| | | | | | | What Does Brexit Mean for the UK Economy? If you have a £250,000 portfolio, download the guide by Forbes columnist and money manager Ken Fisher's firm. It's called "The European Union at a Crossroads: Assessing Brexit." Click Here to Download Your Guide! Fisher Investments UK 
| | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks fall amid rumours ECB will wind down bond purchases London stocks fell on Wednesday amid speculation the European Central Bank may start winding down its bond purchases.
Bloomberg reported on Tuesday that the ECB will probably gradually wind down its €80bn monthly bond purchase before ending its quantitative easing programme.
"Rumours of exit plans being drawn up at the ECB highlight the growing feeling that Draghi & co are facing up to a exhaustion of monetary policy policies and effectiveness," said IG market analyst Joshua Mahony.
Meanwhile, the pound recovered some ground against the dollar after hitting a 31-year low on Tuesday following Prime Minister Theresa May's announcement that formal Brexit negotiations would begin by March 2017. The pound rose 0.24% to 12759.
Bank of England deputy governor Ben Broadbent said the central bank could raise interest rates if sterling fell sharply enough but so far its decline since the 23 June EU referendum had been "pretty orderly, actually". Speaking at a Wall Street Journal event in London, Broadbent said the drop in the pound reflected markets' longer-term judgements about Britain's economy.
"Could the currency fall far enough, hard enough, fast enough to warrant a reversal of course, and some removal of monetary accommodation? The answer is yes, in principle. That has to be judged in the context of what it does to inflation," Broadbent said.
On the data front, activity in the UK services sector grew more than expected in September.
The final Markit/CIPS UK services purchasing managers' index fell to 52.6 from 52.9 in August, which was better than the 52.0 reading economists had been expecting and above the 50 mark that separates contraction from expansion.
Markit's final eurozone composite output index printed at 52.6 in September, in line with the flash estimate but down from August's reading of 52.9. The final eurozone services business activity index came in at 52.2, a touch higher than the flash estimate of 52.1 but down from 52.8 in August.
Eurozone retail sales dipped 0.1% from July, beating expectations of a 0.3% decline, Eurostat revealed. On the year, however, they were up 0.6%, missing forecasts of a 1.5% increase.
In the US, private US employers added 154,000 jobs in September, according to payroll processor Automatic Data Processing and forecasting firm Moody's Analytics, missing expectations of 165,000. The previous month was revised down to 175,000 from the initial estimate of 175,000.
The report comes ahead of Friday's all-important non-farm payrolls, which is expected to show employers added 170,000 jobs in September.
A separate report showed the US service sector improved more than expected in September to a 11-month high. The Institute for Supply Management's index of non-manufacturing activity rose to 57.1 from 51.4 in August, comfortably beating expectations for a reading of 53.0.
US factory orders grew by 0.2% month-on-month in August to $453.1bn, according to the Commerce Department. Economists had pencilled in a drop of 0.5%.
Orders for durable goods were up 0.1% month-on-month to $227.3bn after rising 3.6% in July, beating estimates for no change.
Meanwhile, oil prices rose after the Energy Information Administration revealed US weekly crude inventories fell by three million barrels last week to 499.7 million barrels.
On Tuesday the American Petroleum Institute said crude inventories dropped 7.6 million barrels last week.
Brent crude jumped 2.07% to $51.93 per barrel and West Texas Intermediate gained 2.2% to $49.83 per barrel at 1630 BST.
In company news, Tesco shares jumped after the supermarket reported a 3.3% rise in group sales in the first quarter, including a pick-up in UK like-for-like sales growth, and chief executive Dave Lewis laid out ambitious plans for raising operating margins.
Tesco led shares in fellow supermarkets Morrison Supermarkets and J Sainsbury higher.
Severn Trent and United Utilities were under the cosh after RBC Capital Markets downgraded both stocks as it took a look at the UK water sector.
The bank cut Severn Trent to 'underperform' from 'sector perform' on valuation grounds but lifted the price target to 2,300p from 2,200p.
