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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 fall as caution sets in ahead of data Markets opened lower on Friday morning following a choppy week as traders choose to head into the weekend with caution ahead of a barrage of economic data from the Eurozone and US later on.
Eurozone economic confidence is expected to record a reading of 96 in September from 95.2 last month, according to analysts. Meanwhile the Eurozone industrial confidence index is forecast to climb to -7 this month from -7.9 the prior month while the services confidence index is seen rising to -4.6 from -5.3.
Germany’s consumer price index will also be in focus and is expected to come in at 1.5% in September on the year, in line with the previous month.
Over in the States, markets will be focusing on US personal consumption, income and spending figures and the University of Michigan consumer confidencereport, not to mention speeches from a number of policymakers.
Weighing on stocks this morning were comments fromMark Carney, the Bank of England Governor, who reportedly said that he sees no reason to continue bond-buying following signs that the UK economy is on the up. According to the Yorkshire Post, he said: "My personal view is, given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it."
Nevertheless, he said that if the recovery stalls the bank would consider the option of further quantitative easing.
In other news, Chancellor George Osborne has called on the Bank of England to play a bigger part in supporting the government's Help to Buy scheme to ensure it does not bring about a property boom. This comes alongside the news that the North-South housing price gap has, for the first time, widened to more than £100,000, according to Nationwide.
'Taper', US budget still in focus
Trade has been volatile since last week's decision by the Federal Reserve to hold off from tapering quantitative easing and await a stronger recovery. Conflicting comments by Fed officials since then haven't helped and have worked to cloud the outlook for monetary policy with investors uncertain over when the move will eventually happen.
Fed Bank of Richmond President Jeffrey Lacker spoke on Thursday, saying that he supported a scaling back of stimulus this month but said the Fed would find ot hard to rein in policy without losing face given that last week's shock announcement hurt the central bank's credibility.
"Fisk assets like equities and commodities have held onto the year’s gains, but are now plagued by valuations that could make them unattractive in a new era of tapering, whenever that actually happens," said Financial Trader David White from Spreadex.
"Investors are paying more now from expected earnings than they have in any of the recent past, and whether or not that is justified will be fleshed out by no better event than an ending to cheap money," he said.
Budget negotiations in Washington continue to limit upside on markets with investors nervous ahead of the October 1st deadline, hope that politicians can agree on a extension to the current debt-ceiling limit of $16.7tn to avoid an government shutdown when the new fiscal year begins.
FTSE 100: Randgold lower after BofA cuts gold forecasts
Randgold Resources was a heavy faller this morning after Bank of America Merrill Lynch cut its gold-price forecast by 17% to $1,294 an ounce for 2014. Nevertheless, the bank said Randgold remains amount its preferred 'buys' in the sector due to low costs, a rising grade profile and strong balance sheet.
Other miners including Antofagasta, Anglo American, Vedanta Resources, BHP Billiton and Rio Tinto were also providing a drag on markets this morning.
Airlines easyJet and IAG headed higher as oil price receded after the UN Security Council agreed on a resolution requiring Syria to surrender its chemical weapons, dampening the risk of more conflict in the Middle East.
Engineering group IMI also rose after hiring former Weir boss Mark Selway as its new Chief Executive. He will take the reins from company veteran Martin Lamb who will step down at the end of this year after nearly 13 years at the helm. |
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| | FTSE 100 - Risers
Babcock International Group (BAB) 1,213.00p +1.68%
Travis Perkins (TPK) 1,676.00p +1.58%
Bunzl (BNZL) 1,360.00p +1.19%
GKN (GKN) 351.60p +0.69%
IMI (IMI) 1,463.00p +0.69%
Glencore Xstrata (GLEN) 346.80p +0.59%
BT Group (BT.A) 345.00p +0.55%
Centrica (CNA) 368.90p +0.55%
International Consolidated Airlines Group SA (CDI) (IAG) 340.90p +0.53%
Capita (CPI) 1,006.00p +0.50%
FTSE 100 - Fallers
Persimmon (PSN) 1,082.00p -2.43%
Antofagasta (ANTO) 834.00p -2.28%
SABMiller (SAB) 3,177.50p -1.73%
Randgold Resources Ltd. (RRS) 4,469.00p -1.67%
Vedanta Resources (VED) 1,085.00p -1.63%
Mondi (MNDI) 1,049.00p -1.59%
Rio Tinto (RIO) 3,093.50p -1.50%
