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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | The spotlight was back on US economic data on Thursday with markets ending flat as investors looked ahead to the next policy meeting at the Federal Reserve.
The FTSE 100 finished just 0.55 points higher at 6,588.98. Nevertheless, this was still the third straight day in positive territory for London's benchmark index, which finished at its highest closing level since August 13th when it reached 6,611.94.
Ronnie Chopra, Head of Strategy at Tradenext, said that the key 6,600 level "has been a barrier in recent sessions".
Weighing on sentiment today was the news that factory output in the Eurozone dropped by 1.5% compared to a small increase in June. This was much worse than the 0.3% decline expected by analysts with figures from Germany, Europe's largest economy, showing a 2.3% decline in industrial production.
FOMC in focus after jobless claims
Initial US weekly unemployment claims dropped by 31,000 in the week ended on September 7th to 292,000 - their lowest level since April of 2006. The consensus estimate had been for a reading of 323,000. Employment data has been closely watched in recent months after Fed Chairman Ben Bernanke said back in May that he was looking for a decent recovery in the labour market before beginning the 'tapering' of quantitative easing.
However, markets gave a subdued reaction to the numbers today after the Labor Department said that work carried out on computer systems in two states caused those employment agencies to report fewer applications. Financial Sales Trader Lee Mumford from Spreadex said that the figures "should be taken with a pitch of salt".
Traders seem reluctant to take on too much risk ahead of the Federal Open Market Committee meeting next week, especially after last Friday's worse-than-expected US jobs report which cast doubt over the outlook for monetary policy. Markets are hoping that policymakers might wait until later on in the year before pulling the plug on stimulus, as they await stronger signs of a recovery.
Syria agrees to hand over chemical weapons
Developments in Syria were continuing to catch investors' eyes today as President Bashar al-Assad confirmed that he will agree to Russia’s plan to place chemical weapons under international control. He made the announcement on Russian TV’s Rossiya 24 as US and Russian foreign ministers prepared to meet in Geneva to discuss the proposal.
Russian President Vladimir Putin yesterday called on the US not to intervene in Syria, especially if action is not approved by the United Nations first, given that it could lead to more violence and "unleash a new wave of terrorism". US intelligence says that Assad's regime was behind the attacks last month that killed around one and a half thousand people.
In a rare direct appeal in The New York Times, Putin said: "The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation."
FTSE 100: AMEC walks away; Morrisons rises after H1 results
AMEC was a high riser today after saying that it is considering additional cash returns in the fourth quarter after walking away from making a firm offer for FTSE 250 engineering peer Kentz Corporation. The company also said that it continues to see "attractive opportunities to extend its geographic footprint in the growth regions".
Supermarket group Morrisons was on the rise after a broadly in-line set of first-half results. Profits fell 21.8% to £344m while total turnover was flat at £8.9bn. Analysts at Jefferies said it was a "mixed" first half, but an "undemanding valuation and a clear reduction in capes intensity from here onwards point to an improving outlook".
Fashion retailer Next edged higher after it hiked its interim dividend payout after driving up half-year profits by 8.2% despite a fall in sales. The company said it was able to sell more clothes at full price and few clothes in its sale.
Among the fallers was temporary power and temperature control group Aggreko after Deutsche Bank lowered its target for the stock from 2,100p to 1,870p. The bank kept its 'buy' rating but said that it now expects underlying profits to be flat next year.
Industrial group Melrose was also in the red after Citigroup downgraded the stock to 'neutral' on valuation grounds after a strong outperformance so far this year. The bank said: "While we continue the see attractions on a long-term view, driven by a management team, which has strong record of creating value, we believe the near-term catalysts are appropriately captured in today’s share price."
Meanwhile, SABMiller was taken down a peg by Nomura which cut its rating to 'reduce'. The broker said that the exceptional profit growth across the industry since 2005 is "unlikely to be matched".
Silver and gold prices were heading lower today, causing shares of precious metals producers Randgold and Fresnillo to take a hit.
FTSE 250: Dialight and Kentz provide a drag
Delays in the signing of large contracts has forced industrial lighting group Dialight to warn that profits will be flat for the full year, causing shares to drop sharply today.
