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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | FTSE 100 slips as investors await Fed minutes The FTSE 100 fell into the red on Wednesday morning, hitting a fresh six-week low as investors nervously awaited the minutes of the latest Federal Reserve meeting.
The index dropped 0.5% to around the 6,420 mark early on. The last time the London benchmark closed lower was on July 5th when it finished the day at 6,375.52.
Market sentiment has been a extremely fragile over recent sessions ahead of the Federal Open Market Committee (FOMC) minutes which could give an indication of when policymakers intend to scale back quantitative easing (QE). The minutes are due out after UK markets have closed this evening, around 19:00.
Investors have been trying to pre-empt the Fed's decision to taper stimulus by trimming positions and scaling back risk appetite over recent sessions - the Dow Jones declined for the fifth straight day in New York last night.
"Investors are very much anticipating the next round of QE news flow and probably won’t do a great deal until any new information is becomes known. The risk for investors is indeed that the Fed delivers tapering at a pace faster than predicted," said Financial Trader David White from Spreadex.
With there only being two FOMC meetings left this year which will be followed by a press conference with Fed Chairman Ben Bernanke (September and December) the majority of analysts seem convinced that the taper will begin in September.
"The Fed have previously saved the big decisions for such meetings," pointed out Market Analyst Craig Erlam from Alpari.
The economic data schedule is to pick up today after a fairly quiet start to the week. UK public-sector borrowing figures are due out at 09:30, with the CBI's Industrial Trends survey due out shortly after. In the States, the housing market will be in focus with MBA mortgage-application figures and existing home sales due out in the afternoon.
Greece will also again be in the spotlight today after Germany's Finance Minister Wolfgang Schaeuble admitted that the nation will likely require a third bail-out package.
FTSE 100: Ex-div stocks provide a drag
A number of heavyweight stocks were weighing on markets this morning after going ex-dividend, including British American Tobacco, Capita, Hammerson, InterContinental Hotels, Prudential and Carnival.
A number of mining stocks were also lower this morning as risk appetite is scaled back. Fresnillo, BHP Billiton, Rio Tinto and ENRC were 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 leading the upside after receiving an upgrade by Credit Suisse to 'neutral'. The broker also raised its target from 325p to 362p.
Lloyds gained despite saying that it is to take a £330m loss on the disposal of its German life insurance business as it continues to downsize its international footprint. Banking peers Barclays, RBS and HSBC however were out of favour today.
FTSE 250: Hikma lifts guidance
Hikma Pharmaceuticals rose after saying it had made a strong start to its financial year with all of its businesses performing well as it raised its guidance to around 20% revenue growth for the year.
African Barrick Gold declined after revealing that its CEO Greg Hawkins has resigned with immediate effect to "pursue other opportunities". He will be replaced by industry veteran Bradley Gordon, the former frontman of Intrepid Mines.
Shares in sector peer Hochschild Mining also fell on after the precious metals producer suspended its interim dividend as first-half results were hit by falling commodity prices. |
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| | FTSE 100 - Risers
Standard Life (SL.) 354.30p +3.32%
Glencore Xstrata (GLEN) 301.55p +1.48%
Kingfisher (KGF) 389.90p +1.06%
Croda International (CRDA) 2,593.00p +0.78%
London Stock Exchange Group (LSE) 1,557.00p +0.78%
Persimmon (PSN) 1,159.00p +0.78%
Marks & Spencer Group (MKS) 463.40p +0.76%
Experian (EXPN) 1,186.00p +0.68%
Shire Plc (SHP) 2,433.00p +0.66%
Aggreko (AGK) 1,663.00p +0.60%
FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 1,856.00p -6.17%
Aberdeen Asset Management (ADN) 368.30p -2.77%
Fresnillo (FRES) 1,153.00p -2.62%
HSBC Holdings (HSBA) 686.50p -2.51%
Hammerson (HMSO) 490.80p -2.23%
BHP Billiton (BLT) 1,884.00p -2.05%
Antofagasta (ANTO) 896.50p -1.70%
Anglo American (AAL) 1,469.00p -1.67%
British American Tobacco (BATS) 3,351.00p -1.63%
Randgold Resources Ltd. (RRS) 4,997.00p -1.63%
FTSE 250 - Risers
Paragon Group Of Companies (PAG) 333.60p +4.09%
Enterprise Inns (ETI) 137.90p +3.84%
Hikma Pharmaceuticals (HIK) 1,126.00p +3.30%
Ashtead Group (AHT) 661.50p +3.28%
Carpetright (CPR) 659.50p +2.41%
Drax Group (DRX) 672.00p +1.90%
