holiday spending. The stock jumped 45% in 2012.

An interesting company reporting results today is Qualcomm. The following are recent analyst comments on the stock

  • Jan. 28: JPMorgan Chase reiterated an Overweight rating and a $69 price target on Qualcomm according to a post on StreetInsider.com. The firm noted that iPhone shipments from Apple were in line with expectations and do not pose a risk.
  • Jan. 7: According to a report in Barron's, Citigroup was pout with a positive note on Qualcomm, suggesting the mobile chipmaker could benefit from the rapid growth in smartphone usage in china in 2013. Qualcomm is poised to benefit most from this trend, given its more sophisticated chipsets, particularly in higher-end phones.
  • Dec. 17: Despite concerns over sluggish growth of Apple's iPhone, several firms were out with positive notes on Qualcomm, according to a post on Barron's. MKM Partners reiterated a Buy rating and $71 price target on Qualcomm, based on its broader position in smartphones. Similarly, Susquehanna Financial Group reiterated a Positive rating on the shares, given the company's broad exposure to products beyond the smartphone.
  • Barclays are overweight on the stock with a price target of $75/share.

The last company I'd like to speak about this morning is Facebook. Results are due after the close of trading today and are expected to show that revenue rose 34% to $1.52 billion last quarter. That would be the first growth acceleration since Facebook sold shares to the public in May. Revenue climbed 32% in the preceding two periods, a slowdown from earlier quarters. Shares of Facebook have climbed 74% since slumping to a record in September, bolstered by signs of buoyant demand for marketing messages shown to users of social networks on tablets and smartphones. Mobile advertising made up 24% of the total in the fourth quarter, up from 14 percent in the prior period. That suggests new tools aimed at making ads more useful on small screens are having the desired effect with corporate customers.

Barclays are neutral on the stock with a price target of $30/share. The following are comments from Barclays research, 'We are raising our estimates as we believe Facebook has significantly increased its emphasis on monetization, especially of mobile, and we expect upside to current consensus with stronger monetization trends into 2013. We are raising our price target to $30 on 17.5x our new 2013E EBITDA of $3,767 million (vs 16x 2013E EBITDA of $3,537mn previously). We now forecast 4Q12 revenue of $1,574 million, EBITDA of $875 million, and PF EPS of $0.15, versus consensus of $1,502 million, $853 million, and $0.15, respectively. We expect a continued ramp in mobile monetization, and estimate 4Q mobile revenue of $323 million, owing to improved pricing and a larger number of mobile impressions delivered.

For further information on the stocks mentioned in this blog or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli