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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 US data, but RBS jumps - Markets nervous ahead of US jobs data
- RBS jumps 10 per cent as profits rise
- IHG rises after Q1 results, special divi
techMARK 2,791.50 +0.11%
FTSE 100 6,812.55 +0.05%
FTSE 250 15,923.25 +0.46%
UK markets opened more or less flat on Friday despite a massive jump in the share price of RBS, as investors scaled back their appetite for risk before some key economic data from the States later on.
RBS was trading as much as 12% higher early on after surprising with a doubling of first-quarter pre-tax profits, helped by a reduction in costs and lower impairment charges.
However, London's FTSE 100, which closed at a two-month high on Thursday, was lacking direction this morning as traders chose to sit on their hands ahead of the highly-anticipated US non-farm payrolls figure due out this afternoon.
The index was just 0.05% higher at 6,813 after having finished at 6,808.87 yesterday evening, its highest close since March 4th.
All eyes will be on the US employment report due out at 13:30 with economists predicting a 215,000 rise in non-farm payrolls in April, up from 192,000 the month before. The unemployment rate is expected to dip to 6.6% from 6.7%.
However, some analysts believe that there could be an upside surprise in the data, as the US economy bounces back from the winter-induced weakness that has plagued recent economic indicators.
"A number of indicators has pointed to a solid rebound in activity in March and April (personal spending, ISM, industrial production) and this is expected to be reflected in payrolls as well," said analysts at Danske Bank.
RBS jumps as profits rise
RBS pleased investors after saying that pre-tax profit surged to £1.64bn in the first three months of 2013, up from £826m the year before. This came despite a 2% fall in income to £5.05bn, as expenses fell 6% and impairment losses dropped 65%.
"The first-quarter [statement] appears at first read to be way above consensus and our forecast," said Analyst Mike Trippitt at Numis Securities.
A special dividend and a strong first-quarter performance were plated up for Intercontinental Hotel Group shareholders today, after it delivered its best 'RevPAR' performance in seven quarters. The stock jumped as much as 9% this morning.
Beverage cans maker Rexam fell after saying that regional trading conditions were mixed in the first quarter. The company also announced that foreign exchange movements will be a headwind going forward, while metal premiums are at record highs.
Telecoms group TalkTalk was on the rise after Berenberg upgraded the stock to 'hold', while Taylor Wimpey and Redrow were benefiting from upgrades by Citigroup to 'buy'. |
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| FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 342.70p +11.77%
InterContinental Hotels Group (IHG) 2,196.00p +8.50%
Resolution Ltd. (RSL) 304.80p +2.42%
Barratt Developments (BDEV) 374.80p +1.74%
Persimmon (PSN) 1,343.00p +1.44%
ITV (ITV) 189.10p +1.34%
Randgold Resources Ltd. (RRS) 4,720.00p +0.90%
Group (VOD) 222.60p +0.88%
BG Group (BG.) 1,246.00p +0.69%
G4S (GFS) 238.70p +0.67%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,953.00p -1.47%
Pearson (PSON) 1,086.00p -1.45%
British Sky Broadcasting Group (BSY) 887.50p -1.44%
Rexam (REX) 503.50p -1.27%
Hargreaves Lansdown (HL.) 1,200.00p -1.23%
Reckitt Benckiser Group (RB.) 4,842.00p -0.84%
Marks & Spencer Group (MKS) 440.50p -0.79%
Morrison (Wm) Supermarkets (MRW) 196.00p -0.76%
GKN (GKN) 384.10p -0.75%
Aberdeen Asset Management (ADN) 440.10p -0.74%
FTSE 250 - Risers
Berkeley Group Holdings (The) (BKG) 2,437.00p +3.97%
Redrow (RDW) 302.70p +3.88%
TalkTalk Telecom Group (TALK) 297.90p +3.29%
Dixons Retail (DXNS) 48.00p +3.00%
Taylor Wimpey (TW.) 108.30p +2.85%
Direct Line Insurance Group (DLG) 254.00p +2.50%
Savills (SVS) 620.00p +2.48%
Carphone Warehouse Group (CPW) 325.70p +2.45%
Capital & Counties Properties (CAPC) 343.50p +2.42%
Perform Group (PER) 220.00p +2.33%
FTSE 250 - Fallers
Brown (N.) Group (BWNG) 480.10p -1.36%
Telecity Group (TCY) 715.00p -1.17%
Pace (PIC) 358.50p -1.13%
Riverstone Energy Limited (RSE) 900.00p -1.10%
Micro Focus International (MCRO) 782.50p -1.01%
Hellermanntyton Group (HTY) 312.10p -0.92%
Go-Ahead Group (GOG) 1,996.00p -0.84%