Kentz was also a heavy faller after AMEC said it would not make a firm offer for the company after its £700m proposal was rejected. Kentz Chief Executive Christian Brown said: “I would like to take this opportunity to reiterate our focus on delivering value to our shareholders. Naturally, while we have every confidence in our ability to deliver further value to our shareholders as an independent company, the board fully understands its responsibilities to all our shareholders.” |
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| | FTSE 100 - Risers
Amec (AMEC) 1,078.00p +1.89%
Morrison (Wm) Supermarkets (MRW) 302.50p +1.78%
Glencore Xstrata (GLEN) 343.65p +1.37%
William Hill (WMH) 424.10p +1.22%
Sainsbury (J) (SBRY) 400.80p +1.19%
Severn Trent (SVT) 1,736.00p +1.17%
AstraZeneca (AZN) 3,195.00p +1.06%
Royal Bank of Scotland Group (RBS) 360.40p +0.95%
British Sky Broadcasting Group (BSY) 857.50p +0.94%
BAE Systems (BA.) 446.70p +0.93%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,496.00p -2.56%
Aggreko (AGK) 1,610.00p -2.48%
Antofagasta (ANTO) 864.00p -2.48%
IMI (IMI) 1,477.00p -1.99%
Fresnillo (FRES) 1,194.00p -1.97%
Melrose Industries (MRO) 307.00p -1.82%
Compass Group (CPG) 842.50p -1.35%
Legal & General Group (LGEN) 197.20p -1.30%
Pearson (PSON) 1,275.00p -1.24%
Resolution Ltd. (RSL) 323.40p -1.13%
FTSE 250 - Risers
Home Retail Group (HOME) 172.70p +5.37%
Perform Group (PER) 570.00p +4.11%
Playtech (PTEC) 720.00p +2.49%
Evraz (EVR) 137.10p +1.63%
Essar Energy (ESSR) 138.20p +1.62%
Derwent London (DLN) 2,349.00p +1.56%
Countrywide (CWD) 558.00p +1.45%
International Public Partnerships Ltd. (INPP) 126.50p +1.44%
United Drug (UDG) 339.20p +1.41%
Shaftesbury (SHB) 593.00p +1.37%
FTSE 250 - Fallers
Dialight (DIA) 1,150.00p -16.36%
Kentz Corporation Ltd. (KENZ) 499.00p -9.19%
Bumi (BUMI) 200.10p -6.80%
Centamin (DI) (CEY) 44.50p -3.68%
ITE Group (ITE) 279.40p -3.66%
Sports Direct International (SPD) 705.00p -3.29%
Salamander Energy (SMDR) 120.90p -3.28%
Pace (PIC) 273.20p -2.91%
Euromoney Institutional Investor (ERM) 1,150.00p -2.87%
Oxford Instruments (OXIG) 1,330.00p -2.85% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks mixed on Eurozone, US data FTSE 100: -0.04%
DAX: -0.11%
CAC 40: -0.39%
FTSE MIB: -0.27%
IBEX 35: 0.55%
Stoxx 600: -0.14%
European equities were mixed as Eurozone industrial production fell and US unemployment claims declined.
Factory output in the 17-nation region dropped 1.5% compared to June’s 0.3% increase, missing the consensus for a 0.2% decline, according to Eurostat.
In Germany, Europe's largest economy, industrial production was down 2.3% in July from June.
The report sparked concerns among traders that the Eurozone was headed for a further slump.
It came as European Central Bank President Mario Draghi reaffirmed the monetary authority’s forward guidance on interest rates, saying it expected them to remain "at present or lower levels for an extended period".
The bank left its key rate unchanged at 0.5% last week but Draghi said policymakers had toyed with a possible rate cut, due to concern about money market rates and the uncertain nature of the recovery.
In the US, initial weekly unemployment claims dropped by 31,000 to 292,000 in the week ended September 7th, the lowest level since April of 2006. The consensus estimate had been for a reading of 323,000.
However the Labor Department report said the sharp drop was due to technical problems in some states collecting claims data and as well as the Labor Day holiday-shortened week.
