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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 fall as FOMC leaves door open to June rate hike UK stocks dropped on Thursday after the minutes of the Federal Reserve meeting last month showed a possible interest rate hike in June.
The minutes of the Federal Open Market Committee's 26-27 April policy meeting on Wednesday night revealed most participants supported a rate increase in June if incoming data were consistent with economic growth picking up in the second quarter, labour market conditions continuing to strengthen, and inflation making progress toward the 2% objective.
With the second quarter already looking better than the first, the odds of a June hike are likely to be higher than the near-30% the market was pricing before the release of minutes.
"It's not a slam-dunk," said Ian Shepherson, chief economist at Pantheon Macroeconomics. "The risk of a Brexit vote just eight days after the FOMC meeting-cited by 'some' members as a threat-points to caution on the part of the Fed.
"Given that many members are yet to be convinced there's much upside inflation risk, the FOMC is unlikely to conclude that the cost of waiting a few weeks is very high. A Brexit vote would likely trigger chaos in European markets, to which the US is not immune," he added.
Meanwhile, commodity stocks were in the red as oil prices fell after government data showed a surprise jump in US weekly crude oil inventories. The Energy Information Administration said US crude oil inventories rose 1.3m barrels to 541.3m barrels in the week ended 13 May, noting that this was a historical high for this time of the year.
Brent crude declined 1.5% to $48.18 per barrel and West Texas Intermediate slid 1.5% to $47.44 per barrel at 0859 BST. BHP Billiton and Royal Dutch Shell were among the biggest fallers on the FTSE 100.
Travel stocks were also sitting lower after on the worrying news that a plane travelling from Paris to Cairo has gone missing.
Among other corporate stocks, Royal Mail slumped after posting a 1% fall in overall revenues to £9.2bn in the full year, reflecting a drop in addressed letter volumes.
Thomas Cook tanked after the tour operated posted a narrower loss for the first half of the year but said summer bookings were down 5% and underlying earnings for the year are expected to be at the lower end of market views.
On the upside, banking stocks rallied on the prospect of higher interest rates in the US with Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered in the black. |
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| Market Movers
FTSE 100 (UKX) 6,100.67 -1.06%
FTSE 250 (MCX) 16,759.97 -0.72%
techMARK (TASX) 3,048.83 -0.57%
FTSE 100 - Risers
Barclays (BARC) 173.80p 2.00%
Admiral Group (ADM) 1,895.00p 1.77%
Royal Bank of Scotland Group (RBS) 227.50p 1.70%
RSA Insurance Group (RSA) 486.70p 1.65%
Lloyds Banking Group (LLOY) 70.22p 1.04%
Standard Chartered (STAN) 525.30p 1.02%
3i Group (III) 491.00p 0.72%
Berkeley Group Holdings (The) (BKG) 3,074.00p 0.49%
Prudential (PRU) 1,312.50p 0.23%
Shire Plc (SHP) 4,098.00p 0.00%
FTSE 100 - Fallers
Fresnillo (FRES) 1,098.00p -4.02%
TUI AG Reg Shs (DI) (TUI) 992.50p -3.92%
BHP Billiton (BLT) 812.00p -3.72%
Merlin Entertainments (MERL) 415.60p -3.66%
Anglo American (AAL) 584.60p -3.55%
Royal Mail (RMG) 490.10p -3.52%
Provident Financial (PFG) 2,770.00p -3.48%
Royal Dutch Shell 'A' (RDSA) 1,673.00p -3.46%
