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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 rise ahead of FOMC interest rate decision London stocks advanced ahead of UK employment data and the Federal Reserve's decision on interest rates.
Data from the Office for National Statistics at 0930 GMT is expected to show UK employers added 150,000 jobs in the three months to October. In the same period the unemployment rate held at 5.3%, according to analysts' estimates.
Average weekly earnings in the quarter to October are forecast to rise 2.5% while jobless claims in November are projected to increase by 800.
The main event, however, comes after the UK market closes with the Fed's policy announcement. The US central bank is widely expected to raise interest rates for the first time in nearly a decade by 25 basis points.
"The question of when the Fed will eventually raise interest rates has been discussed in great depth for the majority of this year and even now, while the markets are all but convinced it will happen today, people are very split on whether it should in fact happen," said Craig Erlam, senior market analyst at Oanda.
"The main argument against a rate hike has come from a lack of inflation in the US and with the growing divergence in monetary policies with other central banks, there is a good chance that this could remain low over the next year or so."
However, the Fed is looking to introduce gradual hikes in interest rates to soften the blow if inflation picks up rapidly, Erlam added, saying he thinks this would be "a smart approach".
Elsewhere, Eurozone service activity growth eased in December, according to Markit's preliminary estimate. The purchasing managers' index fell to 53.9 this month from 54.2 in November, missing forecasts of 54. A reading above 50 signals expansion while a level below that indicates a contraction.
In company news, Astrazeneca rallied on news it will buy the core respiratory business of Takeda Pharmaceutical Company for $575m (£382m).
SuperGroup surged after reporting strong first half trading with positive sales growth.
Rolls Royce jumped after splitting out its divisions and reshuffling its senior management team, in what it said is the first step in a "wide-ranging" restructuring programme.
Anglo American declined after Societe Generale downgraded the stock to 'sell' from 'hold' and slashed the price target to 250p from 530p, saying things could get worse before they get better.
Meanwhile, oil prices headed south with Brent crude down 1.8% to $37.75 per barrel and West Texas Intermediate down 1.4% to $36.81 per barrel at 0912 GMT. |
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| Market Movers
FTSE 100 (UKX) 6,028.16 0.17%
FTSE 250 (MCX) 17,010.92 0.07%
techMARK (TASX) 3,136.75 0.13%
FTSE 100 - Risers
Pearson (PSON) 736.00p 4.10%
Shire Plc (SHP) 4,278.00p 2.30%
Dixons Carphone (DC.) 486.00p 1.95%
Rolls-Royce Holdings (RR.) 550.50p 1.94%
BP (BP.) 342.35p 1.38%
Ashtead Group (AHT) 1,113.00p 1.18%
Admiral Group (ADM) 1,671.00p 1.09%
Vodafone Group (VOD) 211.50p 0.95%
AstraZeneca (AZN) 4,429.50p 0.88%
GlaxoSmithKline (GSK) 1,319.50p 0.84%
FTSE 100 - Fallers
Tesco (TSCO) 145.35p -2.65%
Anglo American (AAL) 264.20p -2.55%
Morrison (Wm) Supermarkets (MRW) 144.70p -1.63%
ARM Holdings (ARM) 1,035.00p -1.62%
Marks & Spencer Group (MKS) 455.20p -1.60%
Sainsbury (J) (SBRY) 245.40p -1.56%
Meggitt (MGGT) 357.20p -1.33%
Mondi (MNDI) 1,312.00p -1.06%
Glencore (GLEN) 81.51p -1.04%
SSE (SSE) 1,436.00p -0.97%
FTSE 250 - Risers
Supergroup (SGP) 1,707.00p 12.60%
Acacia Mining (ACA) 169.10p 7.09%
Aldermore Group (ALD) 214.90p 4.57%
Bwin.party Digital Entertainment (BPTY) 121.00p 3.68%
OneSavings Bank (OSB) 349.60p 2.82%
Fidessa Group (FDSA) 1,979.00p 2.54%
Redrow (RDW) 454.40p 2.18%
esure Group (ESUR) 243.70p 1.97%
Domino's Pizza Group (DOM) 987.50p 1.91%
Moneysupermarket.com Group (MONY) 351.20p 1.86%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 87.20p -5.98%
Vedanta Resources (VED) 275.10p -4.64%
Premier Oil (PMO) 46.89p -3.70%
BTG (BTG) 652.50p -2.17%
Aveva Group (AVV) 1,520.00p -1.94%
Debenhams (DEB) 74.50p -1.91%
Drax Group (DRX) 207.00p -1.80%
