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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 surge on stimulus hopes after Yellen comments - Yellen says Fed has 'more work to do'
- FTSE 100 rebounds from four-week low
- French, German GDP paint gloomy picture
techMARK 2,649.73 +0.92%
FTSE 100 6,688.86 +0.89%
FTSE 250 15,335.50 +1.03%
Dovish remarks from the soon-to-be Chair of the Federal Reserve gave markets a big boost on Thursday morning with the FTSE 100 rebounding strongly after hitting a four-week low the previous session.
The FTSE 100 was trading as much as 1% higher than Wednesday's close of 6,630, its worst finish since October 18th when it finished at 6,622.58.
As speculation about an gradual withdrawal of US stimulus continues to ramp up following last week's stronger-than-expected jobs data, Janet Yellen said that the labour market and wider economy are performing "far short of their potential" with unemployment still too high.
In prepared remarks ahead of a hearing in front of Congress later today, Yellen, who is expected to take over from Ben Bernanke as head of the Fed in January, said that the Fed has "more work to do" to help the recovery, easing fears that a taper of quantitative easing is just around the corner.
The Dow Jones Industrial Average and S&P 500 on Wall Street both raced to new record highs following the comments on Wednesday evening.
"Yellen's comments last night made clear her view that record stimulus measures should only be tapered after a sustained recovery, encouraging bullish investors who fear that any reduction in stimulus will trigger a sell-off," said Financial Sales Trader Max Cohen from Spreadex.
In other news, German gross domestic product (GDP) growth slowed to just 0.3% in the third quarter from a rate of 0.7% in the second quarter, though this was in line with consensus estimates. The Federal Statistics Office Destatis said that the slowdown was due to weak external demand.
French GDP meanwhile, contracted by 0.1% quarter-on-quarter, down from 0.5% growth in the second quarter and slightly below analysts' forecasts for a flat reading.
Burberry's first-half revenues reach new high
Burberry's share price was higher this morning after the luxury fashion company said that first-half revenues exceeded £1bn for the first time on the back of strong growth in retail.
Supermarket group Sainsbury was a high riser this morning as investors continued to celebrate the company's better-than-expected first-half results yesterday. The stock was benefitting from a raft of broker upgrades this morning from HBSC, Exane BNP Paribas and Citigroup who all lifted their ratings on the stock and raised targets.
In contrast, sector peer Tesco was being pressured lower by a Goldman Sachs downgrade to 'sell', with the bank saying that investors "still have some time to wait before a cash return programme (buyback of special dividends) can be instigated".
British Gas-owner Centrica was also down after warning that market conditions remained challenging, particularly in business energy supply in both the UK and the US, in UK gas-fired power generation and in UK gas storage. The company said it expects 2013 adjusted earnings to be flat on last year.
Consumer packaging company Rexam fell after saying trading since the start of July. Sentiment still seems fragile following the company's profit warning in June.
Oil and gas group Ophir Energy surged after announcing the sale of a 20% interest in three blocks in Tanzania to Pavilion Energy for a maximum of $1.3bn.
Digital sports media firm Perform, however, dropped sharply after saying that earnings would be lower than expected this year. |
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| FTSE 100 - Risers
Sainsbury (J) (SBRY) 424.70p +3.41%
Prudential (PRU) 1,278.00p +2.82%
Aberdeen Asset Management (ADN) 417.50p +2.61%
Persimmon (PSN) 1,183.00p +2.51%
WPP (WPP) 1,339.00p +2.45%
ITV (ITV) 185.80p +2.20%
Melrose Industries (MRO) 315.60p +2.10%
Shire Plc (SHP) 2,817.00p +2.03%
Travis Perkins (TPK) 1,740.00p +1.93%
Smiths Group (SMIN) 1,433.00p +1.85%
FTSE 100 - Fallers
Centrica (CNA) 354.30p -2.64%
Rexam (REX) 505.00p -2.60%
Fresnillo (FRES) 901.00p -0.11%
Antofagasta (ANTO) 813.00p -0.06%
Tesco (TSCO) 364.65p -0.01%
FTSE 250 - Risers
Ophir Energy (OPHR) 381.30p +15.86%
Ted Baker (TED) 1,879.00p +4.97%
