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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: FTSE 100 hits one-month high UK stocks hit a one-month high on Friday on hopes of a near-term continuation of US stimulus, while data from China showed a pick-up in growth.
The FTSE 100 broke through the 6,600 level today to finish at 6,622.58, up 46.42 points on the day. The last time the index closed higher was on September 19th when it finished at 6,625.39.
Senior Market Analyst Michael Hewson from CMC Markets said that markets were given "further impetus into the end of the week, as investors celebrate the fact that the uncertainty of the last three weeks coming from the US has finally been concluded in the short - term".
Also helping gains was a strong start on Wall Street after a string of well-received earnings from some heavyweight blue chips, such as Google, Morgan Stanley and General Electric. This helped push the S&P 500 extend gains after hitting a record high last night.
Back in London, the FTSE 100 managed to close 2.1% higher on the week as investors showed optimism that the Federal Reserve could delay tapering stimulus given that the government shutdown is likely to have dampened growth in the fourth quarter. Markets are now looking ahead to the delayed release of the September US employment report next Tuesday, which will be key factor in the Fed's next move.
Analysts at Capital Economics said they still expect that the Fed will begin to taper its asset purchases before the end of this year, "but we wouldn't rule out a longer delay, possibly even until mid-2014".
Chinese gross domestic product grew at a year-on-year rate of 7.8% in the third quarter, rebounding after the 7.5% growth seen in the second quarter. This was in line with consensus estimates, though a slowdown in growth of industrial production, retail sales and fixed asset investment in September could mean that there will be some weakness in upcoming quarters, analysts warned. |
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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: Stocks close at fresh five year highs - European equities establish fresh five year highs
- Investors debate timing of Fed tapering
- Euro/dollar near technical resistance
- Gold to fall below 1,100 dollar per ounce level, SocGen says
FTSE 100: 0.71%
Dax-30: 0.60%
Cac-40: 1.09%
FTSE Mibtel 30: 0.38%
Ibex 35: 0.84%
Stoxx 600: 0.79%
European equities closed at fresh five year highs on Friday, tracking the gains seen on Wall Street. A fair bit of market commentary is referencing the possibility that the start of Fed tapering will be postponed until the end of the first quarter of 2014 as the trigger behind today's advance.
Speeches from three speakers from the US Federal Reserve, due out later this evening, may help to clarify the situation.
Sentiment also seems to have received a small boost this morning following the release of in-line Chinese gross domestic product (GDP) data showing a 7.8% rate of expansion, slightly higher than in the previous quarter.
Having said that "[...] Leading indicators of activity suggest China's recovery ended in September," Nomura economists were telling clients following the release of the above data.
They pointed out how electricity production – often regarded as a better indicator of real economic activity - fell "sharply" in September, by 13.6% on the month after a 4% rise in August.
Linked to the apparent change in expectations for Fed policy, the euro/dollar rose 0.15% to 1.3692, nearing technical resistance towards 1.3710. Worth noting, the European Central Bank is believed to not be at all content to watch the single currency appreciate excessively.
Schindler announces stock buy-back programme
Elevator maker Schindler has announced that it is to spend as much as 1.06bn francs in a modified share buyback program.
Alken Asset Management has sold a 2.7% stake the Spanish manufacturer of blood-plasma products Grifols. After Thursday's close UBS said it placed the shares to institutional investors at €29 each.
Europe's largest hotel group by sales, Accor, unveiled accelerating revenue growth for the third quarter.
The French auto parts supplier Valeo said revenue rose by 2.2% in the third quarter, as Brazilian and Japanese sales took a hit from adverse currency movements.
From a sector standpoint the best performance was to be seen in the following industrial groups within the DJ Stoxx 600: Travel&Leisure (1.97%), Personal and Household goods (1.90%) and Food and beverage (1.41%).
The Belgian central bank's consumer confidence index for the month of October has improved slightly, to -6 from -7 in the month before.
Gold to fall below $1,100/ounce, SocGen says
Front month Brent crude futures are rising by 0.429 dollars to the $109.59/barrel mark on the ICE.
Of interest, analysts at Societe Generale on Friday forecast that the price of gold will end the year at $1,200/ounce and move below $1,100/ounce next year. Of possible interest, they pointed out the risk that hedging from producers could result in a quick move lower.
The euro/dollar is now up by 0.15% to the 1.3692 mark.
