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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 flat ahead of Inflation Report, Morrisons gains - Markets await Inflation Report, forward guidance in focus
- Yellen still in focus after taper comments
- China trade surplus widens unexpectedly
- Morrison gains on private-equity buyout hopes
techMARK 2,826.88 -0.34%
FTSE 100 6,678.65 +0.09%
FTSE 250 16,076.98 -0.01%
UK stocks opened more or less flat on Wednesday after hitting a three-week high the previous session, as investors awaited the Bank of England’s Inflation Report which could see Governor Mark Carney revamp his forward guidance plan.
The Inflation Report, due out at 10:30 this morning, will be closely watched given recent increasing pressure on the BoE to adjust its strategy of linking monetary policy to the jobless rate.
This follows a faster-than-expected fall in unemployment towards the 7% threshold at which the Bank said it would reassess its policy. Inflation, meanwhile, remains roughly in line with the BoE’s target of 2%.
Chief Economist Simon Smith from FxPro said that "the Bank is going to revise and soften its forward guidance policy, rather than prepare the market for an imminent rate hike”.
The FTSE 100 was little changed from Tuesday’s closing price of 6,672.66 in early trading; this was the index’s highest finish since January 23rd.
Stocks rose strongly yesterday after new Federal Reserve Chair Janet Yellen expressed her commitment to continuing to scale back stimulus in “measured steps” after a "broad improvement" in the labour market. However, she added that while the unemployment rate has fallen by nearly a percentage point since the middle of last year, “the recovery in the labour market is far from complete”.
Sentiment was also lifted this morning by a higher-than-expected trade surplus in China after exports rose by more than expected in January. Export growth accelerated to 10.6% from 4.3% previously, while import growth rose to 10% from 8.3%. This resulted in a trade balance of $31.86bn, surprising analysts who had expected a slight decline from the $25.64bn surplus registered in December.
“Although a better-than-expected figure would be warmly welcomed, the sharp rise could be due to distortions from the Lunar New Year holidays,” warned Lee Mumford, Financial Sales Trader at Spreadex.
WM Morrison founders considering private-equity buyout
WM Morrison surged this morning after Bloomberg said that its founding family is considering taking the supermarket group private. The Morrison family, who are thought to hold around 9-10% of the UK grocer, are said to have spoken to a number of private-equity firms to gauge their interest. Bloomberg said that a potential buyout of WM Morrison, valued at a market capitalisation of around £5.7bn, would be for at least £7bn.
Supermarket peers Sainsbury and Tesco were also performing well this morning.
Mining stocks were also in demand today after the better-than-expected data from top metals consumer China. Glencore Xstrata, Anglo American, Rio Tinto and BHP Billiton were all advancing.
Precious metals producer Fresnillo was also higher, extending gains made yesterday afternoon after on hopes that it is close to having a ban on an explosives permit in Mexico lifted.
Sector peer African Barrick Gold, however, sunk this morning after cutting its dividend and swinging to an annual loss for 2013, reflecting impairment charges relating to the impact of lower gold prices and changes to mine plans.
Africa-focused explorer Tullow Oil was flat after saying that while revenues rose in 2013 profits fell in the face of a £200m increase in exploration write-offs. Oil peers Shells and BP were trading lower early on.
Consumer products giant Reckitt Benckiser said it exceeded its targets after “another strong year” in 2013, but warned that markets conditions have become more challenging. Shares edge higher early on.
