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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 climb as post-Brexit rebound continues London stocks opened higher on Monday morning, carried by positive sentiment from Asia and the US, with domestic thoughts turning to the Bank of England monetary policy meeting this week.
As the Asia session finishes on the front foot and following the strong non-farm payrolls report that lifted Wall Street at the end of last week, the FTSE 100 was 0.66% higher at 6,633.98 and the 250 up 1.07% at 16,350.06.
Extending the post-Brexit rally, the indices were driven forward this time by mining giants, including Anglo American, Glencore, Antofagasta and BHP Billiton, along with rebounding financials and house-builders.
Monday is a quiet day for macroeconomic data, with some focus on US Labour market conditions this afternoon, while filling the macro gap will be ECB president Mario Draghi and another member of the Eurogroup meeting of finance ministers and a speech by Kansas City Fed President Esther George on the US economy.
But the UK is just days away from the BoE meeting, with investors almost certain there will be a rate cut announced on Thursday, as the Monetary Policy Committee looks to to reduce the shock of the EU referendum decision on the UK economy.
Governor Mark Carney has made his dislike of negative interest rates clear and has also has indicated that the July and August MPC meetings should be considered together as a package that will likely deliver stimulus.
Some feel the only option is a shock cut from the current 0.5% base rate all the way down to zero, followed by quantitative easing in August, though odds are pointing to a 25 basis points cut and a revival of asset purchases as the likely option.
"A plunge in consumer confidence and evidence of markedly reduced business sentiment since the Brexit vote has enhanced the case for interest rates to be cut from 0.50% to 0.25% as soon as Thursday. To us, there seems little reason to wait on an interest rate cut front," said economist Howard Archer at IHS Global Insight, suspecting a revival of quantitative easing and end up extending its Funding for Lending Scheme in August.
Sterling will be volatile, whatever happens, and indeed began the week choppily, still around its 31-year low. It was down 0.1% versus the dollar at 1.2941 and up 0.1% on the euro at 1.1732.
Forex traders have already begun positioning themselves for a rate cut scenario, keeping pressure on the pound while the yield on bonds could go even lower as money takes flight towards safe havens.
In company news, Rolls-Royce has agreed to pay €720m to complete the full takeover of Spanish aero engine component manufacturer Industria de Turbo Propulsores (ITP). The FTSE 100 company, which currently owns a large minority stake in the profitable Bilbao-based business, will purchase the outstanding 53.1% shareholding in ITP from SENER Grupo de Ingeniera in eight instalments over a two-year period.
RPC Group was one of the early leaders of the FTSE 250 as it unveiled a positive update on its first quarter trading - a quarter in which it continued integrating the acquisition of GCS and made an offer for BPI. The plastic products design and engineering companysaid revenues in the three months to 30 June were significantly higher than the same period last year, due to underlying growth and the contribution of acquisitions. Adjusted operating profit at constant currencies was also significantly ahead of both 2015, and management expectations.
CLS Holdings said it has exchanged contracts to buy two properties, one in Dsseldorf and one in Hamburg, for a total of €49.5m. The Dsseldorf property is to be bought for €43.6m including costs, and generates net rental income of €3.1m, reflecting a net initial yield of 7.1%. The property benefits from a high occupancy rate and presents significant scope for future rental uplifts and other asset management opportunities, CLS said. |
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| Market Movers
FTSE 100 (UKX) 6,628.18 0.57%
FTSE 250 (MCX) 16,361.27 1.13%
techMARK (TASX) 3,284.14 0.56%
FTSE 100 - Risers
Anglo American (AAL) 779.00p 4.56%
Glencore (GLEN) 173.35p 3.62%
Royal Bank of Scotland Group (RBS) 174.10p 3.14%
Taylor Wimpey (TW.) 135.20p 2.81%
Barclays (BARC) 142.90p 2.62%
Antofagasta (ANTO) 468.60p 2.61%
International Consolidated Airlines Group SA (CDI) (IAG) 384.70p 2.59%
Persimmon (PSN) 1,455.00p 2.46%
St James's Place (STJ) 790.50p 2.46%
BHP Billiton (BLT) 984.60p 2.41%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 2,563.00p -1.42%
Rolls-Royce Holdings (RR.) 731.00p -0.54%