RBC downgraded United Utilities to 'underperform' from 'sector perform', also on valuation, noting 4% implied total return, but lifted the price target to 1,000 from 975p.
Centamin gained as it reported a 6% increase in quarterly production to 148,674 ounces at its Sukari Gold Mine in Egypt.
Motor insurance company Hastings Group was in the red after saying that a group of investors has agreed to sell 46.17m shares, or a 7% stake, at 216p per share. |
| | Q4 Top 10 Stock Picks | | Opportunities for short term traders and long term investors alike 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 this quarter. Download Q4 Top 10 Stock Picks today Losses can exceed deposits |
| Market Movers
FTSE 100 (UKX) 7,036.45 -0.54%
FTSE 250 (MCX) 18,200.52 -0.77%
techMARK (TASX) 3,555.67 -0.66%
FTSE 100 - Risers
Tesco (TSCO) 207.10p 9.75%
Marks & Spencer Group (MKS) 337.70p 2.68%
Anglo American (AAL) 1,011.00p 2.50%
Barclays (BARC) 172.45p 1.89%
Standard Chartered (STAN) 661.40p 1.82%
Antofagasta (ANTO) 539.50p 1.41%
Prudential (PRU) 1,428.00p 1.38%
easyJet (EZJ) 1,003.00p 1.31%
Royal Dutch Shell 'B' (RDSB) 2,125.00p 1.31%
Aviva (AV.) 453.40p 1.30%
FTSE 100 - Fallers
Polymetal International (POLY) 875.00p -5.71%
United Utilities Group (UU.) 951.00p -4.37%
Randgold Resources Ltd. (RRS) 7,040.00p -3.96%
Intu Properties (INTU) 290.00p -3.59%
Imperial Brands (IMB) 3,953.00p -3.35%
Compass Group (CPG) 1,497.00p -3.29%
British American Tobacco (BATS) 4,881.00p -3.19%
Severn Trent (SVT) 2,417.00p -3.17%
Land Securities Group (LAND) 1,022.00p -3.04%
Fresnillo (FRES) 1,675.00p -2.84%
FTSE 250 - Risers
Aldermore Group (ALD) 186.90p 6.13%
Electrocomponents (ECM) 364.20p 3.35%
Hunting (HTG) 503.00p 3.31%
OneSavings Bank (OSB) 292.30p 2.63%
Spectris (SXS) 2,110.00p 2.63%
Ascential (ASCL) 289.30p 2.30%
Tullow Oil (TLW) 261.80p 2.11%
JD Sports Fashion (JD.) 1,573.00p 2.08%
DFS Furniture (DFS) 278.00p 2.06%
Essentra (ESNT) 508.50p 2.01%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,090.00p -7.23%
Hochschild Mining (HOC) 259.50p -6.32%
PayPoint (PAY) 1,058.00p -4.94%
Countrywide (CWD) 216.40p -3.52%
Domino's Pizza Group (DOM) 367.50p -3.29%
Pennon Group (PNN) 865.50p -3.13%
Capital & Counties Properties (CAPC) 282.00p -3.09%
Workspace Group (WKP) 687.50p -2.96%
Big Yellow Group (BYG) 771.00p -2.90% |
| | 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 |
| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks lower amid ECB tightening fears European stocks fell on Wednesday amid growing concerns about possible monetary tightening by the European Central Bank.
The benchmark Stoxx Europe 600 index was last down 0.49%, while Germany's DAX lost 0.29% and France's CAC 40 was off 0.22%.
Meanwhile, oil prices were on the front foot after the American Petroleum Institute said on Tuesday that US crude inventories fell 7.6m barrels in the week ended 30 September, versus expectations for a 2m increase.
West Texas Intermediate was up 2.11% at $49.74 a barrel and Brent crude was 1.91% firmer at $51.86.
Investors got their first chance to react to a press report after the close on Tuesday that the European Central Bank was reaching a consensus to start tapering its asset-buying programme.
According to Bloomberg, the ECB will start winding down the asset purchases ahead of the programme's end in March next year.