Data centre services group Telecity saw its shares dive as much as 12% in early trading after predicting 2014 revenue would be below that forecast by analysts following a good set of results for 2013. |
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| | FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 245.20p +3.37%
Bunzl (BNZL) 1,429.00p +2.73%
Standard Chartered (STAN) 1,298.00p +2.20%
Anglo American (AAL) 1,545.50p +1.28%
Reckitt Benckiser Group (RB.) 4,887.00p +1.24%
Marks & Spencer Group (MKS) 491.30p +1.17%
BAE Systems (BA.) 440.60p +1.08%
Mondi (MNDI) 988.50p +1.07%
Old Mutual (OML) 182.90p +0.99%
Schroders (SDR) 2,592.00p +0.93%
FTSE 100 - Fallers
Persimmon (PSN) 1,409.00p -1.74%
Barclays (BARC) 261.00p -1.40%
Royal Dutch Shell 'A' (RDSA) 2,115.50p -1.31%
Sage Group (SGE) 422.50p -1.31%
Royal Dutch Shell 'B' (RDSB) 2,246.00p -1.27%
ARM Holdings (ARM) 927.00p -1.07%
Randgold Resources Ltd. (RRS) 4,664.00p -0.87%
BP (BP.) 488.20p -0.72%
G4S (GFS) 232.70p -0.64%
Carnival (CCL) 2,533.00p -0.63%
FTSE 250 - Risers
Kenmare Resources (KMR) 15.68p +1.82%
Lonmin (LMI) 328.60p +1.58%
esure Group (ESUR) 277.10p +1.50%
Home Retail Group (HOME) 193.10p +1.42%
UDG Healthcare Public Limited Company (UDG) 336.60p +1.39%
Debenhams (DEB) 78.65p +1.22%
BlackRock World Mining Trust (BRWM) 507.50p +1.20%
Ocado Group (OCDO) 569.50p +1.15%
Countrywide (CWD) 615.00p +1.15%
Morgan Advanced Materials (MGAM) 316.90p +1.08%
FTSE 250 - Fallers
Telecity Group (TCY) 648.50p -11.16%
IP Group (IPO) 173.20p -3.78%
NMC Health (NMC) 446.90p -3.04%
Kazakhmys (KAZ) 203.50p -2.35%
African Barrick Gold (ABG) 234.70p -2.21%
ICAP (IAP) 406.20p -2.00%
Crest Nicholson Holdings (CRST) 373.50p -1.89%
UK Commercial Property Trust (UKCM) 78.30p -1.76%
Partnership Assurance Group (PA.) 318.50p -1.70%
Riverstone Energy Limited (RSE) 895.00p -1.65% |
| | UK Event Calendar | | INTERIMS
Avanti Communications Group, Frontier Developments, Town Centre Securities
INTERIM EX-DIVIDEND DATE
Henderson Smaller Companies Inv Trust, Ideagen, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 1 E Shares, Ingenious Entertainment VCT 1 F Shares, Ingenious Entertainment VCT 1 G Shs, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Entertainment VCT 2 E Shares, Ingenious Entertainment VCT 2 F Shares, Ingenious Entertainment VCT 2 G Shs, Jupiter Primadona Growth Trust, Murgitroyd Group, Penna Consulting
QUARTERLY EX-DIVIDEND DATE
Boeing Co, BP, MedicX Fund Ltd., Picton Property Income Ltd, Royal Dutch Shell 'A', Royal Dutch Shell 'B'
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Industrial Production (EU) (10:00)
MBA Mortgage Applications (US) (12:00)
Treasury Budget Statement (US) (19:00)
Q4
Norsk Hydro ASA, Smurfit Kappa Group
GMS
Northern 2 VCT
FINALS
African Barrick Gold , Norsk Hydro ASA, Orange Polska S.A. GDR (Reg S), Reckitt Benckiser Group, Sampo OYJ, Smurfit Kappa Group, Telecity Group, Tullow Oil
IMSS
Atkins (WS)
EGMS
OJSC Phosagro GDR (Regs)
AGMS
F&C Capital & Income Inv Trust, Income & Growth VCT
UK ECONOMIC ANNOUNCEMENTS
BoE Inflation Report (09:30)
FINAL DIVIDEND PAYMENT DATE
Octopus VCT 3, Octopus VCT 4
FINAL EX-DIVIDEND DATE
Blackrock Income And Growth Investment Trust, Future, JPMorgan Russian Securities, Octopus Eclipse VCT 1, Pressure Technologies, Sage Group, Terra Capital |
| | The Fundamentals of Stock Market Highs | | How to Know when the Bull Market Ends - Given that the stock market rally has now lasted nearly five years and in view of new all-time highs, many market participants are faced with the question when will there be a top at the major share indexes. After all, everybody wants to exit the market near a high and lock in their profits before the market turns downwards again. Read more. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | European stocks rise as Yellen's first testimony boosts sentiment - Yellen testimony boosts confidence
- BoE releases quarterly inflation report
- Eurozone industrial output data out
FTSE 100: 0.09%
DAX: 0.48%
CAC 40: 0.30%
FTSE MIB: 0.10%
IBEX 35: 0.21%
Stoxx 600: 0.32%
European stocks rose as traders were encouraged by Federal Reserve Chair Janet Yellen’s first testimony yesterday.
In her testimony before the House Financial Services Committee, Yellen confirmed the Fed intends to continue to taper its asset purchases every month with the aim of ending it completely later this year.
Yellen, who took over from Ben Bernanke earlier this month, said the extremely cold weather may have skewed the figures in December and January’s weak job reports.
“I was surprised that the jobs reports in December and January, the pace of job creation, was running under what I had anticipated. But we have to be very careful not to jump to conclusions in interpreting what those reports mean,” she said.
Alpari analyst Craig Erlam said: “This confidence from Yellen clearly fed back into the markets, where investors didn’t really need much of a boost given that US stocks were already headed for a fourth consecutive winning day, while indices in Europe were closing in on a fifth.
“It seems that investors are now convinced that the correction is over and are once again happy to buy the dips, although maybe not quite as aggressively as they were at times last year.”
Turning to today’s agenda in the UK, the Bank of England (BoE) is expected to use its quarterly inflation report to change or scrap its forward guidance.
