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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: Hawkish Fed-speak weighs on Footsie at start of the week London's top flight index dipped lower at the start of trading as investors digested some hawkish 'Fed-speak' over the weekend, with little else to guide them in terms of fresh corporate news or economic data.
Speaking on Sunday, US Federal Reserve vice chairman Stanley Fischer said "we are close to our targets", adding that the labour market had been "remarkably resilient".
"Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes," he added.
His remarks gave a boost to the dollar and weighed on crude oil futures at the start of the week. As of 0817 BST, the US dollar index was up by 0.38% to 94.87 and front month Brent crude futures lower by 2.1% to $49.83 per barrel on the ICE.
In parallel, the FTSE 100 was lower by 14.15 points and trading at 6,842.30.
Fischer, who was widely considered to hold similar views on policy to those of Fed chair Janet Yellen, was speaking ahead of the Federal Reserve's annual economic symposium at Jackson Hole, Wyoming, on 25 to 27 August.
Some economists believed Fed chair Janet Yellen would use her speech at the symposium on 26 August to flag her own thoughts on monetary policy.
"Markets remain very much focused on global monetary policy this week after conflicting Fed chat last week and ahead of this Thursday's US Kansas City Fed Jackson Hole Symposium. As much for the outlook for US monetary policy as for the ramifications for the Euro, itself hemmed in between a Fed wanting to tighten and the Bank of England in easing mode post Brexit," Accendo Markets' head of research Michael van Dulken said.
There were no major UK or US data scheduled for release on Monday.
In corporate news, venture capital-style investor Allied Minds has arranged a one-year debt facility Silicon Valley Bank in the US, while a UK-based subsidiary has raised funds for a biotech project from institutional investors.
Secured over certain group assets, the $20m one-year facility from the SVB has diversified the capital structure and is "a powerful endorsement of the group's growth and development prospects", said chief executive Chris Silva.
Elsewhere, Polymetal International has approved the de-bottlenecking project at the Amursk POX plant that will expand capacity by around 50% in terms of concentrate processed.
"We believe capital-light debottlenecking of the Amursk POX plant is the best approach given the steady increase in Polymetal's refractory reserve base", said chief executive officer Vitaly Nesis. |
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| Market Movers
FTSE 100 (UKX) 6,857.10 -0.17%
FTSE 250 (MCX) 17,881.81 0.06%
techMARK (TASX) 3,513.51 0.15%
FTSE 100 - Risers
easyJet (EZJ) 1,099.00p 1.95%
Compass Group (CPG) 1,511.00p 0.73%
Centrica (CNA) 235.00p 0.56%
International Consolidated Airlines Group SA (CDI) (IAG) 391.10p 0.51%
Shire Plc (SHP) 5,055.00p 0.50%
AstraZeneca (AZN) 5,069.00p 0.46%
Antofagasta (ANTO) 573.50p 0.44%
BT Group (BT.A) 394.65p 0.32%
BP (BP.) 436.90p 0.31%
Berkeley Group Holdings (The) (BKG) 2,512.00p 0.28%
FTSE 100 - Fallers
Provident Financial (PFG) 2,849.00p -1.25%
Admiral Group (ADM) 2,108.00p -1.08%
Hargreaves Lansdown (HL.) 1,323.00p -0.97%
London Stock Exchange Group (LSE) 2,844.00p -0.91%
Mondi (MNDI) 1,584.00p -0.75%
Royal Bank of Scotland Group (RBS) 186.10p -0.64%
BHP Billiton (BLT) 1,069.00p -0.56%
HSBC Holdings (HSBA) 540.90p -0.53%
St James's Place (STJ) 958.00p -0.47%
Barclays (BARC) 159.95p -0.44%
FTSE 250 - Risers
William Hill (WMH) 317.50p 4.75%
Rank Group (RNK) 226.90p 2.39%
Kaz Minerals (KAZ) 183.90p 2.17%
Moneysupermarket.com Group (MONY) 312.00p 2.16%
Countryside Properties (CSP) 237.70p 2.10%
Countrywide (CWD) 245.00p 1.70%
Assura (AGR) 58.30p 1.57%
Softcat (SCT) 338.90p 1.53%
Virgin Money Holdings (UK) (VM.) 289.70p 1.47%
Rotork (ROR) 208.40p 1.46%
FTSE 250 - Fallers
Redefine International (RDI) 43.39p -2.49%
OneSavings Bank (OSB) 221.10p -2.43%
Shawbrook Group (SHAW) 186.40p -2.00%
Brewin Dolphin Holdings (BRW) 265.90p -1.81%
Pets at Home Group (PETS) 246.70p -1.67%
Ocado Group (OCDO) 281.00p -1.06%
Tullett Prebon (TLPR) 362.90p -1.01%
Aggreko (AGK) 1,035.00p -0.96%
Sports Direct International (SPD) 295.50p -0.84% |
| | UK Event Calendar | | Monday August 22
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks edge higher as investors eye Jackson Hole European stocks edged higher in early trade as investors eyed the US Federal Reserve's Jackson Hole meeting later in the week in the hope that it might provide further clues on the timing of an interest rate hike.
