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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: Markets flat, Shell limits upside after profit warning - Shell issues profit warnings, oil stocks fall
- UK retail sales, US consumer sentiment data out
- FTSE 100 holds near eight-month high
techMARK 2,853.35 +0.34%
FTSE 100 6,822.56 +0.10%
FTSE 250 16,229.98 +0.13%
Markets opened more or less flat on Friday morning ahead of a busy day for economic data, with upside being limited early on by a big profit warning from oil giant Royal Dutch Shell.
Shell, the fourth-largest stock in London by market capitalisation, warned today that fourth-quarter profits will be "significantly lower" than recent levels as the company had to deal with tough market conditions in downstream, higher exploration expenses and lower upstream volumes.
Market Strategist Ishaq Siddiqi from ETX Capital said this was "worrying news from the oil major which is clearly suffering from management's inability to get on top of concerns regarding capital discipline."
He added: "Shell is not an isolated case, however, as weak industry conditions for downstream oil is likely to hit sector peers too."
The FTSE 100 was 0.1% higher at 6,822.56 this morning, but has traded broadly sideways since hitting an eight-month high on Wednesday.
Economic data in focus
UK retail sales are due out this morning and are expected to show a 0.3% improvement month-on-month (excluding fuel) in December, with growth easing slightly from the 0.4% increase in November.
Annual growth is estimated to have picked up to 3.2% from 2.3% the month before.
Later on, the University of Michigan's flash reading of its US consumer sentiment index for January is likely to rise to 83.5 from 82.5 in December, according to the consensus forecast.
US building permits and housing starts figures for December will also be closely watched this afternoon, along with industrial production data Stateside.
Shell issues profit warning
Shell was a heavy faller this morning after saying that fourth-quarter earnings excluding one-offs are expected to be just $2.9bn, down from $4.5bn in the third quarter and $7.3bn in the fourth quarter the year before. Market expectations were for a profit of around $4bn.
The company said that Upstream earnings were hit by higher exploration expenses and lower volumes in the fourth quarter, as well as the weakening of the Australian dollar.
Sector peers BP and BG Group were also under the weather today.
Product testing firm Intertek was in the red for a second straight day after Credit Suisse lowered its rating on the stock to 'neutral' and cut its target from 3,500p to 3,200p. Intertek was hit by a downgrade by Berenberg yesterday to 'hold'.
Drinks group Diageo was also lower after JPMorgan Cazenove lowered the shares to 'neutral'. In contrast, Nomura has lifted its rating on oilfield services firm Petrofac to 'buy', giving the stock a lift this morning.
Insurer Aviva gained after signing a joint venture agreement with Astra International, Indonesia's largest publicly listed company, to form Astra Aviva Life, which will sell and distribute life insurance products in Indonesia.
Investors at pharmaceutical group Shire seemed pleased with the company's decision to sell off its loss-making Dermagraft skin treatment assets to US-based Organogenesis Inc, even if it means taking a loss on disposal and one-off impairment charge of $650m. |
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| FTSE 100 - Risers
Admiral Group (ADM) 1,360.00p +2.56%
Glencore Xstrata (GLEN) 335.55p +2.55%
Johnson Matthey (JMAT) 3,397.00p +1.86%
Sainsbury (J) (SBRY) 367.70p +1.83%
Rio Tinto (RIO) 3,387.50p +1.59%
Petrofac Ltd. (PFC) 1,270.00p +1.52%
Marks & Spencer Group (MKS) 485.00p +1.46%
Reckitt Benckiser Group (RB.) 4,714.00p +1.42%
Resolution Ltd. (RSL) 358.00p +1.33%
BHP Billiton (BLT) 1,883.00p +1.24%
FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 2,233.00p -3.17%
Royal Dutch Shell 'A' (RDSA) 2,126.50p -3.12%
William Hill (WMH) 362.70p -2.68%
BP (BP.) 482.55p -1.41%
Royal Bank of Scotland Group (RBS) 366.30p -1.40%
Aberdeen Asset Management (ADN) 445.40p -1.24%
ITV (ITV) 204.70p -1.16%
BG Group (BG.) 1,340.00p -0.85%
Lloyds Banking Group (LLOY) 83.45p -0.77%
International Consolidated Airlines Group SA (CDI) (IAG) 431.10p -0.55%
FTSE 250 - Risers
African Barrick Gold (ABG) 202.10p +4.55%
esure Group (ESUR) 278.10p +3.73%
Home Retail Group (HOME) 208.60p +2.20%
Spirent Communications (SPT) 94.45p +1.83%
Vedanta Resources (VED) 913.00p +1.73%
Smith (DS) (SMDS) 339.40p +1.68%
Riverstone Energy Limited (RSE) 920.00p +1.66%
Bellway (BWY) 1,648.00p +1.60%
AL Noor Hospitals Group (ANH) 838.00p +1.58%
Polymetal International (POLY) 552.00p +1.56%
FTSE 250 - Fallers
Ladbrokes (LAD) 167.90p -4.60%
Diploma (DPLM) 675.00p -2.88%
Ocado Group (OCDO) 509.50p -2.67%
FirstGroup (FGP) 139.40p -2.52%
Renishaw (RSW) 1,926.00p -2.23%
Barr (A.G.) (BAG) 575.00p -2.21%
Daejan Holdings (DJAN) 4,603.60p -2.05%
Alent (ALNT) 324.90p -1.96%
Computacenter (CCC) 662.00p -1.93% |
| | UK Event Calendar | | INTERIM DIVIDEND PAYMENT DATE
Acal, Berkeley Group Holdings (The), Betfair Group, First Property Group, Sweett Group, UK Mail Group
QUARTERLY EX-DIVIDEND DATE
Caterpillar Inc.
