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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | Stocks rise as Chinese data offsets Fed uncertainty London's FTSE 100 rebounded strongly from a six-week low on Thursday morning, snapping a three-day losing streak, after economic data showed a surprise return to growth in Chinese manufacturing activity.
The HSBC/Markit flash purchasing managers' index (PMI) for the Chinese manufacturing sector improved from 47.7 to 50.1 in August, well ahead of the 48.2 consensus forecast the 50-point mark separates expansion from contraction.
Markets were more or less shrugging off an underwhelming set of minutes from the Federal Reserve's latest policy meeting (released last night) which failed to shed any more light on a timeframe for the central bank's imminent tapering of quantitative easing.
The Federal Open Market Committee said at their July 30-31st meeting that they are "broadly comfortable" with the plan to taper stimulus by the end of the year, as they have said in the past, with the labour market having "improved substantially" and economic growth expected to "strengthen further" in the second half.
Stocks have been choppy over recent weeks in anticipation of the minutes - the Dow Jones in New York fell for the sixth consecutive day on Wednesday - as expectations increased that the Fed would begin to withdraw stimulus in September. While the outcome of this impending decision is still uncertain, these expectations have, arguably, now been priced into markets.
IMI impresses with first-half results
Engineering firm IMI was a high riser this morning after broadly meeting consensus estimates with its interim numbers with flat revenue of £1.09bn and a 1% increase in pre-tax profit to £170.1m. With the full-year result expected to be second half-weighted, investors were assured that the group "anticipate[s] better trading conditions in the remainder of the year".
Glencore Xstrata was also performing well this morning as the miner continues to recover after disappointing the market with its first-half report earlier this week. JPMorgan cut its target but maintained its 'overweight' position on the stock today, highlighting the group's "best-in-class free cash flow".
Oil and gas services firm Wood Group was heading the other way after HSBC downgraded its rating from 'overweight' to 'neutral', saying it sees a "more benign medium-term outlook" post first-half results. Sector peers AMEC and Petrofac were also lower this morning.
Closed life and pension fund consolidator Phoenix Group was in demand after saying strong cash generation continued in the first half as it confirmed that it remains on track to reach its full-year targets. |
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FTSE 100 - Risers
IMI (IMI) 1,477.00p +4.83%
Glencore Xstrata (GLEN) 311.85p +2.33%
Antofagasta (ANTO) 913.00p +2.01%
Vedanta Resources (VED) 1,182.00p +1.90%
International Consolidated Airlines Group SA (CDI) (IAG) 309.00p +1.68%
RSA Insurance Group (RSA) 122.00p +1.67%
TUI Travel (TT.) 360.30p +1.61%
Royal Bank of Scotland Group (RBS) 339.30p +1.56%
Wolseley (WOS) 3,243.00p +1.53%
Meggitt (MGGT) 542.50p +1.50%
FTSE 100 - Fallers
Wood Group (John) (WG.) 800.00p -1.30%
Fresnillo (FRES) 1,159.00p -0.43%
Eurasian Natural Resources Corp. (ENRC) 226.20p -0.40%
Experian (EXPN) 1,179.00p -0.34%
Petrofac Ltd. (PFC) 1,231.00p -0.24%
Amec (AMEC) 1,068.00p -0.19%
Aggreko (AGK) 1,652.00p -0.12%
Intertek Group (ITRK) 3,233.00p -0.12%
FTSE 250 - Risers
Phoenix Group Holdings (DI) (PHNX) 767.00p +2.95%
COLT Group SA (COLT) 103.60p +2.78%
St. Modwen Properties (SMP) 313.30p +2.49%
Thomas Cook Group (TCG) 148.40p +2.42%
SIG (SHI) 181.40p +2.31%
Home Retail Group (HOME) 148.30p +2.21%
IG Group Holdings (IGG) 565.50p +2.17%
Renishaw (RSW) 1,708.00p +2.03%
AZ Electronic Materials SA (DI) (AZEM) 328.80p +2.02%
Fidessa Group (FDSA) 2,142.00p +2.00%
FTSE 250 - Fallers
Premier Oil (PMO) 343.40p -3.81%
Carillion (CLLN) 291.00p -2.12%
PayPoint (PAY) 1,070.00p -1.83%
NMC Health (NMC) 352.60p -1.78%
Xaar (XAR) 820.00p -1.44%
Edinburgh Dragon Trust (EFM) 260.00p -1.33%
African Barrick Gold (ABG) 153.30p -1.29%
Templeton Emerging Markets Inv Trust (TEM) 530.50p -1.21%
JPMorgan Emerging Markets Inv Trust (JMG) 539.50p -1.19%
Utilico Emerging Markets Ltd (DI) (UEM) 167.10p -1.07%
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks rise after Federal Reserve minutes FTSE 100: 0.40%
DAX: 0.43%
CAC 40: 0.55%
FTSE MIB: 0.92%
IBEX 35: 1.05%
Stoxx 600: 0.39%
European eauities moved higher after the Federal Reserve released minutes from last month’s policy meeting which signalled a move closer to shedding stimulus.
