Trader Talk: An Analysis of the Markets this Morning

Good morning,

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

• JPMorgan Said Near SEC ‘London Whale’ Settlement Incl. Admissions

• Tesco to Form China Venture With China Resources’ Vanguard

• Level 3 Said to Vie With Deutsche Telekom for Poland’s GTS

• U.S. Investment Banks Seize Market Share as Europeans Struggle

• Most Asian Stocks Rise Before China Output Data

• Carney Guidance Added Third BOE Vote to Be Revealed in Minutes

• Telecom Italia Senior Rating May Be Cut to Junk by Moody’s

• Apollo Said to Acquire $600m of Life Policies From RBS

• Steinbrueck Says Merkel Misleading Voters on Euro Debt Crisis

• Danish PM Plans to Shuffle Cabinet, TV2 Says

• London Leads Home Prices to Record as Sales Reach 4-Year High

• Nuclear Gives France No Edge Over German Industry, Report

• Norilsk Seen Extending Drop on Dividend Talks

• Berlusconi Adds $1.5b to Fortune as Legal Setbacks Mount

• Tesco Seeks to Revive Hypermarkets With Zumba Classes, Tapas

• William Hill Acquires Tomwaterhouse.Com Online Betting Co.

EARNINGS

• Fugro (FUR NA) pre-mkt 1H GAAP EPS est: EU3.68

• Nokian Renkaat (NRE1V FH) 7:00am, 2Q adj. EPS est: EU0.713

• Novozymes (NZYMB DC) 8:00am, 2Q adj. EPS est: DK1.75

• Rheinmetall (RHM GY) 8:00am, 2Q adj. loss/shr est: EU0.44 (1 est.)

• Catlin (CGL LN) 8:00am, 1H adj. EPS est: $0.307 (3 ests.)

• ElringKlinger (ZIL2 GY) 2Q adj. EPS est: EU0.40

Europe

European stock-index futures advanced after Chinese industrial output grew faster than estimated.

China

China’s industrial output rose more than estimated in July, adding to signs the economy is stabilizing after unexpectedly strong trade figures yesterday.

Factory production increased 9.7% from a year earlier, the National Bureau of Statistics said today in Beijing. Retail sales advanced 13.2% while fixed-asset investment excluding rural households grew 20.1% in the first seven months of the year. Consumer prices rose 2.7% in July.

The acceleration in factory output may bolster confidence that China will avoid a deeper economic slowdown after larger- than-forecast rebounds in exports and imports and improvement in gauges of manufacturing and service industries. Stronger production will help Premier Li Keqiang meet this year’s 7.5% expansion target after growth moderated for two quarters.

Japan

Japan’s national debt exceeded 1,000 trillion yen for the first time, underscoring the case for Prime Minister Shinzo Abe to proceed with a sales-tax increase to shore up government finances.

The country’s outstanding public debt including borrowings reached a record 1,008.6 trillion yen ($10.46 trillion) as of June 30, up 1.7 percent from three months earlier, the finance ministry said in Tokyo today. Larger than the economies of Germany, France and the U.K. combined, the amount includes 830.5 trillion yen in government bonds.

UK

London’s property boom drove U.K. house prices to a new record in July as property transactions reached the highest in four years amid improving confidence, Acadametrics Ltd. said.

British home values increased 0.3 percent from June to an average of 232,969 pounds ($362,300), the London-based real-estate researcher and LSL Property Services Plc said in a report today. While prices climbed 2.6 percent from a year earlier, the increase was 1 percent if London is excluded from the index.

The report chimes with a range of gauges showing gains in property values stoked by international demand for ho mes in the capital, loosening mortgage availability and Treasury measures to aid the real-estate market. It also underlines the contrast between London’s buoyancy and a more subdued picture elsewhere.

Good day and happy trading!

Kristian Camenzuli