INVESTORS CHEER DISAPPOINTING US JOBS REPORT - Markets in the US pushed even further ahead yesterday after the delayed jobs report for September was published. From an economist's point of view it was disappointing, with fewer jobs than expected created in the month. Investors, however, were very happy with it.
Mark Murnane, head of trading with Shelbourne Markets said the investor response was down to the expected delayed actions of the US Federal Reserve. "There was talk of tapering of QE at the US Federal Reserve meeting in December. It now looks like it's been pushed out to March or April. That saw broad based buying of stocks in the US and Europe yesterday," Mr Murnane explains.
All of this goodwill on markets is against a backdrop of what appears to be a weakening economy in the US. "The jobs numbers were undoubtedly disappointing. There was also the effect of the government shutdown. They don't have all the numbers yet and they'll be waiting for better data to get a better handle on where the economy is, but fewer people working will have a knock on effect on spending," he states.
Another factor that is driving markets is the performance of listed companies who have been reporting third quarter results. "73% of S&P500 companies have reported better earnings than expected. That's been pushing equities ahead. But the big factor is the stimulus and the expectation that it will continue," Mark Murnane says.
MORNING BRIEFS - Bank of Ireland is close to agreeing a deal with the bank officials association to narrow its €1 billion pension deficit, according to reports on Bloomberg. Any deal would help in paying back part of the Government bailout by lowering the capital that the bank needs to refinance the €1.8 billion of state-owned preference shares. CEO Richie Boucher is hoping to repay the government by the end of March next.
*** Accounts from the National Assets Management Agency for the second quarter of this year show the agency generated some €2 billion in cash during the first six months of 2013. It declared a profit of €54m for the same period, after a tax charge and provision for impairments. Total cash generated since NAMA started to the end of June was €12.6 billion.
*** Bank of Cyprus has appointed an Irishman to head up its operations as it restructures after being severely hit in the Greek sovereign debt crisis. 43 year old John Hourican was formerly head of Royal Bank of Scotland's investment bank, but resigned in February amid the £390m settlement over the manipulation of the Libor interest rate. Bank of Cyprus was the first lender in the euro zone to embark on recapitalisation through a bail-in of uninsured depositors.
*** Asian markets gained overnight following the trend set elsewhere yesterday after the worse than expected jobs report from the US. The S&P 500 hit another intraday record high after the report showed that only 148,000 jobs were created in September - well below expectations. Among the poorer performers in yesterday's rally was Netflix. Its share price raced ahead on Monday night after it reported strong results for the third quarter, but the stock lost 6.5% in trade yesterday. That was mostly down to the decision by investor Carl Icahn to take profits in the 9% of the company that he bought just over a year ago, making himself nearly a billion euro in profit.
*** Apple also performed poorly yesterday despite launching new thinner iPads and faster Mac computers. The share price fell back around 0.3% on a day when it should have been making gains. It is estimated that Apple's share of the global tablet market will slip to just under 47% percent next year.