By IFCMarkets

Global stocks dipped on Friday. The USA Q4 GDP deepened worse-than-expected 2.6% after 5% rise in Q3. The year 2014 marked a 2.4% surge in economy, which is 2.2% higher than in 2013. Most investment banks consider the US Q1 GDP to ramp up by 2.5% this year. This week Dow and S&P 500 lost 2.8%, Nasdaq was down by 2.6%. As of January, Dow, S&P 500 and Nasdaq declined by 3.6%, 3.1% and 2.1% respectively. American stocks turnover on Friday was 22% over its 5-day average and made up 8.5 billion shares.

Significantly, the USA dollar index was weakly affected by macro-economic statistics. In January it recorded 7 straight months of expansion which has been the longest constant surge period since 1971. Our analysts believe it to be driven up by negative data from Greece that weakened the euro. Again, a rather moderate GDP advance was countervailed by other positive indicators. Q4 consumer spending added 4.3% (the best result since Q1, 2006). Michigan’s Consumer Confidence index has risen to its strongest since January 2004. We suppose that it was encouraged by cheap fuel, which has plunged by 43% since July 2014. Amid stable low inflation the Fed rate hike is more likely to happen. Today at 13:30 CET the US Personal Spending and Personal Income for December will be issued: indicators may be negative. At 14:45 CET the Manufacturing PMI index by Markit will be released, followed by the ISM Manufacturing PMI for January and Construction Spending for December, which are to be announced at 15:00 CET. The tentative outlook is neutral.

This morning European stocks have surged together with the US futures. New Greek authorities stated that harming banks or replacing bank managers with party officials is not among their plans. The announcement gave a 5.7% rise to the ATG stock index, which boosted other indicators. Several European and other countries’ Manufacturing PMI have been published this morning. They appeared to be neutral; no important economic statistics is expected today in Europe.

Nikkei slipped today amid Seiko Epson and Konica Minolta low earnings. These companies’ shares dropped 10.1% and 9.4%, respectively. The strengthening yen and Chinese negative statistics added additional pressure on stocks. Market participants expect little important data on Japan this week.

The Chinese Manufacturing PMI suddenly plunged below 50 points, for the first time over 2.5 years, and equaled to 49.8. That had a negative effect on quotes of several commodity futures.

Global oil prices rose due to the strike of American oil workers (the largest one since 1980). There are 3.8 thousand participants, working at 9 refineries that account for 10% of petroleum production in the US. The price was also affected by Baker Hughes announcement of 94 oil wells closed last week. This is the biggest figure since 1987 and the reduction continues for 8 straight weeks. There are 1223 operating oil pumps left: the 2014 high of 1609 oil pumps was reduced by 1/4, reaching the minimum since 2012.

Grain futures continue to retreat on the back of good weather forecasts. We suppose that they are also negatively affected by cheap oil, which is a part of prime cost for grain production. Low oil prices also slashed the demand for biofuel. Investors consider farmers to opt for grain instead of planting biofuel crops. Currency factor in crop-producing countries should be mentioned as well. The Brazilian real, the Russian ruble and the Canadian dollar sagged against the US dollar.

Market Analysis provided by IFCMarkets