Brown (N.) Group (BWNG) 315.70p -1.68%
Diploma (DPLM) 718.50p -1.58% |
| | UK Event Calendar | | Wednesday 16 December
INTERIMS
Dixons Carphone , Supergroup, Tungsten Corporation
QUARTERLY PAYMENT DATE
Brunner Inv Trust, M Winkworth
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (EU) (10:00)
Capacity Utilisation (US) (14:45)
Consumer Price Index (EU) (10:00)
Crude Oil Inventories (US) (15:30)
FOMC Interest Rate (US) (19:00)
Harmonised Index of Consumer Prices (EU) (10:00)
Housing Starts (US) (13:30)
Industrial Production (US) (14:45)
MBA Mortgage Applications (US) (12:00)
Wholesale Price Index (GER) (07:00)
GMS
Alba Mineral Resources, Johnson Matthey, Twentyfour Income Fund Limited Ord Red
FINALS
Elegant Hotels Group , IDOX
AGMS
Altona Energy, BowLeven, EpiStem Holdings, Henderson Far East Income Ltd., Standard Life Equity Income Trust
UK ECONOMIC ANNOUNCEMENTS
Claimant Count Rate (09:30)
Unemployment Rate (09:30)
FINAL DIVIDEND PAYMENT DATE
Plexus Holdings, World Careers Network |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks slip into the red as investors eye FOMC decision European stocks slipped in early trade, reversing modest opening gains as investors opted for caution ahead of the Federal Reserve's rate announcement.
At 0910 GMT, the benchmark Stoxx Europe 600 index was down 0.2%, France's CAC 40 was off 0.4% and Germany's DAX was 0.2% weaker.
If the Federal Reserve goes ahead and raises rates as widely expected, it will be the first major central bank to do so since the financial crisis of 2008.
"The FOMC's intentions have been telegraphed for a while now and a hike is an almost certain outcome," said Societe Generale.
"We expect the FOMC to emphasise that the subsequent hikes will be data dependent and gradual. Chair Yellen is likely to tie gradualism to both cyclical and the slow-moving structural forces, namely low inflation and a low neutral real rate. Reinforcing this message, we also expect the FOMC's estimate of the longer-run fed funds rate to decline from 3.5% to 3.25%."
SocGen said efforts will especially be placed on communication this time around, as the Fed will need to carefully harmonise market expectations with its own forecasts.
"As we saw with the ECB, it is easy to disappoint, so the communiqué, press conference, and Summary of Economic Projections will have a key role to play," the bank said, adding that it expects Yellen to strike the right balance.
In corporate news, Casino surged after the French supermarket operator announced debt-reduction plans. As part of the plans, the company will sell some of its real estate in Thailand and Colombia, as it looks to reduce debt by more than €2bn next year.
Elsewhere, educational publisher Pearson was in the black after Exane upped its stance on the stock to 'outperform' from 'neutral', but Anglo American slid after Societe Generale downgraded it to 'sell' from 'hold', saying things could get worse before they get better.
On the macroeconomic front, Markit's survey of manufacturing in the Eurozone showed activity rose to a 20-month high in December.
The flash services PMI activity index fell to 53.9 from 54.2, which was a three-month low, but the manufacturing PMI rose to a 20-month high of 53.1 from 52.8 in November.
Markit's flash Eurozone PMI composite output index slipped to 54.0 in December from 54.2 the previous month, marking a two-month low but still well above the 50 threshold that separate expansion from contraction.
The flash Eurozone manufacturing PMI output index nudged up to 54.4 from 54.
Chris Williamson, chief economist at Markit, said: "The Eurozone economy enjoyed a comfortably solid end to 2015, though policymakers are likely to remain disappointed by the relatively modest pace of expansion and lack of inflationary pressures, given the stage of the recovery and the amount of stimulus already in place." |
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| | US Market Report | | US close: Stocks gain as UK inflation picks up in November US stocks finished higher on Tuesday after data showed an improvement in inflation ahead of the Federal Reserve's interest rate decision.