At 0850 BST, the benchmark Stoxx Europe 600 index was down 0.6%, Germany's DAX was off 0.5% and France's CAC 40 was 0.6% weaker.
At the same time, oil prices retreated on news that Iraq - OPEC's second-biggest oil producer - will boost its oil exports by 5%. West Texas Intermediate was down 1.6% at $47.73 a barrel and Brent crude was 1.6% lower at $50.06.
Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said: "Equities are range bound on low volumes and little data, as investors once again turn their attention to the US Federal Reserve's Jackson Hole meeting this week. Global central bank policy remains the key driver of equity markets, with the Federal Reserve the largest potential catalyst for market momentum and direction.
"Stanley Fischer's hawkish comments over the weekend have nudged the dollar higher and highlighted (yet again) the differences in opinion and potential policy divide between Federal Reserve members. This makes Janet Yellen's speech on Friday even more significant as a potential signal of whether the Fed might move as soon as its upcoming September meeting."
Federal Reserve vice chairman Fischer said in a speech at the Aspen Institute in Colorado that the US economy was close to meeting the bank's targets.
"Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes," he said.
Corporate news was thin on the ground, but Syngenta surged after the US-based Committee on Foreign Investment in the US cleared ChemChina's takeover of the agrochemical company. |
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| | US Market Report | | US close: Wall Street slips amid lack of economic data US stocks drifted lower on Friday as traders waded through corporate earnings amid a dearth of economic data.
The Dow Jones Industrial Average slipped 0.24% to 18,552.57 points, the S&P 500 dropped 0.14% to 2,183.87 points and the Nasdaq declined 0.03% to 5,238.38.
Oil prices were volatile as the dollar strengthened and investors looked ahead to an unofficial OPEC meeting next month, with hopes of a deal on stabilising the market. West Texas Intermediate increased 19 cents to finish at $48.52 per barrel.
In the absence of US data, the market also continued to mull the Federal Reserve's July meeting minutes, which showed policymakers were divided on the timing of the next interest rate hike.
"On a quiet Friday, focus will remain on the oil market and the Fed as traders try to dissect the wide ranging views of policy makers in order to anticipate when the next rate hike will actually happen.
"We had more comments from policy makers on Thursday but once again, there was no consistent messages and John Williams - who earlier in the week sent the dollar into a tailspin after suggesting that the inflation target should be higher, which suggested there was little desire to raise rates - claimed there should be a hike sooner rather than later.
"Meanwhile we also heard from a couple of his colleagues - William Dudley and Robert Kaplan - and again the message wasn't necessarily consistent with Dudley reiterating that the US economy is strong, as displayed by the labour market data, while Kaplan claimed that while there is some room for manoeuvre on interest rates, it's limited. With other messages from policy makers being more inconsistent again, it's no surprise that the markets are changing their mind on the timing of the next hike on almost a daily basis," said Craig Erlam, Senior Market Analyst at Oanda.
Corporate results were also in focus.
Footlocker shares advanced after reporting second quarter results that beat expectations. In the six months ended 30 July, earnings rose to $127m or 94 cents a share, from $119m or 84 cents a share in the same period last year.
Deere & Company rallied as the maker of agricultural machinery reported a 1.3% increase in earnings per share in the third quarter to $1.55, surpassing estimates of 95 cents.
Estee Lauder declined as it revealed quarterly net income fell to $93.5m from $153m a year earlier, due to restructuring and other charges. The beauty products manufacturer also predicted fiscal 2017 adjusted profit which fell short of analysts' forecasts. |
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| | Newspaper Round Up | | Monday newspaper round-up: Brexit chaos, Nigeria oil, house prices, ITV-ETO Leaving the EU may not not happen anytime soon given that civil servants charged with the task don't yet have an office and hold meetings in Starbucks. Some estimates suggest "full Brexit" may take 10 years and involve up to 10,000 people, not only in the new and other so-called "hot" departments such as foreign, home, environment and business, but across the civil service nationally, at an administrative cost of close to £5bn. - The Guardian
Militants whose attacks on oil rigs and pipelines in the Niger Delta helped to force up oil prices this year announced a conditional ceasefire yesterday. The Niger Delta Avengers, and other groups have disrupted production in Africa's biggest oil exporter in the past six months, reducing Nigeria's output by about 700,000 barrels a day, or one third. While other groups in the oil-rich south are unlikely to adhere to the truce, any pause in the attacks could exert downward pressure on the oil price. - The Times
House prices are expected to fall across the UK next year as years of robust growth end and uncertainty over Brexit saps demand for property. Countrywide, the estate agent, said that it expects a slowdown in the economy next year because the shadow of Brexit will hinder trade and economic growth. This will affect house prices and transaction levels as people worry about job security and their household income. - The Times
Britain's pensions lifeboat has tightened up the rules on who bears the cost of restructuring ailing companies and their retirement commitments, putting the burden squarely on those who benefit from the rescue and laying the groundwork for a deal for Tata Steel's £15bn pension. The Pension Protection Fund, which normally waits until a company has collapsed before taking on its pension liabilities, said in guidance published last week that it would only support a restructuring plan if the company or investors seeking a deal agree to foot the bill for legal, financial and redundancy costs. - Telegraph
Spending on infrastructure has nosedived since the country voted to leave the EU in June. According to figures from the first full month after Brexit, the value of construction contracts for July dropped by 20% to £1.5bn. The consultancy group that supplies figures to the Office for National Statistics, Barbour ABI, revealed that new construction orders were down to £5.8bn in July. - Guardian
Embattled British shareholders have faced a dividend squeeze as firms struggled to maintain their profits, a study shows. In the UK, one-off special dividends masked a shortfall in regular payments, according to the report by asset manager Henderson Global Investors. - Mail
One of the most prominent figures in the City has taken the unprecedented step of permanently abolishing all staff bonuses at his firm. Neil Woodford, the star stock-picker and founder of Woodford Investment Management, has rejected the conventional wisdom that bonuses are essential to motivate and retain staff and has put everyone on a flat salary. - The Times
ITV must offer more for Entertainment One if it wants to mount a serious takeover bid, a leading shareholder has said.