Royal Dutch Shell 'B' (RDSB) 1,681.00p -3.45%
Randgold Resources Ltd. (RRS) 6,025.00p -3.45%
FTSE 250 - Risers
Restaurant Group (RTN) 326.70p 2.70%
Grainger (GRI) 231.80p 1.71%
OneSavings Bank (OSB) 295.80p 1.23%
Spire Healthcare Group (SPI) 347.90p 1.02%
Virgin Money Holdings (UK) (VM.) 345.90p 0.96%
Electrocomponents (ECM) 262.40p 0.92%
International Personal Finance (IPF) 259.20p 0.90%
Entertainment One Limited (ETO) 168.60p 0.78%
Inchcape (INCH) 710.50p 0.71%
Millennium & Copthorne Hotels (MLC) 449.00p 0.56%
FTSE 250 - Fallers
Thomas Cook Group (TCG) 74.70p -16.54%
Brewin Dolphin Holdings (BRW) 264.70p -4.02%
Vedanta Resources (VED) 375.70p -3.67%
Tullow Oil (TLW) 252.10p -3.41%
Centamin (DI) (CEY) 110.30p -3.33%
Redefine International (RDI) 45.01p -3.27%
Keller Group (KLR) 939.00p -3.20%
Ophir Energy (OPHR) 69.90p -3.12%
Evraz (EVR) 121.30p -3.04% |
| | UK Event Calendar | | Thursday 19 May
INTERIMS
Brewin Dolphin Holdings, Britvic, Euromoney Institutional Investor, Grainger, Thomas Cook Group, UDG Healthcare Public Limited Company
INTERIM EX-DIVIDEND DATE
Baronsmead Second Venture Trust, Baronsmead VCT 5, Bellway, Cambria Automobiles, Circle Property , Keystone Inv Trust, Tiso Blackstar Group SE (DI), Utilitywise plc
QUARTERLY EX-DIVIDEND DATE
Blackrock North American Income Trust , M Winkworth, MedicX Fund Ltd., Raven Russia Ltd. Cum Red Pref Shares, Royal Dutch Shell 'A', Royal Dutch Shell 'B', TwentyFour Select Monthly Income Fund Limited
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Current Account (10:00)
Initial Jobless Claims (US) (13:30)
FINALS
Booker Group, Mothercare, National Grid
SPECIAL DIVIDEND PAYMENT DATE
Direct Line Insurance Group
SPECIAL EX-DIVIDEND PAYMENT DATE
Wireless Group
AGMS
Cineworld Group, Computacenter, Crossrider , Fair Oaks Income Fund Limited , Ferrexpo, Gamma Communications, Glencore , GLI Finance Limited, Harvest Minerals Limited (DI), Hiscox Limited (DI), IndigoVision Group, Informa, Learning Technologies Group , LMS Capital, Maintel Holdings, Marsh & Mclennan Cos Inc., Merlin Entertainments , North Midland Construction, Portmeirion Group, PPHE Hotel Group Ltd, ProPhotonix (DI), Prudential, Revolymer, Riverstone Energy Limited , Safestyle UK , Sherborne Investors (Guernsey) 'B' Limited, South African Property Opportunities plc, Spire Healthcare Group, StatPro Group
TRADING ANNOUNCEMENTS
Hargreaves Lansdown, Merlin Entertainments
UK ECONOMIC ANNOUNCEMENTS
Retail Sales (09:30)
FINAL DIVIDEND PAYMENT DATE
Direct Line Insurance Group, Hikma Pharmaceuticals, Mondi, Quixant, Telefonica SA, Tullett Prebon
FINAL EX-DIVIDEND DATE
3i Infrastructure, Advanced Medical Solutions Group, BlackRock Smaller Companies Trust, Bunzl, C&C Group, Cape, Central Asia Metals, Clarkson, Dignity, Elderstreet VCT, Fairpoint Group, Howden Joinery Group, Intertek Group, JZ Capital Partners Ltd, Keller Group, Michael Page International, Netplay TV, NMC Health, Peel Hotels, Phoenix Spree Deutschland Limited SHS NPV , Provident Financial, Quarto Group Inc., Robert Walters, SafeCharge International Group Limited (DI), Science Group , Ted Baker, TT Electronics, Wireless Group, Witan Pacific Inv Trust, Woodford Patient Capital Trust
Q1
MHP SA GDR (Reg S)
|
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks in the red after hawkish Fed minutes European stocks fell in early trade as investors digested the release of hawkish Federal Reserve minutes.
