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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: FTSE relief rally continues but Carney comments eyed London stocks continued to creep higher on Tuesday morning as an unexpected outbreak of political certainty boosted sentiment, helped by a record high on Wall Street overnight and another positive session in Asia.
After half an hour of trading, the FTSE 100 had crawled up 0.12% to 6,690.76, led by the extended rebound of housebuilders and banks, while the 250 was up 1.0% at 16,871.79 with similar sectors to the fore.
Sterling was extending its recovery too, trading above 1.31 against the dollar and topping 1.18 versus the euro.
CMC Markets' Michael Hewson said: "The unexpected removal of an additional two months of uncertainty as Andrea Leadsom suddenly dropped out of the race to replace outgoing Prime Minister David Cameron and elevated Theresa May to the top position in UK politics, helped push the FTSE 100 to new 11-month highs yesterday and the FTSE 250 back to levels last seen the day after the referendum vote."
He added that the recent few day's global developments were also helpings: "the multiple boost of a decent payrolls number, and the promise of additional stimulus measures out of Japan contrived to turbo charge equity markets in the last few days".
Market strategist Hussein Sayed at FXTM said the relief rally is "likely to be short-lived, as many questions remain unanswered", with potential volatility arising from clues and comments that emerge from Bank of England Governor Mark Carney's grilling by MPs on Tuesday ahead of the BoE's policy meeting on Thursday, which is felt likely to result in new stimulus measures to help deal with the Brexit vote.
Carney will appear in front of MPs at 1000 BST with other members of the Financial Stability Committee to answer questions about the BoE's recent measures to ensure markets were orderly following the vote to leave the European Union.
In corporate news, Shire led the blue chip risers after the US Food and Drug Administration approved its lifitegrast eye drops for treating signs and symptoms of dry eye disease. Lifitegrast, to be sold under the Xiidra name, is expected to launch in the third quarter.
"An estimated 16m adults in the U.S. are diagnosed with dry eye disease. An often chronic ocular disease, dry eye is associated with inflammation that may eventually lead to damage to the surface of the eye. An eye care professional can diagnose dry eye disease based on signs and symptoms and determine management options, which could include the use of a prescription treatment," Shire said.
Builders merchant and DIY retailer Grafton Group said like-for-like revenue growth was negative in June as the current uncertainty about Brexit weighed on the building trade. Group revenue for the six months to 30 June increased by 13.3% to £1.23bn and by 11.7% in constant currency.
Housebuilder and construction group Galliford Try said it expects to report record full year results, with profit before tax in line with management's expectations.
Despite the political and economic uncertainty, the FTSE 250 company said it was "too early" to predict specific effects on our markets, but took confidence from the strength of underlying demand for new homes and the continuing availability of mortgage finance and the government's Help-to-Buy scheme for both sides of the business.
On AIM, online fashion retailer ASOS reported a 30% rise in total sales for the four months to 30 June to £500.5m and said it expects full-year sales growth to be at the upper end of the 20-25% range. Total retail sales beat analysts' expectations of around 23% growth.
Sales in the UK were up 28%, while sales in the US rose 53% and EU sales advanced 32%. In the rest of the world, sales were up 16%, while international retail sales grew 31%. |
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| | Market Movers
FTSE 100 (UKX) 6,695.66 0.19%
FTSE 250 (MCX) 16,738.13 0.19%
techMARK (TASX) 3,324.61 0.30%
FTSE 100 - Risers
Shire Plc (SHP) 5,020.00p 4.19%
ITV (ITV) 192.20p 3.50%
Berkeley Group Holdings (The) (BKG) 2,718.00p 2.03%
Taylor Wimpey (TW.) 143.40p 1.85%
Lloyds Banking Group (LLOY) 55.81p 1.75%
Smiths Group (SMIN) 1,205.00p 1.69%
Barratt Developments (BDEV) 407.80p 1.44%
Pearson (PSON) 976.50p 1.24%
Barclays (BARC) 147.20p 1.24%
Glencore (GLEN) 179.95p 1.21%
FTSE 100 - Fallers
Worldpay Group (WI) (WPG) 277.10p -0.93%
Vodafone Group (VOD) 228.15p -0.80%
GlaxoSmithKline (GSK) 1,651.50p -0.66%
Unilever (ULVR) 3,632.00p -0.66%
Rolls-Royce Holdings (RR.) 719.50p -0.62%
Fresnillo (FRES) 1,972.00p -0.60%
HSBC Holdings (HSBA) 476.00p -0.60%
Standard Chartered (STAN) 589.10p -0.56%
Reckitt Benckiser Group (RB.) 7,654.00p -0.49%
Diageo (DGE) 2,151.00p -0.49%
FTSE 250 - Risers
DFS Furniture (DFS) 199.00p 4.19%
Tullett Prebon (TLPR) 325.60p 3.89%
