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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 jump on the back of Fed minutes, grim times ahead for copper London investors reacted with glee to the gains seen overnight on Wall Street after the release of the last set of Fed minutes which appeared to point to a shallower path for interest rate increases over the coming year, although some traders were left harbouring doubts about the exact timing of the first rate hike by the US central bank.
As of 08:49 the FTSE 100 index was up 65.93 points, or 1.05%, taking it to 6,344.80, alongside similar gains over on the Continent.
Front-month Brent crude futures were also higher, tacking on 0.63% to $44.42 per barrel in ICE trading.
Other asset classes however reacted with far more calm. The yield on the benchmark 10-year Gilt was off by two basis points to 1.91% whereas cable was in fact higher by 0.26% to 1.5275.
Fed likely to raise rates in December
The summary of US rate-setters' debate about whether or not raise rates in October had a less hawkish bias to it than had been anticipated, leaving the door open to a tightening of monetary policy in December but seemingly also implying a shallower path of rate rises would follow thereafter, market watchers seemed to agree.
"The minutes suggest that the committee remains divided. However, since the time of the October meeting, we see them as having reached a broad consensus on a December rate hike," economists at Barclays said following the release of the minutes.
Deutsche Bank was of a similar view but added: "This doesn't mean to say that a hike wouldn't be a policy error and it'll be too early to conclude on this for sometime. Monetary policy works with a lag that can be around 1-2 years and we worry that with global nominal growth still so low, the Fed has left it rather late in the cycle to be hiking. In our minds we still see 2017-2018 as potential recessionary years which fits with the above."
In the run-up to yesterday's minutes three Fed speakers had weighed in seemingly favouring a rate rise in December, although - just the same as the Fed minutes - their remarks weren't unequivocally hawkish.
For example, as Michael Hewson, chief market analyst at CMC Markets UK pointed out: "New York Fed President William Dudley's assertion that policymakers don't really know the effect a rate rise would have on markets, doesn't exactly inspire confidence."
On Thursday morning, the Bank of Japan announced its decision to stay put on monetary policy, as was widely expected.
UK retail sales, grim times ahead for copper ahead
UK retail sales figures for October were scheduled for release at 09:30. Economists expected a 0.5% drop month-on-month following a surge in September. In a contrarian vein, Barclays forecast a 0.2% gain on the month, thanks to the salutary effects of the Rugby World Cup over the first fortnight of last month.
To take note of, anlaysts at FC Stone told Bloomberg that the price of copper could slide a further 17% by next year,
"It's grim-to-bleak, so the onus is on the supply side. The market needs to transition to a lower price point to force more cuts," analyst Ed Meir told the newswire.
FTSE 100: Johnson Matthey shows investors the money
Steady sailing was the theme for Johnson Matthey on Thursday morning, as it released its half-year results showing underlying revenue at the specialty chemicals firm was up 20% on the previous period, with sales up 5% to £1.588bn. The company announced it would return £305m to shareholders via a special dividend, more than the roughly £250m some analysts had penciled in.
Building materials group CRH said sales in the nine months to the end of September rose 16% from last year, as it reiterated its guidance that 2015 will be a year of growth thanks to continued positive momentum in the Americas. Cumulative sales from continuing operations increased to €15.5bn (£10.8bn), while earnings before interest, taxes, depreciation and amortisation were up 34% to €1.5bn.
Meggitt has won a multi-million dollar contract to provide the cargo smoke detection system (CSDS) for the Boeing 777X aircraft. The company did not give a specific value on the contract. Production will start in 2017 from Meggitt's facility in Simi Valley, California to meet entry into service in 2019.
Australia's competition watchdog has approved the proposed merger of Royal Dutch Shell and BG Group, leaving just two more major regulatory hurdles and shareholder approval of both companies. The Australian Competition and Consumer Commission (ACCC) rubber-stamped Shell's $47bn cash and share takeover offer of BG Group late on Thursday morning (Wednesday night UK time).
Revenues were flat at Royal Mail in the first half as UK and European parcel growth offsett letters weakness, while the focus on costs saw group operating profit flat. Adjusted profit before tax down 16.4%.
FTSE 250: Poundland weighed down by poor results
Poundland shares were pounded after a poor half-year result. The single-price retailer's underlying results for the period ended 27 September were largely disappointing, with like-for-like sales down 2.8% and EBITDA down 18.5% to £16.5m. Pre-tax profits were down a sizeable 26.3% to £9.3m in the period.
Shares in Bovis Homes Group slumped almost 10% early on Thursday after the home builder revealed its mix of homes for 2015 will be more weighted to existing sites than previously expected.
