Europe turned flat as DAX inched lower 0.05 point to 6,083.85 while FTSE 100 edged higher by 0.09% to 5,371.04. In North American markets, the Dow Jones Industrial Average resumed its advance to 10,320.10 or 0.49% higher. S&P 500 also gained 9.81 points to end at 1,090.10 while Nasdaq Composite finished at 2,200.01 or up 1.06%. Gains were limited as the markets turned cautious ahead of the release of US non-farm payrolls data on Friday. Tech rose higher after the bidding war between HP and Dell ended.
Other than the European Central Bank meeting which ended with the decision to keep the interest rates steady at 1%, the continent had its GDP data for 2Q released. Euro-Zone grew 1.9% in 2Q, higher than the previous estimate of 1.7% growth. The q/q data showed unchanged estimate at 1%. Producer Price Index was also released on Thursday. Euro-Zone PPI slowed from 0.3% in June to 0.2% in July. Year-on-year, the PPI went up 4%, faster than June’s 3%.
UK data due on Thursday include the Nationwide house price which slowed from 6.6% to 3.9% (y/y) in August. PMI for construction also declined, from 54.1 to 52.1, lower than the consensus of 53.9.
In the US, jobless claims showed a further decline in claims to 472,000 from 478,000 a week before, easing the concerns over the state of US labor market. Pending home sales data from the National Association of Realtors indicated an improvement in sales in July, rising 5.2% (m/m) against the expected 1% fall.
Friday’s focus will be set upon the non-farm payrolls for August. The August figure is expected to show a 105,000 decline in payrolls following a drop of 131,000 in July. Earlier this week, ADP reported an unexpected cut of 10,000 jobs in private sector payrolls. Private hiring was initially expected to have risen by 20,000 after it went up by 37,000 in July. As this month’s jobless claims hit 500k, the projected NFP figure would be somewhere around -100k to -150k. How the markets will respond to the report will set the path for probably the entire September. Meanwhile, unemployment rate is seen at 9.6%, inching higher from July’s 9.5%. Another piece of economic data due on Friday is ISM for the non-manufacturing industry. The index is expected at 53.5 in August, falling from 54.3.
From the i
ndustrial news, VCI Association in Germany said that the chemical industry in Germany saw a 5.2% increase in sales during 2Q from 1Q. Revenue increased €41.6 bln in 2Q, production was up 1.5% while capacity utilization went up to 85.6%. VCI Association forecast an increase in production and revenue by 11% and 18%, respectively, but warned that the growth might be slowing as companies had their inventories restocked throughout the first half of the year. BASF, one of the chemical giant inched 0.06% higher to €43.03.Deutsche Bank was hit hardest on Thursday after the analysis from the Bank of America Merrill Lynch put DB in the list of ‘least preferred’ shares. According to the analysis the capital concern at DB and the potential purchase of Deutsche Postbank AG stakes by DB were the factors behind the analyst’s move. DB tumbled 3.2% to €49.34.
Deutsche Post won the case against the government at the European Union high court regarding the subsidy case it had since 2002. Hence, Deutsche Post was freed from paying €1.15 billion back to the government. Deutsche Post was accused of misusing the subsidy provided by the government, but the court deemed the regulators had used a wrong method during their investigation of this matter. Deutsche Post advanced 1.28% to €13.42 by the end of Thursday’s session.
BP was reportedly continuing its asset sales to reach $27.2 billion. So far the oil giant had received $7 billion from Apache and $1.9 billion from asset sales in Colombia to Ecopetrol and Talisman Energy. This week, BP also sold its chemical unit to Malaysian Petronas for $363 million. More BP’s assets will be sold in Pakistan and Vietnam.
Hewlett-Packard finally won the bidding war against Dell in the quest to acquire data storage company 3Par. HP’s bid of $33 per share sent Dell into retreat. The bid would cost HP $2.4 billion. Dell went up 1.98% to $12.36 after it folded its hand, while HP rose 1.2% to $39.68. HP was also raised to OUTPERFORM from MARKET PERFORM by JMP Securities with target price set at $50. HP’s PC business, high-growth geographic factor, as well as light laptops were the factors behind the upgrade.
Aircraft maker Boeing forecast the North American and Canadian market would need 7,200 units of commercial airplanes in the next 20 years. About $700 billion will be needed as investment to meet the demand. The focus will be on single-aisle, fuel efficient airplanes. At the end of Thursday Boeing was settled at $63.39, or up 1.77%.
Top performers in Europe were BMW (+1.6%), Daimler (+1.35%), and Deutsche Post (+1.28%). At the bottom were Deutsche Bank (-3.22%), Deutsche Boerse (-1.47%), and Bayer AG (-1.32%). In North American market, Starbucks soared 4.14%, AMD advanced 2.95% as well as Alcoa. Losers include IBM, Oracle, and Merck with losses of 0.58%, 0.62%, and 0.76%, respectively.
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