Weir Group (WEIR) 1,520.00p 3.68%
Aldermore Group (ALD) 133.00p 3.26%
Dechra Pharmaceuticals (DPH) 1,223.00p 2.60%
Inmarsat (ISAT) 820.00p 2.50%
Shawbrook Group (SHAW) 157.00p 2.48%
Entertainment One Limited (ETO) 198.00p 2.33%
Rightmove (RMV) 3,773.00p 2.30%
Bovis Homes Group (BVS) 794.50p 2.12%
FTSE 250 - Fallers
NMC Health (NMC) 1,210.00p -3.12%
Woodford Patient Capital Trust (WPCT) 86.40p -2.76%
Riverstone Energy Limited (RSE) 896.00p -2.56%
Centamin (DI) (CEY) 164.40p -2.49%
Homeserve (HSV) 541.00p -2.43%
Grafton Group Units (GFTU) 505.00p -2.32%
Renishaw (RSW) 2,317.70p -2.21%
Countryside Properties (CSP) 229.50p -2.09%
Rotork (ROR) 214.10p -2.06% |
| | Tuesday 05 July
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INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Retail Sales (EU) (10:00)
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AGMS
Aberdeen Japan Investment Trust , B.S.D Crown Ltd (DI), Chariot Oil & Gas Ltd., Daily Internet , Northern Investors Co, Software Radio Technology, Software Radio Technology, Young & Co's Brewery 'A' Shares
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks rise as investors welcome removal of UK political uncertainty European stocks rose in early trade as investors continued to welcome the removal of political uncertainty in the UK. At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.3%, while Germany’s DAX and France’s CAC 40 were 0.5% higher. Stocks had racked up healthy gains on Monday as it emerged that Theresa May was set to succeed David Cameron as Prime Minister this week. In Asian trade, Japanese shares rose sharply as the yen slumped after Prime Minister Shinzo Abe promised to stimulate the country’s economy. Abe’s ruling party and coalition won a majority in upper-house elections and he said he wants “the swift formulation of comprehensive, bold economic measures.” Ahead of Thursday’s Bank of England rate announcement, investors will be watching out for Governor Mark Carney’s appearance in front of MPs at 1000 BST with other members of the Financial Stability Committee to answer questions about the central bank’s recent measures to ensure orderly markets. Given the recent volatility in financial markets, expectations of an interest rate cut are mounting. CMC Markets’ Michael Hewson said: “It is this expectation that has helped push the pound to new 31-year lows against the US dollar as markets bet heavily on some form of move as early as this week. The market is currently pricing a 80% probability of a rate cut this week of 25 basis points, and while I would not be surprised to see rates go down further, I strongly suspect that we might see rates remain on hold this week, particularly now that the political picture has become much more stable given that Theresa May is likely to be in place as the new Prime Minister by then.” He added: “Mark Carney has already indicated that the Bank remains ready to act to keep credit conditions flexible, and he has by and large done that, and that to my mind is more important than the level of the headline rate.” In European corporate news, Shire rallied after the US Food and Drug Administration approved its lifitegrast eye drops for treating signs and symptoms of dry eye disease. Daimler was also a high riser after the car maker’s second-quarter results beat analysts’ expectations. Oil prices were in the black on Tuesday, with West Texas Intermediate up 0.7% to $45.08 a barrel and Brent crude 0.9% firmer at $46.65. |
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| | US Market Report | | US close: Stocks finish higher on strong jobs data US stocks finished higher on Monday as investor sentiment continued to be lifted by last Friday's strong jobs report.
The Dow Jones Industrial Average increased 0.44%, the S&P 500 rose 0.34% and the Nasdaq edged up 0.64%.
In contrast, oil prices headed south on renewed concerns about a global supply glut after 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.
West Texas Intermediate crude dropped 2.1% to $44.44 per barrel and Brent fell 1.6% to $46.00 per barrel at 2112 BST.
The non-farm payrolls report on Friday showed employers added 287,000 jobs in June, smashing forecasts for a 170,000 gain.
Many analysts said, however, that the strong jobs report is unlikely to persuade the Federal Reserve to raise interest rates any time soon in the wake of the UK's Brexit vote and low inflation.
"Friday's payrolls beat has provided a more bullish market outlook, with the Brexit fears meaning that the US jobs report has been taken as a good news story for the economy rather than something which will have any material affect to rate expectations," said IG market analyst Joshua Mahony.
Kansas City Fed President Esther George said in a speech in Lake Ozark, Mo. on Monday that she believes the Fed is keeping interest rates too low given the progress the US economy has made.
