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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks edge higher after late rally UK stocks erased losses on Thursday afternoon, finishing in positive territory for the sixth straight session, though the market gave a rather lacklustre reaction to the last-minute US deal to avert a debt default.
Alastair McCaig, Market Analyst at IG, said: "Having jumped out the way of one oncoming train, the US has merely jumped into the path of another, although this one is slightly further down the tracks."
"Widespread disapproval of this avoidance tactic" was seen earlier in the session, McCaig said, though the FTSE 100 rallied late on to finish 4.57 points higher at 6,576.16, its highest level since September 20th.
Both the Senate and House of Representatives passed a bill late on Wednesday night to fund the US government through to January 15th 2014 and raise the debt ceiling until February 7th. Budget negotiations were also pushed back to December 13th.
While the deal has brought an end to the first US government shutdown in 17 years, Standard & Poor's has estimated that the closure has already cost the US economy $24bn in lost activity, which will have a 0.6% adverse impact on growth in the fourth quarter. Meanwhile, Chinese credit-ratings agency Dagong downgraded its rating for US sovereign debt from 'A' to 'A-', keeping a negative outlook.
Helping sentiment today were UK retail sales which rose by a better-than-expected 0.6% in September, rebounding after a 0.8% decline the month before.
FTSE 350: BskyB surges on strong revenues
Satellite television and broadband group BSkyB rose strongly after recording a strong increase in first-quarter revenues helped by an increase of 800,000 paid-for subscription products.
Brewing giant SABMiller gained after saying its first-half performance had been in line with expectations as strong volume growth at its African business offset a challenging environment in parts of Europe. Sector peer Diageo was also higher after saying that a strong performance in US spirits buoyed first-quarter growth.
Budget airline easyJet was rebounding one day after the group suffered an IT meltdown when its Europe-wide computer system crashed, causing delays and cancellations.
Travis Perkins, the builders merchant, reported "encouraging" sales momentum in the third quarter but said that conditions in retail markets were "challenging", denting the share price.
Banking stocks Barclays and HSBC were also among the fallers after Exane BNP Paribas raised concerns about the Prudential Regulation Authority's imposed capital ratios.
Shares in Polymetal raced ahead after the group reported a record-setting third quarter which saw total gold equivalent production of 413,000 oz, up 30% year-on-year.
Meanwhile, Renishaw took a hit after the group revealed a decline in revenue for the three months ended September 30th. Revenues for the quarter dropped to £79.0m from £95.9m a year earlier. |
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| | UK Event Calendar | | INTERIMS
Booker Group, Etalon Group Ltd GDR (Reg S)
INTERIM DIVIDEND PAYMENT DATE
Melrose Industries, Netplay TV, RPS Group, Standard Chartered
QUARTERLY EX-DIVIDEND DATE
Caterpillar Inc.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (EU) (09:00)
Bloomberg Consumer Confidence (US) (14:45)
Building Permits (US) (13:30)
Capacity Utilisation (US) (14:15)
Continuing Claims (US) (13:30)
Current Account (EU) (09:00)
Housing Starts (US) (13:30)
Industrial Production (US) (16:15)
Initial Jobless Claims (US) (13:30)
Philadelphia Fed Index (US) (15:00)
Speech President New York Fed (17:45)
Speech President Kansas City Fed (17:45)
Speech President Minneapolis Fed (19:45)
IMSS
Cairn Energy, Dechra Pharmaceuticals, Diageo, Jupiter Fund Management , Man Group, Rank Group, Renishaw
EGMS
Zhejiang Expressway Co 'H' Shares
AGMS
Brooks Macdonald Group, Dechra Pharmaceuticals, IG Group Holdings, Monitise, Rank Group, Renishaw
TRADING ANNOUNCEMENTS
Britvic, Mothercare, Rank Group, SABMiller
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Coral Products, Volex
Q1
British Sky Broadcasting Group |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Markets mixed as investors digest US deal - Sulzer, Outotec issue profit warnings
- US agreement fails to lift markets
- German growth forecasts cut
FTSE-100: 0.07%
Dax-30: -0.38%
Cac-40: -0.10%
FTSE Mibtel: -0.40%
Ibex 35: 0.39%
Stoxx 600: 0.11%
European markets finished mixed on Thursday as investors gave a cool reaction to the US agreement to avert a debt default, with sentiment dampened further by profit warnings from Sulzer and Outotec.
With just hours to go before the US was due to hit its borrowing limit, both the Senate and House of Representatives passed a bill late on Wednesday night to fund the government through to January 15th 2014 and raise the debt ceiling until February 7th. Budget negotiations were also pushed back to December 13th.
While the deal has brought an end to the first US government shutdown in 17 years, Standard & Poor's has estimated that the closure has already cost the US economy $24bn in lost activity, which will have a 0.6% adverse impact on growth in the fourth quarter. Meanwhile, Chinese credit-ratings agency Dagong downgraded its rating for US sovereign debt from 'A' to 'A-', keeping a negative outlook.
