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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: US Fed in a pinch with CPI set to drop Stocks in London continued to bounce back ahead of Wednesday's policy decision from the US Federal Reserve, as some analyst warned of deflation risks. Even the Shanghai Stock Exchange's Composite Index finished higher overnight, rising by 3.44% to reach 3,789.19 points. Gains were also evident in some of the assets which have been most battered over recent weeks, such as emerging market stocks or the Russian rouble.
Against that backdrop, as of 08:57 the Footsie was higher by 52.08 points to stand at 6,060.08. Oil was the odd one out, with Bret oil futures moving lower by 0.97% to $52.79 per barrel out on the ICE.
Fed rate-setters in a pinch
According to the minutes of the April meeting of the Federal Open Market Committee, most rate-setters in the US prefer not to guide markets too much, especially when it comes to the first rate hike in the cycle - possibly due to the volatility that the first move might trigger.
However, the recent move lower in commodity prices might force the Fed's hand and make it tweak its statement so as to at least note that development, Jim Reid from Deutsche Bank said. Indeed, the Fed is in a bit of a pinch, as core inflation is expected to remain around 2% but headline consumer inflation drops.
"As DB's Joe LaVorgna points out the current -29% year-over-year drop in the CRB index implies YoY headline CPI inflation falling from 0.1% to -0.9% (all other things being equal) over the next couple of months, which would be the largest year-over-year drop since September 2009 (-1.3%) and one of the lowest prints in modern history.
"However core YoY CPI inflation is likely to edge above 2% in the months ahead which complicates matters. So the Fed have plenty to think about but today they'll likely defer the decision," Reid explained.
Acting as a backdrop, global deal-making among companies or so-called M&A activity was set to beat its previous record, set in the summer of 2007, when $944.3bn of transactions were proposed, according to Bloomberg data.
Foreigners keep scooping up London property
Quintain Estates surged 22% on Wednesday after the company confirmed that it was in talks with Bidco - an investment vehicle directly controlled by Lone Star Real Estate Fund - over a takeover deal. Under the terms of the offer, Quintain shareholders will receive 131p in cash for each Quintain share, which values the entire issued, and to be issued, share capital of the company on a fully-diluted basis at around £700m.
Barclays first half results showed an 11% increase in adjusted profit before tax as it set aside a further £1.6bn provision for further litigation and mis-selling after paying £1.6bn in the period. The bank's Tier 1 capital stood at 11.1% with risk weighted assets decreasing to £57bn from £75bn.
British American Tobacco posted a rise in first-half profit, although revenue for the period was dented by currency moves. The company, which owns Dunhill and Lucky Stripe, said net profit for the year to 30 June came in at £2.65bn, up from £1.75bn and better than consensus expectations for £2.44bn. Cigarette volume was down 2.9%.
Capita posted an 11% rise in underlying first-half pre-tax profit as most of it divisions performed well, with particularly strong growth in Asset Services Solutions and a pleasing initial contribution from Capita Europe. For the six months ended 30 June, underlying pre-tax profit came in at £264.9m, up from £238m in the same period last year, on revenue of £2.28bn, up 10% from £2.07bn.
St James's Place said an increase in levies impacted its first half earnings, as it posted underlying profit before shareholder tax at £72.9m for the six months to June 2015, about 7% lower than the same period last year. The UK based wealth management business declared a 20% increase in interim dividend despite this.
