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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | UK stocks jumped in early trading on Tuesday as investors showed optimism that US politicians can avert a default by agreeing to raise the debt ceiling.
The FTSE 100 in London was trading up 0.6% at around 6,550 this morning; the last time it has closed higher was on September 26th when it finished at 6,565.59.
There are now just two days to go before the government hits its $16.7tn borrowing limit and is unable to pay its bills, something which could cause "massive disruption" to the world economy and risk tipping it into another recession, according to International Monetary Fund Managing Director Christine Lagarde.
Senate Majority Leader Harry Reid and Minority leader Mitch McConnell made positive comments following their lengthy discussions on Monday, saying that a deal is within reach ahead of the October 17th deadline.
"I'm very optimistic that we that we will reach an agreement that's reasonable in nature this week," Reid said.
According to market reports, the proposal under discussion includes reopening the government to January and suspending the debt limit through to February 2014.
While the debt-ceiling debate will continue to drive market sentiment over the next few days, investors will be keeping a close eye on corporate results from the US, as third-quarterearnings season gets into full swing.
Citigroup, Coca-Cola and Intel will release their quarterly earnings on Tuesday, IBM will report on Wednesday, while results from Verizon Communication, Google and General Electric are expected on Thursday.
FTSE 100: Burberry sinks after boardroom shake-up
High-end luxury brand Burberry was one of the few blue chips in the red this morning, falling sharply after the surprise exit of Chief Executive Officer (CEO) Angela Ahrendts and appointment of Chief Creative Officer Christopher Bailey. Ahrendts, who earlier this year became the first woman to top the list of the highest paid CEO on the FTSE 100, will leave the company in mid-2014 and move to Apple to take up a newly created position.
The news came as the company reported 14% growth in underlying sales in the first half, helped by strong demand from Chinese customers, and raised its profit guidance for the period.
Leading the upside were the miners as risk appetite returned to the market on hopes over a fiscal deal in the US. Rio Tinto led the risers after enjoying a good third quarter of production, having produced and shipped a record level of iron ore thanks to its new infrastructure in Western Australia.
Sector peers Antofagasta, Anglo American, Vedanta Resources, Fresnillo, Randgold and BHP Billiton were also making decent gains this morning.
Hargreaves Lansdown rose after achieving record assets under administration (AuA) in the first quarter of fiscal year 2014. The financial services company reported AuA of £39.3bn in the three months to September 30th, up 7.9% from the previous quarter’s £36.4bn.
Severn Trent was subdued after analysts at Societe Generale downgraded their ratings for the utility group to 'sell'.
FTSE 250: Ashtead rises after JPMorgan upgrade
Industrial equipment rental firm Ashtead jumped this morning after JPMorgan Cazenove raised its rating for the stock to 'overweight'.
Steel and mining group EVRAZ gained after selling its Gramoteinskaya thermal coal mine in Russia as it continues to offload non-performing assets.
Builder Bellway also rose after lifting its final dividend 50%, buoyed by exceptional prospects for the UK housing market and a bulging order book. |
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| | FTSE 100 - Risers
Rio Tinto (RIO) 3,179.00p +3.08%
WPP (WPP) 1,269.00p +2.17%
Royal Bank of Scotland Group (RBS) 379.50p +2.10%
Antofagasta (ANTO) 885.00p +2.08%
Fresnillo (FRES) 956.00p +2.03%
Mondi (MNDI) 1,087.00p +1.97%
BHP Billiton (BLT) 1,847.00p +1.68%
Old Mutual (OML) 194.20p +1.68%
Anglo American (AAL) 1,546.50p +1.51%
Vedanta Resources (VED) 1,044.00p +1.46%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,524.00p -3.85%
Severn Trent (SVT) 1,786.00p -1.22%
Johnson Matthey (JMAT) 2,970.00p -0.57%
Croda International (CRDA) 2,501.00p -0.36%
Resolution Ltd. (RSL) 334.80p -0.36%
Standard Chartered (STAN) 1,465.00p -0.31%
