| | | | | | | | Your complimentary trading guide
Make a consistent income with this simple, once a day trading strategy which made 7478 pips in 2014. For your free guide click here. | | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks tick higher as China announces fresh policy The UK equities market ticked higher after China announced new policy measures and the premier said the country was not interested in a "currency war".
China's Ministry of Finance said it will roll out "more forceful" fiscal policy to boost the slowing economy. Measures include more funds for infrastructure projects, tax cuts for small businesses, debt quotas for local governments and speeding up the approval process for duty-free stores to stimulate construction activity.
"This seemed to confirm the hopes of some kind of further Chinese stimulus, hopes that were ostensibly behind the large gains made by the Western markets on Tuesday," said Spreadex financial analyst Connor Campbell.
China premier Li Keqiang, meanwhile, tried to soothe markets following the central bank's decision to devalue the yuan on 11 August, which had set off volatility in global stocks.
Speaking at the summer World Economic Forum held in the Chinese port city of Dalian, he said: "There's no basis for persistent depreciation of the renminbi. We will not want to stimulate exports through depreciation. China will not want to see any currency wars. Currency wars would only hurt China."
Japan also heard good news from its leader. Prime minister Shinzo Abe said the government aims to lower the corporate tax rate by a cumulative 3.3 percentage points over two years through the next fiscal year starting in April 2016.
Japanese stocks posted the biggest one-day gain since the height of the global financial crisis following the announcement.
On another positive note for Japan, data from the Cabinet Office showed consumer confidence rose more than expected in August. The sentiment index climbed to 41.7 last month from 40.3 in July, beating forecasts for a reading of 40.5.
UK and US data
UK industrial production contracted 0.4% in July compared with a 0.4% decline in the previous month and short of expectations for a 0.1% increase. On a year-to-year basis, industrial production grew 0.8%, short of analysts' expectations for a 1.4% reading and smaller than the 1.5% increase registered the previous month.
The manufacturing sector suffered a 0.5% decline year-on-year, also falling short of the expected 0.5% increase.
"Although UK data has generally been positive over the past few weeks, today's poor manufacturing production figures will make British manufacturers feel very gloomy," said Dennis de Jong, managing director at UFX.com.
"The recent economic crisis in China is already having a big effect on output and exports, while significant concerns remain about the long-term health of the Eurozone."
NIESR said it estimates that UK GDP grew by 0.5% in the three months ending in August after growth of 0.6% in the previous quarter. "Despite the slight softening, growth remains close to the estimated long run potential of the economy, but below the average rate of growth (0.7% per quarter) observed since the start of 2013." It also projects GDP growth of 2.5% per annum in 2015 and 2.4%t in 2016.
According to the Office for National Statistics, the UK's balance on trade in goods and services widened by £2.6bn from June to £3.4bn in July, driven by an increase to the trade in goods, where the deficit widened from £8.5bn in June to £11.1bn in July.
In the US, job openings rose from 5.32m in June to 5.75m in July, comfortably beating expectations for a 5.30m reading and the highest figure since record began in December 2000, the Labor Department revealed. The job openings rate rose to 3.9% after staying at 3.6% throughout the previous quarter. However, despite the surge in job openings, hiring declined to 4.98m from 5.18m in June, as did the number of separations, which fell to 4.72m from 4.91m, while the quits rate - a gauge of worker confidence - remained at 1.9% for the fourth consecutive month.
"More openings suggest that wage pressures will start to build, giving some more ammunition to those that think a September move from the Fed is still a necessity," IG analyst Chris Beauchamp said on the likelihood of an interest rate hike by the Federal Reserve this month.
The Mortgage Bankers Association said its seasonally adjusted index of applications for US home mortgages, which covers home purchase demand and refinancing demand, declined 6.2% in the week ended 4 September.
China news stokes gains in miners
Anglo American jumped after announcing its wholly-owned subsidiary Anglo American Platinum has reached an agreement to sell its loss-making Rustenberg mining and concentrating operations to Sibanye Gold for at least ZAR4.5bn.
Other miners, including BHP Billiton and Glencore, rose on the back of China's policy announcement and as metal futures were in positive territory.
Hargreaves Lansdown advanced as it posted a 5% drop in operating profit for the year ended 30 June, although revenue nudged up and assets under administration rose 18%.
Ryanair flew higher after raising its full-year net profit outlook by 26% following a strong first quarter of traffic and profits.
Prudential and Standard Chartered, which both have varying but strong degrees of focus on Asia, continued their strong runs this week, after sentiment towards the sector and emerging markets improved somewhat.
GlaxoSmithKline was in the red after initial results of its study with Theravance to understand mortality on the Breo Ellipta inhaler for the treatment of chronic obtrusive pulmonary disease showed that it failed to prolong the life of patients.