Domino's Pizza has announced chief financial officer Paul Doughty is leaving the company and stepping down from the board at the end of the year.The company said he had tendered his resignation after just five months in the role. |
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| Market Movers
FTSE 100 (UKX) 6,334.44 0.88%
FTSE 250 (MCX) 17,148.79 0.35%
techMARK (TASX) 3,169.10 0.65%
FTSE 100 - Risers
Johnson Matthey (JMAT) 2,617.00p 6.51%
Royal Mail (RMG) 475.80p 4.76%
Glencore (GLEN) 96.70p 3.63%
CRH (CRH) 1,836.00p 3.26%
BHP Billiton (BLT) 905.90p 2.86%
Randgold Resources Ltd. (RRS) 4,031.00p 2.49%
Sky (SKY) 1,119.00p 2.47%
Shire Plc (SHP) 4,773.00p 2.14%
Anglo American (AAL) 458.75p 2.07%
Rio Tinto (RIO) 2,305.00p 1.97%
FTSE 100 - Fallers
Persimmon (PSN) 1,844.00p -1.13%
Imperial Tobacco Group (IMT) 3,539.00p -0.87%
Berkeley Group Holdings (The) (BKG) 3,115.00p -0.76%
Taylor Wimpey (TW.) 184.30p -0.75%
Whitbread (WTB) 4,475.00p -0.56%
Bunzl (BNZL) 1,868.00p -0.53%
Rolls-Royce Holdings (RR.) 540.50p -0.46%
Barratt Developments (BDEV) 575.00p -0.43%
Pearson (PSON) 809.50p -0.31%
Vodafone Group (VOD) 223.75p -0.11%
FTSE 250 - Risers
QinetiQ Group (QQ.) 250.60p 6.32%
Electrocomponents (ECM) 238.00p 4.34%
Investec (INVP) 529.50p 3.62%
Marshalls (MSLH) 335.00p 2.86%
Grainger (GRI) 249.40p 2.47%
Kaz Minerals (KAZ) 92.30p 2.16%
Aggreko (AGK) 996.50p 2.15%
Henderson Group (HGG) 300.50p 2.14%
Home Retail Group (HOME) 102.00p 2.05%
Just Eat (JE.) 422.00p 1.93%
FTSE 250 - Fallers
Poundland Group (PLND) 231.20p -17.01%
Bovis Homes Group (BVS) 887.00p -10.31%
B&M European Value Retail S.A. (DI) (BME) 313.40p -2.79%
Aldermore Group (ALD) 269.30p -2.78%
Redefine International (RDI) 52.50p -2.78%
Vesuvius (VSVS) 330.20p -2.62%
Virgin Money Holdings (UK) (VM.) 364.90p -2.43%
TalkTalk Telecom Group (TALK) 237.00p -2.11%
Paragon Group Of Companies (PAG) 412.70p -2.06% |
| | UK Event Calendar | | Thursday 19 November
INTERIMS
Dart Group, Investec, Johnson Matthey, Mothercare, Poundland Group , QinetiQ Group, Royal Mail
INTERIM DIVIDEND PAYMENT DATE
Dillistone Group, Saga
INTERIM EX-DIVIDEND DATE
Braemar Shipping Services, Bunzl, DCC, Downing Three VCT F Shs, Downing Three VCT H Shs, Downing Two VCT F Shs , Downing Two VCT G Shs, E2V Technologies, Edge Performance VCT 'F' Shares, First Derivatives, Grafenia , Great Portland Estates, Hill & Smith Holdings, IFG Group, Liontrust Asset Management, Martin Currie Asia Unconstrained Trust , Prime People, Ranger Direct Lending Fund, Sainsbury (J), Scottish Mortgage Inv Trust, Sophos Group , Spire Healthcare Group, TalkTalk Telecom Group , Tate & Lyle, Vodafone Group, Whitbread
QUARTERLY EX-DIVIDEND DATE
Blackrock North American Income Trust , Canaccord Genuity Group Inc., Carnival, M Winkworth, MedicX Fund Ltd., Utilico Investments Ltd (DI)
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (EU) (09:00)
Continuing Claims (US) (13:30)
Current Account (EU) (09:00)
Initial Jobless Claims (US) (13:30)
Leading Indicators (US) (15:00)
Philadelphia Fed Index (US) (15:00)
Q3
Frutarom Industries Ltd GDR (Reg S), MHP SA GDR (Reg S), New World Resources A Shares
GMS
TechFinancials (DI)
FINALS
Euromoney Institutional Investor, Grainger
IMSS
Catlin Group Ltd., Centrica, CRH, Plaza Centers NV, Ted Baker
SPECIAL EX-DIVIDEND PAYMENT DATE
Calculus VCT, Manchester & London Investment Trust, Prime People
EGMS
El Oro Ltd, Great Eastern Energy Corp Ltd. GDR
AGMS
Close Brothers Group, Genus, Imperial Innovations Group, JPMorgan Global Markets Emerging Income Trust, Ludgate Environmental Fund Ltd., Ruffer Investment Company Ltd Red PTG Pref Shares, SQN Asset Finance Income Fund Limited
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
Internet Retail Sales (09:30)
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Hansard Global, Penna Consulting, Thorpe (F.W.)