Partnership Assurance Group (PA.) 135.00p -0.74%
Ladbrokes (LAD) 153.00p -0.65% |
| | UK Event Calendar | | INTERIM DIVIDEND PAYMENT DATE
Edge Performance VCT 'H' Shares, Redrow
QUARTERLY PAYMENT DATE
British Land Co, Investors Capital Trust 'A' Shares, Investors Capital Trust 'B' Shares
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (US) (15:00)
Non-Farm Payrolls (US) (13:30)
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
Unemployment Rate (EU) (10:00)
Unemployment Rate (US) (13:30)
IMSS
Capital & Counties Properties , Direct Line Insurance Group, Laird, Rexam, Royal Bank of Scotland Group
SPECIAL DIVIDEND PAYMENT DATE
Bodycote
EGMS
Ormonde Mining
AGMS
Aer Lingus Group (Assd Coinside Cash), Capital & Counties Properties , DP Poland, InterContinental Hotels Group, John Laing Infrastructure Fund Ltd, Laird, Rexam, RPS Group, Stadium Group, Starwood European Real Estate Finance Ltd, Symphony Environmental Technologies
TRADING ANNOUNCEMENTS
Rentokil Initial
UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)
FINAL DIVIDEND PAYMENT DATE
32Red, Aberdeen UK Tracker Trust, Berendsen, BlackRock Latin American Inv Trust, Bodycote, EMIS Group, Essentra, Henderson Opportunities Trust, Moneysupermarket.com Group, Nichols, Pearson, Phoenix Group Holdings (DI), Quindell , Ultra Electronics Holdings
Q1
InterContinental Hotels Group |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Ukraine launches offensive on Slovyansk - Traders eye US non-farm payrolls
- Euro and sterling move higher
- Market commentary is highlight weakness in gold and copper
FTSE-100: 0.01%
Dax-30: -0.06%
Cac-40: -0.34%
FTSE Mibtel 30: 0.39%
Ibex 35: 0.07%
Stoxx 600: -0.04%
European equities began the session trading in a mixed fashion ahead of this afternoon's critical US non-farm payrolls report.
That came as the sterling and the Europe grind higher versus the US dollar in foreign exchange markets. However, whereas the Bank of England seems to be increasingly cognisant of potential risks at some point down the line stemming from UK housing prices, the ECB is thought to be hoping that an acceleration in the American economy weakens its currency.
Acting as a backdrop, multiple reports were indicating that Ukraine had launched an offensive against rebels in the city of Slovyansk.
To take note of, gold futures were heading towards a second consecutive weekly drop which some reports are linking to selling by exchange traded funds.
Copper futures on the other hand were on track to confirm their largest drop in seven weeks, with market commentary attributing the move to progress on Wednesday's latest move by the US Fed to reign in its asset purchase program.
Pfizer raises bid for AstraZeneca
US pharmaceuticals giant Pfizer raised its offer for British rival AstraZeneca to £50 from £46.61 beforehand, for a 39% premium versus the Anglo-Swedish company's market value on January 3rd.
Shares of RBS spiked higher after unveiling first quarter profits that tripled analysts' expectations.
German chemicals powerhouse BASF saw operating profits, at the EBIT (earnings before interest and taxes) level, hit €2.1bn, versus the €2.12bn anticipated by markets.
From a sector standpoint the largest gains were to be seen in the following industrial groups: Travel&Leisure (1%), Telecommunications (0.98%) and Media (0.44%).
Euro moves slightly lower
The euro/dollar was 0.08% lower at 1.3856.
Front-month Brent crude futures were advancing 0.370% to the $108.18/barrel mark on the ICE. |
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| | US Market Report | | US close: Nasdaq ekes out small gain ahead of jobs data - Consumer spending, incomes beat forecasts
- ISM manufacturing rises ahead of estimates
- Jobless claims unexpectedly rise
- T-Mobile US up on customer growth, Sprint speculation
Dow Jones: -0.13%
Nasdaq: 0.31%
S&P 500: -0.01%
US stocks ended the day mixed, with small drops in the Dow Jones Industrials and S&P 500, although on the broader NYSE the advance/decline ratio was actually positive.
The Nasdaq Composite managed a positive finish, led by gains in biotechnology stocks.
All of the above transpired before the release of tomorrow's monthly non-farm employment report.
The Dow was traded into the close off by -0.13%, after having reached an all-time high of 16,580.84 on Wednesday, while the S&P 500 fell by 0.01%. The Nasdaq gained 0.31%.