US inflation rose 0.5% in November from a year ago, matching analysts' estimates and marking an improvement from the previous month's 0.2% increase, according to the Bureau of Labor Statistics.
However, CPI fell to 0% in November on a month-on-month comparison, after a 0.2% rise in October, meeting forecasts.
James Hughes, chief market analyst at GKFX, said the improvement in year-on-year inflation paves the way for the Fed to raise interest rates on Wednesday when the central bank wraps up its two-day policy meeting.
"As far as the inflation story alone goes, we must wait for the Core CPE reading before taking stock of the full picture, but today was all about not upsetting the Fed's preparations, and it seems we have come through unscathed," he said.
The Fed is widely expected to raise rates for the first time in nearly a decade by 25 basis points.
Meanwhile, sentiment among US housebuilders remained fairly flat in December, according to the National Association of Home Builders/Wells Fargo. The housing market index nudged down one point to 61, a touch below estimates for a reading of 62 but comfortably above the 50 threshold that indicates improvement.
The Empire State general business conditions index, which measures manufacturing conditions in the New York area, rose to a reading of -4.6 in December from -10.7, beating the -7 estimate.
In the commodities space, energy shares got a break as oil prices rebounded from heavy falls in the previous session, with West Texas Intermediate up 2.2% to $37.14 and Brent crude up 0.99% to $38.30 a barrel at 2118 GMT.
Gold and copper declined 0.28% and 2.79%, respectively, while silver rose 0.29% on the Comex.
Among corporate stocks, FactSet Research Systems was on the back foot after its first quarter revenues fell short of expectations.
3M was also under the cosh as investors digested a weak earnings outlook from the company.
On the upside, Sirius XM Holdings rallied after the satellite radio operator said it has signed Howard Stern to another five-year deal. |
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| | Newspaper Round Up | | Wednesday newspaper round-up: Crude, Halliburton, Deliveroo, retailers Tight restrictions on US crude oil exports, in place for 40 years, would be lifted as part of a budget deal agreed in Congress on Tuesday evening, news agencies reported. The deal presented to Republicans in a late-night meeting by House Speaker Paul Ryan would also raise spending on defence and a number of domestic programmes. It would also avoid a government shutdown that had been looming as soon as Wednesday. - Financial Times
Halliburton, the US oil services group, has been forced to delay for a second time its planned $26bn acquisition of rival Baker Hughes, after failing to reach an agreement with US competition regulators. The US Department of Justice has told the two companies that the disposals they have offered to mitigate the deal's affect on competition are inadequate, but has not yet launched a legal action to block the takeover. - Financial Times
Deliveroo, the high-end takeaway company, hi-tech e-commerce company Powa Technologies and personalised children's book firm Lost My Name are among 15 firms that have been hailed as future stars of the UK digital economy. They have been inducted into the Future Fifty programme, which aims to support fast-growing technology companies that are gearing up for an exit. - Telegraph
UK exports can only be boosted by creating an independent advisory body comprising people from industry, economics and politics who are not side-tracked by short-term issues and "political point scoring", the CBI has said. The lobby group is calling for a national exports commission modelled on similar groups working low pay and infrastructure, to set long-term policy and targets to increase sales of UK goods abroad. - Telegraph
The gender pay gap for women over 40 is almost double the average when they enter management - and it gets worse as they get older, a study has found. The Chartered Management Institute (CMI) found that women over 40 in management roles are paid 35% less than men, a much greater disparity than the 19% average gap across the whole economy. Once women in senior jobs enter their 60s, the gender pay gap widens further to 38%. - Guardian
Christmas shoppers are set to benefit from the deepest high street discounts since 2008 after mild weather and a disappointing Black Friday left shops with stock to clear. With fewer than 10 days to Christmas, discounts are averaging 41.8%, according to analysts at consultants Deloitte, and will rise to 45% by the weekend. - Guardian
Almost a third of households would have to cut spending, work longer hours or change their mortgage terms if interest rates rose by just 2 percentage points without any increase in pay, according to the Bank of England. Research by the Bank found that the number of vulnerable UK households remained high six years after the end of the recession, but they "appear a little better placed to cope with a rise in interest rates than a year ago". - The Times | | |
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