Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. Trade Balance @ 12.30 GMT
WHAT WE’RE WATCHING TODAY
Recent Improvements In U.S. Trade Deficit But Will It Last?
The U.S. trade deficit is expected to narrow to $40.1 billion from USD42.3bn in February which was its highest level in five months due to lower demand for American exports. U.S. exports plunged 1.1% to $190.4 billion as sales of commercial aircraft, computers and farm goods fell. Imports climbed 0.4% to $232.7 billion, mainly autos and clothing. The increase in deficit caused some economists to reduce their estimate for overall economic growth for the January-March quarter. However analysts believe deficit will shrink this year with the help of exports. We should be aware, however, that the key factor in the recent improvements has been the reduction in US net energy imports which is now at the lowest level in 20 years. Whilst recent improvements in the current account balance have been encouraging, in order to be sustainable, trade in non-petroleum goods will need to mirror trade dynamics elsewhere. With the recent weakness in the sector, this could be a tall order. Looking further out, an aging population drawing on pension funds and private nest eggs means further downward pressure on savings relative to consumption which suggests the current account may struggle to hold on to any gains.
Gold Pushes Higher As Ukraine Fighting Boosts Safe-Haven Appeal
Tensions in Ukraine and uncertainty in equities markets in the U.S. combined to lift gold’s safe-haven appeal which extended its run above three-week highs during Tuesday’s trading session. The Ukrainian situation is expected to continue to dominate and provide an element of support going into May, despite the current weakness that greeted the latest round of sanctions. The crisis is likely to get worse before it gets better, benefiting markets as gold, the dollar, the yen and U.S. Treasury’s at the expense of the euro and equities. Spot gold was little changed at $1,308.96 an ounce after gaining 2 percent in the last two sessions. On Monday, gold climbed to $1,315.60, its highest since April 15. Worsening tension in Ukraine is likely to see prices going higher from here but strong resistance is likely to be found at $1,317 according to analysts. Traders said they expect volatility in prices as the Ukraine situation develops, and that sentiment continues to be fragile due to outflows from gold funds. Gold is usually in demand as a safe-haven bet during times of political and economic uncertainty.
Stocks To Watch: Will Disney Earnings Ever Freeze?
Among the companies whose shares are expected to see active trade in today’s session is Walt Disney Co. which is projected to report second-quarter earnings of 96 cents a share. Investors have high expectations for Disney’s earnings growth. In recent months, investors have become even more bullish about Disney earnings, boosting their views on first-quarter earnings by $0.02 per share. The stock has climbed by 11% since late January. Much of the gain in Disney stock came from its fiscal first-quarter earnings. Disney net income jumped 33%, and adjusted earnings per share topped what investors had expected to see by $0.12 per share. The unexpected extent of the movie Frozen’s blockbuster success surprised the company and its shareholders, creating a worldwide phenomenon that included unparalleled demand for merchandise related to the movie.
That sums up today’s highlights! We hope you have a profitable day on the markets.