The Federal Reserve is turning to such economic indicators to weigh whether the US has recovered enough to begin scaling back its $85bn per month in bond purchases.
Economists are mixed on whether the Fed will start tapering at its next policy meeting on September 17th to 18th.
Syria agrees to relinquish chemical weapons
Syria's President Bashar al-Assad has confirmed that he will agree to Russia’s plan to place chemical weapons under international control.
He made the announcement on Russian TV’s Rossiya 24 as US and Russian foreign ministers prepared to meet in Geneva to discuss the proposal.
The US has said it would consider Russia’s recommendation to have Syria hand over its chemical weapons to international control in exchange for avoiding military action.
President Barack Obama has called for a military strike if diplomacy failed after Assad’s regime allegedly used chemicals weapons against civilians on August 21st.
“The news that Syria is willing to give up its chemical weapons to the international community to be destroyed and that the US is willing to consider this has provided a major boost to the markets,” said Craig Erlam, Market Analyst at Alpari Research.
“As we can see by the approval ratings in most countries, people do not want another war and this provides an alternative. Obviously, it’s unlikely to be plain sailing from here, with complications arising along the way, but this is an encouraging development from last week.”
Home Retail, EDF
Home Retail jumped after reporting an 11% increase in same-store sales at its Homebase home-improvement business in the 13 weeks ended August 1st.
Électricité de France slumped after Norges Bank launched the sale of a €289m stake in the utility company on Wednesday evening.
Morrison Supermarkets advanced after raising its dividend and saying its restructuring plan was on track as it reported half-year results.
Sanofi plunged after withdrawing a US application for a diabetes drug.
Aggreko fell to lead miners lower after Deutsche Bank cut its 2013 and 2014 earnings per share forecast and reduced the target to 1870p from 2100p, citing risks of competition, contractual problems and pricing pressures.
Other asset classes rise
Brent crude futures increased $0.854 to $112.460 per barrel on the ICE.
The euro edged up 0.03% to the 1.3315 US dollar. |
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| | US Market Report | | Investors ponder next move Dow Jones Industrials: 0.02%
Nasdaq Composite: 0.13%
S&P 500: -0.01%
The main US equity benchmarks are now trading little changed following the release of some better, although apparently not entirely reliable, macroeconomic indicators.
Worth pointing out is a bullish call on the market courtesy of Goldman Sach’s Chief Equity strategist, Peter Oppenheimer. He reiterated his ‘bullish’ stance, explaining that stocks will continue to rally driven by company earnings rather than expanding valuations.
Shareholders in PC maker Dell will vote today on whether they approve founder Michael Dell’s $25bn to take the company private.
Pandora Media is rising by 5% after naming its new chief executive officer -Brian McAndrews.
Morgan Stanley has downgraded Netflix to equal weight, from overweight.
Hilton Group has filed to go public in a transaction worth $1.25bn.
Very large, but suspect, drop in US unemployment claims
Initial US weekly unemployment claims dropped by 31,000 in the seven days ended on September 7th, reaching 292,000; that is their lowest level since April of 2006. The consensus estimate had been for a reading of 323,000.
However, the figures seem to have been affected by extraordinary circumstances. Two US states reportedly upgraded their computer systems, apparently impacting the data.
However, continuing claims for the week before - which was not impacted by those factors -also dropped sharply, by 73,000, to 2,871,000.
US import prices remained unchanged month-on-month in August, instead of the 0.5% gain expected by markets.
Crude futures rise
Front month West Texas crude futures are now rising by 0.40% to the $108.00/barrel level mark on the NYMEX.
10-year US Treasury yields are down by 4 basis points to 2.88%.