FINAL EX-DIVIDEND DATE
AB Dynamics, Craneware, Digital Globe Services Ltd (DI), Edinburgh Dragon Trust, Fidelity Special Values, Genus, GETECH Group, Lok'n Store Group, London Finance & Investment Group, Manchester & London Investment Trust, MJ Gleeson , Sanditon Investment Trust, Tristel, World Careers Network |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rally as Fed gives clearer indication of next policy move European stocks rallied at the open, taking their cue from upbeat sessions in the US and Asia, as the latest Federal Reserve minutes signalled that a rate hike next month was likely, while insisting that any tightening would be slow and gradual.
"Markets are clearly liking the US central bank's faith in the US economic recovery and belief in a gentle 'testing of the water' first move towards policy normalisation," said Mike van Dulken, head of research at Accendo Markets.
At 0900 GMT, the benchmark Stoxx Europe 600 index and France's CAC were up 1%, while Germany's DAX was 1.2% higher.
Minutes from the Federal Reserve's October meeting - which took place before last month's bumper nonfarm payrolls report - revealed that most members of the policy-setting committee expected economic conditions to be right for a December rate hike.
"The Federal Open Market Committee Minutes were billed as the biggest news event of the week," said Societe Generale strategist Kit Juckes. "In the event, the Fed managed a rare feat - they left the market convinced that they will hike rates in December but equally convinced that it won't be a big deal."
On the corporate front, Johnson Matthey surged to the top of the FTSE 100 after the specialty chemicals firm posted a rise in first half pre-tax profit and revenue and declared a special dividend.
Miner BHP Billiton was also on the front foot after it said that maintaining its balance sheet was a priority.
French catering group Sodexo surged after saying it would cut costs further in order to combat a volatile global economy and posting an increase in full year profit.
German diversified industrial group Thyssenkrupp advanced after it reported a 46% increase in full year net profit and lifted its dividend. |
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| | US Market Report | | US close: Wall Street moves sharply higher despite possibility of December rate hike Stocks jumped sharply following the release of the minutes of the US central bank's last policy meeting, despite the fact that it left the possibility of a December rate hike wide open.
The summary of US rate-setters' debate about whether or not raise rates in October had a less hawkish bias, leaving the door open to a tightening of monetary policy in December but seemed to imply a shallower path of rate rises thereafter as well.
"The minutes suggest that the committee remains divided. However, since the time of the October meeting, we see them as having reached a broad consensus on a December rate hike," economists at Barclays said following the release of the minutes.
Indeed, before the release of the minutes three Fed speakers seemed to drop heavy hints that their preference was to raise rates come December.
The Dow Jones Industrial finished the session 1.42% or 247.66 points up at 17,737.16, while the S&P 500 gained 1.62% or 33.14 points to stand at 2,083.58 by the end of trading.
"Bearing in mind that these minutes were recorded prior to the fairly stellar jobs number in October, one could expect that any perceived hawkishness will effectively be taken as a green light for a rate hike in December," Brenda Kelly, head analyst at London Capital Group, had said before the report.
By sectors, the largest gains were seen in the following industrial groups: coal (7.66%), Non-ferrous metals (4.53%) and Gold (4.29%).
The Chicago Board of Trade's Volatility index (VIX) dropped 10.56% to 16.85.
Housing starts decline
According to the Commerce Department, housing starts fell 11% last month to 1.06m, against expectations for a reading of 1.16m.
As well, housing starts figures for September were revised down from an annual rate of 1.21m to 1.19m.
However, permits for new construction, which are a closely-followed gauge of future demand, rebounded 4.1% to an annual rate of 1.15m, while permits for single-family homes rose 2.4% to 711,000, the highest level since the end of 2007.
The Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 6.2% in the week ended 13 November.
Goldman backs Apple
Target slid 4.29% despite reporting better-than-expected third quarter sales and lifting its full year guidance, while Staples slid 2.39% after its sales fell short of estimates.
