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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Markets pause after strong rise It was a subdued start for equity markets in London on Friday with the FTSE 100 opening broadly flat as investors adopted a cautious approach going into the long weekend.
Stocks were pausing for breath early on after a strong rise the day before on the back of improving economic data from across the globe.
Manufacturing data from China, the Eurozone and US all improved in August with the Chinese sector specifically unexpectedly returning to growth this month. Meanwhile in the States, jobless claims rose but remained near a six-year low and an index of leading economic indicators beat expectations.
Nevertheless, it has been a choppy week for financial markets - US bond yields hit two-year highs, emerging-market currencies came under pressure - as traders awaited the minutes of the latest Federal Reserve meeting out on Wednesday evening.
The statement itself however was rather underwhelming with the Fed failing to shed any more light on a timeframe for the central bank's imminent tapering of quantitative easing. Policymakers said they were "broadly comfortable" with the plan to taper stimulus by the end of the year, as they have said in the past.
Analysts expect markets to remain volatile and sensitive to economic data over the next few weeks in anticipation of the next policy meeting in September, with most now predicting a slight reduction in asset purchases to begin next month.
Croda gains after broker upgrade
Speciality chemicals firm Croda International was a high riser this morning after Deutsche Bank upgraded the stock to 'buy' and hiked its target from 2,400p to 2,850p.
Mining stocks such as Antofagasta, Fresnillo, Randgold and Anglo American were in demand as metals prices edged higher.
BHP Billiton however was lower on the news that it has handed Chief Executive Andrew Mackenzie, who has been on the job for just three months, a £4.6m bonus.
Banking stocks were under pressure this morning after Moody's warned last night that it had placed ratings on the six-largest US banks on review for a possible downgrade. Barclays and RBS were among the worst performers in London today.
Oil and gas group Afren was in the red this morning after first-half profits sunk 16% year-on-year due to one-off costs. Nevertheless, revenues rose 2% despite a dip in the oil price as production grew strongly. |
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| | FTSE 100 - Risers
Croda International (CRDA) 2,646.00p +3.08%
Prudential (PRU) 1,143.00p +1.96%
Antofagasta (ANTO) 923.50p +1.71%
Carnival (CCL) 2,516.00p +1.70%
Morrison (Wm) Supermarkets (MRW) 289.60p +1.19%
Randgold Resources Ltd. (RRS) 5,100.00p +1.19%
Anglo American (AAL) 1,519.50p +1.00%
Johnson Matthey (JMAT) 2,842.00p +0.99%
ARM Holdings (ARM) 886.00p +0.85%
Fresnillo (FRES) 1,225.00p +0.82%
FTSE 100 - Fallers
Reckitt Benckiser Group (RB.) 4,473.00p -1.02%
GKN (GKN) 342.60p -0.78%
CRH (CRH) 1,393.00p -0.71%
Unilever (ULVR) 2,511.00p -0.67%
Barclays (BARC) 282.90p -0.63%
Diageo (DGE) 1,996.50p -0.60%
Amec (AMEC) 1,076.00p -0.55%
Aberdeen Asset Management (ADN) 359.90p -0.47%
Legal & General Group (LGEN) 197.30p -0.45%
Capita (CPI) 987.00p -0.40%
FTSE 250 - Risers
Menzies(John) (MNZS) 758.00p +2.85%
Crest Nicholson Holdings (CRST) 338.40p +2.48%
BH Global Ltd. USD Shares (BHGU) 11.85 +2.16%
Keller Group (KLR) 1,107.00p +2.03%
African Barrick Gold (ABG) 162.50p +1.94%
Renishaw (RSW) 1,729.00p +1.83%
Sports Direct International (SPD) 661.50p +1.77%
Salamander Energy (SMDR) 123.50p +1.56%
Redrow (RDW) 230.00p +1.55%
Evraz (EVR) 121.50p +1.50%
FTSE 250 - Fallers
Afren (AFR) 141.70p -2.88%
Bumi (BUMI) 205.00p -2.38%
United Drug (UDG) 338.20p -1.69%
ITE Group (ITE) 292.30p -1.42%
Carpetright (CPR) 665.00p -0.82%
Diploma (DPLM) 631.50p -0.79%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 106.20p -0.75%
Hikma Pharmaceuticals (HIK) 1,081.00p -0.73%
Carillion (CLLN) 288.00p -0.62%
COLT Group SA (COLT) 99.40p -0.60% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks end higher as euro-area confidence rises
FTSE 100: 0.70%
DAX: 0.23%
CAC 40: 0.25%
FTSE MIB: 0.19%
IBEX 35: 0.66%
Stoxx 600: 0.38%
European stocks ended the week on a high note after euro-area confidence rose more than expected in August.
The European Commission said the index of household confidence for the 17-nation currency bloc improved for a ninth month to minus 15.6, the highest level since July 2011, from minus 17.4 in July.
Economists had predicted an increase to minus 16.5.
The latest European data points to further recovery in the economy after a record-long recession. Gross domestic product in the euro-area jumped 0.3% in the three months through June after six quarterly contractions.
