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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 open: Stocks flat ahead of UK GDP, RBS in the lead - UK growth expected to pick-up in Q3
- German, US data also in focus
- Investors urge Osborne against RBS split
techMARK 2,638.50 -0.14%
FTSE 100 6,710.89 -0.03%
FTSE 250 15,493.44 -0.22%
Markets opened broadly flat on Friday morning as investors awaited key economic growth data from the UK and other key indicators from Germany and the US.
UK gross domestic product (GDP) is pegged to rise at an annual rate of 1.5% from 1.3% in the previous quarter, consensus estimates show. This would represent an 0.8% expansion quarter-on-quarter (q/q).
Chief Market Strategist Michael Hewson from CMC Markets UK said that Markit purchasing managers' indices (PMIs) over the past month - along with a host of independent CBI and BRC data - would suggest that third-quarter growth is likely to be "extremely positive". However, official statistics from the Office for National Statistics have tempered these hopes after contrasting figures for manufacturing and industrial production in August.
"A [quarter/quarter] figure below 0.8% is likely to see the pound get sold off on initial disappointment, and raise further questions about the divergence between independent and official data; however any response needs to be tempered by the fact that the data only accounts for about 40% of the total output and subsequent revisions could well get pushed up towards 1%," he said.
Also on today's agenda, the Ifo Institute for Economic Research will publish its business climate index, a leading gauge of economic activity in Germany. The index is anticipated to rise slightly to 108.0 in October from 107.7 last month.
In the US, durable goods orders for September will likely rise by 2% compared to August when it increased 0.1%, analysts predict, while the final October reading of the University of Michigan consumer confidence index is expected to slip to 75 from the initial estimate of 75.2.
Investors urge Osborne against RBS split
Banking stocks were mixed this morning with domestic lenders RBS, Lloyds and Barclays making gains and global banks HSBC and Standard Chartered registering losses.
RBS was making gains after leading investors urged Chancellor George Osborne not to go ahead with a 'good bank-bad bank' split of the part-nationalised lender. Meanwhile, speculation over the initial public offering of its US subsidiary Citizens Financial has also begun to ramp up.
Pharmaceuticals group Shire was building on its +9% surge on Thursday as analysts reacted to its strong third-quarter results which beat forecasts across the board. JPMorgan Cazenove and Deutsche Bank both maintained their positive ratings on the shares and raised their targets for the stock this morning.
Security solutions group G4S was a high riser this morning after analysts at HSBC upgraded the stock to 'neutral' and hiked their target from 205p to 250p.
Precious metals miner Polymetal was also higher after Citigroup raised its recommendation to 'neutral'.
Closed life fund group Phoenix gained after revealing it is on track to hit the top end of its 2013 cash generation target range following a strong financial performance in recent months. |
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| FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 365.70p +2.58%
G4S (GFS) 258.70p +2.25%
British Land Co (BLND) 635.00p +1.93%
SSE (SSE) 1,442.00p +1.41%
Hammerson (HMSO) 537.00p +1.32%
Tullow Oil (TLW) 969.50p +1.09%
Barclays (BARC) 269.20p +1.03%
Fresnillo (FRES) 1,031.00p +0.88%
Land Securities Group (LAND) 999.00p +0.86%
WPP (WPP) 1,336.00p +0.83%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 356.00p -2.20%
Intertek Group (ITRK) 3,288.00p -1.70%
Vedanta Resources (VED) 1,070.00p -1.65%
British Sky Broadcasting Group (BSY) 936.50p -1.42%
easyJet (EZJ) 1,331.00p -1.26%
Burberry Group (BRBY) 1,535.00p -0.78%
Capita (CPI) 967.50p -0.77%
Rio Tinto (RIO) 3,210.00p -0.77%
HSBC Holdings (HSBA) 677.80p -0.65%
ARM Holdings (ARM) 954.50p -0.62%
FTSE 250 - Risers
Phoenix Group Holdings (DI) (PHNX) 799.50p +3.16%
Imagination Technologies Group (IMG) 288.40p +2.49%
Polymetal International (POLY) 617.50p +1.81%
Fisher (James) & Sons (FSJ) 1,101.00p +1.76%
esure Group (ESUR) 244.70p +1.54%
Barr (A.G.) (BAG) 531.50p +1.53%
Drax Group (DRX) 666.50p +1.52%
Caledonia Investments (CLDN) 1,935.00p +1.52%
Cranswick (CWK) 1,080.00p +1.50%
Menzies(John) (MNZS) 803.50p +1.39%
FTSE 250 - Fallers
Debenhams (DEB) 98.20p -2.77%
