| | | | | | | Q4 Top 10 Stock Picks Moving into the final quarter of the year, a packed events calendar is going to create opportunities aplenty for investors, and we've highlighted the top 10 stocks we believe could outperform the market in Q4. Download this report today Losses can exceed deposits | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Equities dragged lower by commodity producers UK equities were led lower by a slump in commodities stocks on Wednesday as oil prices retreated.
The FTSE 100 closed down 0.85% to 6,958.09 points.
Antofagasta was one of the biggest fallers on London's top tier index after disappointing production numbers and full-year guidance.
Shares in Anglo American, BHP Billiton and Royal Dutch Shell joined in the decline as oil and precious metal prices fell.
Oil prices were under pressure as investors´ faith in a deal to curb production at next month's OPEC meeting flagged after Iraq said it was unlikely to participate in the proposed agreement.
Brent crude slid 0.83% to $50.37 per barrel while West Texas Intermediate declined 0.46% to $49.73 per barrel at 1642 BST.
Data from the Energy Information Administration on Wednesday showing US weekly crude inventories fell by 0.6m barrels to 468.2m barrels last week failed to lift prices.
Meanwhile, Lloyds Banking Group slumped after setting aside a further provision of £1bn in compensation for mis-selling payment protection insurance during the third quarter of the year.
Whitbread continued to fall following its mixed interim results on Tuesday, with some broker downgrades hitting the shares. Société Generale cut its target but maintained its 'hold' rating as results were in line with or slightly above consensus estimates.
On the upside, Tesco and Sainsbury's rallied after Goldman Sachs raised its target on the stocks but reiterated a 'sell' rating, saying British supermarkets do not offer a good reward for risk trade-off as inflation is expected to rise post Brexit.
Luxury fashion company Burberry gained after well-received third quarter earnings from sector peer Kering's Gucci brand. Gucci, which accounts for 60% of Kering's operating profit, reported double-digit quarterly sales growth for the first time since 2012.
On the macro-economic front, the pound edged higher against the dollar after hopes of a Bank of England interest rate cut next week faded. The pound rose 0.37% to $1.2233 at 1649 BST.
BoE Governor Mark Carney on Tuesday said the recent weakening of sterling would be taken into consideration at next week's interest rate decision.
"The concept of a 'hard Brexit' has largely been internalised and as such the current focus is upon monetary policy, which seems unlikely to change anytime soon, if comments from Mark Carney are anything to go by," said IG's Joshua Mahony.
"With the pound already incredibly low by historical standards, the prospect of cost-push inflation, coupled with a global trend of rising CPI readings, it is unlikely we will see the BoE implement any new easing measures for the foreseeable future."
In economic data, the British Bankers' Association (BBA) revealed mortgage approval numbers in September of 38,252, which was up from 37,241 in August but down 14.9% from the same month a year ago. The BBA also said consumer credit was growing at its fastest rate since December 2006, with annual growth of over 6% despite only moderate retail sales growth.
German consumer confidence is seen falling to the lowest level in six months in November due to a weak outlook on global economic growth, a separate survey revealed. GfK's forward-looking consumer confidence index declined to 9.7 points in November from 10.0 in October. Economists had expected no change.
In the US, the advanced trade report for goods showed a deficit of $56.1bn in September compared to $59.1bn August, the government said.
Markit's flash US services purchasing managers' index printed at 54.8 in October, up from 52.3 the month before and above the 50 level that indicates an expansion in activity. Economists had expected no change. It marks the highest reading since November 2015 and contrasts with the subdued growth patterns seen through the third quarter of 2016.
The Commerce Department reported that wholesale inventories for September rose 0.2% to $590.7bn, while the international trade deficit fell to $56.1bn from $59.1bn from August.
