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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: ASOS plummets as UK stocks fall ahead of ECB techMARK 2,825.83 +0.11%
FTSE 100 6,802.80 -0.23%
FTSE 250 15,937.44 -0.31%
A surprise profit warning from fast-growing fashion retailer ASOS and a cautious outlook from speciality chemicals firm Johnson Matthey sent UK stock markets lower on Thursday, as investors nerves were tested ahead of the pivotal European Central Bank (ECB) meeting this afternoon.
Although the ECB is widely expected to unleash a host of new measures to battle deflationary pressures and boost growth across the single-currency region, risk appetite is likely to be kept in check given the potential for policymakers to disappoint.
The FTSE 100 fell 0.2% to 6,803 in early trading. The index has not closed lower than this since May 20th.
"After this week's weak inflation numbers, market expectations of the ECB have likely risen, which we believe raises the bar for the ECB to impress the market with a package of measures," said Analyst Khrishnamoorthy Sooben from Barclays.
"While weak inflation prints increase the probability of quantitative easing (QE) somewhat, we still think the ECB will prefer to wait before embarking on QE and instead focus on rate cuts and credit easing tools in today's meeting."
While the ECB will undoubtedly garner the most attention today, the Bank of England will also be watched as it reports its own monetary policy decision at noon, though analysts expect no change from UK policymakers just yet. The Bank Rate is forecast to be held at 0.5% with the size of the asset purchase programme unchanged at £375bn.
Meanwhile, jobless claims data from the States will be analysed as markets gear up for the all-important US employment report tomorrow, which has the potential to spark some volatility across global financial markets. Jobless claims are expected to rise to 310,000 in the week ended May 31st, from 300,000 the week before which was the second-lowest reading since the financial crisis ended.
ASOS plummets on profit warning
Shares in online fashion retailer ASOS plummeted as much as 40% after the company cut its margin guidance for the full year and blamed a strong pound for a slowdown in growth in the third quarter. The company said that because of a higher mix of UK and European sales, which have lower retail margins, together with increased promotions, its operating margin for the current financial year would be 4.5%, down from its previous forecast of 6.5%.
The surprise trading statement saw shares in fellow retailers Next, Sports Direct, N Brown, SuperGroup and Primark owner Associated British Foods lower. boohoo.com, the online fashion group which floated in March, was down around 12%.
Johnson Matthey, which makes catalytic converters for cars, reported higher sales and profits and hiked its dividend, but the share price fell as it warned that changes in a deal with a supplier and currency volatility would hit growth in 2014/15.
Leading the upside was Smith & Nephew which jumped around 4% as M&A speculation continues to surround the medical devices manufacturer. US group Medtronic has become the latest party rumoured to be interested in the UK firm and is reportedly in the early stages of preparing an offer.
The numbers of passengers flying with budget airline easyJet rose 7.9% in May compared to the same month last year, helping the stock higher early on.
Lloyds Banking Group edged higher after saying that it is to sell a portfolio of UK commercial real estate loans to Promontoria Holding for £352m as part of its continued "non-core run-off portfolio asset reduction programme".
UK residential property developer Bellway rose after saying that demand for new homes remains robust, buoyed by growing consumer confidence and a strong supply of mortgages. |
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| FTSE 100 - Risers
Smith & Nephew (SN.) 1,110.00p +4.32%
Admiral Group (ADM) 1,490.00p +1.22%
Shire Plc (SHP) 3,546.00p +0.91%
Meggitt (MGGT) 496.60p +0.51%
Rolls-Royce Holdings (RR.) 1,067.00p +0.47%
easyJet (EZJ) 1,598.00p +0.44%
National Grid (NG.) 834.00p +0.42%
United Utilities Group (UU.) 871.50p +0.40%
Old Mutual (OML) 200.00p +0.40%
Aviva (AV.) 528.00p +0.38%
FTSE 100 - Fallers
Persimmon (PSN) 1,260.00p -5.41%
Hargreaves Lansdown (HL.) 1,230.00p -1.91%
Associated British Foods (ABF) 2,999.00p -1.61%
