Market update: Sharp fall in Germany 2012 GDP growth

In the US, ahead of the start of the corporate earnings reporting season, stocks ended the first trading day of the week barely changed; both the S&P 500 and the Nasdaq were flat while the Dow Jones edged up 0.1%. Yesterday, both President Obama and Treasury Secretary Timothy Geithner cautioned that the US debt ceiling must be raised to avoid a big hit to the economy. Meanwhile, Federal Reserve Chairman Ben Bernanke delivered a cautiously optimistic outlook for the US economy but gave no indication as to when the central bank’s bond-buying programme would be winding down. In other news, Apple’s share price declined by more than 3% following reports that orders for iPhone 5 parts were reduced owing to softening demand.

Across the Atlantic, early this morning market sentiment in Europe is also muted, with the FTSE Eurofirst 300 flat and FTSE 100 up by only 0.1%. According to Germany’s Federal Statistics Office, gross domestic product (GDP) growth in Q4 2012 fell by a larger-than-expected 0.5%. This means growth fell sharply from 3.0% a year ago to 0.7% in 2012 as the Eurozone crisis and weaker global growth hampered exports and company investment. Meanwhile, UK December Consumer Price Inflation (CPI) has come in at a rate of 2.7% annualised, stubbornly staying at the same rate since the October rise owing largely to a hike in utility bills. In quarterly earnings news luxury brand Burberry reported forecast-beating Q3 revenue of £613 million.

Over in Japan, the Nikkei 225 closed up 0.7% today, the highest level since April 2010 as the market was boosted by yen weakness and the government’s pro-monetary easing stance.