AZ Electronic Materials SA (DI) (AZEM) 274.70p -2.59%
Mitie Group (MTO) 309.20p -1.53%
WH Smith (SMWH) 893.50p -1.49%
Bellway (BWY) 1,512.00p -1.43%
Supergroup (SGP) 1,168.00p -1.43%
Ferrexpo (FXPO) 193.60p -1.27%
Homeserve (HSV) 235.00p -1.26%
Dixons Retail (DXNS) 47.70p -1.20% |
| | UK Event Calendar | | Friday October 25
INTERIM DIVIDEND PAYMENT DATE
Amati Vct 2, Charlemagne Capital Ltd., Costain Group, Crawshaw Group, CRH, F&C Asset Management, Fairpoint Group, Foresight 2 VCT Planned Exit Shares, Foresight VCT Planned Exit Shares, H.R. Owen, Henry Boot, Hygea VCT, Inmarsat, InterQuest Group, IS Solutions, Kentz Corporation Ltd., Pennant International Group, Real Estate Investors, Smurfit Kappa Group, Vitec Group
QUARTERLY PAYMENT DATE
Molex Inc., Molex Inc. 'A' Shares
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Durable Goods Orders (US) (13:30)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
M3 Money Supply (EU) (09:00)
U. of Michigan Confidence (Final) (US) (15:00)
Q3
Polski Koncern Naftowy Orlen S.A. GDR(Reg S), Samsung Electronics Co Ltd (ATT) GDR (Reg S)
ANNUAL REPORT
Daily Internet
IMSS
APR Energy
SPECIAL DIVIDEND PAYMENT DATE
Fortune Oil
AGMS
Daily Internet , Galleon Holdings, Hargreaves Lansdown, Murray Income Trust
TRADING ANNOUNCEMENTS
Mail.ru Group Ltd GDR (Reg S)
UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
Index of Services (09:30)
FINAL DIVIDEND PAYMENT DATE
City of London Investment Group, Consort Medical, Development Securities, ECO Animal Health Group, Norish Units |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks fall before UK GDP, German business confidence - UK GDP released
- German business confidence
- US durable orders
FTSE 100: -0.04%
DAX: -0.24%
CAC 40: -0.60%
FTSE MIB: -0.82%
IBEX 35: -0.93%
Stoxx 600: -0.23%
European stocks declined ahead of the release of reports on UK economic growth and German business confidence.
Britain's gross domestic product is expected to rise to 1.5% from 1.3% the previous quarter, according to consensus ahead of the release of the figures today.
The Bank of England has noted the recent pick-up in the UK's recovery, hinting at the possibility of an earlier interest rate rise.
The central bank this week released minutes of this month's Monetary Policy Committee meeting which showed policymakers discussed a "robust recovery in activity" and an improving jobs market.
Economists said the Bank could begin its first rate rise at the start of 2016, six months earlier than thought, when it updates its UK outlook next month.
In German, Ifo Institute for Economic Research will today publish its business climate index, a leading indicator for economic activity. The index is
anticipated to rise slightly to 104.5 in October from 104.2 last month.
In the US, durable goods orders for September released later will likely show an increase of 2% compared to August when it increased 0.1%, analysts predict.
Kering, Renault
Luxury-goods maker Kering declined after reporting a fall in third-quarter sales from continuing operations that missed analysts' expectations.
Renault slipped as the French carmaker said third quarter sales dipped due to weaker currencies in emerging markets.
Volvo dropped after posting a decrease in third quarter earnings before interest and taxes.
Schneider tumbled after the maker of low- and medium-voltage equipment reduced its 2013 profit and revenue forecasts due to a stronger euro.
Euro strengthens
The euro rose 0.12% to $1.3818.
Brent crude futures fell $0.103 to $106.880 per barrel on the ICE. |
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| | US Market Report | | US close: Stocks gain as corporate earnings impress - Chinese manufacturing improves in October
- Jobless claims, US PMI weaken, trade deficit expands
- Ford, 3M beat forecasts
Dow Jones: 0.62%
Nasdaq: 0.56%
S&P 500: 0.33%
An improved outlook for China and a raft of upbeat corporate earnings lifted US stock markets higher on Thursday, despite some worse-than-expected domestic economic data.
A number of quarterly figures lifted sentiment as companies from Ford to 3M managed to exceed analysts' expectations. This boosted the benchmark S&P 500 to within two points of its record high of 1,754.67 reached earlier in the week.
Meanwhile after the opening bell, results from tech and internet heavyweights Microsoft, Amazon.com and Zynga also impressed the market along with the announced initial public offering of social-media giant Twitter, which intends to list on the stock market later this year valued at up to $11.1bn.