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Building Permits (US) (13:30)
Capacity Utilisation (US) (16:15)
Housing Starts (US) (13:30)
Industrial Production (US) (16:15)
Retail Sales (GER) (07:00)
U. of Michigan Confidence (Prelim) (US) (15:00)
Wholesale Price Index (GER) (07:00)
Speech President US Federal Reserve bank of Richmond
Q4
Schlumberger Ltd.
FINALS
Schlumberger Ltd.
IMSS
Debenhams
EGMS
RCG Holdings Ltd
AGMS
Boxhill Technologies , Catalyst Media Group, Character Group
TRADING ANNOUNCEMENTS
Spectris, William Hill
UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Carr's Milling Industries, K3 Business Technology Group, Northamber |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed before UK and US economic data - UK retail sales to be released
- US confidence, factory output, housing starts out
- Shell issues profit warning
FTSE 100: 0.03%
DAX: 0.24%
CAC 40: 0.16%
FTSE MIB: 0.09%
IBEX 35: -0.11%
Stoxx 600: 0.09%
European stocks were little changed ahead of the release of reports on UK retail sales and US confidence, industrial output and housing starts.
Kicking off the session, data on UK retail sales is expected to show a rise of 2.5% year-on-year in December, compared to the previous month's 2.3% jump.
The data comes amid a tough Christmas for UK retailers despite heavy discounting and promotions to attract shoppers who remained cautious.
Retailers have shown mixed results over the festive period as household incomes have failed to keep up pace with rising inflation.
In the US later on, the University of Michigan's flash reading on consumer sentiment for January is likely to rise to 83.5 from 82.5 in December, according to the consensus forecast.
The Commerce Department will release a report on housing starts which is anticipated to reveal a 9.3% fall to a 990,000 annualised pace in December from a 1.09m rate a month earlier.
Separately, economists predict industrial production in the world's biggest economy expanded 0.3% last month, compared to a 1.1% gain in November.
The Federal Reserve has been monitoring economic data closely in weighing up whether to announce another round of monetary stimulus tapering at its policy meeting at the end of this month.
In December the central bank decided to start winding back monthly bond purchases by $10bn to $75bn.
Shell slumps on profit warns
Royal Dutch Shell's shares declined after the oil producer warned that fourth-quarter profits will be "significantly lower" than recent levels due to tough market conditions in downstream, higher exploration expenses and lower upstream volumes.
Accor rallied after Europe's largest hotel operator said it expects profit to reach the upper end of its forecast in 2013.
Essilor International tumbled after lowering its forecast sales growth for 2013.
The euro fell 0.12% to $1.3603.
Brent crude futures rose $0.170 to 105.930 per barrel, according to data from the ICE. |
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| | US Market Report | | US close: Banks push markets lower, Best Buy tumbles - Citigroup misses forecasts, Goldman beats
- Best Buy tumbles after same-store sales decline
- US jobless claims fall to 326,000, below estimates
Dow Jones: -0.39%
Nasdaq: 0.10%
S&P 500: -0.13%
Underwhelming results from Citigroup and Goldman Sachs and a tumble from Best Buy sent US markets broadly lower on Thursday, as the S&P 500 pulled back from a record high.