Separately, the Commerce Department revealed US new home sales for September revealed rose 3.1% from August to a seasonally adjusted rate of 593,000. Economists had expected 590,000 sales. |
| | Improve your trading for success | | Come and hear more on the Tradeo webinar about how Social Trading is revolutionizing the way you trade. |
| Market Movers
FTSE 100 (UKX) 6,958.09 -0.85%
FTSE 250 (MCX) 17,675.76 -0.71%
techMARK (TASX) 3,411.39 -0.57%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 422.30p 5.10%
Marks & Spencer Group (MKS) 342.80p 2.51%
easyJet (EZJ) 944.00p 2.05%
Tesco (TSCO) 213.55p 1.62%
Barratt Developments (BDEV) 475.90p 1.47%
Sainsbury (J) (SBRY) 243.40p 1.33%
Burberry Group (BRBY) 1,476.00p 1.10%
Lloyds Banking Group (LLOY) 55.88p 0.96%
Royal Bank of Scotland Group (RBS) 193.60p 0.68%
Associated British Foods (ABF) 2,456.00p 0.66%
FTSE 100 - Fallers
Whitbread (WTB) 3,528.00p -4.62%
Antofagasta (ANTO) 523.50p -3.15%
British American Tobacco (BATS) 4,583.00p -2.87%
Micro Focus International (MCRO) 2,115.00p -2.67%
Johnson Matthey (JMAT) 3,366.00p -2.43%
Ashtead Group (AHT) 1,276.00p -2.22%
Royal Dutch Shell 'B' (RDSB) 2,135.50p -2.15%
Glencore (GLEN) 240.85p -2.15%
Land Securities Group (LAND) 1,003.00p -2.15%
Fresnillo (FRES) 1,608.00p -2.13%
FTSE 250 - Risers
Vectura Group (VEC) 140.00p 7.12%
Petra Diamonds Ltd.(DI) (PDL) 157.20p 4.45%
Sports Direct International (SPD) 284.40p 3.23%
FirstGroup (FGP) 108.00p 3.05%
Thomas Cook Group (TCG) 70.00p 2.94%
Keller Group (KLR) 691.50p 2.75%
Inmarsat (ISAT) 708.50p 1.94%
UDG Healthcare Public Limited Company (UDG) 662.50p 1.84%
Entertainment One Limited (ETO) 236.50p 1.55%
ICAP (IAP) 493.90p 1.54%
FTSE 250 - Fallers
Petrofac Ltd. (PFC) 869.00p -3.98%
CLS Holdings (CLI) 1,522.00p -3.67%
BGEO Group (BGEO) 2,945.00p -3.54%
Just Eat (JE.) 505.50p -3.25%
Morgan Advanced Materials (MGAM) 269.20p -3.17%
Cairn Energy (CNE) 207.00p -3.09%
Hunting (HTG) 508.00p -3.05%
Spectris (SXS) 2,093.00p -2.83%
Auto Trader Group (AUTO) 367.00p -2.68% |
| | Think You Know The Markets? Prove It | | Put your trading knowledge to the test at City Index. We’ll be right behind you, with expert analysis and our award winning platforms. The rest is up to you. Losses can exceed deposits. Trade now |
| | US Market Report | | US open: Stocks down after disappointing Apple earnings US stocks were down in the wake of disappointing quarterly results from Apple, while there was a torrent of corporate earnings and economic data.
At 1517 BST, the Dow Jones Industrial Average slipped 0.39% to 18,097.81 points, the S&P 500 fell 0.42% to 2,134.07 points and the Nasdaq declined 0.49% to 5,257.53 points.
Oil prices retreated, as investors doubted that OPEC's proposed cut in production would go ahead as the cartel's members continued to disagree.
Brent crude dropped 2.11% to $49.74 a barrel and West Texas Intermediate was down 1.897% to $49.03 at 1440 BST.
Shares in Apple tumbled 3.51% after it reported fourth-quarter results after close on Tuesday that net income declined 19% to $9bn, on revenue of $46.9bn, down 9%. Although income was a little better than expected, revenue fell short of analysts' forecasts.
Connor Campbell, an analyst at Spreadex, said: "Slipping by just shy of half a percent it seems the main thrust of the Dow's decline this afternoon stemmed from Apple's own fall, the tech giant dropping by 3.5% following yesterday's fourth quarter report. The rate-hike fearing index likely wasn't helped by a better than forecast flash services PMI (at 54.8 against the 52.4 expected), though that particular narrative thread lacked its usual stronger dollar companion, with the greenback losing 0.2% to the pound, while admittedly taking the same amount off the euro."
Coca-Cola's shares rose 0.29% as the beverage maker reported that quarterly revenue fell 7%, compared to last year, to $10.6bn, but beat expectations of $10.5bn.
Shares fell 0.53% in aircraft maker Boeing as its third quarter earnings rose to $2.28bn or, $3.60 a share, up from $2.47 last year, but revenue fell to $23.9bn from $25.85bn.
Cable operator Comcast's shares tumbled 2.12% as it reported that net income rose 12% to $2.24bn, or 92 cents a share, in line with expectations, while revenues increased 14% to $21.3bn thanks to the Rio Olympics and the presidential election.
Shares in Oreo maker Mondelez International increased 2.22% as it said its third quarter profit beat expectations as it earned 52 cents per share, analysts had anticipated 43 cents, while net revenue fell 6.6% to $6.4bn, which had expectations of $6.45bn, but organic revenue rose 1.1%.
Meanwhile on the interest rate watch, analysts at Capital Economics said the Federal Reserve is likely to delay a hike until December. The Fed is due to announce its policy decision on 2 November.
"The markets are convinced that the Fed will stand pat at the upcoming Federal Open Market Committee meeting, which concludes next Wednesday, and will instead raise interest rates at the final policy meeting of the year in mid-December. We broadly agree with that view, but wouldn't rule out the possibility of a surprise November rate hike."