The central bank has vowed to keep interest rates at the record low of 0.5% at least until the unemployment rate falls to 7%. However, unemployment, now at 7.1%, has fallen faster than expected, putting pressure on the BoE to alter its forward guidance.
In other news, Eurozone industrial production data is expected to show a 1.8% year-on-year increase in December, compared to a 3% jump in November.
ING and Societe Generale rally
ING Groep and Societe Generale SA increased at least 2.7% after reporting fourth-quarter profit that beat analysts’ estimates.
Heineken edged higher after saying it expects sales to increase in 2014.
Morrison rallied following reports the founding family of the grocer is said to be considering taking the supermarket group private.
The euro fell 0.02% to $1.3635.
Brent crude futures rose $0.294 to $109.000 per barrel, according to the ICE. |
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| | US Market Report | | US stocks finish with strong gains as Yellen backs taper plan - Investors celebrate as Yellen assures Fed remains on same course
- Labour market sees broad improvement
- Global market volatility not a substantial risk to US
- Dow briefly tops 16,000, Nasdaq turns positive for 2014
Dow Jones: 1.22%
Nasdaq: 1.03%
S&P 500: 1.12%
US markets surged on Tuesday after comments from Federal Reserve Chair Janet Yellen assured investors that the tapering of quantitative easing is likely to continue at a similar pace to previous reductions.
The three main indices on Wall Street all finished over 1% higher with the Dow Jones Industrial Average briefly exceeding the 16,000 level in afternoon trade before paring gains slightly before the close. The index has now closed above this level since January 23rd.
Today's advance was even enough to push the Nasdaq into positive territory for 2014 - with the year-to-date performance now +0.4% - though the Dow and S&P 500 still remain lower than at the start of the year.
Yellen
In her semi-annual monetary policy report to Congress, Yellen said the central bank would continue to taper in “measured steps” after a "broad improvement" in the labour market.
However, she said that while the unemployment rate has fallen by nearly a percentage point since the middle of last year, “the recovery in the labour market is far from complete”.
Reiterating remarks to her predecessor Ben Bernanke and other Fed officials, Yellen stressed that asset purchases “are not on a pre-set course” and future decisions on monetary policy remain dependent on the outlook for the labour market and inflation.
However, she also noted that the recent volatility in global financial markets does “not pose a substantial risk to the US economic outlook”.
Analysts at Capital Economics said that the two key takeaways from her statement were "that neither the recent drop off in the pace of employment growth nor the turmoil in emerging markets will prevent the FOMC from continuing to gradually wind down its monthly asset purchases".
Acting as a backdrop, reports pointed to the possibility that Republicans in the lower chamber of Congress might move forward with plans to bring to the floor a 'clean' bill to raise the debt ceiling.
Meanwhile, a US Treasury auction for $30bn in three-year notes was met with strong demand. The bid-to-cover ratio increased to 3.42 from 3.32 the last time around.
GM rises on China sales, Sprint gains
US auto giant General Motors advanced after saying sales in China rose 12% to a record 348,061 units last month, helped by the demand for Buick and Wuling vehicles. The news came as it was revealed that its Chief Executive Mary Barra would be paid $14.4m this year, some 60% more than her predecessor Dan Akerson.
Telecoms group Sprint gained saying that losses in the fourth quarter came in lower than expected as it reported an increase in wireless subscribers.
CVS Caremark, the drugstore chain, also rose as quarterly sales and profits increased.
InvenSense surged after saying that it has entered into a patent cross-licence agreement with STMicroelectronics, resolving lawsuits over infringement.
Building supplies firm Masco was higher after swinging to a profit in the fourth quarter on the back of better sales and margins.
