Trader Talk: An Analysis of the Markets this Morning

Good morning,

Markets are called to open higher this morning. Asian shares jumped to a four-month high as European index futures and industrial metals rallied after the Federal Reserve unexpectedly refrained from reducing U.S. economic stimulus.

The Federal Open Market Committee said it wants more evidence of an economic recovery before paring its $85 billion-a-month bond buying program, surprising analysts who predicted a $5 billion cut to Treasury purchases. Data today is expected to show U.K. August retail sales were unchanged and Ireland’s economy grew for the first time in four quarters. The U.S. will post jobless claims and home sales figures.

Stock to watch: Apple

Apple Inc. used to make its China fans wait three months to get the latest iPhone. Now the company can’t afford to leave them behind.

For the first time, Apple will release its newest handsets in China on the same day as the U.S., Europe and Japan. The iPhone 5s and lower-cost 5c go on sale tomorrow in Apple’s 11 stores in China and Hong Kong as the company tries to boost sagging market share in the world’s most populous nation.

Apple Chief Executive Officer Tim Cook, looking to reignite growth after a year of not releasing any new products, is counting on iPhone customers in China to give it a fresh boost. That goal will be challenged by a diminishing technology edge versus Samsung Electronics Co., a slew of more affordable devices from local handset makers and the lack of a distribution agreement with China Mobile Ltd., the biggest carrier.

WHAT TO WATCH:

• Fed Unexpectedly Refrains From Taper, Keeps Bond Buying at $85b

• Asian Stocks to Bonds Jump as Fed Maintains Pace of Asset Buying

• JPMorgan Said to Pay $900m to Settle Whale Probes

• ECB Policy Makers Say Bank Stress Tests Risk Market Confusion

• Telefonica Said to Weigh Doubling Down in Italy as Board Meets

• Merkel Rejects Joint Euro Debt, Promises to Stay Hard Course

• ThyssenKrupp Must Not Be Broken Up, Steinbrueck Tells WAZ

• RWE Proposes 3-Year Wage Freeze, Westdeutsche Reports

• Portugal’s Rating May Be Cut If Targets Are Missed, S&P Says

• U.K. Seen Fighting EU Benchmarks Plan in Next Financial Clash

• Morphosys Offers New Shares to Fund Acquisitions

• Gazprom Said to Reimburse RWE $1.5b Following Arbitration

• Ageas Sees Wider Life Margins, Raises Goal for Combined Ratio

• Berlusconi Ally’s Motion to Halt Expulsion Proceedings Fails

EARNINGS All times CET, estimates where available:

• United Utilities (UU/ LN) 2Q sales, trading update

• Booker Group (BOK LN) 2Q sales, trading update

• Premier Farnell (PFL LN) 8am, 1H

• Wilmington Group (WIL LN) 8am, FY adj. EPS GBP0.12

• Gulf Keystone (GKP LN) 8am, 1H

Good day and happy trading!

Kristian Camenzuli