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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 on hopes over US deal, taper delay Stocks gained strongly on Thursday morning as signs of progress in Washington and hopes over a continuation of US monetary stimulus prompted bargain hunters to step in following three straight days of losses.
The FTSE 100 set a fresh three-month low of 6,337.91 on Wednesday afternoon, its worst level since July 3rd, but rebounded with gains of as much as 0.7% this morning.
In focus this morning will be the Bank of England's (BoE) policy meeting with the Monetary Policy Committee likely to hold interest rates at 0.5%. The central bank has vowed to maintain the rate at its record low until the unemployment rate falls from its current level of 7.7% to 7%. During its meeting, the BoE is also expected to keep its asset purchase programme at £375bn.
The government shutdown, entering its 10th day on Thursday, is still weighing heavily on the minds of investors, but some small signs of progress supported US and Asian equity markets overnight.
According to reports, House Republicans are now warming to the idea put forward by President Barack Obama to have a short-term increase in the debt ceiling while leaders continue to wrangle over the budget and a deficit-reduction plan. Chairman of the House Budget Committee Paul Ryan has outlined a plan that would extend the borrowing limit for four to six weeks. However, Obama continues to reiterate that the reopening of government would come without conditions to change policy.
Well-known dove Janet Yellen was nominated as the next chair of the US Federal Reserve on Wednesday afternoon. Yellen will be the first female at the head of the US central bank and is widely expected to argue for a continuation of aggressive monetary easing started by her predecessor, Ben Bernanke, when he steps down on January 31st 2014.
Minutes of the latest Federal Open Market Committee meeting were released yesterday, showing that most members at the central bank still thought it would be appropriate to begin tapering quantitative easing (QE) before the end of the year. However, given that the meeting took place before the government shutdown, many now believe that a taper could be delayed until next year.
Analyst Michael Gapen from Barclays said that the minutes were consistent with his expectation that the Fed will begin to scale back QE in December.
"That said, the ongoing federal government shutdown and upcoming expiration of the debt ceiling suggests that the decision to taper could be pushed into 2014. A sooner resolution to the fiscal risks that cloud the outlook could keep December on the table, but a longer stalemate could dampen growth sufficiently and lead to a tapering in Q1 14 or later."
FTSE 100: Financials, utilities on the rise early on
Asset management firm Schroders was a high riser this morning after earlier this week launching the Global Recovery Fund, a new type of fund that favours "deeply unloved" stocks that people have overlooked in the hope that they will outperform in an economic recovery.
British banking giant RBS was also performing well this morning, along with domestic peers Lloyds and Barclays.
Household utility giant SSE rose after revealing that electricity and gas tariffs are to rise by an average 8.2% from November as the company attempts to pass on rising wholesale energy costs, along with delivery charges and government levies to customers. Sector peers Centrica and United Utilities also gained this morning.
Industrial conglomerate Melrose Industries was in demand after saying it was selling Crosby and Acco to private equity group Kohlberg Kravis Roberts for £627.3m. It said it would use the proceeds to pay down debt and fund a return of capital “in due course".
FTSE 250: WH Smiths jumps on buyback
Newsagent WH Smith surged after booking a full-year profit ahead of expectations, lifting its final dividend 15% and announcing a further £50m share buyback. Pre-tax profit rose 6% to £108m for the year ended August 31st while total sales fell 5% to £1.18bn.