Investors were also reacting to a slightly surprise decline, albeit only small, in claims for unemployment benefits.
The S&P 500 finished 0.1% lower after hitting a fresh all-time high of 1,848.38 on Wednesday. The index also set a new intraday record of 1,850.84 during the previous session after the World Bank upgraded its forecasts for global growth and results from Bank of America came in ahead of expectations.
Meanwhile, the Dow Jones Industrial Average closed down 0.4%; the Nasdaq pushed 0.1% higher.
Initial jobless claims fell by 2,000 to 326,000 in the week ended January 11th, the Labor Department revealed separately, lower than the 328,000 claims predicted.
"[The data] could rekindle speculators fears that the Fed could speed up the tapering process when the Federal Open Market Committee two-day meeting gets underway on the January 28th," said Alex Conroy, Financial Trader at Spreadex.
In other economic news, US consumer prices rose by 1.5% in December, up from 1.2% the previous month and in line with analysts' expectations.
Goldman, Citigroup lead banks lower
Goldman Sachs beat estimates with a less-than-expected 19% drop in fourth-quarter net income to $2.33bn, or $4.60 a share, from $2.89bn, or $5.60 a share, the year before. This exceeded analysts' forecast of $4.18 a share, as equity underwriting revenue doubled and the firm reduced compensation costs. However, the stock finished firmly lower by the close.
Citigroup fell after missing forecasts despite fourth-quarter net income more than doubling to $2.69bn from $1.2bn a year earlier. Excluding accounting charges and special items, adjusted profit was 82 cents a share, missing the 95 cents estimate.
Bank of America, JPMorgan Chase & Co and Wells Fargo, who have all already reported their results, also finished in the red on Thursday.
Best Buy's shares plunged by 29% after posting a unexpected 0.8% fall in same-store sales in the nine weeks ended January 4th despite heavy discounting over the festive period, with domestic same-store sale falling 0.9%. Analysts had predicted 0.5% growth.
Grocery group Kroger also fell after Credit Suisse downgraded the stock from 'outperform' to 'neutral'.
S&P 500 - Risers
Sears Holdings Corp. (SHLD) $38.37 +4.55%
Alcoa Inc. (AA) $11.04 +4.25%
Gilead Sciences Inc. (GILD) $77.90 +3.55%
Eli Lilly and Company (LLY) $55.30 +3.54%
Charles Schwab Corp. (SCHW) $26.80 +2.96%
Vertex Pharmaceuticals Inc. (VRTX) $81.00 +2.83%
PNC Financial Services Group (PNC) $80.93 +2.65%
ONEOK Inc. (OKE) $66.57 +2.64%
FirstEnergy Corp. (FE) $32.49 +2.59%
Frontier Communications Co. (FTR) $4.88 +2.52%
S&P 500 - Fallers
Best Buy Co. Inc. (BBY) $26.83 -28.59%
CSX Corp. (CSX) $27.24 -6.81%
Kroger Co. (KR) $37.35 -4.86%
Citigroup Inc. (C) $52.60 -4.35%
Staples Inc. (SPLS) $13.89 -4.01%
Norfolk Southern Corp. (NSC) $87.76 -3.73%
WellPoint Inc. (WLP) $85.56 -2.94%
Ralph Lauren Corp (RL) $163.31 -2.84%
Archer-Daniels-Midland Co. (ADM) $41.25 -2.83%
Coach Inc. (COH) $52.63 -2.77%
Dow Jones I.A - Risers
McDonald's Corp. (MCD) $96.06 +0.63%
International Business Machines Corp. (IBM) $188.76 +0.54%
Verizon Communications Inc. (VZ) $48.53 +0.54%
AT&T Inc. (T) $33.96 +0.50%
E.I. du Pont de Nemours and Co. (DD) $63.99 +0.41%
Microsoft Corp. (MSFT) $36.89 +0.35%
Home Depot Inc. (HD) $81.26 +0.23%
Exxon Mobil Corp. (XOM) $98.94 +0.16%
United Technologies Corp. (UTX) $114.22 +0.13%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $72.76 -2.78%
Goldman Sachs Group Inc. (GS) $175.17 -2.00%
Wal-Mart Stores Inc. (WMT) $76.76 -1.16%
Visa Inc. (V) $221.77 -0.89%
Nike Inc. (NKE) $74.79 -0.85%
JP Morgan Chase & Co. (JPM) $58.99 -0.84%
Travelers Company Inc. (TRV) $87.24 -0.73%
American Express Co. (AXP) $87.78 -0.53%
General Electric Co. (GE) $27.20 -0.51%
Intel Corp. (INTC) $26.54 -0.49%
Nasdaq 100 - Risers
Tesla Motors Inc (TSLA) $170.97 +4.17%
Gilead Sciences Inc. (GILD) $77.90 +3.55%
Illumina Inc. (ILMN) $125.26 +3.42%
Vertex Pharmaceuticals Inc. (VRTX) $81.00 +2.83%
Alexion Pharmaceuticals Inc. (ALXN) $139.81 +2.03%