At 0855 BST, the benchmark Stoxx Europe 600 index and France's CAC 40 were both down 0.7%, while Germany's DAX was 1.2% weaker.
At the same time, oil prices retreated as the greenback gained ground on US rate hike expectations. West Texas Intermediate fell 2% to $47.24 a barrel and Brent crude was down 2.3% to $47.83.
Basic resources also took a hit from the stronger dollar, which makes dollar-denominated commodities more expensive for holders of other currencies.
"European markets have opened sharply lower tracking losses in Asia amid concerns that the Fed may raise interest rates in the near term with June a possibility. Financial stocks are among the few holding their own this morning as resource stocks continue to be hardest hit amid failing oil and metal prices," said Andy McLevey, head of dealing at stockbroker Interactive Investor.
Minutes from the latest Federal Open Market Committee released on Wednesday revealed that an interest-rate hike in June was a possibility, with a number of participants already angling for a hike at the April meeting.
The key phrase in the minutes was that "most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labour market conditions continuing to strengthen, and inflation making progress toward the Committee's 2% objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June."
Airlines and travel and leisure stocks were dented by news that an EgyptAir plane carrying 66 passengers on a flight from Paris to Cairo had gone missing. There were reports early on Thursday that the plane had crashed off the Greek island of Karpathos.
Shares in Thomas Cook tanked after the FTSE 250 tour operator said it expects underlying earnings for the year to be at the lower end of market views, and with sentiment towards the sector hit by the EgyptAir news.
French oil services firm Technip surged after announcing an all-stock merger with US-based FMC Technologies.
Drug and chemicals group Bayer slumped after making an unsolicited takeover offer for seed company Monsanto.
Henkel nudged lower despite posting an increase in first-quarter profit.
Royal Mail was under the cosh despite reporting a better-than-expected profit for the year, as it warned the market remained challenging.
On the economic calendar, the latest European Central Bank minutes are due at 1230 BST. In the US, the Philadelphia Fed survey, Chicago Fed activity index and initial jobless claims are at 1330 BST. Leading indicators are at 1500 BST. |
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| | US Market Report | | US close: Stocks fall flat after FOMC minutes raise rate odds US stocks had the wind taken out of their sales by a surprisingly hawkish set of meeting minutes from the Federal Reserve's rate setters.
Having risen early doors on Wednesday, by the close the Dow Jones Industrial Average closed 0.02% lower at 17,526.62, though the S&P 500 climbed 0.02% to 2,047.63 and the Nasdaq added 0.5% to 4,739.12.
Minutes from the FOMC committee meeting last month showed a hike in short-term interest rates would be on the table when they reconvene in mid-June, with a few participants already wanted to hike at the April meeting.
The key phrase in the minutes was that "most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee's 2% objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June."
With the second quarter already looking better than the first, the odds of a June hike are likely to be higher than the near-30% the market was pricing before the release of minutes.
"It's not a slam-dunk," said Ian Shepherson, chief economist at Pantheon Macroeconomics. "The risk of a Brexit vote just eight days after the FOMC meeting-cited by 'some' members as a threat-points to caution on the part of the Fed.
"Given that many members are yet to be convinced there's much upside inflation risk, the FOMC is unlikely to conclude that the cost of waiting a few weeks is very high. A Brexit vote would likely trigger chaos in European markets, to which the US is not immune," he added.
Rabobank US strategist Philip Marey said the minutes supported his call for two hikes in 2016, in June and December.
He added: "We also like to point out that the primary downside risk to our forecast lies in the employment report for May. An inconclusive report may elevate the risks that are still in the minds of the Committee. If US economic momentum appears to be fragile, then concerns about China, and the implications of a possible Brexit could weigh more heavily on the minds of the Fed."