Information and events group Informa sunk after the news that its Finance Director Adam Walker will move over to aerospace giant GKN to replace William Seeger. Westhouse Securities was also weighing on the stock this morning after downgrading its rating to 'neutral'. |
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| | FTSE 100 - Fallers
G4S (GFS) 237.00p -0.84%
Babcock International Group (BAB) 1,155.00p -0.43%
Vedanta Resources (VED) 1,017.00p -0.29%
British Sky Broadcasting Group (BSY) 857.50p -0.23%
Unilever (ULVR) 2,349.00p -0.09%
Reed Elsevier (REL) 821.00p -0.06%
BT Group (BT.A) 342.50p -0.06%
FTSE 250 - Risers
WH Smith (SMWH) 903.50p +8.20%
Ladbrokes (LAD) 189.60p +5.45%
Keller Group (KLR) 986.50p +4.95%
Hochschild Mining (HOC) 160.30p +4.77%
Bwin . party Digital Entertainment (BPTY) 125.80p +4.14%
Imagination Technologies Group (IMG) 272.60p +4.01%
Ashtead Group (AHT) 610.00p +3.39%
Berkeley Group Holdings (The) (BKG) 2,205.00p +3.18%
Diploma (DPLM) 635.50p +3.08%
Redrow (RDW) 242.90p +3.01%
FTSE 250 - Fallers
Informa (INF) 497.60p -2.43%
Telecity Group (TCY) 757.50p -1.62%
Brown (N.) Group (BWNG) 483.70p -1.08%
Oxford Instruments (OXIG) 1,389.00p -0.93%
Eurasian Natural Resources Corporation (ENRC) 217.90p -0.73%
Perform Group (PER) 555.00p -0.72%
Inmarsat (ISAT) 700.00p -0.71%
Go-Ahead Group (GOG) 1,670.00p -0.60%
PayPoint (PAY) 1,024.00p -0.58%
Genesis Emerging Markets Fund Ltd. (GSS) 542.00p -0.55% |
| | UK Event Calendar | | INTERIM DIVIDEND PAYMENT DATE
Abbey Protection, Antofagasta, Macfarlane Group, Molins, UBM, Zotefoams
QUARTERLY PAYMENT DATE
XP Power Ltd. (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Report (EU) (09:00)
Import and Export Price Indexes (US) (13:30)
Initial Jobless Claims (US) (13:30)
Treasury Budget Statement (US) (19:00)
FINALS
Air Partner, WH Smith
AGMS
Argos Resources Ltd. (DI), IPPlus, Mattioli Woods, Prosperity Minerals Holdings Ltd.
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
FINAL DIVIDEND PAYMENT DATE
AdEPT Telecom, Colefax Group |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks rise on Fed nomination, debt ceiling talks FTSE 100: 0.72%
DAX: 0.92%
CAC 40: 1.20%
FTSE MIB: 1.39%
IBEX 35: 1.36%
Stoxx 600: 0.96%
European stocks advanced after the US government made progress on debt ceiling talks and Janet Yellen was nominated as the new Federal Reserve Chair.
Bank of England, ECB
The Bank of England is expected to keep its monetary policy unchanged when it meets on Thursday.
The Bank’s Monetary Policy Committee is likely to hold interest rates at 0.5%.
The central bank has vowed to maintain the rate at its record low until the unemployment rate falls from its current level of 7.7% to 7%.
During its meeting, the BoE is also expected to keep its asset purchase programme at £375bn.
The European Central Bank, on the other hand, is expected to unveil new liquidity measures at its next policy announcement, according to economists.
Almost three in four of economists predict President Mario Draghi will reveal new liquidity measures such as longer-term refinancing operations, surveys by Bloomberg showed.
The majority of forecasters also say interest rates will remain unchanged through the first half of 2015.
Tryg gains on third quarter results
Tryg rallied after the Nordic property and casualty insurer reported third-quarter pre-tax profit of 907m kroner, compared to the forecast for 885m kroner.
Hays rose after the UK recruitment agency posted a 2% rise in first-quarter net fees compared to last year on a comparable basis.
Givaudan declined after the fragrance maker reported third-quarter sales that missed estimates. |
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| | US Market Report | | Stocks mixed as markets react to Yellen, FOMC minutes Dow Jones: 0.18%
Nasdaq: -0.46%
S&P 500: 0.03%
US stock markets finished mixed on Wednesday as investors reacted to increased hopes that monetary stimulus could continue and signs that the political deadlock in Washington has started to ease.
Well-known dove Janet Yellen was nominated as the next chair of the US Federal Reserve on Wednesday afternoon. Yellen will be the first female at the head of the US central bank and is widely expected to argue for a continuation of aggressive monetary easing started by her predecessor, Ben Bernanke, when he steps down on January 31st 2014.
Craig Erlam, Market Analyst at Alpari said that investors should "respond positively" to the news, "especially given that he was previously believed to be more in favour of a much more hawkish Lawrence Summers".
Meanwhile, the government shutdown, now in its ninth day, was still weighing heavily on the minds of investors, but some small signs of progress were supporting stocks on Wednesday.
