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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 edge lower ahead of Yellen speech London stocks began the session trading slightly lower following a surge on the previous day, ahead of a key speech from US central bank chair Janet Yellen scheduled for later in the session, with the pound trading at its early May highs.
As of 08:10 BST the FTSE 100 was trading lower by 0.64% or 39.64 points to 6,164.38.
Market analyst Michael Hewson at CMC Markets said: "While yesterday's rebound in risk was helped by a shift in the polls towards 'Remain' the reduced prospect of an imminent Fed rate rise could well have helped as well given last week's comments by St Louis Fed President James Bullard when he suggested that in his view the prospect of multiple Fed rate rises was becoming ever more distant. This was, and is a remarkable shift in narrative from someone who last year was one of the more notable Fed hawks."
Sterling was rising by 0.24% against the dollar to 1.4730, having the previous session posted its biggest one-day climb since 2008.
Yellen is due to deliver her semi-annual Monetary Policy Report to Congress at 15:00 BST.
In the Federal Reserve's policy meeting last week US rates were left on hold but Yellen hinted at a concern about the recent slowdown in the pace of jobs growth.
Her reticence about the prospects of a rate rise in the next meeting or two was noted by economists as a stark contrast to recent comments that suggested a rate rise was looking ever more appropriate in the coming months.
On the data front, UK public finance data emerges at 0930 BST while CBI industrial trends are at 1100 BST.
In corporate news, Whitbread served up a slight improvement in sales in the first quarter of the year as its Costa coffee shops bounced back from a slowdown in the preceding few months.
Group like-for-like (LFL) sales grew 1.8% as although Costa's sales were up 2.6%, the group's Premier Inn hotel chain saw LFL sales slow further to 2.1% from the rate seen in the fourth quarter.
BHP Billiton said it was targeting another $600m in coal production costs by the end of the 2017 financial year.
The mining group also increased its forecast for coal output for the current year to 43m tonnes, with plans to lift production to 46m tonnes in 2018.
"While cost compression has been evident across the industry, we continue to work hard under our new operating model to improve our performance," said BHP Billiton Minerals Australia president Mike Henry.
"Even in today's difficult environment, all of our operations remain cash positive."
Takeaway food digital marketplace Just Eat announced on Tuesday that it has appointed Paul Harrison as chief financial officer and as an executive director, replacing Mike Wroe on 28 September.
The FTSE 250 firm said Harrison is joining from WANdisco - a Silicon Valley-based, London-listed software company - where he has been chief financial officer since 2013.
Saga said it was on track to achieve its targets for the year ending 31 January 2017 and continues to make good progress against its strategic priorities.
Ahead of its annual general meeting at its headquarters in Folkestone later, the group, which provides products and services for the over 50, said it had seen solid trading across the core insurance and travel businesses.
Chief executive officer Lance Batchelor said: "We have made a good start to the year across our core trading divisions. We continue to focus on our strategic objectives and remain on track to deliver on the targets we set out at our preliminary results on 19 April 2016."
Defence company Chemring reported a wider loss for the first half and said it expects its full-year 2016 results to "slightly below" market expectations amid higher costs and a delayed contract. |
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| | UK Event Calendar | | Tuesday 21 June
INTERIM DIVIDEND PAYMENT DATE
Utilitywise plc
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ZEW Survey (EU) (10:00)
ZEW Survey (GER) (10:00)
FINALS
Photo-Me International
ANNUAL REPORT
SSE
EGMS
JPMorgan Senior Secured Loan Fund Limited
AGMS
BlackRock Emerging Europe, Coca-Cola HBC AG (CDI), Futura Medical, Global Resources Investment Trust , Saga , Strategic Minerals, Whitbread
UK ECONOMIC ANNOUNCEMENTS
Public Sector Net Borrowing (09:30)
FINAL DIVIDEND PAYMENT DATE
Capital & Counties Properties , M. P. Evans Group, Powerflute Oyj (DI)
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks flat as investors pause for breath European stocks were little changed in early trade, with investors pausing for breath following strong gains in the previous session as the focus shifted to a speech by Federal Reserve Chair Janet Yellen.
At 0900 BST, the benchmark Stoxx Europe 600 index and France's CAC 40 were both down 0.1%, while Germany's DAX was flat.