Global equity markets were on the up on Thursday after figures from HSBC and Markit showed that activity in China's manufacturing sector rose to a seven-month high in October. The manufacturing purchasing managers' index (PMI) increased from 50.2 to 50.9, ahead of the consensus forecast of 50.4.
As developments closer to home continue to paint a mixed picture of the American economy - especially after the disappointing September employment figures and the government shutdown - markets are also beginning to price in a delayed taper of quantitative easing (QE) by the Federal Reserve. The S&P 500 has risen by nearly 6% in the last two weeks alone.
"We agree that March is now the most likely date for the Fed to begin winding down QE3, but the ongoing fiscal uncertainty could force it into an even longer postponement," said analysts at Capital Economics on Thursday.
Jobless claims fail to hit forecasts
Weekly initial jobless claims fell by 12,000 in the week ended October 19th to 350,000 from a revised 362,000, although it still missed the consensus forecast of 340,000. The higher-than-expected figure was partly due to the effects of the government shutdown as well as the continuing impact of a computer-system upgrade in California last month.
Meanwhile, the four-week moving average of claims increased by 10,000 on the prior week to 348,000.
"It is unclear how long the technical issues in California and government shutdown effects will persist, but both remain upside risks for jobless claims in coming weeks," said analyst Cooper Howes from Barclays.
In other economic data, Markit's 'flash' US PMI for the manufacturing sector fell from 52.8 to 51.1 in October, missing the 52.5 estimate.
The August trade deficit increased slightly to $38.8bn in August from a downwardly-revised $38.6bn the month before, though this was slightly under analysts' forecasts.
Ford beats quarterly estimates
Carmaker Ford accelerated after third-quarter revenues rose from $32.1bn to $36bn, ahead of the $33.8bn consensus forecast. The firm also said it expects an improvement in full-year pre-tax profit in 2013, better than previous guidance.
3M, the technology conglomerate, also impressed with a 6% increase in third-quarter profit to $1.23bn on sales up 5.6% at $7.92bn.
Software maker Citrix advanced after increasing its buyback and forecasting fourth-quarter earnings ahead of analysts' estimates.
Equinix, the operator of data centres, gained after saying it expects fourth-quarter sales to exceed $559m, above market forecasts.
Gold miner Goldcorp was also higher after managing to beat predictions despite a sharp drop in profits in the third quarter after a 21% fall in average realised gold prices.
Heading the other way was computer security firm Symantec which plunged after cutting its 2014 outlook to below Wall Street estimates. It now expects revenue to fall 3-4% on the year.
Akamai Technologies declined after projecting fourth-quarter revenue and profit that fell short of some forecasts.
S&P 500 - Risers
PulteGroup Inc. (PHM) $17.85 +7.01%
Alexion Pharmaceuticals Inc. (ALXN) $116.70 +6.42%
Expeditors International Of Washington Inc. (EXPD) $46.30 +4.89%
McKesson Corp. (MCK) $150.00 +4.86%
Citrix Systems Inc. (CTXS) $58.79 +4.85%
Teradata Corp. (TDC) $45.45 +4.68%
Starwood Hotels & Resorts Worldwide Inc. (HOT) $73.61 +4.49%
Noble Energy Inc. (NBL) $74.52 +4.40%
Precision Castparts Corp. (PCP) $256.43 +4.17%
Janus Capital Group Inc. (JNS) $9.54 +4.03%
S&P 500 - Fallers
Cameron International Corp. (CAM) $53.85 -14.28%
Symantec Corp. (SYMC) $21.49 -12.71%
Akamai Technologies Inc. (AKAM) $46.06 -11.20%
Xerox Corp. (XRX) $9.61 -10.44%
O'Reilly Automotive Inc. (ORLY) $125.08 -6.87%
Varian Medical Systems Inc. (VAR) $73.30 -6.65%
Boston Scientific Corp. (BSX) $11.54 -6.10%
Stericycle Inc. (SRCL) $114.54 -5.24%
Coca-Cola Enterprises Inc. (CCE) $40.45 -4.76%
Zimmer Holdings Inc. (ZMH) $85.66 -4.72%
Dow Jones I.A - Risers
Home Depot Inc. (HD) $76.78 +2.26%
Visa Inc. (V) $202.91 +2.02%
E.I. du Pont de Nemours and Co. (DD) $61.38 +1.93%
Goldman Sachs Group Inc. (GS) $159.96 +1.41%
Walt Disney Co. (DIS) $69.05 +1.37%
International Business Machines Corp. (IBM) $177.80 +1.15%
General Electric Co. (GE) $25.94 +0.93%
Exxon Mobil Corp. (XOM) $88.42 +0.92%
Caterpillar Inc. (CAT) $84.53 +0.92%
Travelers Company Inc. (TRV) $87.03 +0.87%