While the dollar was inflated by the rate hike hawkishness, oil prices were already reeling as a report from the Energy Information Administration showed US crude oil inventories rose 1.3m barrels to a historical high of 541.3m barrels in the week ended 13 May. West Texas Intermediate was down 1% to $47.81 per barrel and Brent fell 1.6% to $48.48 per barrel after the stock markets closed.
On the corporate front, Target's shares plunged after the retailer reported a lower-than-expected increase in first quarter sales at established stores.
Lowe's gained after the home improvement chain posted quarterly sales that beat estimates.
FedEx rose after saying its planned takeover of TNT Express should settle on 25 May.
Staples advanced as is reported first quarter earnings that surpassed analysts' estimates.
S&P 500 - Risers
Citizens Financial Group, Inc. (CFG) $23.13 +6.00%
E*TRADE Financial Corp. (ETFC) $26.65 +5.84%
Huntington Bancshares Inc. (HBAN) $10.29 +5.32%
Regions Financial Corp. (RF) $9.64 +5.13%
Citigroup Inc. (C) $45.87 +4.97%
Charles Schwab Corp. (SCHW) $29.29 +4.91%
Keycorp (KEY) $12.52 +4.86%
Bank of America Corp. (BAC) $14.69 +4.85%
Western Digital Corp. (WDC) $38.46 +4.65%
Fifth Third Bancorp (FITB) $18.28 +4.58%
S&P 500 - Fallers
Hormel Foods Corp. (HRL) $35.48 -8.56%
Freeport-McMoRan Inc (FCX) $10.54 -8.43%
Target Corp. (TGT) $68.00 -7.62%
United States Steel Corp. (X) $13.25 -6.23%
Newmont Mining Corp. (NEM) $33.52 -5.71%
ONEOK Inc. (OKE) $40.13 -4.50%
National Oilwell Varco Inc. (NOV) $31.45 -4.17%
Mosaic Company (MOS) $25.23 -3.70%
Duke Energy Corp. (DUK) $76.57 -3.70%
Best Buy Co. Inc. (BBY) $30.75 -3.57%
Dow Jones I.A - Risers
JP Morgan Chase & Co. (JPM) $64.04 +3.86%
Goldman Sachs Group Inc. (GS) $159.94 +3.42%
American Express Co. (AXP) $63.52 +1.21%
Apple Inc. (AAPL) $94.56 +1.14%
Visa Inc. (V) $77.43 +0.83%
Travelers Company Inc. (TRV) $111.30 +0.80%
Unitedhealth Group Inc. (UNH) $130.51 +0.73%
Merck & Co. Inc. (MRK) $54.67 +0.64%
Microsoft Corp. (MSFT) $50.81 +0.59%
Pfizer Inc. (PFE) $33.17 +0.42%
Dow Jones I.A - Fallers
Wal-Mart Stores Inc. (WMT) $63.15 -3.00%
Nike Inc. (NKE) $56.12 -1.72%
Boeing Co. (BA) $130.99 -1.18%
McDonald's Corp. (MCD) $126.21 -1.16%
Verizon Communications Inc. (VZ) $50.39 -1.00%
Procter & Gamble Co. (PG) $79.85 -0.96%
Walt Disney Co. (DIS) $99.00 -0.94%
E.I. du Pont de Nemours and Co. (DD) $63.99 -0.84%
United Technologies Corp. (UTX) $99.29 -0.77%
Chevron Corp. (CVX) $100.06 -0.68%
Nasdaq 100 - Risers
Charter Communications Inc. (CHTR) $227.41 +11.83%
Western Digital Corp. (WDC) $38.46 +4.65%
Micron Technology Inc. (MU) $10.05 +3.93%
Biomarin Pharmaceutical Inc. (BMRN) $87.16 +3.70%
Tesla Motors Inc (TSLA) $211.17 +3.18%
Seagate Technology Plc (STX) $20.24 +3.08%
Nxp Semiconductors Nv (NXPI) $87.03 +2.69%
Endo International Plc (ENDP) $15.57 +2.64%
Incyte Corp. (INCY) $77.53 +2.62%
Nvidia Corp. (NVDA) $43.36 +2.55%
Nasdaq 100 - Fallers
Dollar Tree Inc (DLTR) $75.33 -2.81%
Discovery Communications Inc. Class A (DISCA) $26.71 -2.70%
Mattel Inc. (MAT) $29.81 -2.55%
TripAdvisor Inc. (TRIP) $64.17 -2.46%
Bed Bath & Beyond Inc. (BBBY) $42.00 -2.42%
PACCAR Inc. (PCAR) $55.23 -2.07%
Discovery Communications Inc. Class C (DISCK) $25.93 -1.95%
Twenty-First Century Fox Inc Class A (FOXA) $28.15 -1.88%
Liberty Global plc Series C (LBTYK) $35.95 -1.72%
Dish Network Corp. (DISH) $44.90 -1.62% |