Stocks racked up strong gains on Monday as investors reacted to the latest EU referendum polls, which showed a swing in favour of the Remain camp.
At the same time, oil prices retreated, with West Texas Intermediate and Brent crude down 0.7% at $49.05 and $50.31 a barrel, respectively.
As well as the referendum, investors were looking ahead to Fed chair Janet Yellen's semi-annual congressional testimony at 1500 BST. She will also be speaking on Wednesday.
David Morrison, senior market strategist at SpreadCo, said Yellen will face questions from both sets of committee members which may cover areas of monetary policy she'd rather not answer.
"The Fed Chair came in for a load of criticism recently when she gave a garbled response when asked about the Fed's credibility. She may get picked up on this over the next couple of days," he said.
Last week saw the central bank keep monetary policy unchanged while lowering its economic growth forecasts for 2016 and 2017. In the subsequent press conference, Yellen cited weaker employment data together with concerns over the possibility of a Brexit as reasons for keeping rates unchanged.
"The Fed Chair will still be able to use the UK referendum as cover for the central bank's unwillingness to hike rates. However, there may be some issues which she will find more difficult to duck," said Morrison. "High amongst these may be the constant flip-flopping on rate expectations from members of the Federal Reserve."
In corporate news, Whitbread rallied after reporting an improvement in sales in the first quarter as its Costa coffee shops bounced back from a slowdown in the preceding few months.
BHP Billiton was a little lower after saying it was targeting another $600m in coal production costs by the end of the 2017 financial year.
Rio Tinto was also in the red after announcing an organisational structure reshuffle.
Germany's Kion Group was under the cosh after the supplier of forklift trucks and warehouse equipment said it was buying US logistics company Dematic Corp for around $2.1bn. |
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| | US Market Report | | US close: Stocks end up but off highs as Brexit fears recede US stocks closed up but off highs on Monday as investors welcomed signs that UK voters were leaning towards the Remain camp in the European Union referendum.
The Dow Jones Industrial Average ended up 0.7%, the Nasdaq rose 0.8% and the S&P 500 closed 0.6% higher.
At the same time, oil prices settled higher, with Brent crude breaching the $50 a barrel mark, up 2.4% at $50.37 and West Texas Intermediate up 2.4% at $49.15 a barrel.
The positive mood was underpinned by signs the Remain campaign was gaining ground in the UK. A Survation poll in the Daily Mail revealed that support for Remain was in the lead, while two Yougov polls - one for ITV's Good Morning Britain and one for the Sunday Times - both showed Remain in front.
In addition, a ComRes poll for the Sunday Mirror revealed the percentage of people saying they'd be relieved if the UK stayed in the EU rose to 45% after the murder of MP Jox Cox, from 35% before.
Meanwhile, an opinion survey conducted for the Observer between Tuesday and Friday showed an even split but of the 10% undecided, 36% said they were leaning towards Remain.
With just a few days until the referendum takes place, CMC Markets analyst Jasper Lawler said it was "important not to get Brexit tunnel vision".
"Central banks still matter. A very dovish shift from the Federal Reserve's James Bullard, who on Friday said the Fed may only raise rates once before 2018, has contributed to a drop in the US dollar, adding to sterling strength. Fed Chair Janet Yellen testifies on monetary policy before the Senate Banking Committee on Tuesday."
Meanwhile, Societe Generale pointed out that while market participants may be distracted by Brexit, celebrating what looks for the moment to be a choice to keep the status quo, when the fog actually clears all the same problems will still be there.
"Whatever the outcome of the Brexit vote this week investors will still be facing the prospect of negative rates and negative yields on a huge range of bonds, massive corporate leverage with worryingly rising delinquencies and of course expensive equity markets and falling profits," the bank said.
"To that extent these political events are a distraction from the main event, weak global economic growth and perverse asset markets."
In currency markets, the dollar slid against the pound, which surged to its highest level in two weeks on the referendum polls.
Monex Europe said: "Today's improvement in risk appetite is weighing on the US dollar, which is down today versus most of the G10 currencies. This week's trading will be dominated by developments in Europe, although on Wednesday the Federal Reserve's chair Janet Yellen is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, which could trigger significant USD volatility."
On the corporate front, Walt Disney closed 0.6% firmer after its Pixar Animation Studio set a box-office weekend record for animated film Finding Dory.
