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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Taper concerns hit stocks ahead of Fed minutes London benchmark index dropped one per cent on Wednesday as investors trimmed positions and took cover ahead of the risk event of the week, the minutes of the Federal Open Market Committee meeting due out later this evening.
The FTSE 100 ended 62.62 points lower on the day at 6,390.84, a fall of 0.97%. The last time it closed below this level was on July 5th when it finished at 6,375.52.
Stocks heavily exposed to the emerging markets some fund managers and financials, for instance came under heavy selling pressure in London today as money continued to pour out of regions in anticipation of the Federal Reserve tapering its stimulus programme in September. Both the Turkish lira and Indian rupee fell to fresh all-time lows today against the dollar.
Upbeat data today showing better-than-expected growth in US existing home sales in July is also likely to have thrown more weight behind the argument to trim asset purchases soon as the economic recovery continues to gather momentum.
"Data in the US has improved since the previous Fed policy meeting but more importantly, various Fed-members U-turned on accommodative easing measures," said Market Strategist Ishaq Siddiqi from ETX Capital.
"Fedspeak over the past month suggests greater unity on the FOMC with now more members endorsing a reduction in asset purchases by the Fed. In fact, it’s Fedspeak that has almost convinced the market that September tapering is now inevitable."
UK data was in focus this morning with public-sector accounts excluding financial interventions showing a deficit of around £0.1bn in July, according to the Office for National Statistics, surprising the consensus who had estimated a surplus of £2.9bn. This was the first July since 2010 that the government has recorded a budget deficit as spending increased.
FTSE 100: IHG leads fallers after going ex-div
Holiday Inn and Crowne Plaza owner InterContinental Hotels Group was a heavy faller on Wednesday after going ex-dividend meaning that new investors won't be able to get their hands on the company's latest dividend payment. A number of other heavyweight stocks also went ex-dividend today, including British American Tobacco, Capita, Hammerson, Prudential and Carnival.
Oil and gas engineering firm Wood Group was also sharply lower, extending losses after it scaled back full-year guidance for one of its divisions yesterday. Deutsche Bank trimmed its target for the stock today.
Continued pressure on emerging-market assets were hitting financial peers Aberdeen, HSBC and Old Mutual today.
A reduction in risk appetite was also affecting mining stocks today with Fresnillo, BHP Billiton and Rio Tinto all in the red. Glencore Xstrata however was bucking the trend, rebounding after some heavy losses the day before after the company disappointed with its first-half results.
Standard Life was also higher after receiving an upgrade by both Credit Suisse and Bank of America. The latter raised its rating from 'underperform' to 'neutral' after a recent drop in the share price, saying that the company "remains well placed for regulatory changes and its asset management business should continue to attract inflows".
Terrestrial broadcaster ITV was being helped higher by comments from Galvan Research which said: "After a multi-year bear market for the shares, there are still ample fundamental and charting positives to keep the ITV turnaround story powering ahead." |
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| | FTSE 100 - Risers
Glencore Xstrata (GLEN) 304.75p +2.56%
Wolseley (WOS) 3,194.00p +2.24%
WPP (WPP) 1,191.00p +2.14%
London Stock Exchange Group (LSE) 1,566.00p +1.36%
ITV (ITV) 163.70p +1.11%
Melrose Industries (MRO) 280.80p +0.79%
IMI (IMI) 1,409.00p +0.64%
Carnival (CCL) 2,427.00p +0.54%
Standard Life (SL.) 344.60p +0.50%
Experian (EXPN) 1,183.00p +0.42%
FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 1,845.00p -6.72%
Aberdeen Asset Management (ADN) 356.30p -5.94%
HSBC Holdings (HSBA) 682.00p -3.15%
Hammerson (HMSO) 488.10p -2.77%
BHP Billiton (BLT) 1,873.00p -2.63%
British American Tobacco (BATS) 3,320.00p -2.54%
Wood Group (John) (WG.) 810.50p -2.47%
Petrofac Ltd. (PFC) 1,234.00p -2.30%
Old Mutual (OML) 187.70p -2.19%
Rio Tinto (RIO) 2,987.00p -2.05%
FTSE 250 - Risers
Brown (N.) Group (BWNG) 563.50p +4.64%
Enterprise Inns (ETI) 138.50p +4.29%
Brewin Dolphin Holdings (BRW) 271.60p +3.23%
NMC Health (NMC) 359.00p +3.01%
Euromoney Institutional Investor (ERM) 1,140.00p +2.98%
Paragon Group Of Companies (PAG) 330.00p +2.96%
Senior (SNR) 282.00p +2.55%
Dixons Retail (DXNS) 42.77p +2.52%
Carpetright (CPR) 660.00p +2.48%
Ocado Group (OCDO) 283.60p +2.38%
FTSE 250 - Fallers
Imagination Technologies Group (IMG) 268.40p -5.02%
JPMorgan Indian Inv Trust (JII) 291.00p -3.32%
F&C Asset Management (FCAM) 102.80p -3.02%
Man Group (EMG) 81.50p -2.69%
Anite (AIE) 110.00p -2.65%
Kentz Corporation Ltd. (KENZ) 570.00p -2.56%
Ashmore Group (ASHM) 326.80p -2.56%
ICAP (IAP) 368.20p -2.52%
Salamander Energy (SMDR) 120.90p -2.50%
Catlin Group Ltd. (CGL) 460.90p -2.50% |
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Capital at Risk. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Banks lead losses FTSE-100: -0.97%
Dax-30: -0.18%
Cac-40: -0.34%
FTSE Mibtel 30: -0.72%
Ibex 35: -0.48%
Stoxx 600: -0.54%
The main European quity markets ended the day with moderate losses on what has been a light news day except for the release of the minutes of the latest US Federal Reserve meeting, which are due out tonight, after the close.