Dow Jones I.A - Fallers
AT&T Inc. (T) $34.63 -1.84%
Verizon Communications Inc. (VZ) $50.42 -0.79%
Coca-Cola Co. (KO) $38.80 -0.74%
Merck & Co. Inc. (MRK) $46.22 -0.73%
JP Morgan Chase & Co. (JPM) $52.48 -0.51%
Procter & Gamble Co. (PG) $80.61 -0.37%
Microsoft Corp. (MSFT) $33.72 -0.12%
Nike Inc. (NKE) $75.51 -0.07%
Boeing Co. (BA) $128.98 -0.03%
Nasdaq 100 - Risers
Alexion Pharmaceuticals Inc. (ALXN) $116.70 +6.42%
Tesla Motors Inc (TSLA) $173.15 +5.26%
Expeditors International Of Washington Inc. (EXPD) $46.30 +4.89%
Citrix Systems Inc. (CTXS) $58.79 +4.85%
Baidu Inc. (BIDU) $161.34 +4.04%
Wynn Resorts Ltd. (WYNN) $172.85 +3.84%
Randgold Resources Ltd. Ads (GOLD) $75.64 +3.60%
Equinix Inc. (EQIX) $174.07 +3.21%
Altera Corp. (ALTR) $33.17 +2.71%
Expedia Inc. (EXPE) $50.50 +2.64%
Nasdaq 100 - Fallers
Symantec Corp. (SYMC) $21.49 -12.71%
Akamai Technologies Inc. (AKAM) $46.06 -11.20%
O'Reilly Automotive Inc. (ORLY) $125.08 -6.87%
Stericycle Inc. (SRCL) $114.54 -5.24%
Sirius XM Radio Inc (SIRI) $3.91 -3.58%
Liberty Media Corporation - Class A (LMCA) $154.11 -1.43%
F5 Networks Inc. (FFIV) $85.15 -1.34%
Celgene Corp. (CELG) $157.96 -1.27%
Intuitive Surgical Inc. (ISRG) $370.29 -1.25%
Starbucks Corp. (SBUX) $79.05 -1.25% |
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| | Newspaper Round Up | | Friday newspaper round-up: Housing bubble, Lloyds, Royal Mail "The grapevine delivers a steady drip of news of wildly optimistic estate agent valuations, turning into properties put up for sale, and then near asking price offers accepted. Even by London's usual standards things have gone bonkers and while prices may continue to rise for now, the bubble will burst. They always do," The Daily Mail's Simon Lambert writes.
Lloyds Banking Group came a step closer to being able to pay dividends for the first time since the financial crisis after holding talks to sell its investments arm to Aberdeen Asset Management for as much as £500m. Lloyds' shares jumped 3% as investors speculated that the bank could use the proceeds of a sale of Scottish Widows Investment Partnership to press its case for resuming dividends, The Times explains.
One of the world's largest investment banks told ministers ahead of the Royal Mail flotation that they could sell the postal business for £10bn, around two and a half times more than the government finally received for it. News of the valuation from JP Morgan re-ignited the huge row over the privatisation with Billy Hayes, the postal workers union leader, claiming a "conspiracy against the taxpayer" and demanding the sacking of Vince Cable as business secretary, The Guardian says.
Speaking at an FT event yesterday Mark Carney, the new Governor of the Bank of England (BoE), signalled a break with the policies of his predecessor by announcing a sweeping overhaul of the way the central bank deals with lenders in financial difficulties. Carney said the BoE had a duty to "keep up" with events and provide a backstop to enable greater dynamism in financial services. He said five words described the BoE's willingness to provide liquidity if banks need it: "We are open for business," the Financial Times writes.
Carmakers led a surge in manufacturing optimism yesterday as it emerged that morale among industrial groups was at a three-and-a-half-year high. More than 1.1m cars have rolled off production lines in Britain this year, 3.9% ahead of last year, after a 9.9% improvement last month. Output is now not far below pre-recession levels. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders, said: "This year alone, more than £2.6bn has been committed across the UK automotive sector, from the supply chain to global car manufacturing brands […]", according to The Times.
Confidence among homeowners in the availability of mortgages and rising house prices hit a four-year high in the three months to September, research today finds. Property website Zoopla said its survey of over 9,000 people found 89% of homeowners expect house prices to rise in the next six months compared to 80% in the previous three months. Only 4% of homeowners see house prices falling over the next six months, down from 7% in the three months to the end of June and 17% during the same period a year earlier, The Daily Mail explains. | | |
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