| | | | | | | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks increase as US GDP revised higher, Yellen signals rate hike London stocks finished Friday's session in positive territory after figures US gross domestic product for the second quarter was unexpectedly revised higher, adding to the case for an interest rate hike later this year.
The third and final estimate of second quarter US GDP was revised to show an annualised 3.9% increase, up from a previous estimate of 3.7%. Analysts had been expecting no change.
"The GDP numbers therefore confirm the Fed's rosy view that the US economy is in fine health," said Chris Williamson, chief economist at Markit. "However, this would be the Fed looking at the economy through the rear-view mirror once again. The recent survey data raise questions over the extent to which growth is already waning."
A separate report showed US consumer confidence in September was higher than originally estimated but remained markedly below last month's level. The final reading of consumer sentiment was revised higher to 87.2 from a preliminary reading of 85.7, according to the University of Michigan, coming in slightly above analysts' expectations for a print of 87.0 but well below the 91.9 level reached in August.
Momentum in the US services sector petered out in September, according to Markit. The seasonally adjusted Flash US Services purchasing managers' index declined from 56.1 to 55.6, in line with analysts' expectations.
The data comes after Federal Reserve chair Janet Yellen said most Federal Open Market Committee members, herself included, anticipate an initial rate increase last this year followed by a gradual tightening thereafter.
Speaking at the University of Massachusetts on Thursday evening, Yellen said she expects inflation to return to the Fed's 2% target over the next few years and that weak growth in emerging economies will not have a big enough impact on the US to influence policy.
"Which is ironic since the slowdown in China is one of the reasons that she gave in her post-meeting press conference for delaying a rate hike earlier this month," said Paul Ashworth, chief US economist at Capital Economics.
"Given that 13 of 17 officials think that rates will rise later this year, our base case scenario is still that the Fed will begin to hike rates in December. But a government shutdown or a debt ceiling stand-off could still scupper those plans."
On home soil, the Bank of England's Ian McCafferty said he believed the best course of action to safeguard the economic recovery would be to raise interest rates . McCafferty, who was the only member of the Monetary Policy Committee to vote in favour of a rate hike this month, said concerns on China "should not be overstated".
"By not delaying, we increase the likelihood of being able to normalise monetary policy only very gradually, thus minimising the potential shock," he wrote in The Times.
In company news, Unilever gained as Berenberg lifted its stance on the stock to 'buy' from 'hold' with an unchanged price target of 3,050p.
Lloyds Banking Group advanced on news the UK government cut its stake to 11.98% from 12.97% in August.
Just Retirement rose as the company and fellow pension provide Partnership Assurance are to raise £150m in a share placing to help pay for their planned merger.
Royal Bank of Scotland climbed after RBC Capital Markets upgraded RBS to 'sector perform' from 'underperform'. The stock also benefited from positive comments from Morgan Stanley, which replaced Barclays with RBS in its preferred names in the sector.
Glencore snapped a rally earlier in the session after Bloomberg reported that the miner has hired banks to sell its stake in an agricultural unit. It said talks were under way with a dozen wealth funds and Asian trading houses. Bloomberg cited a person familiar with the matter as saying that the deal could value the whole unit at as much as $12bn. However the sentiment didn't last long, with the stock dropping back down to negative territory. |
| | Spread Bet And Earn An Apple Watch With Spreadex |
| | Market Movers
techMARK 3,060.54 +2.14%
FTSE 100 6,109.01 +2.47%
FTSE 250 16,799.87 +1.73%
FTSE 100 - Risers
ARM Holdings (ARM) 982.00p +5.99%
Johnson Matthey (JMAT) 2,514.00p +4.84%
St James's Place (STJ) 873.50p +4.42%
Unilever (ULVR) 2,650.00p +4.41%
International Consolidated Airlines Group SA (CDI) (IAG) 604.00p +4.14%
Experian (EXPN) 1,061.00p +3.82%
CRH (CRH) 1,823.00p +3.64%
Intu Properties (INTU) 329.50p +3.62%
Prudential (PRU) 1,392.00p +3.61%
TUI AG Reg Shs (DI) (TUI) 1,221.00p +3.56%
FTSE 100 - Fallers
Anglo American (AAL) 614.70p -1.58%
Glencore (GLEN) 97.22p -1.41%
Antofagasta (ANTO) 506.00p -1.08%
Randgold Resources Ltd. (RRS) 3,926.00p -0.51%
Fresnillo (FRES) 618.50p -0.40%