S&P 500 - Risers
Sears Holdings Corp. (SHLD) $38.72 +8.40%
Regeneron Pharmaceuticals Inc. (REGN) $326.52 +7.41%
Walgreen Co. (WAG) $64.20 +5.85%
Teradata Corp. (TDC) $43.30 +5.43%
Cliffs Natural Resources Inc. (CLF) $21.50 +4.47%
Cardinal Health Inc. (CAH) $69.56 +4.35%
Nabors Industries Ltd. (NBR) $18.30 +4.21%
Halliburton Co. (HAL) $53.84 +3.80%
Transocean Ltd. (RIG) $43.85 +3.76%
H&R Block Inc. (HRB) $30.75 +3.47%
S&P 500 - Fallers
Zoetis Inc (ZTS) $29.13 -6.45%
ConAgra Foods Inc. (CAG) $29.08 -6.34%
Pioneer Natural Resources Co. (PXD) $180.66 -3.35%
Ingersoll Rand Ltd. (IR) $57.26 -3.08%
Urban Outfitters Inc. (URBN) $35.61 -2.81%
HCP Inc. (HCP) $37.80 -2.63%
GameStop Corp. (GME) $35.75 -1.84%
Entergy Corp. (ETR) $62.58 -1.60%
Omnicom Group Inc. (OMC) $73.00 -1.58%
Reynolds American Inc. (RAI) $48.07 -1.52%
Dow Jones I.A - Risers
Boeing Co. (BA) $130.16 +2.36%
Goldman Sachs Group Inc. (GS) $164.39 +2.11%
Johnson & Johnson (JNJ) $92.97 +2.09%
Nike Inc. (NKE) $73.98 +1.80%
Chevron Corp. (CVX) $113.58 +1.69%
AT&T Inc. (T) $32.95 +1.57%
General Electric Co. (GE) $25.43 +1.52%
Merck & Co. Inc. (MRK) $55.70 +1.48%
Exxon Mobil Corp. (XOM) $90.84 +1.47%
International Business Machines Corp. (IBM) $179.70 +1.45%
Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $22.71 -0.53%
Nasdaq 100 - Risers
Green Mountain Coffee Roasters Inc. (GMCR) $119.40 +7.65%
Regeneron Pharmaceuticals Inc. (REGN) $326.52 +7.41%
Vertex Pharmaceuticals Inc. (VRTX) $84.98 +3.42%
Monster Beverage Corp (MNST) $72.98 +3.24%
Xilinx Inc. (XLNX) $47.96 +3.18%
Avago Technologies Ltd. (AVGO) $58.07 +3.13%
Applied Materials Inc. (AMAT) $17.78 +3.07%
Akamai Technologies Inc. (AKAM) $59.79 +3.07%
Alexion Pharmaceuticals Inc. (ALXN) $174.43 +2.54%
F5 Networks Inc. (FFIV) $112.26 +2.52%
Nasdaq 100 - Fallers
Seagate Technology Plc (STX) $49.37 -1.04%
Intuitive Surgical Inc. (ISRG) $426.45 -0.75%
Micron Technology Inc. (MU) $24.71 -0.64%
Tractor Supply Company (TSCO) $65.67 -0.53%
Cisco Systems Inc. (CSCO) $22.71 -0.53%
Starbucks Corp. (SBUX) $74.50 -0.40%
Illumina Inc. (ILMN) $161.10 -0.40%
Henry Schein Inc. (HSIC) $114.43 -0.36%
Stericycle Inc. (SRCL) $115.69 -0.31%
Nxp Semiconductors Nv (NXPI) $52.08 -0.31% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Blinkx, RBS, Barclays... Blackrock has thrown its weight behind Blinkx by raising its stake in the under-seige internet video company to 13 per cent. The global investment house, which is Blinkx's biggest investor, announced that it has bought another five million shares, adding to its 11.6 per cent stake. – Daily Telegraph
Royal Bank of Scotland Chief Executive Ross McEwan has promoted one of his key lieutenants as he seeks to recover from a string of setbacks at its retail banking division. Les Matheson, who joined from Australian lender St George Bank four years ago, is to take charge of the state-backed group's retail arm, just weeks after it set aside almost £1bn extra to compensate customers who were mis-sold payment protection insurance (PPI) and complex interest rate hedging products. - Scotsman
The Institute of Directors has piled into the controversy over pay at Barclays, accusing its institutional shareholders of being "supine" in failing to veto a 10% rise in staff bonuses to £2.38bn in a year when underlying profits slumped. The unprecedented intervention by the employers' body came as the bank revealed it was planning to axe one job in every 12, slashing headcount by between 10,000 and 12,000 this year, with 7,000 jobs going in the UK. – The Times
Chinese exports increased 10.6% from a year earlier, while imports were up 10%. Analysts had forecast flat growth or even declines for both because the base of comparison – January of last year – had been distorted upwards by rampant over-invoicing, eliciting a crackdown from the Chinese government. The chasm between the reported reality and the more sluggish expectations sparked a debate about how to interpret the data. In one camp were those who said the robust trade numbers painted a very positive picture of Chinese demand and the global economy, suggesting that both are performing ahead of expectations. – Financial Times
The Bank of England should ditch "forward guidance" on interest rates and return to inflation targeting, a former rate-setter has urged. Dame DeAnne Julius, one of the founding members of the Monetary Policy Committee, said that the Bank should "get back to basics and just focus on inflation again". Her comments emerged ahead of today's Inflation Report, when Mark Carney, the Bank's Governor, will update guidance but reiterate that rates will not rise for some time to come. – The Times
What started as a nifty gizmo to identify a song has blossomed into a technological success story that yesterday was estimated to be worth $500m
and appeared to be taking another step towards a stock market flotation. Shazam was one of the first apps to emerge in the pre-smartphone era, recognising songs by holding a mobile phone to a speaker, which would trigger a text message identifying the music. – The Times | | |
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