Ahead of its results on Thursday, Morrisons was lifted by anticipation of an encouraging strategic update from new chief executive David Potts, who took the reins in March this year.
Looking ahead, Chinese inflation and the Bank of England will be the centre of attention.
Capital Economics' Chang Liu noted: "We expect consumer price inflation (due 0230 BST on Thursday) to have risen to a 12-month high in August on the back of a continued pick-up in food price inflation. Both pork and vegetable prices, which together have a large weight in the index, rose much faster last month than in August a year ago.
"In contrast, non-food CPI inflation ought to have been broadly stable as continued downward pressure on transportations costs and household utility bills due to further falls in energy prices should have been offset by a pick-up in housing cost inflation."
The markets also expect the Bank of England to maintain UK interest rates following the conclusion of its Monetary Policy Committee meeting on Thursday at 1200 BST.
Market Movers
techMARK 3,110.39 +0.62%
FTSE 100 6,229.01 +1.35%
FTSE 250 17,153.28 +0.90% |
| | SG Market Master 2015 | | Build the ultimate virtual portfolio from our range of Short & Leverage ETPs without risking a penny for real and you could win prizes that money can’t buy: Rugby World Cup 2015 signed shirts, balls, and match day tickets with hotel accommodation. Starting September 7th, contestants will have four weeks to invest £100,000 of virtual funds to create the highest overall return using Short & Leverage ETPs. Click here to register Losses can exceed a direct investment in the underlying asset. The value of the product can go up as well as down. Performance is compounded daily. |
| | Are You Confused About Your Pension? | | If you have a £250,000 portfolio, download the guide for retirees written by Forbes columnist and money manager Ken Fisher's firm. Even if you have something else in place, this must-read guide includes research and analysis you can use right now. Don't miss it! |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Shares track gains in Asian session European equity markets ended the day comfortably higher, boosted by promises of further stimulus out of China and Japan.
The benchmark DJ Stoxx Europe 600 index was up by 1.33%, Germany's DAX was 0.31% higher and France's CAC 40 had advanced 1.44%.
Overnight, the Ministry of Finance said it would inject more funds to support some infrastructure projects and implement tax cuts for small businesses.
That came amid growing concerns regarding the state of that economy. There is a 55% chance of some kind of global recession in the next two years or so, originating in emerging markets and China, Citigroup said in a research report e-mailed to clients.
In parallel, speaking from the Summer World Economic Forum Chinese Prime Minister Li Keqiang said the country was not pursuing a "currency war".
Commenting on the news, RBS's Americas Head of Strategy, John Briggs, said: "Li's comments are very significant, because a further yuan devaluation now would deliver an unacceptable loss of face to China and the head of the party.
"This may not mean that a devaluation is off the table in the scope of years, but in my mind it is off the table in the scope of months, many months in fact."
China's Shanghai Composite rose 2.3% and Japan's Nikkei 225 surged 7.7%, its largest one day gain since 2008.
As far as Japan is concerned, the rebound in the Nikkei followed comments from the country's prime minister Shinzo Abe indicating that the government would do more to stimulate the economy. At a conference in Tokyo, Abe pledged to cut corporate tax rates by at least 3.3% next year.
On the corporate front in Europe, shares in budget Irish airline Ryanair surged after it raised its full-year net profit outlook by 25%.
Hargreaves Lansdown rallied. Although it posted a 5% drop in pre-tax profit for the year ended 30 June, this was in line with expectations and analysts welcomed the surged in assets under administration and boost to the dividend.
Pharmaceuticals giant GlaxoSmithKline bucked the trend and fell after it said late on Tuesday that initial results of its study on the Breo Ellipta inhaler for the treatment of chronic obtrusive pulmonary disease showed it failed to prolong the life of patients.
Front month Brent crude futures were trading 1.43% lower at $48.82 per barrel by the end of the session. |
| | China Meltdown: The UK Stocks to avoid | | In July, Chinese shares had their worst month in 6 years..
Yet right now many UK investors are blissfully unaware. Discover:How the Chinese markets could be ‘rigged’ and the 7 UK stocks to avoid Download Your Free Report Now |
| | US Market Report | | US open: Equities edge higher on Asia-driven momentum US stocks gained ground early on Wednesday, buoyed by a surge in Asian markets.
Shortly after 1500 BST, the Dow Jones Industrial Average was up 64 points to 16,557.22, while the S&P 500 and the Nasdaq were 12 and 27 points higher respectively.
Japan's Prime Minister Shinzo Abe pledged to make tax cuts, which led the Nikkei to rally 7.7%, its biggest one-day percentage gain in over seven years.
"The restatement of loose fiscal and monetary policy measures dissipated the grey clouds over the Japanese markets," said Brenda Kelly, head analyst at London Capital Group.