Centamin (DI) (CEY) 38.39p +1.83%
Crest Nicholson Holdings (CRST) 343.00p +1.78%
Redrow (RDW) 229.30p +1.69%
Howden Joinery Group (HWDN) 276.30p +1.43%
FTSE 250 - Fallers
Bumi (BUMI) 201.70p -4.63%
Polymetal International (POLY) 771.00p -2.84%
African Barrick Gold (ABG) 152.20p -2.37%
Ferrexpo (FXPO) 176.10p -2.06%
Hochschild Mining (HOC) 221.30p -1.86%
NMC Health (NMC) 342.50p -1.72%
IG Group Holdings (IGG) 552.00p -1.69%
Alent (ALNT) 340.50p -1.59%
Kentz Corporation Ltd. (KENZ) 576.00p -1.54%
Evraz (EVR) 113.30p -1.48% |
| | UK Event Calendar | | INTERIMS
Frutarom Industries Ltd GDR (Reg S), Hikma Pharmaceuticals, PPHE Hotel Group Ltd, STV Group, UK Commercial Property Trust
INTERIM DIVIDEND PAYMENT DATE
IDOX
INTERIM EX-DIVIDEND DATE
British American Tobacco, Capita, Catlin Group Ltd., Dairy Farm International Holdings Ltd. (Singapore), Delcam, Hammerson, Henderson Opportunities Trust, Hongkong Land Holding Ltd. (Sing.Reg), InterContinental Hotels Group, Jardine Matheson Holdings Ltd (Singapore Reg), Jardine Strategic Holdingd Ltd. (Singapore), Jupiter European Opportunities Trust, Lancashire Holdings Limited, Mandarin Oriental International (Singapore), Mobeus Income & Growth Vct, Mondi, Prudential, Rentokil Initial, Secure Trust Bank, Synectics, Taylor Wimpey, UBM
QUARTERLY EX-DIVIDEND DATE
Carnival, M Winkworth
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Existing Home Sales (US) (15:00)
FOMC Interest Rate Minutes (US) (19:00)
MBA Mortgage Applications (US) (12:00)
Q2
Frutarom Industries Ltd GDR (Reg S)
FINALS
BHP Billiton
SPECIAL EX-DIVIDEND PAYMENT DATE
InterContinental Hotels Group
EGMS
Thames River Multi Hedge PCC Ld Red Ptg Pref Npv Thames Rvr Hedge £
AGMS
Aberdeen New Dawn Inv Trust, Acorn Income Fund Ld, Latham (James), Terra Catalyst Fund (DI)
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
Public Sector Finances (09:30)
FINAL DIVIDEND PAYMENT DATE
Halma, National Grid
FINAL EX-DIVIDEND DATE
Eckoh, NCC Group, NWF Group, PHSC, red24 |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | European Commissioner Rehn doesn't rule out a third bailout for Greece European Commissioner for Economic and Monetary Affairs and the Euro Olli Rehn joined the debate over whether Greece will eventually need a third bailout and, while he didn't rule out the possibility, he indicated that there were more options on the table.
After German Finance Minister Wolfgang Schäuble explicitly commented on Tuesday that “there will have to be another programme for Greece”, a wave of Greek authorities came on scene to deny the allegation. Athen's Minister of Administrative Reforms Kyriakos Mitsokais assured Greek online newspaper eKathimerini that “we will meet our deadlines. Nothing has changed”.
Hellenic Finance Minister Yannis Stournaras also promised that the country's ministers plan on “co-ordinating” in order to complete requirements before the Troika's (representatives from the International Monetary Fund, European Commission and European Central bank) next country review at the end of October.
Even so, Reuters cited an official from the Finance Ministry as saying that a new programme would be needed to fill the financial shortfall for 2014-2016. The current rescue programme for Greece expires at the end of next year.
Finnish newspaper Helsingin Sanomat cited Rehn as having not ruled out the possibility of a new loan programme, but insisted there are other options. Rehn added that the final decision would be reached when the Troika reviews progress this fall. “We will assess a possible continuation of the Greek program and its funding. However, debt sustainability can also be improved by extending maturities (on current loans)”, Rehn told the Finnish paper.
“The key issue is the ability of Greece to implement reforms under the current programme and achieve a surplus in public finances”, he added.
Meanwhile ECB executive board member Jörg Asmussen is travelling to Athens on Wednesday where a series of meetings are planned with Greek bankers and authorities. He will "discuss the Greek adjustment programme and wider euro-area developments,” the ECB said in a statement on Tuesday.
Asmussen is scheduled to meet with Stournaras at 13:00 London time and is also expected to meet with Greek Prime Minister Antonis Samaras, according to eKathimerini. |
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| | US Market Report | | Stocks finish broadly higher as retailers impress Dow Jones: -0.05%
Nasdaq: 0.69%
S&P 500: 0.36%
Well-received results from a number of retailers including Best Buy and JC Penney gave markets a lift on Tuesday, helping the S&P 500 rebound after four straight days in the red, its longest losing streak so far this year.