Cleveland Fed President Loretta Mester is also due to speak about financial stability after the closing bell in Sydney, Australia.
Elsewhere, Asian markets rallied after Japan Prime Minister Shinzo Abe declared victory in Sunday's election, saying he would push ahead with Abenomics - his economic reform programme. The news fuelled speculation that Abe would introduce further stimulus measures to revive the flagging Japanese economy.
In company news, Alcoa shares jumped as it unofficially kicked off the new earnings season with second quarter earnings and revenue that beat analysts' expectations.
Cintas Corp. is also due to post results after hours.
Banks report results later in the week with JPMorgan Chase & Co. the first of the major US lenders to post earnings on Thursday.
Shares of Nintendo Co. gained as its Pokemon Go mobile app was well received.
Kinder Morgan Inc. edged higher after the energy-infrastructure company said Sunday it is selling a stake in a 7,600-mile natural-gas pipeline system to Southern Co. for $1.47bn.
Twitter Inc. declined after analysts at Monness Crespi Hardt downgraded stock to 'neutral' from 'buy'.
Amazon.com was on the front foot ahead of the online retail giant's Prime Day sales event on Tuesday.
S&P 500 - Risers
United States Steel Corp. (X) $20.01 +5.15%
Wynn Resorts Ltd. (WYNN) $94.10 +4.85%
Alliance Data Systems Corp. (ADS) $210.39 +4.69%
Signet Jewelers Ltd (SIG) $87.78 +4.21%
Freeport-McMoRan Inc (FCX) $11.65 +4.02%
GameStop Corp. (GME) $28.45 +3.95%
American Airlines Group (AAL) $31.16 +3.73%
Textron Inc. (TXT) $38.24 +3.38%
Navient Corporation (NAVI) $13.11 +3.31%
Alcoa Inc. (AA) $10.14 +3.26%
S&P 500 - Fallers
CH Robinson Worldwide Inc (CHRW) $71.86 -3.45%
Murphy Oil Corp. (MUR) $29.74 -3.00%
Transocean Ltd. (RIG) $11.78 -2.97%
Humana Inc. (HUM) $154.00 -2.62%
Netflix Inc. (NFLX) $94.67 -2.46%
Viacom Inc. Class B (VIAB) $44.36 -1.86%
Crown Castle International (CCI) $100.54 -1.62%
Cintas Corp. (CTAS) $98.07 -1.57%
Range Resources Corp. (RRC) $43.44 -1.56%
Celgene Corp. (CELG) $103.41 -1.54%
Dow Jones I.A - Risers
Boeing Co. (BA) $132.04 +1.50%
Goldman Sachs Group Inc. (GS) $152.19 +1.20%
Intel Corp. (INTC) $34.38 +1.12%
American Express Co. (AXP) $62.16 +1.09%
E.I. du Pont de Nemours and Co. (DD) $64.24 +0.86%
JP Morgan Chase & Co. (JPM) $62.27 +0.71%
Home Depot Inc. (HD) $135.15 +0.60%
Chevron Corp. (CVX) $105.39 +0.59%
Cisco Systems Inc. (CSCO) $29.43 +0.58%
McDonald's Corp. (MCD) $122.00 +0.57%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $140.32 -0.67%
Procter & Gamble Co. (PG) $85.75 -0.02%
Merck & Co. Inc. (MRK) $59.34 -0.02%
Nasdaq 100 - Risers
JD.com, Inc. (JD) $21.76 +5.04%
Baidu Inc. (BIDU) $167.03 +4.52%
American Airlines Group (AAL) $31.16 +3.73%
Tesla Motors Inc (TSLA) $224.78 +3.69%
Ctrip.Com International Ltd. Ads (CTRP) $41.78 +2.88%
Skyworks Solutions Inc. (SWKS) $64.64 +2.75%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $43.16 +2.62%
Nvidia Corp. (NVDA) $52.02 +2.30%
Activision Blizzard Inc. (ATVI) $42.20 +2.20%
Lam Research Corp. (LRCX) $86.33 +1.71%
Nasdaq 100 - Fallers
Biomarin Pharmaceutical Inc. (BMRN) $88.59 -3.17%
Netflix Inc. (NFLX) $94.67 -2.46%
Viacom Inc. Class B (VIAB) $44.36 -1.86%
Celgene Corp. (CELG) $103.41 -1.54%
Endo International Plc (ENDP) $17.16 -1.49%
Discovery Communications Inc. Class A (DISCA) $25.25 -1.44%
Illumina Inc. (ILMN) $139.64 -1.14%
O'Reilly Automotive Inc. (ORLY) $277.86 -0.98%
Sba Communications Corp. (SBAC) $113.30 -0.97% |
| | Newspaper Round Up | | Tuesday newspaper round-up: Carney, MPC, HSBC, stamp collecting Mark Carney faces a bruising encounter on Tuesday morning in his first appearance before MPs since the vote to quit the European Union. The governor of the Bank of England is expected to be taken to task over his suggestion before the poll that interest rates could rise if Britain decided to leave, before flatly contradicting his suggestion only days after the result. - The Times
External members of the Bank of England's monetary policy committee have raised concerns about recruiting the best brains amid concerns that the job can hinder the careers of economists. In a survey with Anthony Habgood, chairman of the Bank's court of directors, independent members of the MPC raised concerns about "maintaining the quality and motivation of their individual staff", minutes show. - The Times
A fundamental relationship between bonds and equities has broken down as the pressure for returns intensifies in an ever-expanding world of negative interest rates. An insatiable thirst for income has driven both US bond yields and equity prices - two areas that traditionally move in opposite directions - into record territory. - Financial Times