Those are expected to show that a start to the tapering of the central bank’s purchases will go ahead in September.
Asian equities traded in a mixed fashion overnight, with losses being concentrated in the smaller financial centres of Korea, Thailand, Taiwan or India.
Acting as a backdrop, however, markets were also tense ahead of the upcoming elections in Germany and after remarks from the country’s Finance Minister to the effect that Greece will need a third rescue package, although no private sector involvement is expected currently by analysts and such a scenario was already widely expected.
Morgan Stanley sees value in water
Shares of Veolia Environnement rocketed by 7.7% after Morgan Stanley the stock to its best-ideas list.
Heineken, the brewing company, fell back after saying that profit before some items will not grow in 2013.
From a sector stand-point the worst performance was to be seen in the stocks belonging to the following industrial groups within the DJ Stoxx 600: Banks -1.26%, Financial services -1.15% and Basic resources -0.82%.
Light data calendar
Switzerland’s money supply grew at a 10.8% year-on-year rate in July, versus 11.6% in the month before.
Crude futures under pressure
Front month Brent crude futures are now lower by 0.227 dollars to the 109.89 dollar per barrel mark on the ICE.
The euro/dollar is down by 0.40% to the 1.3370 dollar mark.
CAC 40 - Risers
Veolia Environnement (VIE) € 11.45 +8.32%
Safran (SAF) € 43.22 +1.72%
ST Microelectronics (STM) € 6.42 +1.52%
Publicis Groupe Sa (PUB) € 57.49 +0.86%
Kering (KER) € 179.60 +0.73%
Vallourec (VK) € 46.53 +0.56%
Michelin (ML) € 75.02 +0.48%
Alstom (ALO) € 27.49 +0.48%
Legrand SA (LR) € 39.01 +0.42%
Gemalto NV (GTO) € 85.55 +0.33%
CAC 40 - Fallers
AXA (CS) € 17.03 -1.70%
Unibail-Rodamco (UL) € 175.50 -1.65%
Solvay (SOLB) € 108.00 -1.28%
Sanofi (SAN) € 75.99 -1.23%
Bouygues (EN) € 23.63 -1.13%
EADS (EAD) € 43.47 -1.08%
Technip (TEC) € 85.83 -1.05%
Cap Gemini (CAP) € 41.74 -0.94%
Credit Agricole (ACA) € 7.97 -0.57%
BNP Paribas (BNP) € 48.77 -0.54% |
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| | US Market Report | | PIMCO highlights potential sources of risk for equities Dow Jones: -0.23%
Nasdaq Composite: 0.03%
S&P 500: -0.20%
The main US equity gauges are now trading in an ever so slightly mixed manner. Of interest, some market commentary seems to be highlighting the negative aspects of the current market backdrop.
In that regard, writing in today’s Financial Times bond-fund PIMCO’s Chief Executive Mohamed El-Erian warns investors about some of the risks which markets face in the most extreme short-term.
These would be: the upcoming FOMC meeting, a polarised US Congress over the fiscal cliff, elections in Germany, Eurozone uncertainty, policy doubts in Japan, tensions in emerging markets and unrest in the Middle East.