While the Nasdaq also finished higher, the Dow Jones Industrial Average erased earlier gains to close slightly lower with some blue-chip companies including Home Depot, Johnson & Johnson, General Electric, Wal-Mart and Caterpillar providing a drag.
Market sentiment was still a little fragile ahead of the minutes of the latest Federal Reserve meeting due out on Wednesday as speculation has ramped up regarding the uncertain future of quantitative easing. These concerns pushed the US 10-year Treasury yield to a fresh two-year high of 2.89% on Monday, before pulling back to around 2.82% on Tuesday.
"Ever since Fed Chairman, Ben Bernanke, suggested in May that the Fed could start reducing its asset purchases from the current level of $85 billion dollars a month later this year, the markets have been trying to guess exactly when this will be and by how much," said Market Analyst Craig Erlam from Alpari.
"The markets quickly narrowed it down to one of two meetings, September or December, as these were the only two remaining meetings this year when Bernanke holds a press conference afterwards. The Fed have previously saved the big decisions for such meetings."
Retailers in focus
The share price of electronics retailer Best Buy surged ahead of the opening bell after the firm unexpectedly reported growth in quarterly earnings. Adjusted profits rose from 26 cents last year to 32 cents in the second quarter, well ahead of the 12 cents estimate. Meanwhile, revenue fell 0.4% to $9.3bn but still beat the $9.13bn forecast.
JC Penney won back the hearts of some investors with its results for the second quarter, despite missing both headline revenue and profit forecasts, as the department store group reported an improvement in same-store sales from the preceding three months - a sign that interim frontman Mike Ullman's new strategies could be working.
Retail peers TJX Cos and Urban Outfitters also rose strongly this morning after their second-quarter results.
DIY chain Home Depot however slipped into the red despite a strong start as second-quarter earnings of $1.24 a share, up 17.2% year-on-year, beat the $1.22 prediction. Sales growth of 9.5% to $22.52bn also came in ahead of estimates. Shares fell even though the company hiked its full-year guidance, helped by the recovering housing market in the US.
Dick's Sporting Goods also finished in the red after poor weather hampered sales of outdoor products, such as camping, biking and golf. The firm missed second-quarter forecasts and scaled back its earnings predictions for the full year.
S&P 500 - Risers
Best Buy Co. Inc. (BBY) $34.80 +13.24%
Urban Outfitters Inc. (URBN) $43.19 +8.19%
TJX Companies Inc. (TJX) $54.24 +6.88%
J.C. Penney Co. Inc. (JCP) $14.01 +5.98%
Netflix Inc. (NFLX) $273.29 +5.20%
CONSOL Energy Inc. (CNX) $31.73 +4.89%
Vulcan Materials Co. (VMC) $49.63 +3.96%
First Solar Inc. (FSLR) $38.52 +3.86%
Sears Holdings Corp. (SHLD) $41.59 +3.66%
Allergan Inc. (AGN) $92.07 +3.65%
S&P 500 - Fallers
Medtronic Inc. (MDT) $52.83 -2.35%
Corning Inc. (GLW) $14.47 -1.70%
Deere & Co. (DE) $83.25 -1.50%
Dollar General Corp (DG) $53.37 -1.33%
Apple Inc. (AAPL) $501.07 -1.31%
Home Depot Inc. (HD) $74.29 -1.22%
Philip Morris International Inc. (PM) $84.21 -1.12%
Visa Inc. (V) $173.22 -1.01%
Bristol-Myers Squibb (BMY) $41.57 -0.91%
QEP Resources Inc (QEP) $27.95 -0.82%
Dow Jones I.A - Risers
Intel Corp. (INTC) $22.52 +1.09%
Unitedhealth Group Inc. (UNH) $72.46 +1.05%
Bank of America Corp. (BAC) $14.29 +0.99%
Verizon Communications Inc. (VZ) $47.91 +0.86%
Alcoa Inc. (AA) $8.00 +0.76%
Microsoft Corp. (MSFT) $31.62 +0.72%
JP Morgan Chase & Co. (JPM) $52.12 +0.56%
Pfizer Inc. (PFE) $28.53 +0.25%
AT&T Inc. (T) $33.87 +0.24%
Cisco Systems Inc. (CSCO) $24.32 +0.21%
Dow Jones I.A - Fallers
Home Depot Inc. (HD) $74.29 -1.22%
Johnson & Johnson (JNJ) $89.73 -0.80%
General Electric Co. (GE) $23.72 -0.55%
Wal-Mart Stores Inc. (WMT) $73.23 -0.48%
Caterpillar Inc. (CAT) $83.86 -0.40%
Coca-Cola Co. (KO) $38.65 -0.34%
Chevron Corp. (CVX) $118.29 -0.31%
United Technologies Corp. (UTX) $102.40 -0.22%
3M Co. (MMM) $115.42 -0.16%
Hewlett-Packard Co. (HPQ) $25.84 -0.15%
Nasdaq 100 - Risers
Sears Holdings Corp. (SHLD) $41.59 +3.66%
Ross Stores Inc. (ROST) $67.38 +3.38%