According to reports, House Republicans are now warming to the idea put forward by President Barack Obama to have a short-term increase in the debt ceiling while leaders continue to wrangle over the budget and a deficit-reduction plan. Chairman of the House Budget Committee Paul Ryan has outlined a plan that would extend the borrowing limit for four to six weeks.
However, Obama continues to reiterate that the reopening of government would come without conditions to change policy.
FOMC in focus
Minutes of the latest Federal Open Market Committee meeting were released on Wednesday, though the market reaction was rather subdued. The report showed that the Fed chose to maintain current levels of stimulus in September, most members at the central bank still thought it would be appropriate to begin tapering quantitative easing before the end of the year.
However, given that the meeting took place before the government shutdown, many now believe that a taper could be delayed until next year.
Analyst Michael Gapen from Barclays said that the minutes were consistent with his expectation that the Fed will begin to scale back QE in December. "That said, the ongoing federal government shutdown and upcoming expiration of the debt ceiling suggests that the decision to taper could be pushed into 2014.
"A sooner resolution to the fiscal risks that cloud the outlook could keep December on the table, but a longer stalemate could dampen growth sufficiently and lead to a tapering in Q1 14 or later."
Alcoa, Ford
Alcoa advanced after the aluminium producer reported quarterly earnings that beat forecasts after its smelting business returned to profitability. Demand from the automotive and aerospace sectors lent a helping hand.
Ford gained after the US auto-maker said vehicle wholesales in China climbed 61% to 96,111 units in September compared with a year ago.
Yum slumped as the owner of the KFC fast-food chain cut its 2013 earnings forecast.
Costco declined after the US warehouse-club chain reported fourth-quarter profit that fell short of analysts’ estimates.
Men’s Wearhouse rallied after Jos. A. Bank Clothiers Inc. said it wants to buy the apparel retailer for $2.3bn. The company has spurned the approach.
S&P 500 - Risers
Hewlett-Packard Co. (HPQ) $22.60 +8.92%
Darden Restaurants Inc. (DRI) $49.57 +7.11%
Hartford Financial Services Group Inc. (HIG) $32.10 +4.63%
CenturyLink Inc. (CTL) $32.19 +2.91%
Boston Scientific Corp. (BSX) $11.72 +2.27%
Patterson Companies Inc. (PDCO) $40.44 +2.15%
Costco Wholesale Corp. (COST) $114.59 +2.12%
Invesco Ltd. (IVZ) $32.16 +2.10%
Intuitive Surgical Inc. (ISRG) $389.16 +2.08%
Abercrombie & Fitch Co. (ANF) $33.86 +2.02%
S&P 500 - Fallers
Yum! Brands Inc. (YUM) $66.48 -7.24%
Fastenal Co. (FAST) $46.85 -6.26%
Sears Holdings Corp. (SHLD) $59.57 -5.52%
Netflix Inc. (NFLX) $288.43 -4.59%
Gannett Co. Inc. (GCI) $24.39 -2.87%
Alexion Pharmaceuticals Inc. (ALXN) $105.48 -2.76%
Kraft Foods Group, Inc. (KRFT) $51.88 -2.23%
W.W. Grainger Inc. (GWW) $252.36 -2.20%
JDS Uniphase Corp. (JDSU) $14.24 -2.20%
Regeneron Pharmaceuticals Inc. (REGN) $281.56 -2.13%
Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $22.60 +8.92%
Alcoa Inc. (AA) $8.10 +2.02%
AT&T Inc. (T) $33.75 +1.93%
International Business Machines Corp. (IBM) $181.32 +1.45%
Bank of America Corp. (BAC) $13.84 +1.10%
Procter & Gamble Co. (PG) $76.95 +0.81%
Caterpillar Inc. (CAT) $83.52 +0.81%
Intel Corp. (INTC) $22.59 +0.49%
Johnson & Johnson (JNJ) $85.96 +0.41%
3M Co. (MMM) $117.57 +0.35%
Dow Jones I.A - Fallers
Merck & Co. Inc. (MRK) $47.27 -1.01%
Boeing Co. (BA) $114.47 -0.84%
Travelers Company Inc. (TRV) $82.35 -0.77%
McDonald's Corp. (MCD) $93.27 -0.71%
Walt Disney Co. (DIS) $63.59 -0.64%
Cisco Systems Inc. (CSCO) $22.50 -0.60%
Coca-Cola Co. (KO) $37.08 -0.54%
Chevron Corp. (CVX) $116.13 -0.51%
General Electric Co. (GE) $23.57 -0.42%
Exxon Mobil Corp. (XOM) $85.16 -0.41%
Nasdaq 100 - Risers
Costco Wholesale Corp. (COST) $114.59 +2.12%
Intuitive Surgical Inc. (ISRG) $389.16 +2.08%
Henry Schein Inc. (HSIC) $104.72 +1.69%