Schroders (SDR) 2,645.00p -0.19%
RSA Insurance Group (RSA) 119.10p -0.17%
Admiral Group (ADM) 1,227.00p -0.16%
SSE (SSE) 1,440.00p -0.14%
FTSE 250 - Risers
Ashtead Group (AHT) 652.00p +3.66%
Man Group (EMG) 81.40p +3.43%
Lonmin (LMI) 326.60p +3.16%
Bellway (BWY) 1,425.00p +2.81%
Evraz (EVR) 133.00p +2.54%
Ferrexpo (FXPO) 189.30p +2.32%
Kazakhmys (KAZ) 261.00p +2.27%
Barratt Developments (BDEV) 343.70p +2.08%
Thomas Cook Group (TCG) 153.30p +2.00%
Enterprise Inns (ETI) 156.70p +1.95%
FTSE 250 - Fallers
Essar Energy (ESSR) 122.40p -2.31%
Afren (AFR) 142.90p -1.85%
Oxford Instruments (OXIG) 1,377.00p -1.78%
Perform Group (PER) 540.50p -1.73%
Kier Group (KIE) 1,732.00p -1.59%
Menzies(John) (MNZS) 815.50p -1.45%
St. Modwen Properties (SMP) 326.00p -1.39%
Spirent Communications (SPT) 127.80p -1.31%
Computacenter (CCC) 547.00p -1.17%
KCOM Group (KCOM) 92.80p -1.12% |
| | UK Event Calendar | | INTERIMS
Lombard Risk Management
INTERIM DIVIDEND PAYMENT DATE
Intertek Group, UTV Media
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)
Empire State manufacturing survey (US) (13:30)
French CPI (FR) (07:45)
FINALS
Bellway, Bellway 9h%prf, DotDigital Group, Fusion IP, Utilitywise
IMSS
Hargreaves Lansdown, Michael Page International
EGMS
LXB Retail Properties
AGMS
CIC Capital Ltd (DI), Sacoven
TRADING ANNOUNCEMENTS
Carpetright
UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Producer Price Index (09:30)
Retail Price Index (09:30)
FINAL DIVIDEND PAYMENT DATE
Mattioli Woods, Standard Life UK Smaller Companies Trust |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Stocks rise on US debt ceiling optimism European stocks bounced back on hopes that the US government will soon strike a deal on the debt ceiling.
UK inflation to fall
Britain’s inflation is expected to fall in September to 2.6% from the prior month’s 2.7% when the consumer price index figures are released today.
A reduction in the inflation rate will help close the gap between the rise in the cost of living and the lack of increase in people's incomes.
It could also help ease fears that the Bank of England's low interest rates will be jeopardised by high inflation.
The central bank’s commitment to low rates is dependent on inflation expectations remaining below 2.5%.
“When inflation is currently significantly higher than this, it's difficult to gain comfort from this commitment,” Erlam said.
“Those fears should now subside somewhat, especially if inflation continues in the same direction.”
In Germany, the ZEW survey of economic sentiment is forecast to show a reading of 49.6 in October, the same level as the previous month.
It comes as the Angela Merkel kicks off talks to form a coalition in order to end a hung parliament after failing to win enough votes at last month's federal election.
Rio Tinto, Burberry
Rio Tinto gained after reporting a 1% year-on-year increase in third quarter iron ore output to 53.4m metric tonnes.
Burberry declined after announcing Chief Executive Officer Angela Ahrendts will leave to join Apple next year.
Schindler Holding slumped after the Swiss elevator maker said operating profit fell 5.7% to 682m francs in the nine months through September from a year earlier and cut its forecast for the year. |
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| | US Market Report | | Stocks rally on hopes of 11th-hour debt deal After a weak start, US stocks rallied to finish in positive territory on hopes that lawmakers are closing in on a deal to raise the debt ceiling and avert a default.
The S&P 500, which hit an intraday low of 1,692 early on, finished close to its historical high at 1,710. The index hit a record 1,725 on September 18th.
With just three days to go before the government hits its $16.7tn borrowing limit and is unable to pay its bills, Senate Democratic and Republican leaders continued to scramble towards a deal. Without one, it could cause "massive disruption" to the world economy and risk tipping it into another recession, warned International Monetary Fund Managing Director Christine Lagarde.
Senate Majority Leader Harry Reid and Minority leader Mitch McConnell made positive comments following their lengthy discussions on Monday, saying that a deal is within reach ahead of the October 17th deadline.