FOMC minutes release ahead
That comes ahead of the release – this evening, after the close of trading of the minutes of the latest meeting of the Federal Open Market Committee. Of note, some economists see the “risk” of a, to a certain extent, dovish set of minutes.
According to the latest Bloomberg poll 65% of economists expect that America's central bank will go ahead and initiate the tapering of its asset purchase programme come September, versus the 50% who saw this same possibility one month ago.
Barclays Research, for one, believes the minutes will show that the Committee stands ready to reduce the pace of asset purchases in September. However, the FOMC may “push back” on market pricing of the first rate hike. Thus, the committee may have discussed lowering the unemployment threshold on policy rate hikes, although no such move is expected in the near future.
Retailers mixed
Back on the company front, retailer Target is moving lower after announcing lower than expected quarterly profits and cutting its guidance. American Eagle Outfitters missed analysts’ quarterly sales targets.
Lowe’s Cos., on the other hand, managed to handily beat estimates and the company raised its full-year profit forecasts.
Food giant JM Smucker is edging lower following the announcement of $1.19 per share in fiscal first quarter earnings, slightly below the $1.20 projected by analysts.
Technology heavyweight Hewlett Packard will release its latest quarterly results after the ‘closing bell,’ tonight.
From a technical backdrop, Marketwatch.com's Mark Hulbert is out today calling attention to the possibly worrying fact that the advance-decline ratio on the NYSE failed to confirm the new highs in the benchmarks indices in early August.
Light economic data calendar
US existing home sales rose to an annualised rate of 5.39m in July, versus 5.08m a month before - according to the National Association of Realtors and consensus forecasts for a reading of 5.15m.
Interestingly the NAR's Chief Economist Lawrence Yun attributed part of the rise to increased mortgage rates, the highest in two years, which have pushed some buyers "off the sidelines." Yun also highlights the still tight inventory situation.
Morgage applications dropped by 4.6% week-on-week in the seven days ended on August 16th, figures from the Mortgage Bankers’ Association show.
Energy futures dragged lower by Libya reports
Front month West Texas crude futures are now lower by 0.62% to the 104.46 dollar per barrel mark on the NYMEX. Reports that two Libyan export terminals are ready to return to activity are weighing on the energy complex.
10 year US Treasury yields are now rising by 3 basis points to the 2.84%.
S&P 500 - Risers
Lowe's Companies Inc. (LOW) $46.27 +4.97%
Edwards Lifesciences Corp. (EW) $72.35 +2.68%
NASDAQ OMX Group Inc. (NDAQ) $31.95 +2.34%
FirstEnergy Corp. (FE) $37.95 +1.93%
Garmin Ltd. (GRMN) $39.10 +1.68%
Salesforce.Com Inc. (CRM) $44.05 +1.52%
Quest Diagnostics (DGX) $59.64 +1.50%
CF Industries Holdings Inc. (CF) $189.90 +1.07%
Apple Inc. (AAPL) $506.09 +1.00%
Dollar General Corp (DG) $53.90 +0.99%
S&P 500 - Fallers
Staples Inc. (SPLS) $14.57 -13.48%
J.C. Penney Co. Inc. (JCP) $13.60 -2.96%
Target Corp. (TGT) $66.27 -2.47%
Analog Devices Inc. (ADI) $46.80 -2.19%
Equity Residential (EQR) $50.49 -1.62%
Newmont Mining Corp. (NEM) $32.30 -1.55%
DIRECTV (DTV) $57.76 -1.50%
Abercrombie & Fitch Co. (ANF) $47.77 -1.50%
Mosaic Company (MOS) $41.38 -1.43%
PG & E Corp. (PCG) $42.20 -1.33%
Dow Jones I.A - Risers
Cisco Systems Inc. (CSCO) $24.48 +0.64%
Microsoft Corp. (MSFT) $31.78 +0.51%
Merck & Co. Inc. (MRK) $47.76 +0.42%
International Business Machines Corp. (IBM) $185.22 +0.36%
Home Depot Inc. (HD) $74.52 +0.31%
Procter & Gamble Co. (PG) $79.75 +0.28%
Exxon Mobil Corp. (XOM) $87.04 +0.24%
Hewlett-Packard Co. (HPQ) $25.90 +0.23%
Wal-Mart Stores Inc. (WMT) $73.35 +0.16%
Boeing Co. (BA) $104.75 +0.12%
Dow Jones I.A - Fallers