Randgold Resources Ltd. (RRS) 4,314.00p -1.60%
Fresnillo (FRES) 777.50p -1.58%
Johnson Matthey (JMAT) 3,207.00p -1.57%
Sports Direct International (SPD) 787.00p -1.50%
Next (NXT) 6,560.00p -1.28%
Carnival (CCL) 2,404.00p -1.07%
Anglo American (AAL) 1,446.00p -1.03%
FTSE 250 - Risers
AL Noor Hospitals Group (ANH) 1,036.00p +2.98%
Bellway (BWY) 1,430.00p +1.78%
Genus (GNS) 1,059.00p +1.44%
Worldwide Healthcare Trust (WWH) 1,304.00p +1.40%
Perform Group (PER) 270.00p +1.39%
Diploma (DPLM) 662.50p +1.07%
Infinis Energy (INFI) 210.90p +1.01%
Big Yellow Group (BYG) 497.30p +0.95%
JPMorgan Emerging Markets Inv Trust (JMG) 560.00p +0.90%
JD Sports Fashion (JD.) 1,640.00p +0.86%
FTSE 250 - Fallers
Supergroup (SGP) 1,059.00p -4.59%
Ocado Group (OCDO) 357.10p -3.51%
Brown (N.) Group (BWNG) 458.20p -2.34%
Morgan Advanced Materials (MGAM) 327.10p -2.07%
Tullett Prebon (TLPR) 282.00p -1.88%
Centamin (DI) (CEY) 60.75p -1.86%
Lonmin (LMI) 249.10p -1.62%
Unite Group (UTG) 415.80p -1.47%
Moneysupermarket.com Group (MONY) 175.90p -1.46% |
| | UK Event Calendar | | Thursday June 05
QUARTERLY PAYMENT DATE
Total SA
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
ECB Interest Rate Announcement (EU) (12:45)
ECB Report (EU) (09:00)
Factory Orders (GER) (11:00)
Initial Jobless Claims (US) (13:30)
PMI Construction (GER) (08:30)
PMI Retail (EU) (09:10)
PMI Retail (GER) (09:10)
Retail Sales (EU) (10:00)
FINALS
Acal, AO World, Johnson Matthey, VP, Wincanton, API Group
IMSS
Bellway
ANNUAL REPORT
First Derivatives, National Grid
EGMS
OJSC Megafon GDR (Reg S)
AGMS
21st Century Technology, Air Partner, Ascent Resources, Asia Resource Minerals, Camellia, Camkids Group, Chariot Oil & Gas Ltd., Compagnie de St-Gobain SA, Dignity, Elderstreet VCT, G4S, Himalayan Fund NV, Inspired Energy, InternetQ, Invesco Perpetual UK Small Companies Inv Trust, Lewis Php.5%Pf 5% Cum Prf Stk #1, M. P. Evans Group, Michael Page International, Morrison (Wm) Supermarkets, PowerFilm Inc. (Reg S)
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
New Car Registrations (09:30)
FINAL DIVIDEND PAYMENT DATE
Macfarlane Group, TT Electronics
FINAL EX-DIVIDEND DATE
Air China Ltd.
|
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks little changed ahead of ECB meeting - ECB policy meeting begins
- BoE policy decision due
- US weekly jobless claims out
FTSE 100: -0.18%
DAX: -0.05%
CAC 40: -0.06%
FTSE MIB: 0.21%
IBEX 35: -0.03%
Stoxx 600: 0.00%
European stocks were little changed ahead of the European Central Bank's (ECB) policy meeting today.
The ECB is widely expected to loosen policy to tackle weak inflation and high unemployment in the euro-area.
Chief UK and European Economist at IHS Global, Howard Archer, said he sees the ECB cutting interest rates by 10 to 15 basis points, including taking its deposit rate modestly into negative territory.
He also said the ECB may possibly do a Long-Term Refinancing Operation (LTRO) which is tailored specifically towards lifting bank lending to the private sector, particularly smaller companies.
"The ECB could also stop sterilising the money it spent buying sovereign bonds during the Eurozone's debt crisis under its now-terminated Securities Markets Program (SMP)," he said.
"However, we remain doubtful that the ECB will undertake full blown quantitative easing. We suspect this will only happen if Eurozone consumer price inflation falls to new lows over the coming months and Eurozone growth falters markedly."
Inflation fell to a 0.5% year-on-year rate in May from 0.7% in April, which has put added pressure on the ECB to take action.
ECB President Mario Draghi has indicated that he is "comfortable" with introducing new measures if needed to boost the euro-area's economy.
In the UK, the Bank of England is expected to maintain its key rate at 0.5% and leave bond purchases at £375bn.
In the US, a Labor Department report is tipped to show jobless claims rose by 10,000 to 310,000 in the week ended May 31st.
Deutsche Telekom
Deutsche Telekom gained following reports that Sprint Corp. is close to clinching a deal on the price, capital structure and termination fee of an acquisition for T-Mobile US.
Asos slumped as the online fashion retailer forecast that earnings before interest and taxes will be about 4.5% of sales for the year through August, compared with a previous margin estimate of 6.5%.
Smith & Nephew jumped as Medtronic Inc. was said to be considering a takeover of the UK company.
The euro rose 0.04% to $1.3605.
