US MID-SESSION UPDATE – 18/10/12

US MID-SESSION UPDATE – 18/10/12

Recent market direction has been dictated by the unscheduled earnings report from Google, which surprised markets and showed a miss on their headline EPS and revenues, causing a sell-off across the equity indices. This news was the most exciting of the session, and caused Google to fall over 10% before being halted for trade, leaving market participants questioning how and why the report hit the wires hours before they were due to report after-market. Google responsed by saying that the release was a mistake made by RR Donnelley, a comment which caused the co. to sell off by over 6%.

In other news today, data was mixed, with initial jobless claims printing a higher than expected reading, which along with a weaker employment component for the Philly Fed added to uncertainty heading into October’s non-farm payroll reading. After the jobless claims, Barclays forecast a reading of +125k for non-farms, one of the first institutions to submit a forecast.

Back over in Europe the summit is still underway. A think tank report earlier in the session summed up expectations by suggesting European leaders will leave open the possibility of direct bank recapitalizations via the ESM to include legacy assets, and European leaders are not ready to approve Spanish aid, or a Greek program amendment as yet.

Nothing else is scheduled on the calendar, but we are still looking out for Google to reopen for trade, any further news on why the report was released during market hours, and separately the second EU summit press conference is then due at 2100BST.

Print

17:43 –
Market Analysis

– Source:

RANsquawk

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