"The age old city adage of buy the rumour and sell the fact was perfectly demonstrated [today], with the recent rally on resolution whispers reversing as final confirmation of a deal hit the headlines," said Alex Young, Senior Sales Trader at CMC Markets.
Madrid's IBEX 35 closed in positive territory after the Spanish Treasury saw strong demand in a bond auction. Spain issued a more-than-expected €2.545bn in medium-term debt at lower financing costs.
However, bourses in Frankfurt, Paris and Milan fell into the red, though losses were trimmed slightly by the close of trade. London's benchmark index finished flat.
Concerns about the German economy increased today after four major think tanks cut their growth forecasts due to the more sluggish expansion in emerging markets and increasing risks for the global economic recovery.
The non-profit research groups Ifo institute, DIW, IW and RWI, said in their autumn growth forecasts that German gross national product (GDP) would now grow in 2013 by 0.4%, compared to their 0.8% prior spring estimate.
Sulzer warns, KPN plummets
Sulzer fell after the Swiss pump maker lowered its full-year sales guidance for a second time. 2013 sales will not surpass the 4.02bn francs generated in 2012, the company said, worse than previous forecasts with slight growth.
Finnish mining equipment group Outotec dropped after cutting its sales and profit forecasts for 2013 and cutting 500 jobs, as miners have scaled back spending.
Mexican billionaire Carlos Slim had admitted defeat in his attempts to take over Dutch telecommunications outfit KPN for €7.2bn, sending the company's shares sharply lower.
The share price of French liquor maker Remy Cointreau finished flat after announcing that interim sales had decreased by 3.6%.
Grocery giant Carrefour saw supermarket sales in France grow again in the third quarter. Sales in China also improved. German retailer Metro was similarly upbeat, announcing that revenues rose in its country and expressing confidence in its outlook for Christmas period. |
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| | US Market Report | | US close: Fed's Fisher says best to stay the course on bond buying - Fed (Fisher): Best to stay the course on bond buying
- Philly Fed new orders gauge improves
- Dollar index declines sharply
Dow Jones Industrials: -0.60%
Nasdaq Composite: -0.22%
S&P 500: -0.15%
The main US equity benchmarks were slightly off despite last night's agreement on Capitol Hill. The US federal government and global capital markets have won a stay of execution on a debt default. However, some observers, such as Blackrock Chairman Larry Fink, told Bloomberg TV that they are now more worried about the situation in the US than before.
Significantly, the US dollar index was moving lower by 1% on speculation that Federal Reserve tapering may now well be put off for longer.
In that same vein, the President of the Fed bank of Dallas, Robert Fisher, on Thursday morning indicated that the central bank cannot deliver on its full-employment mandate unless the US Congress and President fix their "fiscal mess".
Critically, he added that it was “best” to stay the course on bond buying at the October meeting of the Federal Open Market Committee (FOMC).
Of interest, Goldman Sachs believes that the September non-farm payrolls report may be released on October 25th.
The latest quarterly results out of the likes of Baxter, Philip Morris, Union Pacific and Verizon Communications came in ahead of analysts' estimates.
Those of Google, IBM, Goldman Sachs and E-bay, on the other hand, turned out weaker than was expected.
Wall Street titan Goldman Sachs posted third-quarter revenues of $6.72bn, well below the $7.36bn forecast by analysts.
Revenue from fixed income, currency and commodity trading totalled $1.25bn, versus $2.46bn in the prior period, as the bank was walloped by the slide in Treasury prices over the summer and early fall.
IBM’s sales came in about $1bn short of estimates with the company referencing the uncertainty surrounding Beijing’s new economic plans – due to be announced in November – as weighing on company’s investment plans.
New manufacturing orders improved in Philadelphia Fed district
The Philly Fed manufacturing sector index slipped to 19.8 in October, from 22.3 in the month before (consensus: 15.0). The new orders sub-index, however, improved to 27.5 from 21.2.
Initial weekly unemployment claims fell by 15,000 in the seven days ended on October 12th, to reach 358,000 (consensus: 335,000)
Crude continues to gravitate towards $100/barrel mark
US 10-year Treasury bond yields were off by 5 basis points to 2.61%.
Front month West Texas crude futures are lower by 1.52% to the $100.73/barrel mark on the NYMEX.