The Federal Open Market Committee’s (FOMC) minutes from the July 30th to 31st meeting was released on Wednesday.
It showed policymakers were “broadly comfortable” with Chairman Ben Bernanke’s plan to begin scaling back its $85bn per month in bond purchases later this year as long as the economy continues to pick up.
Several members said tapering may be needed soon as the FOMC indicated that it expects economic growth will continue to improve in the second half.
“While it's far from a certainty, the minutes from the FOMC meeting back in late July appear to support our view that the Fed will begin to slow its monthly asset purchases at the next meeting in mid-September,” according to Paul Ashworth, Chief US Economist at Capital Economics.
Ashworth said since the FOMC is still split on its decision to cut quantitative easing, he suspects that officials may begin with a smaller than expected initial reduction by just $10bn to $75bn.
With policymakers keeping a close watch on economic data, a US Labor Department jobs report released later on Thursday will be in focus. The report is expected to show initial claims for unemployment benefits climbed to 330,000 last week from 320,000 the previous week, according to economists.
In Europe, preliminary reports are anticipated to show that manufacturing industries of Germany and France expanded in August.
In China, a purchasing managers’ index of manufacturing from HSBC Holdings and Markit Economics rose to 50.1 in August from 47.7 in July. A reading higher than 50 signals expansion.
IMI, Wienerberger AG, Royal Ahold
Shares in IMI gained after the engineering company reported an increase in first-half profit on bigger margins at its severe service business.
Wienerberger AG slumped after UBS AG lowered its recommendation on the shares to ‘neutral’ from ‘buy’.
Royal Ahold advanced after the Dutch supermarket owner reported second-quarter underlying operating income that exceeded analysts’ expectations.
Other asset classes slide
The euro/dollar was down 0.18% to the 1.3331 dollar mark.
Brent crude futures slipped 0.192 to $109.600 per barrel on the ICE. |
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| | US Market Report | | Stocks slip on tapering uncertainty Dow Jones: -0.70%
Nasdaq: -0.38%
S&P 500: -0.57%
Minutes of the latest monetary policy meeting left investors uncertain as to when the Federal Reserve will start to scale back quantitative easing, pressuring US stocks lower on Wednesday.
This was the Dow's sixth day in the red, its longest losing streak since July 2012.
The Federal Open Market Committee said at their July 30-31st meeting that they are "broadly comfortable" with the plan to taper stimulus by the end of the year, but didn't shed any light on an expected timeframe.
Their outlook for the economy was bright, with the labour market having "improved substantially" and economic growth expected to "strengthen further" in the second half.
Analyst Michael Gapen from Barclays said that the minutes didn't alter his outlook for a tapering of asset purchases to begin in September.
"The minutes were largely non-committal, offering little to suggest that the committee was ready to raise expectations further about tapering in September, while also saying little to indicate that participants did not think a September tapering would be appropriate," Gapen said.
Retailers in focus
Office supplies chain Staples plummeted after cutting its annual profit forecasts as second-quarter earnings failed to meet expectations. Shares dropped by as much as 15%, its worst one-day plunge since May 2011.
Discount retailer Target was moving lower after announcing lower than expected quarterly profits and cutting its guidance.
American Eagle Outfitters, the fashion retail chain, declined after saying that its second-quarter results reflected "disappointing production execution in women's". Meanwhile, the company gave a gloomy outlook for the third quarter due to a competitive retail landscape and a decline in traffic.
DIY group Lowe’s Cos. bucked the trend, rising strongly after beating estimates and raising its full-year earnings guidance.
Food giant JM Smucker fell after despite a 14% increase in first-quarter net income beating expectations.
Home sales data beat expectations
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 [NAR]. The consensus forecast was for a reading of 5.15m.
Mortgage applications dropped by 4.6% week-on-week in the seven days ended on August 16th, figures from the Mortgage Bankers’ Association [MBA] showed.