Associated British Foods (ABF) 2,813.00p -0.46%
Royal Dutch Shell 'B' (RDSB) 2,120.00p -0.33%
Dixons Carphone (DC.) 314.40p -0.29%
Royal Dutch Shell 'A' (RDSA) 2,097.00p -0.24%
National Grid (NG.) 1,107.50p -0.23%
United Utilities Group (UU.) 1,024.00p -0.19%
British American Tobacco (BATS) 4,888.50p -0.19%
BP (BP.) 456.15p -0.19%
FTSE 250 - Risers
Kaz Minerals (KAZ) 136.10p 7.67%
NCC Group (NCC) 306.00p 5.59%
Centamin (DI) (CEY) 168.70p 5.44%
Vedanta Resources (VED) 495.00p 4.83%
Virgin Money Holdings (UK) (VM.) 225.20p 4.79%
Hochschild Mining (HOC) 227.20p 4.12%
Sports Direct International (SPD) 277.60p 3.81%
Galliford Try (GFRD) 860.50p 3.74%
Thomas Cook Group (TCG) 64.55p 3.53%
Zoopla Property Group (WI) (ZPLA) 271.80p 3.46%
FTSE 250 - Fallers
CMC Markets (CMCX) 280.50p -3.54%
Marshalls (MSLH) 219.60p -1.74%
Beazley (BEZ) 374.80p -1.55%
Hastings Group Holdings (HSTG) 179.40p -1.32%
Daejan Holdings (DJAN) 5,203.00p -1.27%
PayPoint (PAY) 870.50p -0.85%
Spire Healthcare Group (SPI) 318.00p -0.81%
Spirax-Sarco Engineering (SPX) 3,779.00p -0.79%
Barr (A.G.) (BAG) 515.50p -0.58% |
| | Monday 04 July
INTERIMS
RM
INTERIM DIVIDEND PAYMENT DATE
Lakehouse, Mitchells & Butlers, Renew Holdings
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (US) (15:00)
Producer Price Index (EU) (10:00)
FINALS
Oneview Group
AGMS
LGO Energy
TRADING ANNOUNCEMENTS
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UK ECONOMIC ANNOUNCEMENTS
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FINAL DIVIDEND PAYMENT DATE
Amec Foster Wheeler, Beximco Pharmaceuticals Ltd. GDR (Reg S), HSS Hire Group , International Consolidated Airlines Group SA (CDI), Learning Technologies Group , Nasstar, Pacific Assets Trust, Scottish Mortgage Inv Trust, Synthomer, Tandem Group, WPP |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks track gains in Asia after Abe wins Japan elections European stocks tracked gains in Asia on Monday as Japan Prime Minister Shinzo Abe declared victory in Sunday's election.
Asian equities were given a boost as Abe said on Monday he would push ahead with his economic reform programme - known as Abenomics - after his ruling coalition won a majority of seats in Japan's upper house.
Michael Hewson, chief market analyst at CMC Markets, said some hoped Abe's victory would make it easier to implement new reforms and a stimulus package in order to revive the flagging Japanese economy.
Meanwhile, analysts also continued to digest Friday's better-than-expected US non-farm payrolls report which saw the S&P 500 close one point away from its record high seen on 21 May last year.
Monday's economic calendar is thin on the ground with data so the focus will likely be on any political developments following Britain's vote to leave the European Union.
The pace is set to pick up on Tuesday with German inflation data followed by China trade data on Wednesday and Thursday's Bank of England interest rate decision. The BoE is expected to cut interest rates to address the fallout following the Brexit vote.
Meanwhile, oil prices fell as data on Friday from industry group Baker Hughes showed the number rigs looking for oil in the US rose by 10 to a total of 351, adding to concerns about the global supply glut.
Brent crude dropped 1.7% to $45.95 per barrel and West Texas Intermediate dipped 1.8% to $44.58 per barrel at 0904 BST.
On the company front, ThyssenKrupp rallied after the German steelmaker confirmed it was in talks with Tata Steel over sector consolidation. |
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| | US Market Report | | US close: Stocks jump after bumper job gains, Treasuries stage advance Markets in the US jumped on Friday, after a surprisingly strong nonfarm payrolls report saw the S&P rise past its May 2015 highs even as yields on longer-dated government debt fell.
The Dow Jones Industrial Average finished higher by 1.40% or 250.86 points at 18,146.74, while the S&P 500 added 1.53% or 32.00 to 2,129.90 - but rose past its 21 May 2015 highs on an intra-day basis - and the Nasdaq Composite advanced 1.64% or 79.95 points to see the day out from the 4,956.76 point mark.
For the holiday-shortened week the S&P clocked in with an advance of 1.3%
In parallel, the yield on the benchmark 10-year US Treasurby bond ended three basis points lower on Friday at 1.3579%.
The 287,000 headline nonfarms figure was well ahead of the forecast 170,000 increase, and reassured investors after a surprisingly small reading for May.
With the rise in payrolls came a rise in unemployment to 4.9% from 4.7%, albeit as more Americans entered the workforce in search of jobs. Wage growth was weaker than expected, increasing by 0.1% month-on-month.