In Germany, a report showed second quarter economic growth climbed 0.7% in line with estimates. The Federal Statistics Office in Wiesbaden said a pick-up in consumption and a rebound in investment helped stimulate recovery in Europe’s biggest economy.
The reports helped back an argument by European Central Bank governing council member Ewald Nowotny who said the recent positive news on the Eurozone economy has taken away the need for the monetary authority to implement further rate cuts.
In an interview with Bloomber TV at Jackson Hole, he said a stream of good news meant he did "not see many arguments now for a rate cut". However, Nowotny stopped short of suggesting that the ECB will immediately embark on policy tightening. "The most recent developments will have no immediate effects on the policy of the European Central Bank," he clarified.
New US homes sales fall unexpectedly
Sales of new US homes declined more than expected by 13.4% to a 394,000 annualised pace in July, the weakest since October, the Commerce Department revealed.
It followed a 455,000 rate in the previous month and missed estimates for a decrease to 487,000.
The report suggested the housing sector may be taking a break as mortgage rates rise.
In the UK, GDP for the second quarter was revised upwards to 0.7% by the Office for National Statistics.
GDP was up 0.1% from the initial estimate released in July. Compared to a year ago, it was 1.4% higher. The ONS said the revision reflected growth across agriculture, construction, production and services.
In other good news for Britain’s economy, mortgage approvals for house purchases grew 31% to 37,200 in July compared to a year earlier.
The British Bankers’ Association said the government schemes such as Funding for Lending and Help to Buy combined with record low interest rates boosted demand in the sector.
Croda International, Commerzbank
Specialty chemical maker Croda International surged after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold’ on expectations that top-line growth will pick up.
Commerzbank’s shares advanced following news the German government could sell its 17% stake in the country's second biggest bank to another European lender to make sure the bank is purchased by a preferred bidder.
Afren plunged after the oil explorer said first-half net income dropped to $79.6m from $100.7m.
ING gained after Morgan Stanley raised its rating on the shares to ‘overweight’ from ‘equal weight’.
Other asset classes increase
The euro/dollar rose 0.26% to the 1.3391 dollar mark.
Brent crude futures climbed $0.991 to 111.000 per barrel on the ICE.
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| | US Market Report | | Treasuries rise, yields back off Dow Jones Industrials: 0.05%
Nasdaq Composite: 0.28%
S&P 500: 0.18%
The main US equity benchmarks are now recovering somewhat following the small dip seen at the start of trading despite the release of a much weaker than expected reading on new home sales.
Acting as a backdrop, Barclays Research has reportedly upped its forecast for 10 year US Treasury yields to 3.5% by mid-2014 versus the 2.90% level envisaged before.
Commenting on the above data the same broker had his to say: "Altogether, the softness in this report is likely to raise fears about whether the recovery in US housing will prove durable due to the rise in mortgage rates observed since early May.
"Our view has been that the recovery in housing may slow due to the sizeable fiscal drag in place during 2013 and higher mortgage rates, but that housing fundamentals were strong enough to prevent a sharp correction in activity. We continue to hold this view [...]."
No less important, in remarks to Bloomberg TV the President of the US Federal Reserve bank of Atlanta, Dennis Lockhart, said that he sees some kind of tapering in September so long as the economic data was strong enough. His opposite number at the St.Louis Fed, however, believes there is no need to rush. In a somewhat similar vein the President of the Federal Reserve bank of San Francisco thinks that tapering has to be data-dependent.
No Fed speakers were scheduled for today, but interviews with those above have been aired on different financial media outlets.
Microsoft shares are moving 6% higher after its Chief Executive Steve Ballmer’s announcement that he will retire in 12 months’ time.
The latest quarterly earnings out of Pandora and Aeropostale have come in on the weak side.
Qualcomm is to sell its Omnitracs unit for $800m.
Autodesk is in the lead on the S&P 500 following positive broker commentary.
New US home sales plummeted to an annualised rate of 394,000 in July (Consensus: 490,000).
Front month West Texas crude futures are now higher by 0.98% to the $106.04 per barrel mark on the NYMEX.
10 year US Treasury yields are now falling by 8 basis points to the 2.80% mark.