S&P 500 - Risers
Peabody Energy Corp. (BTU) $19.37 +8.27%
Sandisk Corp. (SNDK) $66.98 +6.42%
American Express Co. (AXP) $79.39 +4.02%
Danaher Corp. (DHR) $71.84 +3.89%
Cliffs Natural Resources Inc. (CLF) $23.32 +3.74%
United States Steel Corp. (X) $24.04 +3.26%
Verizon Communications Inc. (VZ) $48.77 +3.22%
PPG Industries Inc. (PPG) $171.50 +3.18%
Pioneer Natural Resources Co. (PXD) $218.30 +3.04%
Newmont Mining Corp. (NEM) $26.66 +3.01%
S&P 500 - Fallers
International Business Machines Corp. (IBM) $176.36 -5.55%
Xilinx Inc. (XLNX) $44.45 -5.28%
Unitedhealth Group Inc. (UNH) $72.01 -4.23%
Union Pacific Corp. (UNP) $150.66 -4.14%
eBay Inc. (EBAY) $51.37 -4.02%
Humana Inc. (HUM) $93.62 -3.11%
Norfolk Southern Corp. (NSC) $77.77 -2.68%
Goldman Sachs Group Inc. (GS) $158.09 -2.56%
Stanley Black & Decker Inc. (SWK) $74.81 -2.53%
Dover Corp. (DOV) $86.12 -2.49%
Dow Jones I.A - Risers
American Express Co. (AXP) $79.39 +4.02%
Verizon Communications Inc. (VZ) $48.77 +3.22%
Coca-Cola Co. (KO) $38.35 +0.91%
3M Co. (MMM) $121.74 +0.66%
Microsoft Corp. (MSFT) $34.85 +0.59%
United Technologies Corp. (UTX) $106.95 +0.49%
Visa Inc. (V) $196.52 +0.45%
Johnson & Johnson (JNJ) $91.49 +0.42%
Wal-Mart Stores Inc. (WMT) $75.89 +0.38%
AT&T Inc. (T) $34.26 +0.18%
Dow Jones I.A - Fallers
International Business Machines Corp. (IBM) $176.36 -5.55%
Goldman Sachs Group Inc. (GS) $158.09 -2.56%
Cisco Systems Inc. (CSCO) $22.54 -1.98%
Caterpillar Inc. (CAT) $85.30 -1.12%
Travelers Company Inc. (TRV) $85.39 -0.80%
JP Morgan Chase & Co. (JPM) $53.70 -0.56%
McDonald's Corp. (MCD) $94.79 -0.45%
Merck & Co. Inc. (MRK) $47.00 -0.36%
General Electric Co. (GE) $24.28 -0.31%
Home Depot Inc. (HD) $74.80 -0.19%
Nasdaq 100 - Risers
Sandisk Corp. (SNDK) $66.98 +6.42%
Randgold Resources Ltd. Ads (GOLD) $71.66 +3.11%
Monster Beverage Corp (MNST) $58.14 +2.96%
Mondelez International Inc. (MDLZ) $32.24 +2.56%
Vodafone Group Plc ADS (VOD) $36.83 +1.99%
Baidu Inc. (BIDU) $152.53 +1.55%
Sba Communications Corp. (SBAC) $82.45 +1.15%
Facebook Inc. (FB) $51.64 +0.98%
Netflix Inc. (NFLX) $325.76 +0.89%
Costco Wholesale Corp. (COST) $118.33 +0.83%
Nasdaq 100 - Fallers
Xilinx Inc. (XLNX) $44.45 -5.28%
eBay Inc. (EBAY) $51.37 -4.02%
Green Mountain Coffee Roasters Inc. (GMCR) $64.59 -3.51%
F5 Networks Inc. (FFIV) $86.63 -2.15%
Cisco Systems Inc. (CSCO) $22.54 -1.98%
Autodesk Inc. (ADSK) $40.04 -1.81%
Regeneron Pharmaceuticals Inc. (REGN) $303.08 -1.49%
Amazon.Com Inc. (AMZN) $306.23 -1.37%
Yahoo! Inc. (YHOO) $32.71 -1.15%
Maxim Integrated Products Inc. (MXIM) $29.59 -1.14% |
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| | Broker Tips | | Broker tips: UK banks, SABMiller, Antofagasta UK banks were trading in the red on Thursday after Exane BNP Paribas speculated that lenders may need to raise more capital to meet regulatory requirements.
The Prudential Regulation Authority (PRA), due to make its final statement in December, could introduce additional capital buffers on top of current regulation, raising the fully loaded equity tier-1 ratio to 13% "over time". Analysts believe that Lloyds (rated 'outperform') is the only UK bank that is likely to reach a 13% fully loaded equity ratio by 2015.
Canaccord Genuity has upgraded its rating for SABMiller from 'sell' to 'hold' after an 'improved performance' during the drinks group's first half.
The broker said that SABMiller has "defied the more extreme emerging-market sceptics" by reporting that volume and revenue growth had picked up in the three months to September.
HSBC has raised its recommendation for Chile-based copper mining group Antofagasta from 'neutral' to 'overweight' as it lifted its target for the commodity.
The bank reportedly raised its 2014 forecast for copper from $7,250 to $7,750 a metric tonne, saying that supply concerns have been "overdone". | | |
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