"Although the conviction in Abenomics is on declining path on inability to bring the second and third arrows in the game, the promises of more liquidity and lower taxes could always make a shiny kneejerk boost."
Meanwhile, the Shanghai Composite rose 2.29% after China's Ministry of Finance promised to accelerate tax reforms and increase infrastructure spending in a bid to shore the country's economy.
Wednesday data
According to figures released by the Labor Department, job openings increased from 5.32m in June to 5.75m in July, comfortably beating expectations for a 5.30m reading and the highest figure since records began in December 2000.
The job openings rate rose to 3.9% after staying at 3.6% throughout the previous quarter.
"Combining these data with figures from the Labor Department's employment report suggests that labor market slack continues to diminish," analysts at Barclays said in a note.
"The ratio of unemployed job seekers to job openings fell to 1.44 in July, the lowest on record since 2000.
"On balance, the July JOLTS data suggest labor demand held up solidly at the beginning of the third quarter."
Meanwhile, the Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 6.2% in the week ended 4 September.
The seasonally-adjusted sub-index of refinancing applications tumbled 10%, while the index of loan requests for home purchases, a key indicator of home sales, fell 1% but remained 41% higher year-on-year.
In company news, Apple rose 0.45% ahead of its latest event, scheduled for 1800 BST, during which the tech giant is widely expected to unveil new versions of iPhone and Apple TV.
United Continental Holdings fell 0.59% and could be in focus after the airline revealed its chief executive stepped down amid a federal probe.
Yahoo! slid 0.39% after analysts at Nomura cut their target on the stock from $48 to $40, while digital media producer Barnes & Noble tumbled 5.64% as quarterly results missed targets
Elsewhere, European equities moved higher on the back of strong performances in Asian markets, while oil prices edged lower, with West Texas Intermediate losing 0.95% to $45.51 a barrel and Brent slipping 0.85% to $49.10. |
| | 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. |
| | Broker Tips | | Broker tips: Jimmy Choo, Hargreaves Lansdown, PZ Cussons RBC Capital Markets has initiated coverage of Jimmy Choo at 'outperform' with a 200p price target.
"Jimmy Choo's footwear-focused model is attractive given the early stage of brand development and the defensiveness of the product category on a long term view," the Canadian bank said.
It said 10-15 new stores per year, largely in Asia, an expanding menswear business and omni-channel integration position the group to grow revenue and earnings before interest and tax by a 10% compound annual growth rate to full-year 2020.
The bank also highlighted franchise conversions as a potential source of future revenue and margin uplift.
It noted the stock trades at 22x 2016 estimates, which is a 25% premium to sector and in the context of its €300m sales base and under-penetration in China is not excessive.
"The niche brand positioning (predominantly women's footwear), disciplined capital management and clear medium-term strategy sets Jimmy Choo on a sustainable path to growth, and its current valuation levels are in line with its average since IPO, providing suitable headroom for potential future re-rating."
Numis upgraded Hargreaves Lansdown to 'add' from 'hold' and lifted its price target to 1,280p following the company's results, which it said showed a strong underlying performance.
Numis said the numbers were in line with forecasts in terms of profit, but the 18% growth in client assets was ahead of expectations.
It said Hargreaves continues to increase its market share in a structural growth market with its share of platform assets increasing to 35.0% from 33.6% and its share of ISA flows increasing from 10.9% to 14.1%.
"We continue to believe that HL justifies a significant premium valuation given its dominant market position in a growth segment of a growth market," Numis said.
Numis said the group's scale benefits are substantial and unmatched providing it with by far the highest operating margin and the buying power to provide the cheapest fund prices in the market.
"We expect the high marginal margin and industry growth to more than offset the expected ongoing industry price compression."
As far as the industry in general is concerned, it expects substantial growth due to the increase in self-investment and the shift from defined benefit pensions to defined contribution pensions.
In addition, it said auto-enrolment should significantly increase the proportion of the population with money to manage most of which will have to be done through self-invest platforms like HL due to the scale of these pension assets.
PZ Cussons got a boost after Investec lifted the stock to 'buy' from 'hold', noting weakness in the shares since July.
"Whilst there remains a risk of further currency headwinds this year, we feel the stock price, at these low levels, is more than discounting a 15-20% devaluation," said Investec.
It said PZ Cussons' 2015 results were resilient in the face of a number of challenges ranging from Ebola to slower growth in emerging markets and currency headwinds.
It pointed out that management is well versed in navigating the challenges of emerging markets. Currency weakness has been a growth limiting factor and this could continue to influence the outcome for full-year 2016, said Investec.
However, it argued that PZ Cussons remains committed to the longer-term opportunities , investing in its branded FMCG portfolio, with a growing emphasis on Food. |
| | 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 patrick@advfn.co.uk |
| | | | | | | 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