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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 start higher as China data overlooked London stocks made an initial move higher on Monday morning, as traders ignored lacklustre Chinese trade numbers and they digested last week's news and a smattering of encouraging UK data post-Brexit data.
The FTSE 100 was up 26 points to 6,819.47 after half an hour of trading, while the FTSE 250 had risen more than 125 points to 17,590.61.
The FTSE is now sitting at its best level since last June, noted analyst Connor Campbell at Spreader: "The index still dining out on last week's Bank of England stimulus package and US non-farm surprise double whammy. It will be interesting to see how much mileage the FTSE gets out of this goodwill, especially since there isn't much else for it to preoccupy itself with this Monday."
Earlier, China's exports had been shown to have fallen 4.4% in dollar terms in July, with imports declining 12.5%, according to Beijing's General Admission of Customs.
Later in the week China will also publish inflation data as well as July retail sales and industrial production data.
But the market was still likely to be carrying good momentum over from Friday's strong non-farm payrolls report, which has added weight to expectations of a rate hike from the Federal Reserve this year.
With no major UK data releases due, some less heralded domestic surveys may have added to the optimism, with business confidence data declining, according to BDO's business trends figures for July, but by less than expected after analysts feared the Brexit vote would hit confidence harder. The accountancy group noted minor falls in optimism, to 97.9 from 98.9, based on growth prospects six months out, and in output to 98.2 from 99.0. BDO suggested that the "initial impact of the Brexit vote has been less severe than expected".
High street consumer spending data from Visa and Markit showed the UK spending rose 1.6% year on year in July, with hotels, restaurants and bars leading the way, up 8.9%.
In corporate news, first-half results from Shire confirmed the drugmaker's strong performance so far in 2016, completing two acquisitions and continuing to grow its underlying business. Just a week after it published second-quarter results, Shire posted interim numbers that showed total reported product sales up 36% to $3.9bn, thanks to double digit product sales across all legacy businesses and $559m of product sales from almost one month from the newly acquired Baxalta. Earnings before interest, tax, depreciation and amortisation rose 35% on the previous year to $1.9bn.
Support services and construction group Interserve has been awarded a two-year extension of its contract to provide security services to the BBC worth more than £20m. Interserve has been providing the BBC with security services since 2014, when it was awarded the company's National Security Contract on a three-year deal.
Global medical technology business Smith & Nephew announced on Monday that it has completed the divestiture of its gynaecology business to Medtronic, for $350m, of which it would return the majority to investors. The FTSE 100 firm said the sale of its gynaecology business demonstrates its "disciplined strategic approach" to capital deployment, with shareholders benefiting directly through a $300m share buy-back programme, which is expected to be broadly neutral to adjusted earnings per share in 2017 and to reduce EPSA by less than one cent in 2016. |
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| Market Movers
FTSE 100 (UKX) 6,818.99 0.38%
FTSE 250 (MCX) 17,591.11 0.72%
techMARK (TASX) 3,522.50 0.31%
FTSE 100 - Risers
Barclays (BARC) 156.90p 3.22%
Anglo American (AAL) 882.50p 2.63%
BHP Billiton (BLT) 1,038.00p 2.37%
Legal & General Group (LGEN) 217.70p 1.97%
Antofagasta (ANTO) 524.00p 1.95%
Lloyds Banking Group (LLOY) 54.16p 1.90%
Rio Tinto (RIO) 2,531.50p 1.89%
Standard Chartered (STAN) 650.40p 1.85%
Berkeley Group Holdings (The) (BKG) 2,707.00p 1.84%
Prudential (PRU) 1,402.50p 1.81%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 2,351.00p -1.84%
Compass Group (CPG) 1,451.00p -1.09%
GlaxoSmithKline (GSK) 1,678.50p -0.94%
British American Tobacco (BATS) 4,788.00p -0.90%
Fresnillo (FRES) 1,870.00p -0.74%
Shire Plc (SHP) 5,110.00p -0.68%
Imperial Brands (IMB) 4,030.50p -0.44%
Relx plc (REL) 1,426.00p -0.35%
Pearson (PSON) 880.00p -0.28%
Tesco (TSCO) 154.40p -0.26%
FTSE 250 - Risers
Shawbrook Group (SHAW) 200.80p 5.68%
Meggitt (MGGT) 432.70p 4.37%
Millennium & Copthorne Hotels (MLC) 430.20p 3.66%
Serco Group (SRP) 132.80p 3.59%
Aldermore Group (ALD) 144.00p 3.37%
Vesuvius (VSVS) 377.30p 3.34%
Virgin Money Holdings (UK) (VM.) 280.90p 3.16%
Tullow Oil (TLW) 209.10p 2.95%
William Hill (WMH) 325.70p 2.74%
Hochschild Mining (HOC) 277.30p 2.63%
FTSE 250 - Fallers
McCarthy & Stone (MCS) 170.80p -5.01%
Hastings Group Holdings (HSTG) 205.00p -1.91%
Riverstone Energy Limited (RSE) 1,025.00p -1.44%
AO World (AO.) 142.30p -1.39%
Pendragon (PDG) 32.87p -1.11%
Polypipe Group (PLP) 257.10p -0.92%
Pagegroup (PAGE) 341.10p -0.87%
Dechra Pharmaceuticals (DPH) 1,360.05p -0.80%
Entertainment One Limited (ETO) 197.00p -0.76% |
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| | UK Event Calendar | | Monday August 08
INTERIMS
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks edge higher as investors digest China data European stocks edged higher in early trade as investors weighed up disappointing Chinese trade data against rising expectations of an interest rate hike by the Federal Reserve this year.