Brent crude futures fell $0.250 to $108.130 per barrel, according to the ICE. |
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| | US Market Report | | US close: S&P hits new record as Fed's Beige Book encourages - Beige Book reveals services and manufacturing boost
- ADP, productivity, trade data misses forecasts
- ECB meeting, non-farm payrolls in focus
Dow Jones: 0.09%
Nasdaq: 0.41%
S&P 500: 0.19%
Wall Street recorded reasonable gains on Wednesday as a taste of encouraging news from the Federal Reserve's 'beige book' helped investors wash down the breakfast buffet of mediocre data morsels.
The Fed's anecdotal economics data from around the country showed continuing steady recovery and suggestions of a uptick in growth in the second quarter. It was noted that incidence of the word 'weather' in the beige book declined by two thirds.
The Fed found consumer spending expanding in almost all districts, with service sector activity growing in most reporting districts. Bank lending activity was reported as increasing, while manufacturing activity was very promising, reported as expanding "throughout the nation" and at an "increasingly strong pace" in several districts.
Analysts at Barclays said: "Overall, this report is consistent with our expectation of a pick-up in growth in the second quarter after a weather-related contraction in Q1."
The news helped the S&P hit another record high, up 0.2% over the day to 1,928, while the Nasdaq rose 0.4% and the Dow Jones 0.1%.
Slow start as ADP and trade data disappoint
Trading had started off on the back foot as stocks tracked a subdued performance across Europe ahead of the pivotal European Central Bank meeting on Thursday which could see policymakers unleash new measures to stave off deflation and stimulate growth.
Investors also had to chew over a smorgasbord of mediocre economic figures and seemed to left room for Thursday's main course of non-farm payrolls.
Private-sector payrolls increased at the slowest pace in four months in May, according to the ADP report, which is often seen as a rough guide to the government's 'official' employment report on Friday. Just 179,000 private payrolls were added last month, down from the 215,000 gain registered in April and below the 210,000 consensus estimate.
The ADP numbers added to the downside risks that official payroll employment rose by around 230,000 in May, argued Paul Dales, Senior US Economist at Capital Economics. However, he admitted that the ADP survey was not as reliable a predictor of non-farm payrolls as it used to be.
Meanwhile, the US trade deficit increased by 6.9% to $47.2bn in April, its highest in two years, according to the Commerce Department. This was up from a revised $44.2bn in March and surprised analysts looking for a fall to $40.6bn.
Gainers
Newell Rubbermaid was a high flier after analysts at Morgan Stanley upgraded the kitchenware company to 'overweight' from 'equalweight' in light of expected gains in organic sales and earnings growth.
Drug store owner Walgreen was also high after the company beat expectations for same store sales for the fourth month in a row. Pharmacy sales were up nearly 8% last month compared to the previous year.
Apple was still moving higher two days after its keynote presentation from the Worldwide Developers Conference, where it unveiled the latest versions of the company's operating systems with a significant focus on personal healthcare and connectivity between apps.
Japanese group Dai-ichi Life Insurance said it would buy Protective Life Corp for around $5.7bn, causing shares in the US-listed life insurer to surge.
S&P 500 - Risers
Broadcom Corp. (BRCM) $37.08 +6.43%
Applied Materials Inc. (AMAT) $21.57 +5.12%
Newell Rubbermaid Inc. (NWL) $30.27 +4.42%
Walgreen Co. (WAG) $74.56 +4.19%
First Solar Inc. (FSLR) $65.40 +3.92%
Medtronic Inc. (MDT) $63.22 +3.62%
Sears Holdings Corp. (SHLD) $40.17 +3.26%
United States Steel Corp. (X) $23.46 +3.21%
MetLife Inc. (MET) $54.78 +2.95%
CONSOL Energy Inc. (CNX) $45.76 +2.95%
S&P 500 - Fallers
E TRADE Financial Corp. (ETFC) $19.70 -3.71%
Diamond Offshore Drilling Inc. (DO) $47.73 -3.69%
Coach Inc. (COH) $38.99 -3.39%
Bristol-Myers Squibb (BMY) $47.52 -2.98%
Allergan Inc. (AGN) $165.60 -2.36%
CME Group Inc. (CME) $70.26 -2.35%
Cliffs Natural Resources Inc. (CLF) $14.60 -2.28%
Sealed Air Corp. (SEE) $32.24 -2.10%
Actavis plc (ACT) $211.00 -1.99%
AES Corp. (AES) $13.97 -1.55%
Dow Jones I.A - Risers