Taylor Wimpey (TW.) 108.40p +4.84%
Amlin (AML) 452.60p +4.82%
Telecom Plus (TEP) 1,548.00p +3.89%
Kier Group (KIE) 1,751.00p +3.73%
Booker Group (BOK) 155.90p +3.59%
Electrocomponents (ECM) 299.30p +3.42%
NMC Health (NMC) 358.00p +3.38%
Atkins (WS) (ATK) 1,296.00p +3.35%
FTSE 250 - Fallers
Perform Group (PER) 475.20p -12.00%
Serco Group (SRP) 454.90p -9.74%
Bank of Georgia Holdings (BGEO) 2,013.00p -6.85%
Phoenix Group Holdings (DI) (PHNX) 735.00p -5.41%
Devro (DVO) 306.30p -4.28%
AL Noor Hospitals Group (ANH) 820.00p -2.44%
Synthomer (SYNT) 218.60p -2.37%
3i Group (III) 363.30p -2.02%
Pace (PIC) 299.70p -1.87% |
| | UK Event Calendar | | Thursday November 14
INTERIMS
Carphone Warehouse Group, Charles Stanley Group, Electrocomponents, Great Portland Estates, Norcros
INTERIM DIVIDEND PAYMENT DATE
Scisys, Tullett Prebon
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Report (EU) (09:00)
GDP (Flash Estimate) (EU) (10:00)
Gross Domestic Product (GER) (07:00)
Initial Jobless Claims (US) (13:30)
Productivity (US) (13:30)
Q3
New Europe Property Investments
FINALS
Euromoney Institutional Investor, Frontier Developments, Hangar 8
IMSS
Centrica, Perform Group, SIG, Taylor Wimpey
AGMS
Avanti Communications Group, Crown Place VCT, Henderson EuroTrust, Kier Group, Ricardo, Swallowfield, Thorpe (F.W.), Wetherspoon (J.D.)
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Animalcare Group
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise ahead of Yellen's nomination hearing - Yellen nomination hearing in focus
- Eurozone GDP released
- Economic activity slows in Germany, falls in France
FTSE 100: 0.95%
DAX: 0.85%
CAC 40: 1.10%
FTSE MIB: 0.52%
IBEX 35: 0.87%
Stoxx 600: 0.82%
European stocks rose on expectations that Janet Yellen will take over as the new Federal Reserve Chair and maintain stimulus.
Yellen, currently Vice Chair of the central bank, will appear before the Senate Banking Committee later today before being anticipated to be confirmed as Ben Bernanke's replacement.
Nominated by President Barack Obama, Yellen is a dovish choice among investors as she has backed the monthly $85bn bond buying programme.
She said the US economy and labour market must improve before the Fed begins tapering quantitative easing.
"A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases," Yellen said in testimony prepared for her nomination hearing before the Senate Banking Committee.
"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy."
Eurozone GDP
Eurozone gross domestic product (GDP) for the third quarter is expected to have risen just 0.1%, compared to the previous quarter's 0.3% gain.
Ahead of the release, other reports showed economic activity slowed in Germany and declined in France during the three months through September.
Germany's GDP rose 0.3% in the third quarter, compared to 0.7% in the prior quarter, while France's GDP contracted by 0.1% from a previous increase of 0.5%.
Evidence of slowing recovery might support European Central Bank President Mario Draghi's case for last week's surprise interest rate cut from 0.5% to 0.25%.
At the time of the rate cut Draghi cited risks of deflation that would hamper economic growth.
Burberry gains on strong half-way figures
Burberry advanced after the luxury fashion group reported a 17% rise in first half revenue to £1bn, driven by strong retail sales.
Wind turbine maker Nordex SE rallied after raising its full-year order intake outlook to between €1.4bn and €1.5bn from a previous guidance range of €1.3bn and €1.4bn.
K+S climbed after posting third quarter earnings that exceeded analysts' expectations.
European Aeronautic, Defence & Space Co. declined after reporting third quarter results that missed forecasts.
Euro weakens against dollar
The euro fell 0.17% to $1.3464.
Brent crude futures rose $0.400 to $107.550 per barrel on the ICE. |
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| | US Market Report | | US close: Dow, S&P hit record after Yellen comments - Yellen says economy running short of potential
- Stocks rise on hopes over continuation of Fed stimulus
- Macy's jump after solid quarter
Dow Jones: 0.45%
Nasdaq: 1.17%
S&P 500: 0.81%
Despite a weak start, US stocks raced into positive territory by the close on Wednesday with both the Dow Jones Industrial Average and S&P 500 finishing at new record highs.
