Stocks recover from early softness; Oil falls despite OPEC release

Summary:

• US indices turn green after opening lower

• Morgan Stanley slumps after earings miss

• DE30: Infineon pulls back along with other Apple suppliers

• Oil falls despite encouraging OPEC release

• Wordpress launches new platform with built-in blockchain tools

US indices have recovered after some selling ahead of the Wall Street open, with the markets turning green into the European close and trading back near their highest level in 1-month, which was set during Wednesday’s session. On the data front there’s been some better than expected 2nd tier data, but this on its own is unlikely to have a lasting impact on the markets. Just under an hour ago the latest Philadelphia Fed manufacturing index showed a higher than forecast reading of 17.0 against a consensus estimate of 9.5. New orders were one component that was particularly strong (21.3 v 13.3) but the employment index was poor (9.6 v 19.1) and viewed in the context of the prior index reading being the worst since August 2016, maybe the rise this time out isn’t as positive as it first appeared.

The big US banks have been in focus this week with JP Morgan delivering a disappointing set of results for the past quarter, while the Bank of America Merrill Lynch and Goldman Sachs both beat. Today, it was the turn of Morgan Stanley, and unfortunately for investors there was more bad news on this front. ESP came in at $0.80 vs an expected $0.89 as the firm's two biggest business units, Wall Street trading and advisory and wealth management both suffered revenue declines amid a difficult market environment last year. This meant that companywide revenue declined 10% to $8.55B, compared to an expected $9.3B. The firm posted the weakest fixed-income trading results of its peers, plunging 30% to $564m, compared to the $806M estimate.  Morgan Stanley’s stock is called to open lower by around 4% and the recovery from lows of 36.78 seen just after Christmas is no under threat.

Infineon Technologies (IFX.DE) is one of the worst performing DAX members today. Sentiment towards the company was undermined by downbeat guidance issued by one of the Apple’s top suppliers. Namely, Taiwan Semiconductor released a downbeat revenue guidance for the quarter saying that demand remains weakish. The demand issues are likely to be industry-wide rather than company-specific and this is the reason why Infineon underperforms today.

Oil prices are falling lower at the time of writing despite encouraging numbers released by the OPEC. The cartel informed that Saudi Arabia’s oil output had fallen 468 kbpd, and the OPEC’s crude output had declined 751 kbpd in December, the most in two years. The group also expects that Russian oil production will be cut by 130 kbpd during the first half of 2019. In general, the OPEC kept its 2019 global oil demand growth at 1.29 mbpd. However, simmering concerns regarding a global economic slowdown seem to be weighing on crude prices.

Nevertheless, Thursday has not brought livelier price movements for top cryptocurrencies, and they have seen some only slight gains and losses thus far. According to CoinMarketCap, the capitalization of the cryptocurrency market stands a little above the $121 billion handle whereas the capitalization excluding Bitcoin stands slightly below the $58 billion mark on Thursday morning. Wordpress, the world’s most popular publishing platform, announced its new publishing platform called Newsdesk on Monday. To create a new platform, Wordpress is teaming up with some giants including Google and Consensys. Newsdesk is aimed at small and medium-sized news organizations, as Wordpress reported on its blog. Nevertheless, it also needs to be said that  Newsdesk will offer built-in blockchain tools created by Civil Media (a ConsenSys-backed company), as CoinDesk reports.