Housebuilder Taylor Wimpey said it will return £300m in dividends to shareholders, as it posted a 33.4% rise in pre-tax profit following a strong selling season in spring and early summer. For the period ended 28 June, profit before tax and exceptional items came in at £238m from £178.4m in the first half of last year, on revenue of £1.34bn, up 12.2% from £1.19bn. Analysts had been expecting the company to post a pre-tax profit of around £221m. |
| | Market Movers
techMARK 3,162.00 +0.64%
FTSE 100 6,600.91 +0.70%
FTSE 250 17,507.03 +0.69%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK) 2,396.00p +3.23%
British American Tobacco (BATS) 3,655.50p +2.93%
Barclays (BARC) 286.10p +2.32%
CRH (CRH) 1,885.00p +1.89%
ITV (ITV) 274.50p +1.59%
Imperial Tobacco Group (IMT) 3,329.00p +1.31%
Pearson (PSON) 1,189.00p +1.28%
Experian (EXPN) 1,169.00p +1.21%
BT Group (BT.A) 471.25p +1.21%
Hargreaves Lansdown (HL.) 1,167.00p +1.21%
FTSE 100 - Fallers
Compass Group (CPG) 1,042.00p -4.05%
RSA Insurance Group (RSA) 506.50p -2.31%
Antofagasta (ANTO) 577.00p -1.54%
Capita (CPI) 1,270.00p -1.24%
St James's Place (STJ) 950.50p -0.78%
Taylor Wimpey (TW.) 182.30p -0.22%
Royal Mail (RMG) 485.90p -0.16%
Johnson Matthey (JMAT) 2,844.00p -0.14%
Travis Perkins (TPK) 2,182.00p -0.14%
Whitbread (WTB) 5,135.00p -0.10%
FTSE 250 - Risers
Rightmove (RMV) 3,596.00p +6.08%
Greggs (GRG) 1,251.00p +5.66%
Foxtons Group (FOXT) 234.20p +5.02%
Diploma (DPLM) 800.00p +4.58%
Tate & Lyle (TATE) 533.00p +4.31%
Jupiter Fund Management (JUP) 460.40p +4.30%
Man Group (EMG) 157.50p +4.30%
Dignity (DTY) 2,452.00p +3.46%
Renishaw (RSW) 2,030.00p +3.36%
Indivior (INDV) 267.30p +3.09%
FTSE 250 - Fallers
Premier Farnell (PFL) 150.90p -9.42%
Hellermanntyton Group (HTY) 324.00p -2.64%
Pets at Home Group (PETS) 280.70p -2.53%
Jimmy Choo (CHOO) 168.80p -1.75%
Synergy Health (SYR) 1,670.00p -1.30%
Lancashire Holdings Limited (LRE) 662.50p -1.27%
John Laing Group (JLG) 217.50p -1.05%
Shawbrook Group (SHAW) 332.00p -0.81%
Redefine International (RDI) 53.05p -0.75% |
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| | UK Event Calendar | | Wednesday 29 July
INTERIMS
4Imprint Group, Aer Lingus Group, Barclays, British American Tobacco, Capital & Counties Properties , Compagnie de St-Gobain SA, Dignity, Foxtons Group , Greggs, Indivior, International Personal Finance, Jupiter Fund Management , National Express Group, Ooredoo Q.S.C. GDR (Reg S), Quartix Holdings , Rightmove, Riverstone Energy Limited , Share plc, Smurfit Kappa Group, St James's Place, Tarsus Group, Taylor Wimpey, Telecity Group, Tullow Oil, Tyman
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
Crude Oil Inventories (US) (15:30)
FOMC Interest Rate (US) (19:00)
GFK Consumer Confidence (GER) (07:00)
MBA Mortgage Applications (US) (12:00)
Pending Homes Sales (US) (15:00)
U. of Michigan Confidence (Final) (US) (14:55)
Q2
GlaxoSmithKline, Lancashire Holdings Limited
Q4
Sky
FINALS
Mwana Africa, Renishaw, Sky
IMSS
Brewin Dolphin Holdings, Tate & Lyle, Wizz Air Holdings
AGMS
Acal, Atkins (WS), British Smaller Companies VCT, CML Microsystems, Cropper (James), Dragon-Ukrainian Properties & Development, Eastbridge Investments, EMED Mining Public Ltd., GB Group, JPMorgan Private Equity Ltd USD Equity Shares, Polar Capital Holdings, Stanley Gibbons Group, Tate & Lyle, Tongaat-Hulett Ltd., TyraTech Inc. (Reg S), Weiss Korea Opportunity Fund Ltd
TRADING ANNOUNCEMENTS
Mitchells & Butlers, Tarsus Group
UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trades Surveys (11:00)
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
FINAL DIVIDEND PAYMENT DATE
Investec Structured Products Calculus VCT, Investec Structured Products Calculus VCT 'C' Shares, Norcros, Record
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Equities rise on earnings boost, with Fed eyed European stocks rose in early trade following a stabilisation in China's equity markets and a slew of well-received earnings reports, although investors were likely to remain a little cautious ahead of a rate announcement in the US.
At 0910 BST, the benchmark Stoxx Europe 600 was up 0.8%, Germany's DAX was 0.3% higher and France's CAC 40 was up 0.7%.
"A raft of positive corporate earnings this morning has delivered a boost for markets," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
"However, investors will still be keenly waiting for the Federal Reserve's statement this evening to see if there is any more clarity on whether interest rates will start to rise in September or move later in the year."