S&P 500 - Risers
Garmin Ltd. (GRMN) $40.28 +4.76%
Sears Holdings Corp. (SHLD) $43.27 +4.04%
Lowe's Companies Inc. (LOW) $45.81 +3.92%
Visa Inc. (V) $178.39 +2.98%
Cognizant Technology Solutions Corp. (CTSH) $72.50 +2.62%
Tesoro Corp. (TSO) $47.78 +2.31%
Western Digital Corp. (WDC) $66.37 +2.11%
Dollar General Corp (DG) $54.40 +1.93%
Edwards Lifesciences Corp. (EW) $71.70 +1.76%
CF Industries Holdings Inc. (CF) $191.00 +1.66%
S&P 500 - Fallers
Staples Inc. (SPLS) $14.27 -15.29%
J.C. Penney Co. Inc. (JCP) $13.33 -4.85%
Cablevision Systems Corp. (CVC) $17.62 -4.24%
Expedia Inc. (EXPE) $45.70 -3.99%
Target Corp. (TGT) $65.50 -3.61%
Abercrombie & Fitch Co. (ANF) $46.80 -3.51%
Apollo Group Inc. (APOL) $18.27 -3.38%
Best Buy Co. Inc. (BBY) $33.75 -3.02%
Newmont Mining Corp. (NEM) $31.84 -2.96%
Computer Sciences Corp. (CSC) $50.72 -2.65%
Dow Jones I.A - Risers
Wal-Mart Stores Inc. (WMT) $73.55 +0.44%
Bank of America Corp. (BAC) $14.34 +0.35%
International Business Machines Corp. (IBM) $184.86 +0.16%
Dow Jones I.A - Fallers
Alcoa Inc. (AA) $7.84 -2.00%
Hewlett-Packard Co. (HPQ) $25.38 -1.78%
3M Co. (MMM) $113.42 -1.73%
Intel Corp. (INTC) $22.17 -1.57%
Verizon Communications Inc. (VZ) $47.27 -1.34%
Walt Disney Co. (DIS) $61.14 -1.20%
AT&T Inc. (T) $33.48 -1.15%
American Express Co. (AXP) $73.44 -1.12%
Caterpillar Inc. (CAT) $82.94 -1.10%
Travelers Company Inc. (TRV) $79.42 -1.06%
Nasdaq 100 - Risers
Garmin Ltd. (GRMN) $40.28 +4.76%
Sears Holdings Corp. (SHLD) $43.27 +4.04%
Cognizant Technology Solutions Corp. (CTSH) $72.50 +2.62%
Western Digital Corp. (WDC) $66.37 +2.11%
Celgene Corp. (CELG) $137.57 +1.35%
Gilead Sciences Inc. (GILD) $58.69 +1.19%
Priceline.Com Inc. (PCLN) $940.20 +0.80%
Baidu Inc. (BIDU) $135.99 +0.76%
Biogen Idec Inc. (BIIB) $208.08 +0.74%
Seagate Technology Plc (STX) $39.51 +0.74%
Nasdaq 100 - Fallers
Staples Inc. (SPLS) $14.27 -15.29%
Expedia Inc. (EXPE) $45.70 -3.99%
Randgold Resources Ltd. Ads (GOLD) $77.46 -3.63%
Comcast Corp. (CMCSA) $41.83 -2.01%
eBay Inc. (EBAY) $50.96 -1.98%
Analog Devices Inc. (ADI) $46.95 -1.88%
DIRECTV (DTV) $57.54 -1.88%
F5 Networks Inc. (FFIV) $85.38 -1.65%
Intel Corp. (INTC) $22.17 -1.57%
Linear Technology Corp. (LLTC) $38.70 -1.50% |
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| | Thursday newspaper round-up | | MPC, India, Eurozone break-up In an interview with The Daily Telegraph, Martin Weale, one of four external members of the Monetary Policy Committee, said he could “certainly envisage circumstances in which it would be sensible to undertake further asset purchases” on top of the Bank’s recently announced policy of “forward guidance”.
The Indian rupee fell below Rs65 to the US dollar on Thursday, extending a run of record lows as new government policy measures failed to improve investor sentiment in Asia’s third-largest economy. The Reserve Bank of India has announced a series of new measures aimed at stemming the rupee’s decline, but restrictive capital controls announced last week have been taken as a signal of desperation, the FT writes.
The City regulator has confirmed the details of a nationwide redress scheme for as many as 7m Britons sold useless cover between 2005 and 2011. The move follows the Financial Conduct Authority’s crackdown on CPP, an insurer that specialises in ID and credit card theft protection and which was fined £10.5m by the regulator last year, The Daily Telegraph says.
Bundesbank chief Jens Weidmann slammed the “recklessness” of those invoking a Eurozone break-up, in comments to a German business magazine. "What vexes me is how recklessly people invoke such a scenario," he told the magazine in an interview to be published on Thursday, The Daily Telegraph writes.
Almost 250 staff working for Heinz in Britain could lose their jobs as part of a streamlining of the business after its sale six months ago. The Pittsburgh-based food manufacturer, which was bought by Warren Buffett’s Berkshire Hathaway and 3G for $28bn in February, said that it needed to be in a “better position for accelerated growth in a very competitive global market,” The Times reports.
Private sector workers earning the average wage will be 29 pound-a-week worse off when the new flat-rate state pension is introduced, a new estimate shows. The introduction of the single tier pension in 2016, worth £144-a-week in last, will bring an end to the second state pension, which acts as a top-up to the basic state pension. The loss of S2P will be of detriment to millions of workers in the long-term, claims the Trades Union Congress, according to the Daily Mail.
Virgin Money has beefed up its senior management team in a move that it says reflects “a period of unprecedented growth” since its acquisition of Northern Rock. The Edinburgh-based company has hired Lee Rochford from Royal Bank of Scotland as chief financial officer, in an unusual move that will see him work “in tandem” with finance director Finlay Williamson, The Scotsman says. | | |
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