Elsewhere, health insurers Anthem and Cigna were in focus following a Wall Street Journal report saying US antitrust regulators are concerned about their $48bn merger. Anthem rose 0.3% while Cigna fell 1.3%.
There were no major US data releases on Monday.
S&P 500 - Risers
Marathon Oil Corp. (MRO) $14.48 +10.03%
Southwestern Energy Co. (SWN) $13.91 +6.26%
Murphy Oil Corp. (MUR) $31.10 +6.00%
CBRE Group Inc (CBG) $29.43 +4.70%
Borg Warner Inc. (BWA) $34.73 +3.73%
Devon Energy Corp. (DVN) $37.32 +3.72%
Freeport-McMoRan Inc (FCX) $11.55 +3.68%
Tesoro Corp. (TSO) $75.01 +3.46%
Chesapeake Energy Corp. (CHK) $4.66 +3.33%
Centene Corp. (CNC) $69.22 +3.30%
S&P 500 - Fallers
Alliance Data Systems Corp. (ADS) $200.80 -3.10%
Wynn Resorts Ltd. (WYNN) $100.29 -2.81%
Endo International Plc (ENDP) $16.07 -2.25%
Baker Hughes Inc. (BHI) $45.87 -2.01%
H&R Block Inc. (HRB) $22.76 -1.98%
CVS Health Corp (CVS) $93.23 -1.70%
FirstEnergy Corp. (FE) $33.74 -1.60%
CF Industries Holdings Inc. (CF) $27.96 -1.38%
Kroger Co. (KR) $34.71 -1.34%
Perrigo Company plc (PRGO) $96.75 -1.32%
Dow Jones I.A - Risers
Boeing Co. (BA) $132.75 +2.26%
Goldman Sachs Group Inc. (GS) $147.75 +1.45%
3M Co. (MMM) $171.23 +1.36%
Intel Corp. (INTC) $32.17 +1.29%
Nike Inc. (NKE) $54.36 +1.21%
International Business Machines Corp. (IBM) $153.61 +1.07%
Chevron Corp. (CVX) $102.61 +1.02%
McDonald's Corp. (MCD) $123.42 +0.94%
Johnson & Johnson (JNJ) $116.54 +0.92%
Pfizer Inc. (PFE) $34.50 +0.82%
Dow Jones I.A - Fallers
Cisco Systems Inc. (CSCO) $28.80 -0.52%
Apple Inc. (AAPL) $95.10 -0.24%
Microsoft Corp. (MSFT) $50.07 -0.12%
Procter & Gamble Co. (PG) $83.04 -0.11%
Verizon Communications Inc. (VZ) $53.76 -0.04%
Nasdaq 100 - Risers
JD.com, Inc. (JD) $21.07 +4.64%
eBay Inc. (EBAY) $24.57 +3.28%
Liberty Media Corporation - Series C (LMCK) $18.66 +3.15%
Vodafone Group Plc ADS (VOD) $31.87 +3.11%
Skyworks Solutions Inc. (SWKS) $65.95 +3.10%
Liberty Media Corporation - Class A (LMCA) $18.94 +3.05%
Cognizant Technology Solutions Corp. (CTSH) $61.31 +2.96%
Ctrip.Com International Ltd. Ads (CTRP) $39.13 +2.81%
Adobe Systems Inc. (ADBE) $97.99 +2.52%
TripAdvisor Inc. (TRIP) $64.66 +2.50%
Nasdaq 100 - Fallers
Endo International Plc (ENDP) $16.07 -2.25%
Alexion Pharmaceuticals Inc. (ALXN) $123.96 -0.99%
Netflix Inc. (NFLX) $93.80 -0.69%
Express Scripts Holding Co (ESRX) $74.14 -0.59%
Cisco Systems Inc. (CSCO) $28.80 -0.52%
Whole Foods Market Inc. (WFM) $30.42 -0.49%
Regeneron Pharmaceuticals Inc. (REGN) $352.66 -0.44%
Biogen Inc (BIIB) $237.41 -0.34%
Apple Inc. (AAPL) $95.10 -0.24% |
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| | Newspaper Round Up | | Tuesday newspaper round-up: Soros, Brexit, ECB, disposable income The world's most famous currency speculator has warned that a vote on Thursday for Britain to leave the EU would trigger a bigger and more damaging fall for sterling than the day he forced Britain out of the Exchange Rate Mechanism almost a quarter of a century ago. George Soros, writing in the Guardian, said a Brexit vote would spark a 'black Friday' for the UK, but the devaluation of sterling would bring none of the benefits to the economy that it enjoyed after it dropped out of the ERM on 16 September 1992 - Black Wednesday. - Guardian
The European Union referendum will "come down to the wire" following a surge of support among those certain to back Remain in the final days of the campaign, David Cameron's election strategist Lynton Crosby says. His comments come in an analysis of a poll for this newspaper which shows that amongst definite voters, the Prime Minister's Remain campaign now has a 7-point lead, with 53 per cent of the vote compared to Leave's 46 per cent. - Telegraph
National leaders and media across Europe mobilised on Monday to persuade British voters to remain in the EU, with Hungary's prime minister Viktor Orban buying a full-page ad in Monday's Daily Mail urging Britons to choose "Remain". The advertisement tells voters the decision is theirs, adding: "But I would like you to know that Hungary is proud to stand with you as a member of the European Union." - Financial Times
Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country's membership of the European Union still looking uncertain, many large hedge funds have opted to reduce their overall market exposure rather than attempt to predict a result. - Financial Times
The supermarket price war and the national living wage have helped average weekly disposable income to rise to a record £201 a week per household, according to research from Asda. Britons had £13 more to spend each week in May than at the same time last year, according to Asda's Income Tracker, which has been monitoring household spending since 2008. The 7.2 per cent increase was the highest rate of growth since November last year, while the £201 figure was the highest recorded by the tracker. - The Times
Germany's highest court will on Tuesday make a landmark judgment on one of the European Central Bank's most important - and most controversial - weapons to fight financial crises. The German Constitutional Court decision at 10am local time on the legality of the ECB's Outright Monetary Transactions programme has been four years in the making. - Financial Times
HSBC has launched Britain's first fixed-rate mortgage with an interest rate below 1%, as competition among lenders hots up and the cost of borrowing for banks and building societies falls to new lows. The bank is offering customers the chance to lock in for two years at an interest rate of 0.99%, but they need a deposit of at least 35% and will pay a product fee of £1,499. - Guardian
Oi SA filed for Brazil's largest ever bankruptcy protection on Monday after the country's No. 1 fixed-line phone carrier ran out of time to reorganize operations and restructure 65.4 billion reais ($19.3 billion) of debt amid a harsh recession.
The petition for bankruptcy protection from Oi, Brazil's fourth-biggest mobile provider, and six subsidiaries came after talks with creditors ground to a halt earlier this month ahead of a July debt payment.
Dominic Chappell, the thrice-bankrupt former racing driver who bought BHS, has been accused of repeatedly misleading MPs by other witnesses to the parliamentary panel examining the collapse of the department store group. Chris Martin, chairman of the BHS pension scheme, said that comments made to the cross-party select committee by Mr Chappell on June 8 were "incorrect and untrue". Lesley Titcomb, chief executive of the Pensions Regulator accused Mr Chappell of making incorrect assertions. David Taylor, general counsel for the Pension Protection Fund, also contradicted one claim by Mr Chappell. - The Times
Morrisons has been forced to repay cash and discipline staff after it was found to have breached the grocery market code of conduct for a second time by demanding lump sums of about £2m from suppliers. The grocery market watchdog said Morrisons admitted to making 19 requests which were above and beyond agreed deals with suppliers in contravention of an industry code in place since 2009. - Guardian
India's bid to become the 'economic super-tiger' of Asia is in serious doubt after an assault on the independence of the central bank and failure to deliver on promised reforms. The country has been the darling of the emerging market universe since the Hindu nationalist Narendra Modi swept into power in May 2014 promising a blitz of Thatcherite reform and a bonfire of the diktats, but key changes have been blocked in the legislature. The government has turned increasingly populist. - Telegraph
Criminals who trade in stolen personal data should face jail sentences of up to two years, MPs have said in a stark warning over the vulnerability of the Britain's biggest companies to cyber attacks. Chief executive who fail to prevent cyber security breaches should meanwhile have a portion of their pay docked, the Culture Media and Sport Select Committee added as it published the results on an inquiry into the cyber attack that plunged the broadband operator TalkTalk into crisis last year. - Telegraph | | |
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