Strong results from retail giant Macy's and some dovish comments from the soon-to-be Chair of the Federal Reserve Janet Yellen gave sentiment a boost, with the Dow rising 70.96 points to 15,821.63 and the S&P finished 14.31 higher at 1,782. The Nasdaq, meanwhile, jumped 45.66 to end at 3,965.58.
Yellen, who is expected to take over from Ben Bernanke as the head of the Fed in January, said in prepared comments that the labour market and wider economy are performing "far short of their potential" with unemployment still too high.
The comments follow some stronger-than-expected growth and jobs data last week, which ramped up speculation over a sooner-than-anticipated taper of stimulus by the Fed.
However, as Chief Market Analyst Michael Hewson from CMC Markets explained: "Her comments […] would appear to suggest that the Fed remains some way from looking at a December taper."
In other news, the Federal Budget deficit rose 22% year-on-year in October to reach $120bn. In its monthly budget report today, the Treasury said spending jumped 16% to $304.3bn last month, outpacing revenue which increased 13% to $184.3bn. Analysts had expected a budget gap of $113bn.
It comes as the government continues to tackle a bipartisan budget deal. Republican Senator Lindsey Graham told Reuters negotiations between US lawmakers were "stuck, not irreconcilably, but stuck".
Congress formed the House of Representatives-Senate working group about a month ago as part of a deal that reopened the federal government following a 16-day shutdown and raised US borrowing authority to avoid a potential default. The committee has until December 13th to finish its work and Congress faces a January 15th decline for when funding runs out.
Macy's impresses with quarterlys
Department-store group Macy's surged after profits in the third quarter managed to beat Wall Street forecasts by a mile. The firm earned 47 cents in the quarter ended October, up 31% from a year ago and above the 39 cents estimate. The 3.3% increase in revenues to $6.28bn also beat analysts' expectations of $6.19bn.
Chief Executive Terry Lundgren also gave an upbeat outlook for the company heading into the all-important Christmas shopping season. "Our business improved during the quarter, with particular strength in October, so we are entering the fourth quarter with confidence," he said.
Starbucks declined after saying it will pay Mondelez International Inc. $2.76bn to settle a dispute over bagged coffee.
Telsa Motors rose after co-founder Elon Musk said the company won't recall its Model S following fires involving the electric sedan.
Trucking firm YCR Worldwide plummeted after unveiling a worse-than-expected loss in the third quarter owing to weakness in its freight business.
S&P 500 - Risers
First Solar Inc. (FSLR) $64.20 +4.02%
Sears Holdings Corp. (SHLD) $63.89 +3.55%
Hasbro Inc (HAS) $52.95 +3.32%
Akamai Technologies Inc. (AKAM) $46.53 +3.15%
TripAdvisor Inc. (TRIP) $87.49 +3.05%
Yahoo! Inc. (YHOO) $35.10 +3.04%
Nvidia Corp. (NVDA) $16.15 +2.77%
Mondelez International Inc. (MDLZ) $33.31 +2.71%
NetApp Inc. (NTAP) $41.29 +2.71%
Goodyear Tire & Rubber Co. (GT) $21.58 +2.46%
S&P 500 - Fallers
Citrix Systems Inc. (CTXS) $58.02 -4.81%
Regeneron Pharmaceuticals Inc. (REGN) $277.20 -3.38%
Ace Ltd. (ACE) $96.41 -2.14%
Exelon Corp. (EXC) $27.86 -1.10%
Duke Energy Corp. (DUK) $70.94 -1.09%
Fastenal Co. (FAST) $46.49 -1.09%
Plum Creek Timber Co. (PCL) $43.78 -1.00%
AGL Resources Inc. (GAS) $47.10 -0.99%
Eli Lilly and Company (LLY) $49.57 -0.98%
Apartment Investment & Management Co. (AIV) $26.16 -0.91%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $38.15 +2.13%
Cisco Systems Inc. (CSCO) $24.00 +1.12%
Intel Corp. (INTC) $24.60 +0.70%
AT&T Inc. (T) $35.17 +0.00%
Walt Disney Co. (DIS) $67.77 +0.00%
General Electric Co. (GE) $27.05 +0.00%
Pfizer Inc. (PFE) $31.38 +0.00%
Johnson & Johnson (JNJ) $93.56 +0.00%
Exxon Mobil Corp. (XOM) $92.67 +0.00%
Caterpillar Inc. (CAT) $83.85 +0.00%
Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $61.60 -0.73%
United Technologies Corp. (UTX) $106.86 -0.55%
Visa Inc. (V) $197.87 -0.20%
International Business Machines Corp. (IBM) $183.07 -0.00%
McDonald's Corp. (MCD) $97.66 -0.00%
Procter & Gamble Co. (PG) $82.80 -0.00%