The Federal Reserve has said it is using the jobs market as an indicator of when it should next raise interest rates.
Nonetheless, expectations for interest rate hikes from the Fed in the remainder of 2016 remained on ice even after the June jobs figures, due to the fallout from Brexit across the pond.
"If July payrolls show continued strength, a healthier trend reading of job growth would be consistent with reduced recession risk, in our view. For the Fed, this morning's print will give some FOMC members confidence that underlying US labor market health has not deteriorated, as the May report had suggested.
"We maintain our view that better labor market and activity data in the coming weeks will bolster the near-term outlook for policy tightening and re-affirm our confidence that the expansion remains intact. Should the bounce back in payrolls prove transitory, risks of a looser policy path in line with current market pricing would remain," economists at Barclays Research said in a report sent to clients.
Investors were still only pricing in a 22.5% chance of another rate increase this year, according to the CME Fed Watch Tool.
Oil futures rose, with West Texas Intermediate up by 22 cents at $45.41 per barrel on NYMEX.
In corporates, Eleven Biotherapeutics shares soared after the drugmaker's Investigational New Drug application for EBI-031 became effective, entitling the company to a $22.5m milestone payment from Hoffman-La Roche.
Gap announced late on Thursday that same-store sales rose 2% in June, leading the stock to jump early on Friday.
Juno Therapeutics tumbled after the company said on Thursday that its study into a cancer drug has been suspended by the FDA after two patients died.
Polycom was up after it was announced that Siris Capital will acquire the telecoms equipment maker for $2bn in cash, though that also brought the axe down on a previously agreed merger between Polycom and Mitel Networks.
SemiLEDS fell in early trading, after flying 208% higher on Thursday on news Peter Chiou was spending $5 per share to buy 577,000 shares in the firm.
From a sector stand-point the best performing industrial groups were: Real estate services (6.24%), Real estate investments (5.19%) and Aluminium (5.14%).
S&P 500 - Risers
CBRE Group Inc (CBG) $26.20 +6.42%
CF Industries Holdings Inc. (CF) $24.86 +5.79%
Alcoa Inc. (AA) $9.82 +5.14%
United States Steel Corp. (X) $19.03 +5.14%
Viacom Inc. Class B (VIAB) $45.20 +5.02%
Freeport-McMoRan Inc (FCX) $11.20 +4.97%
Synchrony Financial (SYF) $27.31 +4.96%
Gap Inc. (GPS) $22.70 +4.95%
Capital One Financial Corp. (COF) $64.71 +4.56%
Navient Corporation (NAVI) $12.69 +4.44%
S&P 500 - Fallers
Humana Inc. (HUM) $158.15 -2.82%
Vertex Pharmaceuticals Inc. (VRTX) $88.96 -1.21%
Starbucks Corp. (SBUX) $56.51 -0.70%
Noble Energy Inc. (NBL) $35.98 -0.42%
Under Armour Inc. Class A (UA) $40.43 -0.22%
Darden Restaurants Inc. (DRI) $62.03 -0.06%
Constellation Brands Inc. Class A (STZ) $165.99 -0.01%
Walgreen Co. (WAG) $76.05 -0.00%
Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $77.37 +3.09%
E.I. du Pont de Nemours and Co. (DD) $63.69 +2.86%
American Express Co. (AXP) $61.49 +2.81%
Visa Inc. (V) $76.42 +2.56%
Home Depot Inc. (HD) $134.34 +2.42%
Intel Corp. (INTC) $34.00 +2.41%
Goldman Sachs Group Inc. (GS) $150.38 +2.30%
Boeing Co. (BA) $130.09 +2.30%
JP Morgan Chase & Co. (JPM) $61.83 +2.06%
Cisco Systems Inc. (CSCO) $29.26 +1.81%
Dow Jones I.A - Fallers
Nasdaq 100 - Risers
Viacom Inc. Class B (VIAB) $45.20 +5.02%
Nvidia Corp. (NVDA) $50.85 +4.01%
Biomarin Pharmaceutical Inc. (BMRN) $91.49 +3.78%
Liberty Global plc Series A (LBTYA) $29.27 +3.68%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $42.06 +3.62%
Western Digital Corp. (WDC) $49.35 +3.55%
Citrix Systems Inc. (CTXS) $83.54 +3.53%
Nxp Semiconductors Nv (NXPI) $79.15 +3.50%
Lam Research Corp. (LRCX) $84.88 +3.46%
Micron Technology Inc. (MU) $12.62 +3.44%
Nasdaq 100 - Fallers
Baidu Inc. (BIDU) $159.80 -2.22%
Vertex Pharmaceuticals Inc. (VRTX) $88.96 -1.21% |
| | Newspaper Round Up | | Monday newspaper round-up: BoE groupthink, corporate governanace, BT, Diageo, Tesla A former Bank of England economist has called for an overhaul of the central bank's approach to decision making and for the power of the governor to be curtailed, as the first interest rate cut since 2009 is considered in response to the economic turbulence that has followed the Brexit vote. Richard Barwell, now a senior economist at BNP Paribas, warned that too little challenge was being provided to Mark Carney and that there was evidence of "group think" at the Bank. - The Times
The UK economy is already showing early signs of stress in the wake of the Brexit vote with a consumer spending and productivity slipping to multi-year lows last month. Business activity in the second quarter of the year fell to three-year lows, according to Lloyds Bank's tracker for manufacturing and services, with London emerging as a key casualty of the political and economic uncertainty caused by the referendum. - Telegraph