"I'm very optimistic that we that we will reach an agreement that's reasonable in nature this week," Reid said.
President Barack Obama had postponed a 15:00 White House meeting of congressional leaders to give Reid and McConnell more time, saying: "My hope is that a spirit of co-operation will move us forward over the next few hours."
Monday was a fairly quiet day on the corporate and economic calendar - the latter owing to the ongoing government shutdown as well as the Columbus Day holiday - though things will pick up towards the end of the week with results from a raft of bellwethers due.
Citigroup, Coca-Cola and Intel will release their quarterly earnings on Tuesday, IBM will report on Wednesday, while results from Verizon Communication, Google and General Electric are expected on Thursday.
Micron continues to pull back
Shares of semiconductor group Micron Technology turned around to trade higher following the sharp falls which ensued following the release of its fiscal fourth-quarter results last week. The company reported on Thursday that it swung to a profit of $1.71bn in the final quarter, compared with a loss of $243m the year. However, a number of analysts were of the opinion that the declines were the result of profit-taking following a 160% surge for the stock since the start of 2013.
Wells Fargo on Friday downgraded its rating for Micron to ‘underperform’ from ‘market perform’. The bank said that even after raising its estimates, its target still stands below the current share price.
Merck, the pharmaceuticals firm, was trading in the red after saying it is talking with private-equity groups and investors to share the cost of some clinical trials. Both Bernstein and Barclays downgraded their ratings for the stock today, to ‘market perform’ and ‘equalweight’, respectively.
Stock in handbag designer Coach was also moving lower after analysts at Canaccord Genuity downgraded the stock to ‘hold’, saying that the firm’s 30% US market share could come under pressure from rising competition at rival Michael Kors.
Expedia fell sharply after Deutsche Bank downgraded the online-travel website from 'buy' to 'hold', raising doubts over the implementation of its business plan and management changes.
Online video streaming firm Netflix surged after Bloomberg reported that it is in talks to add TV subscription-streaming services to set-top boxes of US cable-TV operators.
S&P 500 - Risers
Netflix Inc. (NFLX) $324.36 +7.82%
Advanced Micro Devices Inc. (AMD) $3.97 +3.66%
Western Digital Corp. (WDC) $68.90 +3.25%
Peabody Energy Corp. (BTU) $17.93 +3.05%
Intuitive Surgical Inc. (ISRG) $401.68 +2.95%
Boston Scientific Corp. (BSX) $12.21 +2.86%
Monster Beverage Corp (MNST) $55.13 +2.57%
First Solar Inc. (FSLR) $44.36 +2.42%
Seagate Technology Plc (STX) $47.33 +2.29%
Cerner Corp. (CERN) $55.95 +2.29%
S&P 500 - Fallers
Whirlpool Corp. (WHR) $131.29 -6.50%
Expedia Inc. (EXPE) $48.51 -6.24%
D. R. Horton Inc. (DHI) $18.25 -2.14%
Mead Johnson Nutrition Co. (MJN) $75.42 -1.71%
Alexion Pharmaceuticals Inc. (ALXN) $107.01 -1.65%
CenturyLink Inc. (CTL) $32.68 -1.63%
J.C. Penney Co. Inc. (JCP) $7.87 -1.62%
Lennar Corp. Class A (LEN) $34.31 -1.46%
Tyson Foods Inc. (TSN) $29.35 -1.38%
Dollar General Corp (DG) $57.05 -1.35%
Dow Jones I.A - Risers
Pfizer Inc. (PFE) $29.35 +2.19%
Alcoa Inc. (AA) $8.45 +1.56%
Boeing Co. (BA) $119.46 +1.25%
Bank of America Corp. (BAC) $14.35 +1.13%
Microsoft Corp. (MSFT) $34.45 +0.94%
Walt Disney Co. (DIS) $66.83 +0.94%
American Express Co. (AXP) $76.07 +0.89%
Intel Corp. (INTC) $23.45 +0.84%
Chevron Corp. (CVX) $118.58 +0.77%
Exxon Mobil Corp. (XOM) $87.60 +0.75%
Dow Jones I.A - Fallers
Merck & Co. Inc. (MRK) $46.75 -1.14%
AT&T Inc. (T) $33.92 -0.82%
Verizon Communications Inc. (VZ) $46.81 -0.59%
Wal-Mart Stores Inc. (WMT) $74.68 -0.19%
United Technologies Corp. (UTX) $106.90 -0.10%
General Electric Co. (GE) $24.38 -0.08%
McDonald's Corp. (MCD) $94.72 -0.02%
Nasdaq 100 - Risers
Netflix Inc. (NFLX) $324.36 +7.82%