At 0850 BST, the benchmark Stoxx Europe 600 index was up 0.4%, Germany's DAX was up 0.8% and France's CAC 40 was 0.5% higher.
At the same time, oil prices were firmer. West Texas Intermediate was up 1.1% at $42.27 a barrel and Brent crude was 1.1% stronger at $44.74.
According to data released earlier by the General Admission of Customs, exports in the world's second-largest economy fell 4.4% in July, while imports declined 12.5%.
At the same time, investors were mulling over Friday's strong non-farm payrolls report, which has been seen as many as increasing the chances of a rate hike from the Federal Reserve this year.
CMC Markets' Michael Hewson said: "Certainly the odds have gone up that we could get a move, which suggests that this month's Jackson Hole Symposium on 26 August is likely to be a key bellwether for the Fed's appetite for a move higher, or whether the lack of inflation could stay there hand."
Corporate news was thin on the ground on Monday.
Dutch postal service PostNL rallied after well-received second-quarter results and confirmation of its outlook.
Barclays racked up healthy gains as Exane BNP Paribas upgraded the stock to 'outperform' from 'neutral' saying it remained its preferred large UK bank.
On the downside, Airbus was under pressure as the UK's Serious Fraud Office launched an investigation into allegations of fraud, bribery and corruption at the company.
Shire edged lower after the drug maker confirmed its strong performance so far in 2016, as it completed two acquisitions and continued to grow its underlying business. |
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| | US Market Report | | US close: Stocks jump after July jobs figure, strategists sound optimistic note A better-than-expected US jobs report for July pushed the Nasdaq Composite to its first record close in a year at the end of the week, alongside fresh highs for the S&P with financials and transport stocks spearheading the rise.
The Dow Jones Industrial Average rose 1.04% or 191.48 points to 18,543.53, the S&P 500 gained 0.86% or 18.62 points to 2,182.87 and the Nasdaq moved up 1.06% or 54.87 points to finish at 5,221.12.
In contrast, oil prices retreated with West Texas Intermediate crude oil futures drifting four cents lower to $41.80 per barrel.
Among the major market groups, the largest gains were to be seen among: Life insurers (3.35%), Airlines (3.29%), Transport services (3.08%), Banks (2.99%) and Marine transport (2.93%).
Non-farm payrolls trounce forecasts
US employers added 255,000 jobs in July, smashing forecasts of 180,000, the Labor Department's non-farm payrolls report revealed. It followed an upwardly revised 292,000 increase in June.
The unemployment rate was unchanged at 4.9% in July, compared to estimates of 4.8%. Average hourly earnings rose 0.3% on the month, beating estimates for a 0.2% increase and following a 0.1% rise in June. On the year, hourly earnings growth in July was unchanged at 2.6%, as expected.
"The steady job market improvement and keeps alive the possibility of the Fed hiking rates again this year, but worries about sluggish economic growth and deteriorating productivity, as well as uncertainty created by the presidential election, suggests that any tightening of policy will be delayed until December," said Chris Williamson, chief business economist at IHS Markit.
"The problem facing the Fed is that the ongoing robust rate of job creation is taking place against a backdrop of weak output growth, suggesting productivity and profit margins are likely to be suffering."
By the close of trading on 5 August, the CME FedWatch tool was indicating a 15% chance of an interest rate rise in September, a 15% chance in November and 43.7% in December.