Leading investors in Burberry were last night questioning a dramatic boardroom reshuffle which will see Christopher Bailey step back from his role as chief executive to be replaced by the boss of French fashion brand Celine. Though pleased that designer Mr Bailey will hand control of the FTSE 100 retailer's financial future to Marco Gobbetti, shareholders questioned the incumbent's new title of president in addition to his existing role of chief creative officer, with one top five investor saying the decision to hand Mr Bailey the role "looked very odd". - Telegraph
Deutsche Börse has been forced to delay the closing date of a vote on its merger with the London Stock Exchange by two weeks because of a "technical barrier" that precluded funds from voting on the deal. The problem appeared to have come to light over the weekend and apparently was missed by all the advisers on the merger. There are 12 investment banks and other financial advisers working on the deal, not counting law firms and accountants. Total fees could approach a quarter of a billion pounds. - The Times
The US government decided not to pursue criminal charges against HSBC for allowing terrorists and drug dealers to launder millions of dollars after George Osborne and the UK banking regulator intervened to warn that prosecuting Britain's biggest bank could lead to a "global financial disaster". A congressional report published letters and emails from Osborne and Financial Services Authority (FSA) officials to their US counterparts warning that launching criminal action against HSBC in 2012 could have sparked a "financial calamity". - Guardian
Europe's largest industrial combine has vowed to press ahead with investment in Britain despite the vote to leave the EU, backing away deftly from earlier suggestions that Brexit would cause a painful freeze on new activities. Joe Kaeser, the chief executive of Siemens, said the German engineering and technology giant remains fully committed to the UK whatever happens, but called on Theresa May to clarify Britain's post-Brexit trade vision as soon as possible and tell the world what kind of country it will become. - Telegraph
Twelve energy providers have pulled fixed-rate tariffs and replaced them with more expensive deals since 23 June, in signs that the pound's fall in the wake of the Brexit vote could push up household bills. Comparison website uSwitch found a dozen dual-fuel deals had been replaced since the referendum, with new offers costing up to £105 a year more for the average customer. - Guardian
American investment banks are refusing to sign up to a Treasury campaign to push more women into senior roles in the City. Goldman Sachs, JP Morgan, Citi and Bank of America Merrill Lynch are among American banks declining to sign up to a UK charter that requires financial institutions to link bosses' bonuses to gender diversity targets. - The Times
Stamps have become an unlikely safe-haven investment against choppy markets, outperforming shares, property and gold, according to antique specialists. An index of the 250 most valuable British stamps, compiled by collectibles dealer Stanley Gibbons, returned 1.2pc in the 12 months to June, beating the FTSE 100, which lost 11pc during the same period. A separate list of the 30 rarest stamps returned 0.5pc over the past year. - Telegraph
The fragile state of Italian banks in the fraught post-Brexit financial climate has been highlighted by the International Monetary Fund, in a stark warning that the eurozone's third biggest economy will have suffered for almost two decades before it starts to recover the ground lost since the 2008 financial crash. Italian banks suffered fresh heavy losses on Monday as the European Union insisted that Matteo Renzi's centre-left government abide by state-aid rules that limit Rome's scope to provide help to banks burdened by the non-performing loans (NPLs) caused by economic stagnation. - Guardian
The American financial watchdog is understood to be investigating Elon Musk's electric vehicle company, Tesla Motors, for a possible securities law breach after it failed to disclose to markets a fatal crash in May. The Securities and Exchange Commission is examining whether the accident on May 7 in Florida, which killed Joshua Brown, 40, who was driving a Tesla Model S car similar to the one above in autopilot mode, was "material" to Tesla's stock price. - WSJ | | |
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