Today we are seeing some solid upside out of Europe, despite the possibility the UK may slip back into recession for the third time. Mario Draghi, the ECB head, reiterated again at the World Economic Forum in Davos that he sees the Euro recovery to improve into the second half of the year. Also driving Euro markets is the positive news out of Germany indicating business morale continues to rise. Euro markets at midday are up about three quarters of a point.
Moving across the pond, US futures are stronger on the news out of Europe and continued positive earnings results as P&G, Honeywell, Kimberly Clark and Haliburton all beat estimates. Futures are currently higher by about a quarter point.
Gold is off more the $10.00 this morning while oil continues to decouple and is up again today by about a half a point.
In Canada, a survey of analysts is suggesting the inflation target should get back into the 2% area in December but just which is the level the BOC would like it at. Also, based on the fact the BOC in its statement earlier in the week suggested that it would not be moving to increase interest rates earlier than previously indicated caused a big slide in the Loonie yesterday which has brought our currency back to par with the USD.
Lastly, yesterday we had the tale of two companies yesterday. Apple plummeted more than 10% on a revenue miss (earnings beat estimates) and dragged the entire sector down with it including RIM until news came out of China that hardware maker Lenovo suggested there would be some solid M&A opportunities concerning the stock. The news caused the stock which did fall earlier in the day to finish higher. With that said, it would seem the likelihood of a Chinese company buying the “Canadian Crown Jewel”, to quote Steven Harper would be highly unlikely. Also, I might suggest that the US government would have something to say as they still use the BB and national security could be compromised. The saga continues…………..
Kenneth A. Dick, BA, CIM, CFP