Strategists upbeat
Credit Suisse´s Andrew Garthwaite bumped up his end-2016 target for the S&P 500 to 2,250, explaining, amongst other things, that the equity risk premium ought to be at 5.0% instead of 5.8%.
"[...] Many US lead indicators of IP, capex and employment are now turning higher. In addition, we have had the longest period of inventory decline since the 1950s. 3) There appear to be clear hints of fiscal easing from policy makers in the US, UK and Japan," he also added.
His peers at Citi were also to be seen out and about, telling clients in a research report that US equities were "cheap" in terms of their free cash flow yield.
Analysts up quarterly earnings estimates
On the corporate front, Zynga shares dropped after the videogame developer released a weak outlook on third quarter revenues.
FireEye slumped after the security software company reported quarterly sales that missed its own forecast and announced plans to cut 300 to 400 jobs.
Liberty Media Corp. edged higher as it reported strong quarterly results.
GoDaddy continued to rise after reporting a narrower loss for the second quarter on Wednesday.
With roughly three-quarters of its components having already reported their quarterly financials, approximately 77% of S&P 500 firms had beaten profit projections and 56% exceeded sales forecasts, according to Bloomberg data.
Analysts had also tempered their estimates for a decline in second-quarter net income to 2.7%, from 5.8% less than a month ago, Bloomberg reported.
Ten-year US Treasury note yields jumped nine basis points to 1.59% while those on the two-year note advanced by eight basis points to 0.722%.
Dow Jones - Risers
Merck & Co. Inc. (MRK) $63.86 10.41%
JP Morgan Chase & Co. (JPM) $66.30 2.70%
Goldman Sachs Group Inc. (GS) $162.09 2.56%
American Express Co. (AXP) $65.52 2.47%
Nike Inc. (NKE) $55.85 1.93%
Apple Inc. (AAPL) $107.48 1.52%
United Technologies Corp. (UTX) $107.74 1.30%
International Business Machines Corp. (IBM) $163.50 1.21%
Intel Corp. (INTC) $34.98 1.16%
Microsoft Corp. (MSFT) $57.96 0.99%
Dow Jones - Fallers
Verizon Communications Inc. (VZ) $53.64 -0.54%
Procter & Gamble Co. (PG) $85.78 -0.31%
Coca-Cola Co. (KO) $43.48 -0.07%
Exxon Mobil Corp. (XOM) $87.56 0.09%
Chevron Corp. (CVX) $100.51 0.12%
Unitedhealth Group Inc. (UNH) $142.99 0.20%
Johnson & Johnson (JNJ) $124.24 0.31%
General Electric Co. (GE) $31.28 0.35%
Boeing Co. (BA) $131.73 0.40%
3M Co. (MMM) $178.57 0.43%
S&P 500 - Risers
Merck & Co. Inc. (MRK) $63.86 10.41%
Eog Resources Inc. (EOG) $90.16 7.03%
Quanta Services Inc. (PWR) $24.85 5.97%
Lincoln National Corp. (LNC) $45.51 5.84%
United Continental Holdings Inc. (UAL) $48.41 5.47%
Charles Schwab Corp. (SCHW) $29.93 5.05%
Motorola Solutions Inc (MSI) $73.50 4.64%
Keycorp (KEY) $12.26 4.52%
Prudential Fincl Inc. (PRU) $76.03 4.38%
Citigroup Inc. (C) $45.72 4.29%
S&P 500 - Fallers
Bristol-Myers Squibb (BMY) $63.28 -15.99%
Chesapeake Energy Corp. (CHK) $4.89 -4.68%
TripAdvisor Inc. (TRIP) $60.81 -4.37%
Centerpoint Energy Inc. (CNP) $22.67 -3.94%
Willis Towers Watson Public Limited Company (WLTW) $119.92 -3.36%
Sempra Energy (SRE) $107.04 -2.95%
Dentsply International Inc. (XRAY) $61.99 -2.67%
Southwestern Energy Co. (SWN) $13.97 -2.51%
Regeneron Pharmaceuticals Inc. (REGN) $423.00 -2.40% |
| | Newspaper Round Up | | Monday newspaper round-up: Lloyds, new post-Brexit data, banks Thousands of retail investors are likely to be denied the chance of buying shares in Lloyds Banking Group at a discount as the government is expected to abandon the plan in the aftermath of market uncertainty caused by Brexit. The government put plans for a "Tell Sid" offer of Lloyds shares on hold in January because of market turmoil, though City sources believe that Chancellor Philip Hammond is about to abandon permanently the eye-catching offer that was announced by his predecessor during the Conservative Party conference in October last year. - The Times
Business confidence has fallen by less than expected after Britain's vote to leave the European Union, while shoppers have largely shrugged off Brexit, the latest monthly surveys show. The accountancy firm BDO said its business trends figures for July found minor falls in optimism, based on growth prospects six months out, and in output, measuring "companies' experience of orders for the three months ahead". - The Times
Britain's vote to leave the EU has had little immediate impact on people's spending habits, according to new figures that suggest more money was splashed out on clothes, meals out and day trips in July. Consumer spending picked up in July as the warm weather provided an incentive to eat out and buy new summer clothes, figures from Visa compiled by Markit showed, contrasting with signs of a drop in business activity following the June vote to leave the EU. - Guardian