After the media distribution giant behind Peppa Pig having rejected a 236p per share bid for, one of the company's ten biggest shareholders has now said the minimum likely to be accepted is 284p per share, which would value the company at £1.2bn. - Mail
Two FTSE 250 groups that make specialty chemicals used in products ranging from latex gloves to anti-ageing creams are on the lookout for acquisitions, at a time when megamergers are gripping the upper end of the industry. The chief executives of Croda and Synthomer said they were in the market for bolt-on deals as well as bigger transactions that could transform their respective companies. - Financial Times
National Grid will reveal the winning bids this week for one of the world's biggest battery storage projects, providing back-up power to keep Britain's lights on. Thirty-seven companies have submitted bids for the scheme to supply 200 megawatts (MW) of power, mainly using utility-scale battery arrays. The winners will be announced on Friday. - The Times
Tata's giant Port Talbot steel plant has clawed itself back into profit as staff strain to boost efficiency despite having no idea whether their jobs are safe. Sources familiar with finances at the sprawling operation in South Wales revealed it made a £5m profit in June, reversing the £1m a day loss it was making six months ago. - Telegraph
Sports Direct is paying some of its takings from website customers outside the UK to a little-known delivery broker owned by the older brother of its founder Mike Ashley, adding to the list of transactions with personal connections to the billionaire. The FTSE 250-listed retailer, which is Britain's biggest sportswear chain and operates local-language websites serving 33 other countries, has not disclosed the arrangement in its published accounts. - Financial Times
Black, Asian and minority ethnic (BAME) workers are a third more likely than white workers to be underemployed with fewer hours of employment than they would like, according to the Trades Union Congress. The TUC warns in a report today that the higher underemployment rate for BAME workers is a waste of talent and is calling on employers and ministers to tackle discrimination in the workplace. - Guardian
India's new bank governor is seen as a hawkish, continuity candidate to follow Raghuram Rajan, who unexpectedly announced he was quitting in June. The government on Saturday named Urjit Patel as the next governor of the Reserve Bank of India. As deputy governor, Mr Patel earned a reputation for taking a tough stance on inflation despite political pressure for the central bank to be more expansionary. - The Times
One of the world's biggest law firms has predicted that London will remain a global legal centre even after the UK withdraws from the EU. Eduardo Leite, global chairman of Baker & McKenzie, said he was "not that pessimistic" about Brexit and believed that London would continue to be a significant legal centre even on a five- to 10-year view because of the quality of its legal expertise. - Financial Times
National Grid's drive for hospitals to help keep the UK's lights on by using their back-up diesel generators is "highly questionable" because it will cause air pollution right in the vicinity of patients, a think-tank has warned. The energy utility is encouraging NHS sites to sign up for schemes where they will be paid to use their back-up generators for electricity routinely, not just in the event of an emergency power cut. - Telegraph
Engineering group GKN is hoping to leverage its recent acquisition of Fokker to build a foothold in China's burgeoning aerospace sector. The country is forecast to be the fastest growing aviation market in the world over the next 20 years, and China's nascent aerospace industry could become a strong player in the field. - Telegraph
An Aim-listed diamond explorer is planning a "transformation deal" that will create Sierra Leone's second-biggest diamond mine from two "high-grade" deposits. Stellar Diamonds will acquire the Tonguma project from Octea Mining and combine it with its own neighbouring Tongo deposit to build a mine with a resource of five million carats underground. - Telegraph
Elegant Hotels, the AIM-listed Barbados group, will launch its latest luxury hotel and spa this week. The group, which floated in London last year, said that the 70-room Waves Hotel in Barbados, acquired for $18 million, had been "extensively redesigned and refurbished". - The Times
A $100 million remake of the 1959 Charlton Heston film classic Ben-Hur was an epic failure at the US box office on its opening weekend. It brought in only $11.35 million, according to figures released yesterday. The film, starring Jack Huston and Toby Kebbell, was marketed heavily at Christian audiences, with special screenings for religious leaders. - The Times | | |
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