Of interest, Bloomberg cites Jeremy Grantham, Chief Investment Strategist at Grantham Mayo Van Otterloo & Co., as having told clients today that the S&P 500 will climb above 2,250 points, before collapsing after the next US presidential elections.
In economic news today, personal incomes and spending in the States both increased in March, with growth accelerating from the prior month. Spending and incomes rose by 0.9% and 0.5%, respectively, ahead of forecasts, in part due to the implementation of Obama's Affordable Care Act and also due to the unwinding of the negative winter weather effects.
All in all, gross domestic product may be headed for a rise of 3.5% this quarter after having essentially stagnated during the first three months of the year, wrote Capital Economics.
"While these were already incorporated in the first-quarter 2014 advance GDP release, they suggest solid momentum in underlying goods and services spending going into the second quarter of 2014, and we project another 3% increase in consumer spending on the quarter," said Analyst Dean Maki from Barclays Research .
An index measuring activity in the sector, as measured by the Institute for Supply Management, rose to 54.9 in April from 53.7 the month before, ahead of the 54.3 forecast.
Meanwhile, initial weekly unemployment claims unexpectedly rose to a nine-week high of 344,000 last week from a revised 333,000 the week before, according to from the Labor Department. The consensus forecast was for a drop to 320,000.
T-Mobile rallies
Shares in T-Mobile rallied 8% after the company added 1.3m new monthly subscribers during the first three months of the year, its highest ever quarterly gain.
T-Mobile US was also boosted by reports that larger telecoms firm has met with banks to make debt arrangements in a potential bid for the company.
Oil major Exxon Mobil was subdued early on despite reporting a less-than-expected 1% decline in earnings per share (EPS). Sector peer , however, impressed with its quarterly results as adjusted EPS rose 27%.
Auto major Ford declined after saying that US vehicle sales declined to 211,126 units in April, down 0.7% on a year earlier. , however, gained after reporting 6.9% growth.
From a sector standpoint the worst performing sectors were: Gold mining (-1.64%), Platinum&Precious metals (-1.61%) and Consumer electronics (-1.57%).
Small decline in crude futures
Front month West Texas crude futures were down by 0.41% to the $99.33/barrel mark on the NYMEX.
10-year US Treasury yields edged lower by three basis points to 2.61%. |
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| | Newspaper Round Up | | Friday newspaper round-up: House prices, BP, Marks&Spencer Surging house prices pose the single biggest threat to UK financial stability, the deputy Governor of the Bank of England has warned. Jon Cunliffe said that policy-makers must decide quickly whether to take action to cool the market and, in the starkest warning yet that rapid price rises could derail Britain's recovery, argued that it would be "dangerous to ignore the momentum that has built up in the UK housing market". – The Daily Telegraph
BP is being drawn ever deeper into its costly Russian venture with oil giant Rosneft, quietly extending a five-year loan to help the company lower debt costs despite escalating US sanctions against Russia. The move leaves BP increasingly exposed as the crisis spins further out of control in eastern Ukraine. Eleven cities are in the hands of pro-Russian paramilitary forces. The Ukrainian government openly admits that it has no means of regaining the region. – The Daily Telegraph
Marks&Spencer launched an on-line drive yesterday aimed at the 19m customers who shop in its stores every year but don't visit its website. The clothing and food group, which has 34m store and on-line customers a year, said accelerating the marketing of the new website it launched in February as well as online-only promotions would help ramp up on-line profits and sales. "We do believe the 19m consumers that do not consume at M&S.com today is a real opportunity for us," said marketing director Patrick Bousquet-Chavanne. – The Daily Express
UK house prices could quadruple to an average of over £900,000 in twenty years' time and make home ownership impossible for millions if the Government does not take action to tackle the housing shortage, a leading charity has warned. Shelter called on the Government to make reforms aimed at increasing the amount of new homes being built to 250,000 a year by 2021 in order keep up with demand, as it said currently there was a shortage of 100,000 houses a year in the UK. – The Daily Mail
The boss of the rogue trader who lost UBS $2.3bn has been permanently banned from working in the City because of "a lack of honesty". John Hughes, who was in charge of the jailed trader Kweku Adoboli, was banned by regulators after they reviewed a series of chat messages that he exchanged with Mr Abodoli referring to a slush fund that was kept off UBS's books that was meant to contain hidden profits. – The Times
PizzaExpress is being served up to potential suitors after being put on sale by Cinven with an estimated price tag of £1 billion. Gondola Group, which also owns the Ask Italian and Zizzi chains, has appointed Goldman Sachs to handle a sale of its biggest brand, although the backstop of an initial public offering has not been ruled out. Sources close to the process said that international private equity firms were hopeful of securing a deal within the next two to three months amid growing interest in the restaurant sector. – The Times | | |
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