S&P 500 - Risers
Autodesk Inc. (ADSK) $40.20 +11.26%
Expedia Inc. (EXPE) $50.83 +9.38%
Microsoft Corp. (MSFT) $34.67 +7.04%
Ross Stores Inc. (ROST) $70.22 +2.48%
Cliffs Natural Resources Inc. (CLF) $22.87 +1.92%
First Solar Inc. (FSLR) $39.75 +1.87%
Gap Inc. (GPS) $42.78 +1.83%
L Brands Inc (LTD) $59.42 +1.40%
Valero Energy Corp. (VLO) $36.44 +1.28%
Advanced Micro Devices Inc. (AMD) $3.67 +1.10%
S&P 500 - Fallers
Big Lots Inc. (BIG) $32.08 -1.26%
Cognizant Technology Solutions Corp. (CTSH) $71.91 -1.17%
Alexion Pharmaceuticals Inc. (ALXN) $105.64 -1.06%
Halliburton Co. (HAL) $47.35 -0.97%
St Jude Medical Inc. (STJ) $51.48 -0.87%
Bed Bath & Beyond Inc. (BBBY) $73.77 -0.83%
Dollar Tree Inc (DLTR) $52.71 -0.79%
Fastenal Co. (FAST) $44.89 -0.77%
SLM Corp. (SLM) $24.77 -0.76%
Abercrombie & Fitch Co. (ANF) $38.24 -0.75%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $34.67 +7.04%
Bank of America Corp. (BAC) $14.67 +0.69%
Intel Corp. (INTC) $22.41 +0.65%
Coca-Cola Co. (KO) $38.51 +0.54%
Chevron Corp. (CVX) $118.66 +0.31%
Verizon Communications Inc. (VZ) $47.15 +0.29%
Hewlett-Packard Co. (HPQ) $22.28 +0.27%
Walt Disney Co. (DIS) $61.81 +0.27%
Boeing Co. (BA) $105.40 +0.25%
Procter & Gamble Co. (PG) $79.92 +0.19%
Dow Jones I.A - Fallers
Johnson & Johnson (JNJ) $87.81 -0.51%
American Express Co. (AXP) $73.52 -0.46%
3M Co. (MMM) $114.20 -0.41%
Travelers Company Inc. (TRV) $80.27 -0.35%
International Business Machines Corp. (IBM) $184.81 -0.21%
Caterpillar Inc. (CAT) $84.00 -0.20%
Pfizer Inc. (PFE) $28.13 -0.11%
Cisco Systems Inc. (CSCO) $23.99 -0.08%
JP Morgan Chase & Co. (JPM) $52.17 -0.08%
Home Depot Inc. (HD) $73.95 -0.07%
Nasdaq 100 - Risers
Autodesk Inc. (ADSK) $40.20 +11.26%
Expedia Inc. (EXPE) $50.83 +9.38%
Microsoft Corp. (MSFT) $34.67 +7.04%
Ross Stores Inc. (ROST) $70.22 +2.48%
Facebook Inc. (FB) $39.24 +1.79%
Yahoo! Inc. (YHOO) $28.16 +0.93%
Randgold Resources Ltd. Ads (GOLD) $79.28 +0.83%
Vertex Pharmaceuticals Inc. (VRTX) $78.97 +0.73%
Intel Corp. (INTC) $22.41 +0.65%
Vodafone Group Plc ADS (VOD) $29.77 +0.61%
Nasdaq 100 - Fallers
Nuance Communications Inc. (NUAN) $18.87 -1.72%
Cognizant Technology Solutions Corp. (CTSH) $71.91 -1.17%
Alexion Pharmaceuticals Inc. (ALXN) $105.64 -1.06%
Bed Bath & Beyond Inc. (BBBY) $73.77 -0.83%
Dollar Tree Inc (DLTR) $52.71 -0.79%
Fastenal Co. (FAST) $44.89 -0.77%
Cerner Corp. (CERN) $47.29 -0.71%
Amgen Inc. (AMGN) $105.61 -0.64%
Twenty-First Century Fox Inc Class A (NWSA) $15.61 -0.64%
Citrix Systems Inc. (CTXS) $72.78 -0.61% |
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| | Broker Tips | | Afren: Canaccord Genuity cuts target from 220p to 190p, while leaving its buy recommendation unaltered.
AVEVA Group: Liberum Capital initiates with a target of 2350p and a hold recommendation.
Carillion: Numis reduces target from 350p to 315p, while its hold recommendation remains unchanged.
Centrica: Liberum Capital takes target from 370p to 440p retaining its buy recommendation.
Costain Group: Liberum Capital cuts target from 320p to 300p and downgrades to hold.
Croda International: Deutsche Bank raises target from 2400p to 2850p and upgrades to buy.
Henry Boot: Investec ups target from 180p to 200p and keeps a buy recommendation.
IMI: JP Morgan increases target from 1450p to 1660p and reiterates an overweight rating.
Kazakhmys: Deutsche Bank shifts target from 241p to 250p maintaining a hold recommendation. Canaccord Genuity raises target from 280p to 320p keeping its hold recommendation.
Kirkland Lake Gold: Investec lowers target from 380p to 377p and retains a buy recommendation.
New World Resources: Jefferies moves target from 60p to 70p and keeps a hold recommendation. JP Morgan shifts target from 40p to 38p staying with its underweight rating.
Perform Group: Morgan Stanley reduces target from 600p to 560p, while leaving its overweight rating unchanged.
Premier Oil: Deutsche Bank ups target from 560p to 592p and maintains a buy recommendation.
Prudential: Deutsche Bank increases target from 1240p to 1290p reiterating a buy recommendation.
Rockhopper Exploration: Canaccord Genuity reduces target from 422p to 365p, while staying with its buy recommendation.
SAB Miller: Morgan Stanley cuts target from 3435p to 3400p and stays with its equal-weight rating. | | |
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