Micron Technology Inc. (MU) $18.15 +1.26%
Apple Inc. (AAPL) $486.59 +1.17%
Mattel Inc. (MAT) $40.76 +0.92%
Expeditors International Of Washington Inc. (EXPD) $42.41 +0.83%
Equinix Inc. (EQIX) $165.36 +0.70%
Sandisk Corp. (SNDK) $61.48 +0.52%
Intel Corp. (INTC) $22.59 +0.49%
Nasdaq 100 - Fallers
Green Mountain Coffee Roasters Inc. (GMCR) $68.89 -6.64%
Fastenal Co. (FAST) $46.85 -6.26%
Sears Holdings Corp. (SHLD) $59.57 -5.52%
Netflix Inc. (NFLX) $288.43 -4.59%
Tesla Motors Inc (TSLA) $168.78 -3.41%
Vertex Pharmaceuticals Inc. (VRTX) $70.15 -2.87%
Alexion Pharmaceuticals Inc. (ALXN) $105.48 -2.76%
Liberty Interactive Corp (LINTA) $22.86 -2.47%
Kraft Foods Group, Inc. (KRFT) $51.88 -2.23%
Regeneron Pharmaceuticals Inc. (REGN) $281.56 -2.13% |
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| | Friday newspaper round-up | | Help to Buy, Royal Mail, Libya... The Government’s flagship Help to Buy mortgage subsidy scheme could make housing even less affordable, the International Monetary Fund has warned. By launching it when house prices are already rising across the country the plan, formally unveiled this week, ‘may lead to even higher housing prices’, the Fund said. The Treasury scheme has come under widespread criticism that it could provoke another housing bubble, The Daily Mail writes.
More than 700,000 people have applied for shares in Royal Mail, the government has revealed, reviving privatisation fever last seen in the 1980s and intensifying fears that the postal service is being sold too cheaply. Vince Cable, the business secretary, said the public had placed orders for more than seven times the number of shares available to them. Small investors could have bought the entire company if 70% of the shares on sale had not been reserved for City investors and pension funds, The Guardian reports.
Hundreds of thousands of private investors will get the bare minimum of shares in tomorrow’s Royal Mail flotation as evidence mounted that the government has inadvertently created a stampede by selling it off too cheaply. Another City stockbroker has risked its reputation by saying that it suspects the £3.3bn Royal Mail sell-off has been underpriced by more than 80%. Canaccord Genuity believes that Royal Mail should be valued at nearer £6bn (599p a share) compared with the 330p a share that ministers are likely to ask for when it starts trading, according to The Times.
The Libyan Prime Minister Ali Zeidan has been snatched by armed men in a dawn raid on his hotel in Tripoli, the country’s government confirmed this morning. “The head of the transitional government, Ali Zeidan, was taken to an unknown destination for unknown reasons by a group” of men believed to be former rebels, the government said in a brief statement on its website. Mr Zeidan, 63, had been using the Corinthia Hotel, which is popular with diplomats and foreign officials, as his residence, The Times reports.
Flatlining investment by Britain's battered businesses was the main reason the independent Office for Budget Responsibility drastically overestimated the likely strength of the economic recovery, it conceded in its latest forecast review. The OBR, set up by George Osborne to provide a check on Treasury number-crunching, said in its annual forecasting evaluation report that when it set out the expected path for the recovery in June 2010, shortly after the coalition came to power, it was projecting that business investment would bounce back strongly, as in previous recoveries, The Guardian writes.
Policy makers at the US Federal Reserve were split over the merits of slowing its $85bn-a-month asset purchases in September, highlighting the difficult task facing Janet Yellen as she prepares to take the chairmanship of the central bank. Calling her “one of the nation’s foremost economists and policy makers”, Barack Obama nominated Ms Yellen to the most powerful job in the world economy in a ceremony at the White House, just one hour after the release of the minutes, the Financial Times writes. | | |
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