Baidu Inc. (BIDU) $173.00 +1.47%
Celgene Corp. (CELG) $167.60 +1.36%
Nxp Semiconductors Nv (NXPI) $46.00 +1.34%
Fastenal Co. (FAST) $46.67 +1.32%
Green Mountain Coffee Roasters Inc. (GMCR) $80.09 +1.25%
Nasdaq 100 - Fallers
Staples Inc. (SPLS) $13.89 -4.01%
Avago Technologies Ltd. (AVGO) $55.43 -2.70%
Citrix Systems Inc. (CTXS) $61.35 -2.59%
Dish Network Corp. (DISH) $55.36 -2.24%
Yahoo! Inc. (YHOO) $40.34 -1.78%
Applied Materials Inc. (AMAT) $17.63 -1.67%
Expedia Inc. (EXPE) $68.48 -1.35%
KLA-Tencor Corp. (KLAC) $63.06 -1.28%
Starbucks Corp. (SBUX) $75.29 -1.18%
Tractor Supply Company (TSCO) $74.31 -1.16% |
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| | Newspaper Round Up | | Friday newspaper round-up: Lloyds, Experian, Greenhouse gases Ed Miliband will today promise to create at least two new challenger lenders by forcing Britain's biggest high street banks to sell a "significant" number of branches. The Labour leader claims that, if elected, one of his first acts would be to order the Competition and Markets Authority (CMA) to produce a report on how to cap the market share of the big banks and encourage new competitors. Lloyds Banking Group would be the main target of any move to force lenders to sell off large parts of their branch networks. – Daily Telegraph
Experian risked provoking shareholder anger yesterday when it flouted rules on boardroom best practice and moved its Chief Executive up into the Chairman's job. At the same time, the credit checker and data analysis group promoted Brian Cassin, its finance director, into the Chief Executive's seat. It also made George Rose, one of its non-executives, the new senior independent director, among the most important channels for communications between shareholders and a company. – The Times
Global greenhouse gas emissions are set to rise by nearly a third in the next two decades, putting hopes of curtailing dangerous climate change beyond reach, a new report by BP has found. The drastic rise in emissions, despite international efforts to cut carbon, will come despite the predicted enormous growth in the use of shale gas, according to the oil and gas giant. – The Guardian
The Government is failing in its target to double exports to £1trn by 2020, despite spending £420m last year trying to do so. A report by the Commons Public Accounts Committee warned that the Government that it must increase export values by 10% a year if it is to meet this target. For the past two years the annual value of global exports has been flat. – The Times
European leaders yesterday insisted deflation was not a threat, only a day after the International Monetary Fund warned it could derail the global recovery. Jens Weidmann, head of Germany's Bundesbank, said fears that the eurozone was heading for a damaging period of falling prices were 'irrational'. Eurogroup president Jeroen Dijsselbloem added that there was 'no acute threat' of deflation in the single currency bloc. – Daily Mail
China's first initial public offering for more than a year got off to a flying start, rising 20% in the initial hours of trading. Shares in Suzhou-based Neway Valve rose sharply on Friday after the company raised $240m from a Shanghai listing, marking the end of a regulator-forced freeze in the primary market. In 2012, China was the world's second-biggest IPO market, after the US. But concerns about the quality of companies waiting to list, and the sheer number of them – almost 900 at one point – prompted the China Securities Regulatory Commission to block all new listings. – Financial Times
The flotation of EE, Britain's largest mobile operator, has been put on hold by Orange and Deutsche Telekom, after the joint owners concluded they would secure a higher valuation for the business when its 4G telephone services take off. Orange and Deutsche Telekom – which has also been linked with a sale of its US business this year – had been working on options for a partial sale of EE for more than a year. – Financial Times | | |
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