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Markets are called to open higher this morning. This is what's happening today:
Alot of things happened this weekend which will set the tone for trading in the markets this week. Let's start off with Apple. For all you Samsung Galaxy Fans who for all these years have critisized Apple for not having what Samsung has to offer clients all I can tell you is watch Samsung share price get hammered today in the markets but more importantly look at the share price performace of Apple today as it emerges as a winner. Apart frtom the $1bln fine, there is a probability that Samsung cannot sell the Galaxy in the US anymore and Samsung's appeal was rejected. We couldn't have started the week off on a better note. It's like Christmas came early this year!
Moving on to other issues, oil gained the most in a week as Tropical Storm Isaac shut Gulf of Mexico production and gasoline reached a four-month high after a refinery explosion in Venezuela killed 39 people. About 24 percent of U.S. oil production and 8.2 percent of natural gas output from the Gulf of Mexico has been shut due to the storm.
Chinese stocks dropped to a three-year low as profits at industrial companies fell by the most this year. We are seeing Chinese companies suffer from the global slowdown. Nonetheless I am confident that the Chinese will get through this year on a positive note as both the Chinese and other international governments intervene to help improve growth worldwide.
In Europe, German business confidence probably fell for a fourth straight month in August as the sovereign debt crisis curbed growth in Europe’s largest economy. German economic growth slowed to 0.3% in the second quarter from 0.5% in the first as the debt crisis damped demand for exports and prompted companies to postpone investments. While sales to faster-growing markets outside Europe and domestic spending are helping to insulate Germany from the turmoil, the Bundesbank said last week that the prevailing uncertainty may cause the economy to cool further.
My opinion still remains unchanged. Despite the negative news we see coming out of the markets, I remain a buyer of US blue chips and Emerging markets ETFs. On the other hand I wouldn't get too excited about the strength we are seeing in the Euro short term against the Dollar. Although it would be wise to start building postions back into Euro, I would remain overweight the USD at this point in time.
UBS – Longer-term bullish dollar view remains unchanged – The dollar’s dip, nevertheless, is likely to prove temporary unless the Fed resumes aggressive money printing. With the ECB and the Banks of Japan and England all likely to ease too, we continue to see EURUSD falling to 1.15 over the next twelve months as austerity in Europe leads to prolonged loose monetary policies.
Stock to watch: Apple (Price $663.22, Jefferies Price Target $900)
Samsung Electronics Co. fell the most in almost four years in Seoul trading after a U.S. jury found the mobile-phone maker infringed Apple Inc.’s patents and ordered the South Korean company to pay more than $1 billion. Samsung dropped as much as 7.7 percent, headed for the biggest decline since Oct. 24, 2008, to 1,177,000 won before trading at 1,187,000 won as of 9:20 a.m. on the Korea Exchange, while South Korea’s benchmark Kospi index declined 0.4 percent.
Yields on Samsung’s five-year U.S. dollar-denominated bonds due April 2017 rose 1 basis point to 1.58 percent as of 9:10 a.m. in Seoul, according to prices from Credit Agricole SA. The nine-member panel in San Jose, California, found on Aug. 24 that Samsung infringed six of seven patents for mobile devices in the first lawsuit between the dominant global smartphone competitors to go before a U.S. jury. The verdict may also lead to a ban on U.S. sales of some Samsung mobile products.
“We expect there is a two-thirds chance of an injunction against Samsung products,” Peter Misek, an analyst at Jefferies & Co. Inc., wrote in an Aug. 26 report. “While there is going to almost certainly be an appeal by Samsung, we believe the evidence and weight of the case are heavily in Apple’s favor.” Samsung, which called the U.S. verdict a loss for the American consumer, said it will file post-verdict motions to overturn the decision and will appeal if the filing is unsuccessful.
The jury rejected Samsung’s patent counterclaims against Apple and its request for damages. A Seoul court ruled hours earlier that both companies infringed each other’s patents.
For further information on Apple or other stocks and bonds we follow, contact our offices on 25688688.
Good day and happy trading!
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