Although Greece was no longer the driving force in markets, investors continued to keep an eye on any news there. The Greek stock market is due to reopen this week following approval from the European Central Bank, having been closed since the end of last month.
The focus on Wednesday was firmly on earnings, as investors sifted through an avalanche of reports.
In London, Barclays was the standout gainer after it posted a 36% rise in first-half pre-tax profit to £1.44bn.
British American Tobacco rallied as investors welcomed a stronger-than-expected increase in first-half profit, although revenue for the period was dented by currency moves.
Hedge fund firm Man Group was also a high riser after its first-half profit beat analysts' expectations as performance fees nearly doubled.
Tate & Lyle gained after a well-received first-quarter trading update in which the company said its performance was in line with expectations and stuck to its guidance for the full year.
Shares in oil giant Total rose after it posted a better-than-expected second-quarter profit on the back of increased refining margins and accelerated cost-cutting.
Elsewhere, French car maker Peugeot made healthy gains after its first-half earnings surpassed expectations, while luxury-goods maker LVMH Moet Hennessy Louis Vuitton pushed up after posting its best earnings increase in three years.
On the downside, catering company Compass fell sharply. Although it posted a 6.8% rise in organic revenue for the third quarter, it warned that operating profit this year and the next would be dented by restructuring costs.
Schneider Electric was a little lower after its cut its 2015 forecasts for profitability and revenue.
On the macroeconomic front, investors will eye the release of US pending home sales at 1500 BST.
The main focus, however, will be on the Federal Reserve's rate announcement, which is due after the European close. |
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| | US Market Report | | US Close: Stocks gain as Fed meeting kicks off US markets broke a five day losing streak as investors were encouraged by signs of a Chinese recovery and the Federal Reserve headed into a two day meeting. The Dow Jones Industrial Average closed up 1.09%, the S&P 500 rose 1.23% and the Nasdaq ended 0.98% higher.
All eyes on the Fed
Investors will watch closely the two day Federal Reserve meeting for hints of when an interest rate hike take place. Chairwoman Janet Yellen had indicated a rate increase is on the cards before the end of the year.
However analysts at Rabobank described this month's Federal Open Market Committee as a "second tier" event, and unlikely to be historic.
Tuesday data
US house prices climbed 1.1% month-on-month in May, according to the Case-Shiller 20-city composite index. When considering a seasonal adjustment, prices declined 0.2%, the report added.
Home prices in May rose 4.9% year-on-year, a slightly slower rate of growth compared to April's 5%.
Consumer confidence suffered a sharp setback in July, retreating to its lowest level since September 2014. The Conference Board institute's consumer confidence gauge fell to a reading of 90.9 following the previous month's downwardly revised print of 99.8. Economists had been expecting a reading of 100.0. The preliminary estimate for June was 101.4.
Twitter jumps on result
Shares in Twitter were up 5.36% at 2132 BST after mobile ad revenues drove a better than expected second quarter result. The social media platform boosted its second quarter revenues by 61% year on year.
Leading the S&P 500 were Exxon Mobil, up 4.06%, and Chevron, which was up 3.66%.
Peabody Energy Corp shares closed up 14.15% despite worse than expected second quarter results, followed by home improvement manufacturer Masco, which lifted second quarter revenues by 3% to 1.9bn, and said revenue would have been up by 7% for not for currency translation .
Micron Technology led Nasdaq risers after announcing it would begin production of "3D XPoint," a chip technology that is much faster than traditional chips.
Elsewhere, the dollar rose a touch against the yen, rose about 10% against the euro and fell slightly against the pound, while gold futures fell 20 cents to settle at $1,096.20 an ounce. Oil prices were up, with West Texas Intermediate up 0.65% to $47.70 a barrel, while Brent also rose, up 0.79% to $53.05 a barrel.