Nike Inc. (NKE) $76.87 -0.00%
Travelers Company Inc. (TRV) $86.44 -0.00%
Coca-Cola Co. (KO) $39.88 -0.00%
JP Morgan Chase & Co. (JPM) $53.97 -0.00%
Nasdaq 100 - Risers
Facebook Inc. (FB) $48.71 +4.52%
Sears Holdings Corp. (SHLD) $63.89 +3.55%
Akamai Technologies Inc. (AKAM) $46.53 +3.15%
Yahoo! Inc. (YHOO) $35.10 +3.04%
Nvidia Corp. (NVDA) $16.15 +2.77%
Mondelez International Inc. (MDLZ) $33.31 +2.71%
NetApp Inc. (NTAP) $41.29 +2.71%
Fossil Group Inc (FOSL) $129.14 +2.43%
Mattel Inc. (MAT) $45.55 +2.34%
Adobe Systems Inc. (ADBE) $57.55 +2.33%
Nasdaq 100 - Fallers
Citrix Systems Inc. (CTXS) $58.02 -4.81%
Regeneron Pharmaceuticals Inc. (REGN) $277.20 -3.38%
Randgold Resources Ltd. Ads (GOLD) $71.89 -1.63%
Fastenal Co. (FAST) $46.49 -1.09%
Sba Communications Corp. (SBAC) $90.15 -0.66%
Expedia Inc. (EXPE) $61.72 -0.48%
PACCAR Inc. (PCAR) $56.59 -0.39%
DIRECTV (DTV) $63.87 -0.23%
Autodesk Inc. (ADSK) $43.54 -0.16%
Microchip Technology Inc. (MCHP) $43.44 -0.15% |
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| | Newspaper Round Up | | Thursday newspaper round-up: SSE, Company flotations, Yellen Energy giant SSE has piled more pressure on UK ministers to rethink their policy on "green taxes" by vowing to scale back its planned price hike if the controversial levies were overhauled. The pledge came as the Perth-based group, which trades as Scottish Hydro north of the Border, said its retail division had fallen into the red during the first half of the year because of higher wholesale gas prices, rising distribution costs and "government-sponsored social and environmental obligations", The Daily Mail writes.
The fragile recovery in new company flotations came under threat yesterday as shares in several of the market's most recent debutantes took a hammering. Leading blue-chip investors said that fatigue was creeping into the market for initial public offerings, which has been booming for more than a year after blowout offerings from Direct Line, Countrywide, Merlin Entertainment and Royal Mail. They blamed the way investment banks have handled recent flotations for a turn in sentiment, with leading long-term shareholders growing frustrated with the process, The Times explains.
Janet Yellen will say the US economy is performing "far short" of its potential at her confirmation hearing on Thursday in prepared remarks that justify continued monetary stimulus. "We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession," the nominee for chair of the US Federal Reserve will say, according to prepared testimony. Yellen's remarks suggest she will strike a dovish tone before the Senate Banking Committee on Thursday morning but they give away little about current policy or the specifics of how the Fed might act in the future, The Financial Times says.
Spain's historic Rio Tinto copper mine is at the centre of an ownership dispute between an AIM-quoted miner and Trafigura, the privately owned commodities trader. Emed Mining, the listed explorer and developer, yesterday rejected claims by Trafigura that it had acquired an option to take over the rights of the mothballed mine, according to The Times.
Energy firm SSE has announced an inflation-busting dividend for shareholders just two days before it puts up customer bills by 8.2%. SSE's dividend to shareholders will go up by 3.2% to 26p a share, a healthy return above the 2.2% inflation rate. On Friday SSE's 10m customers – largely in Scotland and southern England – will see their bills going up well above inflation, taking the average dual-fuel bill to £1,380, in the same week that the National Audit Office warned of above-inflation energy bills until 2030, according to The Guardian.
Pressure on the squeezed middle classes is growing as the economy finds a 'new normal' in the wake of the financial crisis with the number of low-paid, low-skill and high-paid, high-skill jobs increasing, but those caught in the middle dropping in availability. New research from think-tank the Resolution Foundation and the London School of Economics adds to concerns the UK is heading for a two-tier labour market as result of the prolonged downturn, The Daily Telegraph reports. | | |
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