Travelers Company Inc. (TRV) $79.71 -0.70%
3M Co. (MMM) $114.66 -0.66%
Verizon Communications Inc. (VZ) $47.64 -0.56%
Walt Disney Co. (DIS) $61.58 -0.49%
American Express Co. (AXP) $73.91 -0.48%
Unitedhealth Group Inc. (UNH) $72.11 -0.48%
Caterpillar Inc. (CAT) $83.61 -0.30%
AT&T Inc. (T) $33.77 -0.30%
Intel Corp. (INTC) $22.47 -0.26%
Pfizer Inc. (PFE) $28.47 -0.21%
Nasdaq 100 - Risers
Garmin Ltd. (GRMN) $39.10 +1.68%
Vertex Pharmaceuticals Inc. (VRTX) $77.39 +1.10%
Facebook Inc. (FB) $38.81 +1.04%
Apple Inc. (AAPL) $506.09 +1.00%
Google Inc. (GOOG) $873.96 +0.99%
Western Digital Corp. (WDC) $65.61 +0.94%
Autodesk Inc. (ADSK) $35.99 +0.84%
Whole Foods Market Inc. (WFM) $52.83 +0.75%
Monster Beverage Corp (MNST) $59.67 +0.73%
Vodafone Group Plc ADS (VOD) $30.03 +0.70%
Nasdaq 100 - Fallers
Staples Inc. (SPLS) $14.57 -13.48%
Analog Devices Inc. (ADI) $46.80 -2.19%
Randgold Resources Ltd. Ads (GOLD) $78.72 -2.06%
DIRECTV (DTV) $57.76 -1.50%
Texas Instruments Inc (TXN) $38.32 -1.11%
Comcast Corp. (CMCSA) $42.24 -1.05%
Linear Technology Corp. (LLTC) $38.91 -0.97%
Avago Technologies Ltd. (AVGO) $36.46 -0.90%
Twenty-First Century Fox Inc Class A (NWSA) $15.58 -0.76%
Expeditors International Of Washington Inc. (EXPD) $40.24 -0.75% |
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| | Broker Tips | | Anglo American: JP Morgan cuts target from 1675p to 1655p keeping a neutral rating.
Aquarium Platinum: Investec shifts target from 46p to 48p and stays with its hold recommendation.
ASOS: Deutsche Bank increases target from 3800p to 4450p, while leaving its hold recommendation unchanged.
Balfour Beatty: Numis moves target from 250p to 285p and upgrades to add.
BHP Billiton: Goldman Sachs ups target from 1950p to 2000p and retains a neutral rating. UBS takes target from 2080p to 2180p and leaves its buy recommendation unchanged. JP Morgan reduces target from 2310p to 2280p maintaining its neutral rating. Citi raises target from 1900p to 2000p and maintains a neutral rating. Deutsche Bank cuts target from 2309p to 2290p, while leaving its buy recommendation unaltered.
British Sky Broadcasting Group: Citi takes target from 950p to 1000p reiterating its buy recommendation.
Brown (N) Group: Credit Suisse raises target from 455p to 620p and upgrades to outperform.
Cineworld: Investec ups target from 380p to 420p and retains its buy recommendation.
CRH: Jefferies cuts target from 1770p to 1700p, while keeping a buy recommendation. Deutsche Bank reduces target from 1580p to 1500p and retains a buy recommendation.
Drax Group: UBS increases target from 710p to 845p and reiterates its buy recommendation.
Essar Energy: Nomura lowers target from 180p to 170p, while leaving its buy recommendation unaltered.
Glencore Xstrata: Deutsche Bank shifts target from 372p to 375p and maintains a buy recommendation.
John Wood Group: Deutsche Bank cuts target from 1020p to 980p, while its buy recommendation remains unchanged.
Kentz Corporation: HSBC downgrades to neutral with a target of 600p.
Ladbrokers: Nomura reduces target from 199p to 165p and downgrades from neutral to reduce.
PPHE Hotel Group: Liberum Capital raises target from 336p to 500p and maintains a buy recommendation.
Renew Holdings: Numis moves target from 130p to 148p and upgrades from add to buy.
Renishaw: Investec cuts target from 1760p to 1715p and keeps a hold recommendation.
Rio Tinto: JP Morgan reduces target from 4300p to 4200p, while staying with its overweight rating.
Serica Energy: JP Morgan lowers target from 47p to 31p and downgrades from neutral to underweight.
Standard Life: Credit Suisse takes target from 325p to 362p upgrading to neutral.
STV Group: Numis raises target from 167p to 210p and maintains a buy recommendation.
Synthomer: Numis shifts target from 245p to 240p and downgrades to hold.
William Hill: Nomura increases target from 380p to 505p and upgrades from reduce to buy. | | |
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