FTSE 250 - Risers
Synergy Health (SYR) 2,244.00p +42.03%
Evraz (EVR) 72.80p +5.51%
Indivior (INDV) 230.70p +5.39%
Premier Oil (PMO) 67.15p +5.09%
Ted Baker (TED) 3,165.00p +4.73%
Card Factory (CARD) 399.00p +4.53%
Debenhams (DEB) 79.00p +4.43%
Jimmy Choo (CHOO) 147.00p +4.40%
Man Group (EMG) 160.20p +4.30%
Diploma (DPLM) 652.00p +3.99%
FTSE 250 - Fallers
Aggreko (AGK) 902.00p -3.17%
Kaz Minerals (KAZ) 101.50p -3.15%
Mitchells & Butlers (MAB) 322.30p -2.42%
Riverstone Energy Limited (RSE) 920.00p -2.13%
Acacia Mining (ACA) 246.00p -2.03%
UDG Healthcare Public Limited Company (UDG) 508.50p -1.55%
IP Group (IPO) 240.90p -1.31%
Greencore Group (GNC) 287.50p -1.20%
Woodford Patient Capital Trust (WPCT) 108.50p -1.18%
Centamin (DI) (CEY) 63.00p -1.18%
FTSE TechMARK - Risers
BATM Advanced Communications Ltd. (BVC) 20.25p +6.58%
Oxford Instruments (OXIG) 575.50p +3.32%
Skyepharma (SKP) 363.00p +2.83%
E2V Technologies (E2V) 229.00p +2.00%
KCOM Group (KCOM) 90.00p +1.12%
NCC Group (NCC) 268.00p +0.37%
Spirent Communications (SPT) 74.50p +0.34%
Consort Medical (CSRT) 925.00p +0.33%
Dialight (DIA) 628.00p +0.16%
FTSE TechMARK - Fallers
RM (RM.) 165.00p -4.90%
Oxford Biomedica (OXB) 8.55p -4.15%
SDL (SDL) 323.00p -2.49%
Torotrak (TRK) 6.72p -2.11%
XP Power Ltd. (DI) (XPP) 1,598.00p -1.90%
Ricardo (RCDO) 894.50p -1.70%
Triad Group (TRD) 32.00p -1.54%
Innovation Group (TIG) 39.25p -1.26%
Gresham Computing (GHT) 109.00p -0.91%
IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 201.54 -0.42% |
| | Avoid NHS waiting lists with private medical insurance from AXA PPP healthcare from £1.33 a day* The NHS is under pressure to meet people's healthcare demands. ADVFN are working with AXA PPP healthcare to bring you low cost private healthcare cover. |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks rally as Yellen hints at rate hike by end of the year European stocks rallied on Friday, as remarks from Federal Reserve chairwoman Janet Yellen's in favour of raising interest rates later this year mitigated concerns about the economic outlook
The benchmark Stoxx Europe 600 index closed 2.84% higher, while Germany's DAX gained 2.77 and France's CAC rose 3.07%.
The euro was broadly flat against the dollar, but gained 0.48% and 0.54% against the yen and the pound respectively.
Yellen hints at rate hike
On Thursday, Yellen suggested the Fed is still planning to raise rates by the end of the year as long as inflation is stable and the economy is strong enough to support employment.
"It will likely be appropriate to raise the target range of the federal-funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labour market improves further and inflation moves back to our 2% objective," she said in a speech at the University of Massachussets.
Yellen's comments delivered some much-needed stability in global equity markets, although analysts warned the feel good factor could be short lived.
"Janet Yellen's hint that rates will still rise this year has actually prompted a bout of buying in stock markets, on the calculation that the Fed is more optimistic about the global economy than it hinted in its most recent meeting, and thus valuations are not as overstretched as previously thought," said Chris Beauchamp, senior market analyst at IG.
"Such thinking might not last if the round of economic data next week - especially China numbers and US non-farm payrolls - do not match up to estimates, but overall good news is good news once again."
In company news Volkswagen lost 4.32% board is due to announce a replacement for chief executive Martin Winterkorn, amid reports that Porsche's CEO Matthias Mueller is the front-runner.
Meanwhile, BMW recovered from sharp losses in the previous session and rose 4.24%, as German car magazine Auto Bild clarified a report it put out on Thursday, saying it had no evidence of data manipulation at the car maker.
Pharmaceutical company Sanofi gained 3.09% sharply following reports it's considering selling its bio-surgery and renal units.
On a day quiet in terms of economic in data in the Eurozone, investors focused on reports from across the Atlantic, where the University of Michigan Index for September was upwardly revised from 85.7 to 87.2 but remained well below August reading of 91.9. |
| | PROVEN Trading Strategy - Made 7478 pips in 2014 and 5176 by April 2015. | | Earn a tax free income trading, from just 20 minutes a day. Our simple to follow, rules based trading strategy will tell you exactly when to buy and sell with confidence.
Register for a FREE brochure and trading guide, Click Here. |
| | US Market Report | | US open: Stocks rally on Yellen's comments US equity markets rallied on Friday, after Federal Reserve chairwoman Janet Yellen said the economy was strengthening and a rate hike was likely this year.