CAC 40 - Risers
Cap Gemini (CAP) € 48.06 +5.46%
Alstom (ALO) € 26.50 +5.24%
Accor (AC) € 33.61 +4.04%
L'Oreal (OR) € 127.50 +3.57%
Safran (SAF) € 45.67 +2.73%
Schneider Electric (SU) € 62.20 +2.59%
Lafarge (LG) € 50.40 +2.58%
Kering (KER) € 172.10 +2.38%
LVMH (MC) € 141.00 +2.14%
Michelin (ML) € 80.74 +2.10%
CAC 40 - Fallers
GDF Suez (GSZ) € 18.56 -1.30%
ST Microelectronics (STM) € 6.33 -1.14%
Carrefour (CA) € 27.36 -0.99%
Credit Agricole (ACA) € 9.14 -0.64%
Veolia Environnement (VIE) € 13.47 -0.37% |
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| | US Market Report | | US open: - Google shares soaring 13 per cent higher
- Wave of positive company results
- SP 500 at new record high
Dow Jones Industrials: 0.07%
Nasdaq Composite: 1.01%
S&P 500: 0.45%
US stock were moving higher again and setting new records as markets reacted to a host of better-than-expected earnings reports from a number of blue chips – particularly from tech giant Google.
The S&P 500 index was extending gains after finishing at its highest ever close of 1,733.15 on Thursday night as analysts attempted to predict how the recent political uncertainty on Capitol Hill will affect the outlook for monetary policy.
As the dust begins to settle following the last-minute deal on Wednesday to extend the debt ceiling and reopen the US government, markets are hoping that the Federal Reserve could delay tapering stimulus until early 2014, given that the shutdown is likely to have dampened growth in the fourth quarter.
Chief Analyst Allan von Mehren from Danske Bank said that the central bank will likely begin to taper at its meeting at the end of January. "The Fed likely needs to see the recovery on a stronger footing before it will start to taper. Hence hard data on private consumption, capex and job growth should improve in order for the Fed to move," he said.
Investors are now looking ahead to the delayed release of the September US employment report next Tuesday, which will be key factor in the Fed's next move.
Google's shares hit a record high above the $1,000-per-share level following third-quarter results last night that beat expectations. The internet giant reported adjusted earnings of $10.74 a share on sales of $11.92bn in the quarter, ahead of consensus forecasts for $10.36 and $11.7bn, respectively, helped by strong growth in advertising.
Banking heavyweight Morgan Stanley swung to a better-than-expected profit in the third quarter, reporting a net income of $906m, up from a loss of $1.02bn the year before.
Earnings per share, once debt valuation adjustments are taken into account, came in at 55 US cents versus the 40 cents forecast by analysts. Revenues came in at $8.1bn, versus the $7.7bn which had been estimated by analysts.
US conglomerate General Electric was also higher after adjusted earnings totalled 40 cents a share in the third quarter, ahead of the 35 cents estimate.
Chipotle Mexican Grill, Align Technology, Parker-Hannifin and Baker Hughes were also making gains ahead after their earnings reports. However AMD dropped sharply despite beating expectations as it post a 6% fall in computer chip sales.
Treasury yields flat
Front month West Texas crude futures are nudging higher by 0.35% to the $101.03/barrel mark on the NYMEX.
US 10-year bond yields are flat at 2.58%.