Anglo American (AAL) 1,546.50p -1.47%
BHP Billiton (BLT) 1,860.50p -1.19%
GlaxoSmithKline (GSK) 1,578.00p -1.16%
FTSE 250 - Risers
Regus (RGU) 187.70p +3.70%
Premier Farnell (PFL) 218.40p +3.56%
Telecity Group (TCY) 862.00p +2.56%
Michael Page International (MPI) 495.80p +2.27%
BH Global Ltd. USD Shares (BHGU) 11.83 +1.98%
Savills (SVS) 628.00p +1.87%
Thomas Cook Group (TCG) 148.00p +1.86%
Electrocomponents (ECM) 280.10p +1.60%
CSR (CSR) 519.50p +1.46%
Dignity (DTY) 1,421.00p +1.43%
FTSE 250 - Fallers
Countrywide (CWD) 532.50p -2.20%
Evraz (EVR) 130.60p -2.10%
Hochschild Mining (HOC) 188.10p -1.98%
Centamin (DI) (CEY) 46.50p -1.67%
Ladbrokes (LAD) 171.10p -1.55%
Polymetal International (POLY) 679.00p -1.52%
Amlin (AML) 409.00p -1.49%
Investec (INVP) 398.40p -1.48%
Computacenter (CCC) 506.00p -1.46%
Lonmin (LMI) 325.50p -1.45% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks fall as Carney votes against stimulus - UK, Eurozone consumer confidence
- Carney votes against QE
- US data comes as budget deadline looms
FTSE 100: -0.35
DAX: -0.20%
CAC 40: -0.28%
FTSE MIB: -0.26
IBEX 35: -0.30%
Stoxx 600: -0.09%
European equities slid before a report on Eurozone consumer confidence and after Bank of England Governor Mark Carney reportedly said he saw no reason to continue stimulus.
Market research group GfK's forward-looking consumer sentiment indicator for the UK rose to -10 this month compared to -13 in August. Economists were expecting a reading of -11.
The report follows Thursday's UK gross domestic product figures which confirmed the economy grew by 0.7% in the second quarter.
In light of an improvement of the UK economy, Carney is said to have decided against continuing quantitativeeasing.
However, he also said that if the recovery stalls then the Bank would consider the option of further bond-buying, according to the Yorkshire Post.
In the Eurozone, economic confidence will rise to a reading of 96 in September from 95.2 last month, according to analysts.
Other figures are anticipated to show that Eurozone industrial confidence climbed to -7 this month from -7.9 the prior month and services confidence increased to -4.6 from -5.3.
Later on, a slate of data in the US including personal consumption expenditure, personal income, personal spending and University of Michigan will be released.
It comes amid speculation over when the Federal Reserve will begin scaling back monetary stimulus and talks over the government’s debt ceiling.
The government has until next week to pass a budget or face a potential shutdown.
Some economists say a government shutdown would cut into fourth-quarter economic growth by as much as 1.4 percentage points depending on its length.
“We’re likely to see more risk aversion in the markets on Friday, as we head into the final weekend before Monday’s deadline, when Congress must pass a budget for the next year or face partial government shutdown,” said Craig Erlam, Market Analyst at Alpari UK.
H&M, Vestas
H&M advanced after Credit Suisse Group, Cantor Fitzgerald LP and Societe Generale lifted their ratings on the European clothing retailer.
Vestas Wind Systems rallied after the Danish turbine maker formed a
venture with Mitsubishi Heavy Industries to develop offshore wind energy.
Countrywide declined following news Alchemy Partners LLP is selling a 5.9% stake in the UK property broker.
Vallourec dropped after the producer of steel pipes said it will buy the assets of Lupatech’s tubular services Rio das Ostras unit for €21m. |
| | This major London estate agent is listing on the LSE. | | Your free report on the Foxtons IPO includes: - IPO parameters (price range/market cap etc)
- Full breakdown of dates, including grey-market period.
- Performance of peers and recent similar IPOs.
Click here for your free Foxtons IPO report Losses can exceed deposits. |
| | US Market Report | | Benchmarks snap five-day losing streak as jobless claims fall - Jobless claims post surprise drop
- Pending homes sales, US GDP disappoints
- Debt-ceiling talks still in focus
Dow Jones: 0.36%
Nasdaq: 0.69%
S&P 500: 0.37%
US markets finished with moderate gains on Thursday with the Dow Jones and S&P 500 ending a five-day losing streak as an upbeat reading of US jobless claims offset concerns about budget negotiations in Washington.
US jobless claims fell by 5,000 last week, surprising the consensus of analysts who had expected a jump of 15,000. IT issues in a number of regions had distorted figures the week before leading to a higher number of claims so markets had largely expected a rebound in claims last week.
“While the lingering issues in California could result in a further uptick in continuing claims in coming weeks, it appears that the improved initial claims numbers are more a result of improved labour-market conditions than technical issues,” said analyst Cooper Howes fromBarclays.