Markit's seasonally adjusted flash composite PMI output index rose to 54.9 in October, from 52.3 in September and above the 50.0 no-change value for the eighth month running, which was the sharpest expansion of private sector output since November 2015.
The Commerce Department reported that wholesale inventories for September rose 0.2% to $590.7bn, while the international trade deficit fell to $56.1bn from $59.1bn from August. |
| | IS Lloyds a Brexit Bargain? | | Get all the details now in this FREE Report Lloyds shares have fallen around 40% from last year's high. Download your FREE special report now |
| | Broker Tips | | Broker tips: Sainsbury, Diageo, Metro Bank Goldman Sachs removed Sainsbury from its 'conviction sell' list, keeping at 'sell', with a 195p price target.
The bank noted Sainsbury has significantly underperformed UK peers years-to-date, down 6% versus Morrison up 55% and Tesco up 41%.
"Though we remain bearish on the stock, there is no longer more downside to our target versus other stocks in our coverage. We therefore remove the stock from the conviction list, but with 20% downside we remain sell rated."
Since being added to the conviction list back on 18 January, 2013, the shares are down 25.6% versus the FTSE World Europe up 25%, due to structural UK grocery market pressures which manifested over the period, GS said.
Goldman said Sainsbury remains the stock it is most bearish on when it comes to risks to earnings estimates.
The bank pointed out that in the food business, it has consistently argued that EBITDAR margins around 100-150 basis points ahead of Morrison and Tesco UK is sustainable, particularly in the context of them driving like-for-like volume growth well ahead of Sainsbury for the first time in over five years.
"We believe further price and/or offer investment will be required to reverse this trend and therefore forecast grocery EBIT margins falling 119 bp FY16-20."
In addition, it highlighted Sainsbury's recent acquisition of Argos. GS said that although there are clear synergies from optimising the Argos and Sainsbury store footprints, over the next two years as hedges roll off, the exposure to the US dollar on purchasing at Argos will be a major profitability headwind.
Sainsbury is scheduled to release its first-half earnings on 9 November and Goldman expects to see underlying group EBIT of £316m, down from £366m in the first half a year ago.
HSBC upgraded Diageo to 'buy' from 'hold' and lifted the price target to 2,600p from 2,350p.
"After a year of extended conversations with managers across the company, we think Diageo's often criticised corporate culture is finally evolving in the direction long hoped for by the market. This gives us optimism that management is executing more efficiently than at any time in recent memory; we are, in effect, giving the benefit of the doubt to a management team that is affecting change in a meaningful and constructive way," it said.
HSBC explained that it kept its rating on the stock at 'hold' during the post-Brexit rally as it reckoned the shares were being boosted by Brexit currency tailwinds rather than fundamentals, and it would need to see more from the group before giving it the benefit of the doubt.
"But what we have now is significantly more confidence in Diageo as a commercial organisation with a stronger strategic backbone than at any time in the past."
The bank said it was upgrading the stock for two reasons.
Firstly, it argued that operationally, Diageo is focused on meaningful cost control, benefiting from a booming and well-resourced Reserve portfolio push and stoking solid local growth stories.
"All of these we believe will continue to drive the stock from here post the Brexit vote rally."
Secondly, it pointed out that thanks to the company's high operational exposure to the US and the eurozone, the recent update to HSBC's global cost of equity estimates has an immediate positive impact on its discounted cash flow valuation.
"Trading at a price-to-earnings ratio of 21.1x versus our calendar 2017e earnings per share of 103.62p, the stock remains at a 5% discount to the group average of 22.5x, making it an attractive option versus expensive peers."
Metro Bank posted its first ever quarterly profit on Wednesday, but that didn't stop RBC Capital Markets from cutting its view on the stock to 'sector perform' from 'outperform' as it pointed to a strong price performance.
RBC noted Metro is now trading at around its price target of 2,700p and has materially outperformed the market.
"We still like Metro, its Q3 results and growth profile, and against an uncertain economic outlook, we reaffirm our confidence that our forecasts remain achievable.
"However, following Metro's robust share price performance, we believe the fact that the share price approximates our target, when coupled with the potential downside risk given upcoming Brexit negotiations and economic uncertainty, justifies our downgrade to sector perform."
Metro said on Wednesday that it swung to an underlying pre-tax profit of £0.6m compared a £3.4m loss in the same quarter last year, as revenue surged 78% to £53.4m.
RBC pointed out that Metro is deposit funded (at below peer rates), maintains conservative ratios and is taking market share, growing at impressive levels, and engages in low risk lending. |
| | Discover a new way to trade with eToro | | Trade 1000s of markets independently, connect with millions of other traders and copy top performing traders move-for-move. Click Here 
| | |
New ADVFN Service - FREE Reports Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE
To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
| | | | | | | To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49 | |
No comments:
Post a Comment