S&P 500 - Risers
Sprint Nextel Corporation (S) $6.81 +4.77%
Walgreen Co. (WAG) $52.80 +4.04%
Kroger Co. (KR) $38.83 +3.08%
Yahoo! Inc. (YHOO) $30.02 +2.84%
TripAdvisor Inc. (TRIP) $75.66 +2.53%
Dominion Resources Inc. (D) $60.09 +2.53%
Lennar Corp. Class A (LEN) $35.46 +2.46%
Sears Holdings Corp. (SHLD) $57.03 +2.20%
PulteGroup Inc. (PHM) $16.95 +2.17%
Nike Inc. (NKE) $68.79 +1.78%
S&P 500 - Fallers
Cliffs Natural Resources Inc. (CLF) $22.75 -3.76%
Valero Energy Corp. (VLO) $35.01 -2.94%
Newmont Mining Corp. (NEM) $28.64 -2.78%
Corning Inc. (GLW) $14.50 -2.62%
CF Industries Holdings Inc. (CF) $193.15 -2.55%
Garmin Ltd. (GRMN) $42.24 -2.29%
Crown Castle International (CCI) $71.38 -2.26%
International Paper Co. (IP) $48.30 -2.15%
Tenet Healthcare Corp. (THC) $38.00 -1.94%
Halliburton Co. (HAL) $49.22 -1.93%
Dow Jones I.A - Risers
United Technologies Corp. (UTX) $108.99 +1.08%
AT&T Inc. (T) $34.26 +0.85%
Home Depot Inc. (HD) $75.56 +0.69%
Procter & Gamble Co. (PG) $78.71 +0.56%
Boeing Co. (BA) $109.68 +0.42%
Verizon Communications Inc. (VZ) $46.70 +0.39%
Wal-Mart Stores Inc. (WMT) $74.32 +0.36%
American Express Co. (AXP) $75.44 +0.35%
McDonald's Corp. (MCD) $97.79 +0.34%
Chevron Corp. (CVX) $124.28 +0.29%
Dow Jones I.A - Fallers
Coca-Cola Co. (KO) $38.38 -1.03%
Merck & Co. Inc. (MRK) $47.66 -1.00%
JP Morgan Chase & Co. (JPM) $52.76 -0.94%
Hewlett-Packard Co. (HPQ) $22.12 -0.67%
Alcoa Inc. (AA) $8.14 -0.67%
Exxon Mobil Corp. (XOM) $88.28 -0.63%
General Electric Co. (GE) $23.96 -0.54%
Bank of America Corp. (BAC) $14.58 -0.48%
Travelers Company Inc. (TRV) $83.34 -0.47%
E.I. du Pont de Nemours and Co. (DD) $58.67 -0.27%
Nasdaq 100 - Risers
Yahoo! Inc. (YHOO) $30.02 +2.84%
Sears Holdings Corp. (SHLD) $57.03 +2.20%
Vertex Pharmaceuticals Inc. (VRTX) $81.51 +2.13%
Citrix Systems Inc. (CTXS) $73.79 +1.78%
QUALCOMM Inc. (QCOM) $69.27 +1.73%
Tesla Motors Inc (TSLA) $166.16 +1.62%
Whole Foods Market Inc. (WFM) $56.89 +1.43%
Viacom Inc. Class B (VIAB) $83.18 +1.38%
Micron Technology Inc. (MU) $16.68 +1.15%
KLA-Tencor Corp. (KLAC) $60.35 +1.05%
Nasdaq 100 - Fallers
Randgold Resources Ltd. Ads (GOLD) $71.42 -2.87%
Garmin Ltd. (GRMN) $42.24 -2.29%
Activision Blizzard Inc. (ATVI) $16.87 -1.83%
Nuance Communications Inc. (NUAN) $19.63 -1.70%
Netflix Inc. (NFLX) $304.11 -1.36%
Intuitive Surgical Inc. (ISRG) $372.07 -1.18%
Green Mountain Coffee Roasters Inc. (GMCR) $84.02 -1.15%
F5 Networks Inc. (FFIV) $90.98 -1.13%
Sba Communications Corp. (SBAC) $77.78 -1.01%
Check Point Software Technologies Ltd. (CHKP) $57.84 -0.91% |
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| | Broker Tips | | African Minerals: Deutsche Bank cuts target from 550p to 450p and retains a buy recommendation. Citi lowers target from 380p to 320p keeping a buy recommendation.
Aggreko: Deutsche Bank reduces target from 2100p to 1870p, while staying with its buy recommendation.
