Good morning! It’s the final day of a shortened trading week. Ahead of Friday’s opening bell, here’s what you need to know:
Saudi King Abdullah Is Dead. Saudi Arabia’s 91-year-old King Abdullah bin Abdulaziz has died, according to Saudi media outlets. He was admitted to a hospital in Riyadh for “medical checks” at the end of December. Crown Prince Salman has been named the new king.
And Oil Prices Jumped. Futures of the US benchmark West Texas Intermediate crude rose more than 2% to a high of $US47.76 a barrel in early Asian trading. WTI prices, however, came off these highs as oil policy is not expected to change following the leadership transition in Saudi Arabia.
China’s Manufacturing Activity Is Still Contracting. Almost good news out of China with the release of the HSBC Flash China Manufacturing PMI, which beat expectations for 49.5 with a print of 49.8. However, the index still lingers below 50, signaling contraction in the Chinese manufacturing sector.
Chinese Stocks Gain It All Back. After falling more than 7% on Monday, China’s Shanghai Composite stock index earned back all of these losses by Friday’s close, despite manufacturing data out of the world’s second-largest economy that still indicated contraction in that sector.
The Euro Hit 11-Year Lows After The QE Announcement. The euro is still falling after Thursday’s announcement from the ECB that it would embark on a quantitative easing program totaling €60 billion per month, larger than had been expected. On Thursday, the euro fell from about 1.16 to below 1.14 against the US dollar, and early Friday the euro is down to nearly 1.12 against the dollar.
The ECB Has An Open-Ended Commitment. The market is still digesting the ECB’s announcement of QE. On Thursday, Business Insider’s Tomas Hirst highlighted the most important line from the notice. The ECB said it would buy €60 billion in bonds through at least the end of September 2016 but said it would continue to buy bonds until inflation moves back toward its target. In other words, this is an open-ended commitment to fighting deflation from the central bank.
Here Comes Housing Data And Earnings. On Friday, investors are looking for earnings reports from companies including McDonald’s and General Electric, both expected before the bell. The economic data this week wraps up with a flash reading on manufacturing activity from Markit due out at 9:45 a.m. ET, and a report on existing home sales due at 10 a.m. ET.
Oil Companies Are Looking At Liquidations. The carnage from low oil prices is about to get even uglier. Conway Mackenzie, the largest restructuring firm in the US, says oil drillers will begin shutting down as soon as the second quarter, followed closely by explorers, according to Bloomberg’s Joe Carroll.
Yemen’s President Quit. Yemeni President Abd-Rabbuh Mansour Hadi resigned Thursday, after a loss of control in which Iran-assisted Houthi rebels surrounded the presidential palace, kidnapped the presidential chief of staff, and opened fire on an American diplomatic vehicle.
Box Prices Its IPO At $US14. The cloud storage company Box raised its IPO price to $US14 a share, making it worth about $US1.67 billion. That’s slightly more than the initial pricing range of $US11 to $US13 a share Box had set in its S1 two weeks ago. At $US14 a share, Box will be able to raise $US175 million from its IPO.