Randgold Resources Ltd. Ads (GOLD) $80.38 +2.80%
Staples Inc. (SPLS) $16.84 +2.62%
Celgene Corp. (CELG) $135.74 +2.49%
Regeneron Pharmaceuticals Inc. (REGN) $233.30 +2.48%
Dollar Tree Inc (DLTR) $52.00 +2.14%
Sba Communications Corp. (SBAC) $73.00 +1.78%
Vertex Pharmaceuticals Inc. (VRTX) $76.55 +1.69%
Liberty Interactive Corp (LINTA) $22.37 +1.68%
Nasdaq 100 - Fallers
Apple Inc. (AAPL) $501.07 -1.31%
Mylan Inc. (MYL) $35.73 -0.72%
DIRECTV (DTV) $58.64 -0.71%
CA Inc. (CA) $30.10 -0.56%
Cognizant Technology Solutions Corp. (CTSH) $70.65 -0.48%
Intuit Inc. (INTU) $63.14 -0.44%
NetApp Inc. (NTAP) $41.75 -0.33%
Discovery Communications Inc. Class A (DISCA) $80.02 -0.25%
Activision Blizzard Inc. (ATVI) $16.75 -0.24%
Dell Inc. (DELL) $13.76 -0.22% |
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| | Wednesday newspaper round-up | | North Sea, India, Germany Oil production from the North Sea will slump by more than expected this year and be flat in the next, according to new estimates by Oil&Gas UK. Those revisions are the result of the latest data pertaining to the extent of the necessary maintenance and repair operations which will need to be carried out to keep ageing platforms active. Production is now thus expected to average 1.3m barrels a day in 2013, versus 1.54m last year. Furthermore, the recovery towards output of 2.0m barrels a day has been pushed back to 2020, from 2017, which will mean lower tax revenues for the Treasury, writes The Times.
Indian bank stocks jumped on Wednesday in the aftermath of fresh measures from the Reserve Bank of India [RBI] to inject liquidity into struggling financial markets. Late on Tuesday night the RBI announced that it would purchase Rs80bn ($1.2bn) of long-dated government bonds, along with other measures to ease pressures on banks, whose valuations have suffered as a result of the actions taken to buttress the Rupee over the past month, the Financial Times explains.
Linda Hudson, 62, has surprised analysts with her resignation BAE´s US subsidiary after seven years with the company. Mrs. Hudson has reportedly decided that she had “many more things I want to do professionally and philanthropically”. Her exit comes at a time of savage spending cuts in Pentagon spending. As of yet there is no known planned substitute for Mrs.Hudson. She is credited internally with having streamlined the organisation, The Daily Telegraph reports.
Just a short-time before upcoming elections Germany´s Finance Minister, Wolfgang Schaeuble, has admitted that Greece will require a third bail-out package. That is a deeply unpopular prospect in the central European country even if this third round of aid is expected to be much smaller than two previous ones. The European Central Bank´s Jorg Asmussen is expected to travel today to the Mediterranean country to analyse which must reform measures are necessary before a third dose of rescue funds is authorised, according to The Daily Telegraph.
Chris Leslie, the shadow financial secretary to the Treasury has criticised companies for differing paying bonuses so as take advantage of the lower 45p tax rate which came into force in April. That may have cost the state £85m in lost revenues. According to the figures from the Office for National Statistics, banks and insurers delayed about £700m of bonuses and non-financial firms deferred around £1bn. Businesses seem to have ignored the controversy unleashed by reports - earlier in the year - that Goldman Sachs was planning to do something similar, which forced the US outfit to backtrack, The Daily Telegraph says.
For the Chairman of the Fuel Poverty Advisory Group, Derek Lickorish, ministers have a “duty” to promote the extraction of shale gas because it has the potential to drive down the cost of energy. That follows protests against drilling by exploration outfit Cuadrilla Resources at Balcombe, West Sussex. The company plans to resume exploration in the next few days. Lickorish cited a report commissioned by the Department of Energy and Climate Change which concluded that wholesale gas prices could fall by more than a fifth if shale gas production takes off in the UK and elsewhere in Europe, The Times says. | | |
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