S&P 500 - Risers
Chipotle Mexican Grill Inc. (CMG) $485.95 +10.68%
Google Inc. (GOOG) $979.99 +10.26%
Baker Hughes Inc. (BHI) $55.78 +7.72%
Parker-Hannifin Corp. (PH) $113.35 +6.11%
Ingersoll Rand Ltd. (IR) $66.65 +4.93%
Kansas City Southern (KSU) $116.48 +2.93%
General Electric Co. (GE) $25.39 +2.88%
Schlumberger Ltd. (SLB) $93.97 +2.78%
Chesapeake Energy Corp. (CHK) $28.29 +2.39%
FMC Technologies Inc. (FTI) $59.57 +2.27%
S&P 500 - Fallers
Interpublic Group of Companies Inc. (IPG) $15.99 -5.33%
Intuitive Surgical Inc. (ISRG) $378.44 -5.18%
Genuine Parts Co. (GPC) $77.63 -3.88%
People's United Financial Inc. (PBCT) $14.50 -3.78%
Lowe's Companies Inc. (LOW) $47.93 -2.22%
Mylan Inc. (MYL) $38.87 -2.12%
Tyson Foods Inc. (TSN) $29.20 -1.91%
Honeywell International Inc. (HON) $85.15 -1.83%
Baxter International Inc. (BAX) $66.19 -1.56%
M&T Bank Corp. (MTB) $110.94 -1.49%
Dow Jones I.A - Risers
General Electric Co. (GE) $25.39 +2.88%
Caterpillar Inc. (CAT) $86.92 +1.25%
Verizon Communications Inc. (VZ) $49.42 +1.06%
3M Co. (MMM) $123.33 +0.58%
Goldman Sachs Group Inc. (GS) $159.18 +0.55%
Cisco Systems Inc. (CSCO) $22.89 +0.48%
Travelers Company Inc. (TRV) $86.38 +0.42%
Coca-Cola Co. (KO) $38.70 +0.39%
Exxon Mobil Corp. (XOM) $87.60 +0.14%
Wal-Mart Stores Inc. (WMT) $75.86 +0.11%
Dow Jones I.A - Fallers
Home Depot Inc. (HD) $74.64 -1.45%
Microsoft Corp. (MSFT) $34.45 -1.35%
American Express Co. (AXP) $79.64 -0.74%
International Business Machines Corp. (IBM) $173.66 -0.67%
McDonald's Corp. (MCD) $94.99 -0.50%
E.I. du Pont de Nemours and Co. (DD) $59.39 -0.42%
Pfizer Inc. (PFE) $30.14 -0.40%
Walt Disney Co. (DIS) $66.17 -0.38%
Visa Inc. (V) $197.63 -0.33%
Johnson & Johnson (JNJ) $91.69 -0.30%
Nasdaq 100 - Risers
Google Inc. (GOOG) $979.99 +10.26%
Facebook Inc. (FB) $54.03 +3.48%
Baidu Inc. (BIDU) $159.01 +3.36%
Amazon.Com Inc. (AMZN) $317.77 +2.25%
Priceline.Com Inc. (PCLN) $1,050.86 +1.81%
Yahoo! Inc. (YHOO) $33.27 +1.60%
Wynn Resorts Ltd. (WYNN) $172.00 +1.50%
Intuit Inc. (INTU) $68.88 +1.29%
Expedia Inc. (EXPE) $48.82 +1.27%
Monster Beverage Corp (MNST) $58.11 +1.15%
Nasdaq 100 - Fallers
Intuitive Surgical Inc. (ISRG) $378.44 -5.18%
Mylan Inc. (MYL) $38.87 -2.12%
eBay Inc. (EBAY) $50.66 -1.40%
Microsoft Corp. (MSFT) $34.45 -1.35%
Alexion Pharmaceuticals Inc. (ALXN) $109.43 -1.23%
O'Reilly Automotive Inc. (ORLY) $133.77 -1.05%
Altera Corp. (ALTR) $37.46 -0.96%
Seagate Technology Plc (STX) $48.04 -0.86%
Express Scripts Holding Co (ESRX) $63.66 -0.81%
Vertex Pharmaceuticals Inc. (VRTX) $76.24 -0.81% |
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| | Broker Tips | | Broker tips: RBS, Utilities, Computacenter Investec has maintained its 'sell' rating for UK lender Royal Bank of Scotland (RBS), recommending investors not to own the stock ahead of its third-quarter results on November 1st.
Analyst Ian Gordon said that the bank will likely fall back into the red in the second half, though most of the damage will come in the fourth quarter. "Despite all the considerable 'balance sheet repair', we still believe that RBS has a dangerous cocktail of legal, political and regulatory obstacles to overcome," he said.
Credit Suisse has labelled SSE and Shanks (rated 'outperform') as buying opportunities, saying that the market is overly cautious about these utility providers.
Meanwhile, despite staying cautious on the UK water sector due to concerns over low returns, Credit Suisse raised its rating for water company United Utilities from 'underperform' to 'neutral', saying that the stock has lagged and now offers just 2% total return downside to the target of 660p.
IT infrastructure services firm Computacenter was trading in the red on Friday after UBS downgraded the stock from 'buy' to 'neutral'.
While the bank said that the stock's valuation is not demanding, it believes the company is "navigating a tricky path in France and Germany's turnaround is at an early stage". "With July's capital return behind us, we see limited upside from current levels and move to a 'neutral' rating." | | |
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