Markets opened strongly after the figures but upside was limited by some disappointing housing-market data and no upwards revisions to economic growth forecasts.
Meanwhile, investors were cautious ahead of the October 1st deadline, hope that politicians can agree on a extension to the current debt-ceiling limit of $16.7tn to avoid an government shutdown when the new fiscal year begins.
Treasury Secretary Jacob Lew said on Wednesday the US will hit its debt ceiling by October 17th. He said unless the US is allowed to extend its borrowing limit, currently set at $17trn, the government will be left with $30bn of cash - half the money it needs to pay its bills.
The future of Federal Reserve monetary policy continues to be in focus in the aftermath of last week's surprise decision by the Fed to hold off from tapering stimulus as it await a stronger recovery. Conflicting comments from Fed officials since then have sparked further uncertainty as analysts begin speculate over if October will see the first 'taper'.
Fed Bank of Richmond President Jeffrey Lacker spoke on Thursday, saying that he supported a scaling back of stimulus this month but said the Fed would find ot hard to rein in policy without losing face given that last week's shock announcement hurt the central bank's credibility.
"It could be hard to do it [tapering] in October without losing face, but I don't see why we couldn't do it," he said.
Jobless claims in surprise fall
US jobless claims dropped from a revised 310,000 to 305,000 in the week ended September 20th, surprising the consensus of analysts who had expected a jump to 325,000.
“While the lingering issues in California could result in a further uptick in continuing claims in coming weeks, it appears that the improved initial claims numbers are more a result of improved labour-market conditions than technical issues,” said analyst Cooper Howes from Barclays.
Pending-home sales fell for the third straight month, dropping 1.6% in August after a revised 1.4% decline the month before. Analysts had expected a fall of just 1%.
The second and final estimate of US gross domestic product (GDP) growth was unrevised at an annualised rate of 2.5% for the second quarter, disappointing analysts who had expected an upwards change to 2.6%.
Commenting on the numbers economists at Barclays Research had this to say: “All in all, the report provides no new information for policymakers, who will be more keenly focused on forward-looking growth indicators. On this front the picture remains mixed - our GDP tracking estimate, for example, currently suggests some easing in the third quarter (as it stands at 1.7%).”
JC Penney leads gains
Fashion retailer JC Penney shares registered a large rise after saying it expects positive sales trends in the second half of this year.
Retailing peer Bed Bath & Beyond rallied after it raised its forecast for full-year adjusted earnings per share to between $4.88 to $5.01 from a previous range of $4.84 to $5.01.
Caesars Entertainment Corp. fell as the casino operator started selling 10m new shares.
Hertz Global Holdings declined after cutting its forecast for full-year revenue and profit due to weaker than expected car rentals at US airports.
Online marketplace eBay surged after paying $800m to cut payment platform Braintree which it said was a perfect fit with it own payments arm PayPal.
S&P 500 - Risers
Regeneron Pharmaceuticals Inc. (REGN) $305.53 +4.55%
Bed Bath & Beyond Inc. (BBBY) $77.54 +4.52%
Yahoo! Inc. (YHOO) $32.75 +4.50%
eBay Inc. (EBAY) $56.64 +4.48%
Cabot Oil & Gas Corp. (COG) $37.12 +4.36%
Discovery Communications Inc. Class A (DISCA) $83.99 +3.73%
Autodesk Inc. (ADSK) $41.94 +3.13%
Range Resources Corp. (RRC) $78.09 +3.08%
Celgene Corp. (CELG) $149.89 +2.97%
J.C. Penney Co. Inc. (JCP) $10.42 +2.96%
S&P 500 - Fallers
Jabil Circuit Inc. (JBL) $21.62 -9.92%
Windstream Holdings Inc (WIN) $8.19 -4.32%
Western Digital Corp. (WDC) $63.32 -3.22%
News Corp Class A (NWSA) $16.29 -3.04%
Eli Lilly and Company (LLY) $51.04 -2.98%
Cisco Systems Inc. (CSCO) $23.77 -2.70%
H&R Block Inc. (HRB) $26.05 -2.62%
McCormick & Co. (MKC) $66.56 -2.19%
Tesoro Corp. (TSO) $44.53 -2.07%
PG&E Corp. (PCG) $41.04 -1.98%
Dow Jones I.A - Risers
Verizon Communications Inc. (VZ) $47.67 +1.54%
Walt Disney Co. (DIS) $65.24 +1.23%
Coca-Cola Co. (KO) $38.74 +1.07%
Microsoft Corp. (MSFT) $32.77 +0.82%
Boeing Co. (BA) $119.38 +0.73%
Home Depot Inc. (HD) $76.07 +0.73%
McDonald's Corp. (MCD) $98.19 +0.58%
AT&T Inc. (T) $34.23 +0.53%