Shortly before 1500 BST, the Dow Jones Industrial Average was up 189 points to 16,390.33 while the S&P 500 and the Nasdaq gained 13 and 33 points respectively.
Late on Thursday, Yellen said the US central bank will start raising interest rates in the coming months, indicating inflation pressures will gradually increase over the next couple of years.
"The Fed chair appeared to provide a bit of much needed clarity, claiming that he majority of the Federal Open Market Committee, including Yellen, expect a 2015 lift-off," said Spreadex's financial analyst Connor Campbell.
"This leaves the announcement of a rate-hike in October or December on the cards, providing the kind of future anchoring event for the markets they have been sorely lacking this week."
Yellen's words might have provided a timely boost to the markets but changes in the economic landscape were not to be ruled out, warned Michael Hewson, chief market analyst at CMC Markets.
"While markets appear to have taken comfort from the slightly clearer tone last night a lot can change between now and October and or December, and recent data does suggest that the Fed's timetable could well be blown off course," he said.
"Furthermore Yellen's assertion that inflation effects are short - term and transitory doesn't bear up to the facts that commodity prices have been putting downward pressure on prices for over three years now.
"That's not transitory, that's a trend."
Better-than-expected GDP
On the economic data front, US gross domestic product expanded at an annualised pace of 3.9% in the second quarter, according to a final estimate from the Department of Commerce, up from the prior estimate of 3.1% and compared with analysts expectations for a 3.7% increase.
"Headline growth is likely to be held back by a slower pace of inventory investment in the third quarter, but we are tracking real final sales growth of 3.4%," analysts at Barclays said in a note.
"This morning's data have no substantive effect on our tracking estimate, and we continue to look for GDP growth of 2.5% from the fourth quarter through late next year."
A reading on consumer sentiment for September is on tap at 1500 BST.
Elsewhere, Asian stocks were mostly in the as investors were worried by the prospect of a hike in interest rates in the US, while European stocks gained, partly because of Yellen's remarks.
The dollar was broadly flat against the euro and gained 0.21% and 0.42% against the pound and the yen respectively, while gold futures shed 0.71% to $1,145.60.
Oil prices advanced, with West Texas Intermediate gaining 2.07% to $45.18 a barrel, while Brent rose 1.03% to $48.25 a barrel.
In company news, Nike surged 7.26% after delivering an upbeat quarterly earnings report on Thursday.
Ahead of the bell, BlackBerry posted a wider-than-expected adjusted loss in the second quarter. Shares fell 0.56%. |
| | Blue Chip Opportunities - Morgan Stanley issues 'full house' buy alert | | Morgan Stanley recently put out a 'full house' buy alert, effectively calling the bottom of 2015's late summer equity slump. The last time it issued such a bullish signal, back in 2009 following a massive financial crash, the FTSE100 promptly commenced an uptrend that's still valid today. Download your copy of this report in which we discuss reasons for the August sell-off and why you should seriously consider investing in our five September picks. Losses can exceed deposits |
| | Broker Tips | | Broker tips: IAG, Unilever, RBS JPMorgan Cazenove upgraded International Consolidated Airlines Group to 'overweight' from 'neutral' and lifted its price target to €9.55 from €8.50.
JPM highlighted IAG's potential to expand profitability beyond the 1-2% unit cost savings discounted in the bank's medium-term estimates.
The bank also noted lower susceptibility to the competitive threats faced by its legacy peers and successful inorganic growth and valuation.
The bank said it remains positively biased towards the higher-growth, lost-cost carriers Ryanair, EasyJet and Wizz, all rated 'overweight', versus the strategically-challenged Air France-KLM and Lufthansa, both rated 'underweight'.
Unilever shares rallied as Berenberg lifted its stance on the stock to 'buy' from 'hold' with an unchanged price target of 3,050p.
"Our forecasts do not assume a quick rebound in emerging-market growth, but we believe Unilever is past the trough of group organic growth. It provides margin momentum, improving return on invested capital and free cash flow generation, with net M&A increasingly accretive," said Berenberg.
However, despite forex and inflationary pressures, Unilever consistently delivers positive reported earnings per share growth. It noted that since 2002, Unilever's reported EPS growth has been positive every year, except 2009. Berenberg forecast a 9% compound annual growth rate to 2017.
Royal Bank of Scotland got a boost on Friday from a couple of upbeat broker notes.
RBC Capital Markets upgraded RBS to 'sector perform' from 'underperform', keeping the target at 350p, saying it sees 11% upside to the share price.
RBC said its 'underperform' rating was based on its view that the original "bad bank" was too small and the residual corporate and institutional division, art 35% of the group, would not generate returns above the cost of equity and nor would the group. |
| | Central London Property Investment Paying 15% Per Annum | | Limited availability, serious investors only click here | | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment