< Back to Trader Blog Articles

Trader Talk: An Analysis of the Markets this Morning

Asian markets are trading lower this morning as the United Nations Security Council met to discuss worsening violence in Ukraine. Russia called an emergency meeting of the UN Security Council as officials from the U.S. and Moscow blamed each other for violence that left at least one Ukrainian serviceman dead. At the UN, Russia demanded that the U.S. pressure Ukraine to drop the deadline set by acting President Oleksandr Turchynov for protesters to vacate the buildings by this morning Ukraine time. The U.S. said Russia was destabilizing Ukraine and that President Vladimir Putin’s government was not correct in accusing the West of fomenting the unrest.

Regarding company specific news out of Asia, Sharp Corp., a supplier of displays for Apple Inc.’s iPhone and iPad, fell the most in more than ten months after the company said it’s considering ways to increase capital. Shares dropped 8.7%, the most since June 3, to close at 273 yen in Tokyo trading. Sharp is considering options and hasn’t decided on a method, it said in a filing to the Tokyo Stock Exchange yesterday. The company may raise about 200 billion yen ($2 billion) in the fiscal year ending March 2015.

Moving on to Europe, markets are also called to open lower this morning. Yesterday, Mario Draghi said that the strengthening of the Euro requires further monetary stimulus. The warning marked the strongest stance yet taken by Draghi since he and fellow policy makers began complaining about the euro’s rise in early March. With inflation already about a quarter of the ECB’s target of just below 2% , the currency’s 6% gain against the dollar in the past year is further jeopardizing its ability to deliver price stability by cheapening imports and hurting exporters.

PSA Peugeot Citroen, Europe’s second-largest carmaker, outlined plans to cut its model lineup by almost half and turn the Citroen unit’s DS badge into a separate brand in a bid to restore the automotive division’s profit. The carmaking unit’s operating margin will amount to 2% of sales by 2018, with the figure rising to 5% in the 2019-2023 period, Chief Executive Officer Carlos Tavares said today in his strategic review of the Paris-based company.

In the US, JPMorgan Chase & Co., the biggest U.S. bank, fell 3.7% on April 11 after it reported first-quarter earnings that missed analysts’ estimates on lower revenue from fixed-income trading and mortgages.

Citigroup Inc. reports earnings today after disappointing results from JPMorgan Chase & Co. and a selloff in technology stocks sent the S&P 500 to its biggest weekly loss since June 2012. Citigroup cut 200 to 300 jobs in its division handling stock and bond trades to shrink costs amid a slump. A slump in bond trading, a business that once fueled Wall Street’s rebound after the credit crisis, is now eroding banks’ earnings. Citigroup Chief Financial Officer John Gerspach, told investors last month he expected trading revenue to drop by a high mid-teens percentage. Equities revenue was holding up better than fixed income, which accounts for an average 80% of markets revenue.

Bank of America Corp, Goldman Sachs Group Inc. and Morgan Stanley are due to release results this week.

For the latest copy of our in-house report on Bank of America, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli

The Calamatta Cuschieri Traders Blog is available daily on CC WebTrader. Other market coverage including coverage of the International Bond Markets is also available.

The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly any views or opinions expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the particular circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Calamatta Cuschieri & Co. Ltd. (CC) has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. CC does not accept liability for losses suffered by persons as a result of information, views or opinions appearing on this website.
This website is owned and operated by Calamatta Cuschieri & Co. Ltd (Co. Reg. No. C13729) of 5th Floor, Valletta Buildings, South Street, Valletta VLT 1103, Malta. CC is licensed to conduct Investment Services in Malta by the Malta Financial Services Authority.