S&P 500 - Risers
Peabody Energy Corp. (BTU) $1.21 +14.15%
Masco Corp. (MAS) $25.63 +10.66%
Micron Technology Inc. (MU) $19.76 +9.04%
Freeport-McMoRan Inc (FCX) $12.33 +8.44%
Transocean Ltd. (RIG) $14.12 +7.70%
Chesapeake Energy Corp. (CHK) $9.00 +7.53%
Precision Castparts Corp. (PCP) $201.37 +7.49%
Eastman Chemical Co. (EMN) $77.02 +6.81%
Southwestern Energy Co. (SWN) $19.57 +6.76%
Reynolds American Inc. (RAI) $84.20 +6.33%
S&P 500 - Fallers
Ingersoll Rand Ltd. (IR) $60.70 -6.62%
Torchmark Corp. (TMK) $59.87 -2.24%
TripAdvisor Inc. (TRIP) $79.34 -1.56%
Macy's Inc. (M) $68.88 -1.53%
E.I. du Pont de Nemours and Co. (DD) $55.90 -1.46%
Nordstrom Inc. (JWN) $76.29 -1.34%
Zoetis Inc (ZTS) $48.85 -1.27%
AES Corp. (AES) $12.77 -1.24%
Wynn Resorts Ltd. (WYNN) $98.01 -1.23%
Wyndham Worldwide Corp. (WYN) $80.61 -1.21%
Dow Jones I.A - Risers
Exxon Mobil Corp. (XOM) $82.48 +4.06%
Chevron Corp. (CVX) $92.40 +3.66%
Caterpillar Inc. (CAT) $77.78 +3.27%
Unitedhealth Group Inc. (UNH) $121.52 +3.09%
Pfizer Inc. (PFE) $35.35 +2.94%
Intel Corp. (INTC) $28.96 +2.15%
3M Co. (MMM) $151.11 +1.61%
Home Depot Inc. (HD) $114.84 +1.57%
Nike Inc. (NKE) $113.47 +1.56%
McDonald's Corp. (MCD) $97.33 +1.34%
Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $55.90 -1.46%
Microsoft Corp. (MSFT) $45.34 -0.02%
Nasdaq 100 - Risers
Micron Technology Inc. (MU) $19.76 +9.04%
Tesla Motors Inc (TSLA) $264.82 +4.67%
Amgen Inc. (AMGN) $172.74 +4.35%
Vertex Pharmaceuticals Inc. (VRTX) $128.30 +4.11%
Biogen Inc (BIIB) $319.93 +3.39%
CH Robinson Worldwide Inc (CHRW) $66.86 +3.24%
Nxp Semiconductors Nv (NXPI) $91.04 +3.20%
Sirius XM Holdings Inc (SIRI) $3.96 +3.13%
Liberty Media Corporation - Class A (LMCA) $36.83 +3.11%
Avago Technologies Ltd. (AVGO) $128.42 +3.02%
Nasdaq 100 - Fallers
Baidu Inc. (BIDU) $168.03 -15.00%
TripAdvisor Inc. (TRIP) $79.34 -1.56%
Wynn Resorts Ltd. (WYNN) $98.01 -1.23%
Amazon.Com Inc. (AMZN) $526.03 -1.01%
Discovery Communications Inc. Class A (DISCA) $31.31 -0.73%
Intuitive Surgical Inc. (ISRG) $540.74 -0.63%
Tractor Supply Company (TSCO) $91.72 -0.39%
Autodesk Inc. (ADSK) $50.89 -0.31%
Yahoo! Inc. (YHOO) $37.72 -0.30% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Santander, Tullett Prebon, M&A One of the leading executives at the British division of Santander, the Spanish financial group, has quit the bank, complaining that its delayed stock market listing meant there was little point in him continuing to work there. Stephen Jones, the chief financial officer of Santander UK, said yesterday that he would leave the bank in October to reacquaint himself with his family after a disappointing four years with the lender, in which plans for a £10bn flotation were repeatedly delayed, putting off a potentially lucrative payout for senior managers. - The Times A Connecticut-based broker of oil and gas derivatives is the latest venture into the energy sector by Tullett Prebon, the UK interdealer broker (IDB). The purchase of Moab Oil, for $12.3 million initially and potential further payments of $14.3m depending on performance over five years, comes 14 months after Tullett agreed to buy PVM Oil Associates, a London-based oil broker, for $160m. - The Times
Corporate finance departments in big City firms have been burning the midnight oil for months. It is proving to be 'a golden age' for global merger and acquisition activity, which increased 38 per cent to £1.4trillion in the first six months of the year, the highest level since 2007. Across the Pond it soared 60 per cent to £629billion, the best since records began. Judging by yesterday's spate of new deals, year-end totals could smash all records. - Daily Mail
Banks are too focused on executive pay and shareholder dividends and need to focus more on the rights of employees, their creditors and wider society, according to the Bank of England's chief economist. Andy Haldane argued that companies in the UK and the US, and particularly in the financial sector, are structured in a way that encourages them to take big risks and pay out large sums to bosses and investors, rather than taking a long-term view. - The Daily Telegraph | | |
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