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| | Newspaper Round Up | | Thursday newspaper round-up: Pensions, Rolls-Royce, BHS The Bank of England's chief economist has admitted that the British pensions system is so complicated, even he fails to understand it, warning of the "damaging" consequences this presents for consumers as they approach retirement. Andy Haldane said he considered himself to be "moderately financially literate" yet confessed to "not being able to make the remotest sense of pensions". - Financial Times
A UK probe into suspected bribery at Rolls-Royce, the engineering group, has spread to Nigeria in the latest blow to a company already facing investigations in multiple countries. Britain's Serious Fraud Office is examining Rolls-Royce's former energy operations in the oil-rich west African state, as part of a wider inquiry that also covers Brazil, Indonesia and China, the Financial Times has learnt. - Financial Times
Rent bills are likely to fall if Britain exits the EU and property will become more affordable to first-time buyers, according to the bodies that represent the UK's estate agents and landlords. The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (Arla) said that Brexit would cut levels of immigration and depress future price rises, leaving the average UK house worth £2,300 less in 2018, and £7,500 less in London. - Guardian
Sports Direct tycoon Mike Ashley is understood to have been outbid by rivals including the owners of Matalan and Edinburgh Woollen Mill as administrators try to secure the future of BHS. Sources said Ashley had put in a "low-ball offer" for the business, which collapsed into administration at the end of last month, putting 11,000 high street jobs at risk. - Guardian
he time it takes the nation's small firms to deal with all the form-filling required to stay in business has surged to almost a day a week, it has been claimed, with more than two-thirds saying that red tape distracts them from running or growing their company. Britain's small business owners are spending an estimated 33 hours a month on business administration, a report by the Federation of Small Businesses has found - or four days every month. - Telegraph
Paddy Power Betfair, Playtech and Foxtons have become the latest companies to be swept up in this year's Shareholder Spring after investors rebelled against pay at the two gambling businesses and the high-profile estate agency. Some 31.8pc of shareholders that voted at Paddy Power Betfair's annual general meeting came out against the freshly-merged company's remuneration report, dealing a bloody nose to the business, which is led by boss Breon Corcoran, just months after it was created in February. - Telegraph
A former Nomura banker has claimed that the Japanese investment bank failed to check whether the investor at the centre of the largest individual loss in the company's history was authorised to trade, according to a witness statement at his employment tribunal. Giovanni Lombardo, 48, said that his boss had described Invexstar, which collapsed last year with losses of nearly £100 million, as a "rogue account". He claimed that Nomura staff had allowed Alberto Statti, Invexstar's top manager, access to its electronic trading systems despite knowing that he had presided over another collapsed fund. - The Times
Coffee shops and the fast-food outlets have done more to prop up the traditional high street than any other kind of retailer, according to research charting their explosive growth over the past two decades. Branches of coffee shop chains have ballooned twentyfold to more than 4,200 in the past 17 years, according to a study by CBRE, the commercial property agency. Fast-food and other takeaway shops owned by chains have tripled over the same period to more than 8,700. - The Times |
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