Activision Blizzard Inc. (ATVI) $17.83 +4.33%
Liberty Interactive Corp (LINTA) $25.74 +4.13%
Vertex Pharmaceuticals Inc. (VRTX) $73.71 +3.93%
Western Digital Corp. (WDC) $68.90 +3.25%
Intuitive Surgical Inc. (ISRG) $401.68 +2.95%
Randgold Resources Ltd. Ads (GOLD) $69.97 +2.75%
Monster Beverage Corp (MNST) $55.13 +2.57%
Seagate Technology Plc (STX) $47.33 +2.29%
Cerner Corp. (CERN) $55.95 +2.29%
Nasdaq 100 - Fallers
Expedia Inc. (EXPE) $48.51 -6.24%
Alexion Pharmaceuticals Inc. (ALXN) $107.01 -1.65%
Baidu Inc. (BIDU) $152.96 -1.25%
Mylan Inc. (MYL) $39.48 -1.08%
Citrix Systems Inc. (CTXS) $58.54 -0.91%
Cognizant Technology Solutions Corp. (CTSH) $88.22 -0.71%
Nuance Communications Inc. (NUAN) $18.20 -0.66%
Equinix Inc. (EQIX) $166.12 -0.58%
Mondelez International Inc. (MDLZ) $30.68 -0.55%
Discovery Communications Inc. Class A (DISCA) $80.16 -0.47% |
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| | Tuesday Newspaper Round Up | | Debt ceiling, Chinese banks, small business Senate leaders were late on Monday closing in on a deal to reopen the federal government and avert a potentially catastrophic default on US borrowings. The deal, which has yet to be finalised, would raise the debt ceiling until early February, reopen the government until January and include a mechanism to force lawmakers into longer-term budget discussions, the Financial Times reports.
George Osborne will on Tuesday roll out the red carpet for Chinese banks looking to expand in London, offering to break down regulatory barriers in a bid to reinforce the City’s position as a global renminbi hub. In a major diplomatic initiative, the chancellor is expected to offer the prospect of special terms to China’s state-owned banks as part of his “personal mission” to make London a significant Chinese offshore banking centre, the Financial Times says.
Small business owners have welcomed a proposed crackdown on late payments, which could see larger firms fined for not paying their bills on time. David Cameron said the UK government is to launch a consultation this year to examine ways of speeding up payments by large companies, after a YouGov survey found 85% of small suppliers had been affected by late bills over the past two years, according to The Scotsman.
Leading British businessmen will brief the Cabinet today on how only 30 cuts to Brussels red tape could save companies billions of pounds a year. Ian Cheshire, the Chief Executive of Kingfisher, and Paul Walsh, the former Chief Executive of Diageo, are among the business leaders presenting recommended changes to European Union regulation in Downing Street today. The event is the first of its kind since David Cameron used his speech to the Conservative Party conference this month to defend big business, The Times says.
The Chancellor has asked one of Britain’s top software developers to join a delegation of UK technology start-ups that are touring China with a view to opening up new “e-trade routes” with the East. Mike Lynch, the founder and former Chief Executive of Autonomy, will lead a group of business people with George Osborne and Ian Livingstone, the former Eidos president who helped to develop Lara Croft: Tomb Raider, according to The Times.
The dollar tumbled last night as Barack Obama postponed crisis talks aimed at securing a deal to raise the United States debt limit and avert a new global financial calamity. The White House said the President and Vice President Joe Biden were due to meet with senior politicians to ‘make clear the need for Congress to act to pay our bills and reopen the government’. The US looks set to hit its $16.7trn (£10.5trn) borrowing limit on Thursday and will default on its debts if Democrats and Republicans fail to agree a deal to raise the ceiling. It is feared a US default will trigger a new financial crisis and tip the global economy back into recession, The Daily Mail explains. | | |
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