ARM Holdings: Goldman Sachs raises target from 1400p to 1500p and retains its strong buy recommendation. Numis ups target from 750p to 800p maintaining a reduce rating.
Ashmore Group: Morgan Stanley lowers target from 420p to 410p, while its equal-weight rating remains unchanged.
Aveva: Goldman Sachs increases target from 3600p to 4450p and reiterates a strong buy recommendation.
Barclays: Investec cuts target from 345p to 330p downgrading from buy to add.
Barratt Developments: Citi moves target from 315p to 330p and maintains a neutral rating.
Berendsen: Investec increases target from 828p to 958p, while downgrading from buy to add.
Betfair: Jefferies raises target from 930p to 1175p and keeps a buy recommendation.
Bodycote: Citi takes target from 525p to 665p upgrading to neutral.
Bovis Homes Group: Panmure Gordon shifts target from 801p to 806p and reiterates its hold recommendation.
Blinkx: Goldman Sachs increases target from 152p to 215p and stays with its buy recommendation.
British American Tabacco: Societe Generale cuts target from 3650p to 3550p and maintains its hold recommendation.
Fidessa: Goldman Sachs raises target from 2050p to 2630p, while retaining a neutral rating.
Greene King: JP Morgan downgrades to neutral with a target of 880p.
Imagination Technologies: Goldman Sachs ups target from 310p to 390p and stays with its buy recommendation.
Kier Group: Liberum Capital increases target from 1500p to 1800p and stays with its buy recommendation. Investec raises target from 1500p to 1955p maintaining a buy recommendation. Numis takes target from 1670p to 1950p, but downgrades to add.
Kingfisher: Bank of America moves target from 400p to 450p leaving its neutral rating unchanged. Cantor Fitzgerald raises target from 300p to 400p and retains a hold recommendation. Deutsche Bank takes target from 360p to 400p reiterating a hold recommendation. Societe Generale ups target from 392p to 414p leaving its hold recommendation unaltered.
Marston's: JP Morgan cuts target from 180p to 160p and downgrades to neutral.
Melrose: Citi moves target from 295p to 305p, while downgrading to neutral.
Micro Rocus: Goldman Sachs shifts target from 770p to 775p, while downgrading from neutral to sell.
Mitchells & Butlers: JP Morgan downgrades to underweight with a target of 410p.
Oxford BioMedica: N+1 Singer shifts target from 4p to 3.60p retaining its buy recommendation.
Oxford Resources: N+1 Singer ups target from 1390p to 1425p maintaining a hold recommendation.
Pace: Goldman Sachs takes target from 330p to 370p and retains a neutral rating.
Playtech: JP Morgan raises target from 800p to 825p keeping its overweight rating.
Premier Foods: Investec ups target from 120p to 160p, but downgrades from buy to hold.
Reed Elsevier: Jefferies takes target from 700p to 884p and reiterates its buy recommendation.
Restaurant Group: JP Morgans ups target from 620p to 665p retaining an overweight rating.
SABMiller: Nomura reduces target from 3300p to 2800p and downgrades from neutral to reduce.
Sage Group: Goldman Sachs takes target from 366p to 410p and reiterates a neutral rating.
Spectris: Citi increases target from 2326p to 2650p and maintains a buy recommendation.
Spirax-Sarco-Engineering: Citi raises target from 2905p to 3040p, while downgrading to hold.
Spirent Communications: Goldman Sachs moves target from 165p to 175p and stays with a neutral rating.
Telecity: Goldman Sachs ups target from 1200p to 1230p keeping a buy recommendation.
Thalassa Holdings: WH Ireland raises target from 185p to 310p and retains a buy recommendation.
TUI Travel: JP Morgan upgrades to overweight with a target of 410p.
Vedanta Resources: Alphavalue shifts target from 1126.20p to 1121.60p, while upgrading from sell to reduce.
WANdisco: Panmure Gordon downgrades from buy to hold with an unchanged target of 1149p.
Wolfson Microelectronics: Goldman Sachs moves target from 145p to 160p, but still recommends selling.
Young & Co's Brewery: JP Morgan ups target from 910p to 980p, while downgrading to neutral. | | |
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