Manufacturing companies are spurning bank financing and hoarding cash, raising fears that firms will cut investment following the Brexit vote and spurring calls for the competition regulator to reform the services lenders offer to businesses. Some 55pc of companies have amassed more cash on their balance sheets compared to before the financial crisis, according to a survey by the EEF, the organisation that represents the engineering and manufacturing industries. - Telegraph
Businesses are trying to persuade the government to slow or even abandon its policy to raise the "national living wage" to one of the highest rates in the developed world by 2020. At least 16 trade associations have written jointly to Greg Clark, the new business secretary, recommending that he "exercise caution" on the national living wage in light of the "economic uncertainties the country faces" after the Brexit vote. - Financial Times
Football fans are likely to face more increases in the cost of watching matches at home, as the media watchdog will today drop its two-year investigation of the Premier League's multi-billion-pound TV rights auction. Ofcom will abandon work on a complaint from the cable operator Virgin Media, after concluding that it does not have the capacity to assess either way whether the way the Premier League sells rights is harming consumers. - Telegraph
Overdraft fees and an easier system of moving personal and small business accounts are expected to be at the centre of measures intended to bolster competition in the banking sector. After a two-year investigation into the banking sector, the measures to be published on Tuesday will focus on how customers can switch accounts away from the high street "big four". Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC hold more than 70% of the current account and small business sectors that generate £14bn of revenue for the industry a year. - Guardian
The Serious Fraud Office has launched a criminal inquiry into alleged fraud, bribery and corruption in relation to commercial jet sales by Airbus, the European aircraft-maker disclosed last night. The formal investigation comes after Airbus admitted in April that it was in talks with the SFO over the use of third-party agents in aircraft deals which it was asking the British government to cover with financing guarantees. - The Times
The Pensions Regulator is facing the prospect of an overhaul as MPs investigate its role. The work and pensions committee will examine whether the regulator should be given new powers to block takeovers if pension schemes are not adequately funded. The review comes after the BHS scandal put the retirement savings of 20,000 people at risk. - The Times
Three of Europe's biggest energy groups are looking to make progress with multibillion-dollar asset disposal programmes before the end of this year, despite pressure on valuations from low oil prices. Total of France is aiming to sell its Atotech chemicals subsidiary this autumn in a deal expected by analysts to raise about $3bn, and Eni of Italy says talks to offload part of a big Mozambique gasfield are at an "advanced stage". - Financial Times
The future of farming after Britain leaves the EU is likely to see an end to direct subsidies to farmers, many of whom are calling instead for measures to support a profitable market. "Most farmers do not want to have a subsidy," said Minette Batters, deputy president of the National Farmers' Union, a Wiltshire beef farmer and Brexit supporter. - Financial Times
The bosses of Britain's largest public companies earned an average of £5.5m last year, and have enjoyed a 10% pay rise while wages in the rest of the economy lag far behind. Rapid inflation for the country's best paid executives is being driven by a small, all-male group at the top of the corporate tree, according to the High Pay Centre, which published its annual survey on earnings at FTSE 100 companies on Monday. - Guardian
BT Group believes that it has more room than its rivals to raise prices for customers in an effort to retain Premier League television rights after 2018. The boss of the company's consumer division has warned that future auctions for top-flight football rights will be "limited by consumers' willingness to pay", as it prepares to broadcast the first matches in its joint £5.14 billion three-year deal with Sky Sports this weekend. - The Times
The government should prioritise the creation of a more ambitious high-speed rail network linking England's northern cities to address the "stark" shortfall in investment compared with London, according to a UK thinktank. The IPPR says the chancellor, Philip Hammond, should take advantage of record low government borrowing costs to fund an ambitious new HS3 scheme. This high-speed line could connect Liverpool, Manchester, Leeds, Newcastle and other major cities, boosting economic growth across the region. - Guardian | | |
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