American Express Co. (AXP) $76.32 +0.43%
Procter & Gamble Co. (PG) $78.05 +0.42%
Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $23.77 -2.70%
Intel Corp. (INTC) $23.41 -1.22%
Alcoa Inc. (AA) $8.27 -0.72%
Chevron Corp. (CVX) $123.49 -0.47%
Hewlett-Packard Co. (HPQ) $21.30 -0.47%
Bank of America Corp. (BAC) $14.08 -0.42%
Caterpillar Inc. (CAT) $84.20 -0.36%
Travelers Company Inc. (TRV) $85.83 -0.17%
Exxon Mobil Corp. (XOM) $87.07 -0.08%
Wal-Mart Stores Inc. (WMT) $74.62 -0.04%
Nasdaq 100 - Risers
Regeneron Pharmaceuticals Inc. (REGN) $305.53 +4.55%
Bed Bath & Beyond Inc. (BBBY) $77.54 +4.52%
Yahoo! Inc. (YHOO) $32.75 +4.50%
eBay Inc. (EBAY) $56.64 +4.48%
Discovery Communications Inc. Class A (DISCA) $83.99 +3.73%
Autodesk Inc. (ADSK) $41.94 +3.13%
Celgene Corp. (CELG) $149.89 +2.97%
Micron Technology Inc. (MU) $17.47 +2.95%
Sirius XM Radio Inc (SIRI) $3.93 +2.64%
Alexion Pharmaceuticals Inc. (ALXN) $115.97 +2.58%
Nasdaq 100 - Fallers
Western Digital Corp. (WDC) $63.32 -3.22%
Cisco Systems Inc. (CSCO) $23.77 -2.70%
Seagate Technology Plc (STX) $43.14 -1.66%
Broadcom Corp. (BRCM) $26.37 -1.57%
Monster Beverage Corp (MNST) $53.57 -1.42%
Intel Corp. (INTC) $23.41 -1.22%
KLA-Tencor Corp. (KLAC) $60.96 -0.86%
Randgold Resources Ltd. Ads (GOLD) $72.11 -0.73%
Cerner Corp. (CERN) $48.71 -0.57%
Fiserv Inc. (FISV) $100.94 -0.47% |
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| | Press Round-up | | Mark Carney, the Bank of England Governor, sees no need for more stimulus for the economy given the gathering pace of the recovery, sending the pound higher. He said the central bank would consider the case for adding to the 375bn pounds it has already pumped into the economy should the recovery falter: "But my personal view is, given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," he said in an interview with the Yorkshire Post published on Friday, The Daily Telegraphreports.
A leading energy boss has called for the nationalisationof large parts of the industry to prevent the UK’s power and gas market from being manipulated by foreign companies. In an extraordinary intervention, Kevin McCullough, the Chief Executive of UK Coal, has called for the Government to take control of assets in the country that are owned by German, French and Spanish companies, The Timessays.
George Osborne has given the Bank of England a greater role in ensuring that his flagship Help to Buy scheme does not create a housing bubble. The Chancellor, who said earlier this month that the financing scheme is not a “weapon of mass destruction”, has asked the central bank’s Financial Policy Committee to review the Help to Buy programme every year. The FPC was originally told to advise on the plan every three years, according to The Daily Telegraph.
Economists expect the UK economy to accelerate in the autumn after official figures today confirmed that output grew at a rapid 0.7% in the second quarter. Gross domestic product growth in the first three months of the year was also revised up to 0.4% from 0.3%, the Office for National Statistics said, taking economic growth in the first half of the year to 1.1%. The third and final estimate of second quarter growth showed consumers spent an extra £661m between April and June, with spending on new cars 4.5% higher than three months earlier, The Daily Mailsays.
The average UK home is increasing in value by more than £50 a day, according to new figures from Nationwide which also show that prices in some London boroughs, including Hackney and Islington, have doubled over the past decade. Britain's biggest building society said the acceleration in house prices had been "surprisingly quick", with the annual rate of growth now running at 5% nationally and 10% in London – in both cases the strongest figures since 2010. As recently as May this year, the UK annual rate was just 1%, according to The Guardian.
Leaders of consumer and energy groups have rallied to support Ed Miliband's proposals to freeze prices and shake up the power market, saying his initiative had exploded outdated ideas that radical reform was not necessary or possible. As Centrica and SSE saw their share prices hit hard for the second day in a row, Adam Scorer, director of policy at the independent organisation Consumer Futures, said he did not accept the threats from the big six power companies that a shake-up could lead to the lights going out and investment drying up, The Guardian writes.
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