Home Depot surrendered 0.29%, even though analysts at RBC Capital lifted their target on the stock from $137 to $140, while Apple gained 3.17% after analysts at Goldman Sachs added the stock to their conviction buy list
Keurig Green Mountain and Salesforce.com are among those reporting after the market close.
Elsewhere, Asian equity markets endured a mixed session, as investors remained edgy ahead of the release of the minutes from the latest Fed meeting, while European stocks lost ground.
Front month West Texas crude futures finished the session 36 cents lower at $40.75 per barrel after dipping below the $40 mark at one point in the session.
Market Movers
FTSE 100 (UKX) 6,278.97 0.16%
FTSE 250 (MCX) 17,089.09 0.03%
techMARK (TASX) 3,148.55 0.10%
FTSE 100 - Risers
Antofagasta (ANTO) 500.00p 5.84%
Glencore (GLEN) 93.31p 5.04%
Hikma Pharmaceuticals (HIK) 2,048.00p 4.86%
Anglo American (AAL) 449.45p 4.28%
Pearson (PSON) 812.00p 2.92%
Coca-Cola HBC AG (CDI) (CCH) 1,599.00p 2.83%
Fresnillo (FRES) 689.00p 2.75%
Rio Tinto (RIO) 2,260.50p 2.10%
Sainsbury (J) (SBRY) 253.60p 2.09%
Aberdeen Asset Management (ADN) 337.20p 1.72%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 573.00p -3.13%
Smiths Group (SMIN) 989.50p -2.99%
Rolls-Royce Holdings (RR.) 542.50p -2.16%
InterContinental Hotels Group (IHG) 2,465.00p -1.40%
Carnival (CCL) 3,400.00p -1.39%
Dixons Carphone (DC.) 460.00p -1.33%
CRH (CRH) 1,778.00p -1.28%
Prudential (PRU) 1,495.00p -1.22%
BT Group (BT.A) 487.25p -1.15%
British Land Company (BLND) 829.00p -1.13%
FTSE 250 - Risers
Hunting (HTG) 348.00p 10.48%
Petra Diamonds Ltd.(DI) (PDL) 57.95p 7.31%
Essentra (ESNT) 848.50p 5.34%
Evraz (EVR) 84.65p 5.29%
B&M European Value Retail S.A. (DI) (BME) 322.40p 4.68%
BBA Aviation (BBA) 197.90p 4.21%
Polymetal International (POLY) 579.50p 3.67%
Tullow Oil (TLW) 202.30p 3.16%
Enterprise Inns (ETI) 104.00p 2.87%
Wood Group (John) (WG.) 568.00p 2.62%
FTSE 250 - Fallers
esure Group (ESUR) 240.80p -4.42%
Drax Group (DRX) 217.10p -4.15%
Entertainment One Limited (ETO) 222.20p -3.35%
Spire Healthcare Group (SPI) 300.80p -2.46%
Centamin (DI) (CEY) 59.90p -2.44%
Bwin.party Digital Entertainment (BPTY) 106.90p -2.29%
Allied Minds (ALM) 440.40p -2.18%
Renishaw (RSW) 1,840.00p -2.13%
Just Eat (JE.) 414.00p -2.04% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Free trade, Ladbrokes, HBOS Business will benefit from a giant free-trade deal between Europe and the United States only if there is substantial reform to the European Union, Sajid Javid believes. The eurosceptic business secretary is expected to deliver a staunch defence today of the contentious Transatlantic Trade and Investment Partnership, which is intended to create the world's biggest free-trade zone by removing tariffs and regulatory barriers. - The Times
Dermot Desmond's fight to block Ladbrokes' £2bn merger with rival Coral gathered momentum tonight after a top ten shareholder in the bookmaker said he would meet the Irish billionaire to hear his objections. The Irish financier, who owns between 1% and 2% of the bookmaker, on Wednesday published an open letter to Ladbrokes shareholders urging them to vote against the tie-up at Tuesday's general meeting. The billionaire described the merger with privately-held Coral as "the wrong deal" and warned investors that the transaction was "a zero premium acquisition of Ladbrokes". - The Daily Telegraph
Former HBOS executives will learn whether they face fresh investigations into their conduct in the run up to the bank's near collapse in 2008 Thursday's publication of the much-delayed and long-anticipated report into what went wrong at the bank will be published alongside an opinion commissioned by the regulators into the decision in 2012 to only punish one former executive. - The Guardian
Police foiled terrorist attacks on Paris's business district and airport yesterday after a dawn raid in the French capital during which Europe's first female bomber blew herself up. Abdelhamid Abaaoud, 27, the alleged mastermind of last Friday's Paris attacks in which 129 people died, was also killed, according to unconfirmed reports last night. - The Times | | |
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