Theresa May will promise to ensure that workers are represented on company boards and that shareholders get a binding vote on corporate pay as the favourite in the UK prime ministerial race launches her national campaign to become Conservative leader. The home secretary will say that the rules on pay and board membership need to change because big business is too unaccountable. - Guardian
The UK's decision to leave the EU will not have a "significant credit impact" for the ratings of states across Asia Pacific, according to Moody's Investors Service. The relatively limited direct trade countries across the region have with the UK shields them from any British economic downturn, the ratings agency said, with Cambodia judged as being the most exposed. - Financial Times
Diageo is pursuing drinks tycoon Vijay Mallya to recover an estimate 12bn rupees (138m) in funds it alleges were diverted from its Indian subsidiary into his associate companies. The Smirnoff and Guinness owner said that it had discovered "improper transactions" involving its Indian spirits arm, United Spirits Limited (USL), and their subsidiaries. - Financial Times
BT has crowded the penalty box in anticipation of Sky's move into the mobile market by offering free Premier League and Champions League football to EE's huge customer base. In the first significant move made by BT since it paid 12.5 bn to re-enter the mobile market by buying EE, the offer of six months of free football to EE's users via the BT Sport app will also return the BT brand to the high street as the offer will be promoted heavily in EE's stores. - The Times
A US private equity firm is preparing to spend more than 1bn on discounted UK real estate in the next six to 18 months including buildings from a series of property funds that suspended trading this week. The plan by New York-based Madison International Realty is an early sign of how opportunistic investors might seek to take advantage of any downturn in the market triggered by the UK's vote to leave the EU. - Financial Times
Boeing is to double its workforce in the UK to 4,000 within a decade as it increases its presence in a country that is awarding the American aerospace company two of its most important defence contracts. As final details emerge at the Farnborough airshow in Hampshire of Ministry of Defence orders for nine Poseidon P8 maritime surveillance aircraft in a $2bn (1.5bn) deal to replace the Nimrod fleet and a further $3bn for 50 Apache attack helicopters, Boeing is going on the offensive to persuade people that it is not just a friend of Britain but part of British industry. - The Times
The UK food and drink industry is calling for the sugar tax to be mothballed as manufacturers face a shortage of workers, cost inflation and weak consumer confidence since the Brexit vote. "The whole thing should be paused," said Ian Wright, the director general of industry lobby group the Food and Drink Federation (FDF), whose members include the makers of Coca-Cola, Pepsi and Tango. "Confidence in the consumer goods market is very fragile and the government has promised not to impose any new burden on industry." - Guardian
The chancellor, George Osborne, will urge US investors not to turn their backs on Britain as he begins a world tour aimed at building new trade ties outside the European Union. Osborne will meet senior figures from Wall Street in New York on Monday during the first of several missions to major economies to discuss the ramifications of Brexit on trade links. - Guardian
A Russian meerkat and some French ferrets are heading for a listing on the London Stock Exchange. BGL, the owner of CompareTheMarket and the French comparison website LesFurets, is preparing to hold a beauty parade of investment banks to handle an initial public offering tipped to value the company at up to 2bn. - The Times
Tesla Motors CEO Elon Musk, under pressure after a fatal crash involving one of his electric cars, went on Twitter Sunday to say he's working on another "Top Secret Tesla Masterplan". He said he hoped to publish details this week. The tantalizing message echoes an August 2006 blog post, titled "The Secret Tesla Motors Master Plan (just between you and me)", in which Musk unveiled the cars that became the Tesla Model S four-door family car and the Tesla 3 sports sedan. - Guardian
Top companies are poised to slash graduate recruitment in the wake of Brexit as the famed "milk round" turns sour. Law firms, banks and other major businesses are expected to cancel or cut back jobs for graduates as an easy way of saving money as they fret about the short-term future, recruitment experts have warned. - The Times | | |
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