Travelers Company Inc. (TRV) $94.67 +1.35%
McDonald's Corp. (MCD) $102.44 +0.98%
Unitedhealth Group Inc. (UNH) $80.51 +0.79%
Nike Inc. (NKE) $76.13 +0.77%
E.I. du Pont de Nemours and Co. (DD) $69.32 +0.65%
Wal-Mart Stores Inc. (WMT) $77.13 +0.55%
Walt Disney Co. (DIS) $84.24 +0.43%
Goldman Sachs Group Inc. (GS) $162.39 +0.36%
Johnson & Johnson (JNJ) $102.68 +0.21%
Pfizer Inc. (PFE) $29.64 +0.17%
Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $24.49 -1.17%
General Electric Co. (GE) $26.55 -0.90%
United Technologies Corp. (UTX) $117.14 -0.58%
3M Co. (MMM) $142.26 -0.44%
AT&T Inc. (T) $35.05 -0.43%
Boeing Co. (BA) $135.33 -0.40%
Exxon Mobil Corp. (XOM) $100.04 -0.35%
Verizon Communications Inc. (VZ) $49.15 -0.28%
Coca-Cola Co. (KO) $40.79 -0.22%
Intel Corp. (INTC) $27.60 -0.22%
Nasdaq 100 - Risers
Broadcom Corp. (BRCM) $37.08 +6.43%
Applied Materials Inc. (AMAT) $21.57 +5.12%
Vimpelcom Ltd Ads (VIP) $8.66 +3.22%
Apple Inc. (AAPL) $644.82 +2.57%
Celgene Corp. (CELG) $158.82 +2.55%
Amgen Inc. (AMGN) $119.15 +2.32%
Monster Beverage Corp (MNST) $68.10 +2.04%
Dollar Tree Inc (DLTR) $54.32 +1.88%
Whole Foods Market Inc. (WFM) $38.38 +1.78%
Verisk Analytics Inc. (VRSK) $60.88 +1.60%
Nasdaq 100 - Fallers
Baidu Inc. (BIDU) $163.38 -2.31%
Liberty Global plc Series A (LBTYA) $44.25 -2.08%
Priceline Group Inc (PCLN) $1,245.97 -1.54%
Citrix Systems Inc. (CTXS) $60.55 -1.38%
Vodafone Group Plc ADS (VOD) $34.22 -1.33%
CA Inc. (CA) $28.32 -1.29%
Cisco Systems Inc. (CSCO) $24.49 -1.17%
F5 Networks Inc. (FFIV) $108.98 -0.99%
NetApp Inc. (NTAP) $36.26 -0.90%
Henry Schein Inc. (HSIC) $119.42 -0.88% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Smith & Nephew, Saga, Morrisons Smith & Nephew could become the centre of an American bidding war after another US company was said to be interested in making an offer for the medical technology company. As shares in the FTSE 100-listed hip replacement maker rose by more than three per cent yesterday, there were reports that Medtronic, one of the world's largest medical device manufacturers, was making early stage preparations before an offer. According to Bloomberg, the information provider, Medtronic had 14.2bn dollars in cash or near-equivalent assets at the end of April. – The Times
One of the world's biggest hedge funds is betting against Saga in the wake of the company's high-profile flotation that has left hundreds of thousands of private investors out of pocket. GLG Partners, which is part of Man Group, has taken a short position of 0.61% in the over-50s insurance and holidays group, according to a filing with the Financial Conduct Authority. – The Daily Telegraph
Morrisons is set to reveal a management restructuring in its stores within weeks that could lead to as many as 2,000 job losses. The move, resulting from trials of three possible slimmed-down management structures in around seven of its new stores, is likely to affect managers overseeing product categories such as fresh food or non-food across the chain's 500 stores, according to industry insiders. – The Guardian
Desmond Tutu will lead protesters on Thursday campaigning against British security firm G4S's role in maintaining prisons and detention centres in the West Bank and Israel. The South African retired archbishop and Nobel peace laureate will challenge G4S's management over the company's alleged role in facilitating "Israel's brutal occupation and abhorrent prison system" at the company's annual general meeting in London on Thursday afternoon. – The Guardian
Pressure mounted on Tesco boss Phil Clarke yesterday as the supermarket giant posted the worst quarterly slump in UK sales he has witnessed in four decades with the group. The latest setback came after the company posted its second year running of falling profits and a £734m write-down on the value of its European and Chinese businesses in April. Clarke, who became Chief Executive in 2011, also acknowledged that the firm's woes were unlikely to ease in the near-term.- The Scotsman
Eurozone growth remained just above zero in the first quarter, reinforcing expectations that the European Central Bank will introduce negative interest on Thursday to head off the threat of deflation and underpin a "stuttering" recovery. GDP in the 18-nation currency bloc expanded by just 0.2% in the three months to March, the EU's statistics office Eurostat said on Wednesday. – The Daily Telegraph | | |
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