The ECB later denied that the issue had been discussed.
In addition, market participants were still digesting comments by Richmond Fed President Jeffrey Lacker who said on Tuesday that he would have voted in favour of an interest rate hike at the September policy meeting if he had been able to vote.
"I would have dissented," Lacker told reporters in Charleston, West Virginia, where he gave a speech on the economic outlook.
The Fed last month decided to keep rates at between 0.25% and 0.50% as it waits for further evidence of improvement in inflation and the economy. The central bank indicated that it expects one rate increase this year.
Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said: "European equity markets are on the back foot as concerns grow that central banks are going to pare back accommodative policy - with the ECB potentially tapering bond purchases and previously dovish Fed members ramping up expectations of an interest rate rise this year.
"Both equity and bond market valuations have been founded on monetary support from global central banks and have arguably become hooked on quantitative easing and low interest rates.
"The possibility of central banks returning to a more normal regime could see taper tantrums resume, volatility spike and investors flee."
In corporate news, Tesco surged 9.75% after reporting much-improved sales and operating profits in the first half of the year, though its pension deficit has grown to a whopping £6bn due to lower bond yields.
BHP Billiton pushed 0.12% higher as it talked up the opportunities within its petroleum business during an investor briefing.
On the downside, Air Liquide fell 0.89% after saying it has begun exclusive talks to sell its scuba-diving equipment making unit Aqua Lung to Montagu Private Equity.
On the data front, Markit's final eurozone composite output index printed at 52.6 in September, in line with the flash estimate but down from August's reading of 52.9.
Meanwhile, the final eurozone services business activity index came in at 52.2, a touch higher than the flash estimate of 52.1 but down from 52.8 in August.
In terms of sectors, output rose at manufacturers and service providers. The rate of expansion in manufacturing production ticked higher and remained above that for service sector business activity for the fourth straight month. Services output growth dipped to a 21-month low.
Meanwhile, separate data from Eurostat showed retail sales dipped 0.1% from July, beating expectations of a 0.3% decline. On the year, however, they were up 0.6%, missing forecasts of a 1.5% increase. |
| | 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 |
| | US Market Report | | US open: Stocks rise as investors weigh private payrolls report US stocks gained on Wednesday as lacklustre private payrolls jobs data made the chances of an interest rate hike by the Federal Reserve seem less likely.
At 1557 BST the Dow Jones Industrial Average rose 0.53% to 18,263.71 points, the S&P 500 increased 0.39% to 2,158.98 points and the Nasdaq jumped 0.52% to 27.35 points.
At the same time oil prices rose after the Energy Information Administration revealed US weekly crude inventories fell by three million barrels last week to 499.7 million barrels.
On Tuesday the American Petroleum Institute said crude inventories dropped 7.6 million barrels last week.
West Texas Intermediate edged up 2.2% to $49.81 per barrel and Brent increased 2.07% to $51.95 per barrel.
Meanwhile, private US employers added 154,000 jobs in September, according to payroll processor Automatic Data Processing and forecasting firm Moody's Analytics, missing expectations of 165,000. The previous month was revised down to 175,000 from the initial estimate of 175,000.
The slowdown was driven by the services sector, which Barclays Research said is a "concern and is a risk to our outlook for economic activity".
"However, in this instance, the slowing in services growth, relative to recent trends, is concentrated in trade, transportation, and utilities," the bank added.
"This series tends to be related to the pace of manufacturing activity in the US. As such, the slowdown in services is likely a manifestation of a still-weak manufacturing sector rather than a change in trend in the health of services sector more generally."
The report comes ahead of Friday's all-important non-farm payrolls, which is expected to show employers added 170,000 jobs in September.
A separate report showed the US service sector improved more than expected in September to a 11-month high. The Institute for Supply Management's index of non-manufacturing activity rose to 57.1 from 51.4 in August, comfortably beating expectations for a reading of 53.0.
US factory orders grew by 0.2% month-on-month in August to $453.1bn, according to the Commerce Department. Economists had pencilled in a drop of 0.5%.
Orders for durable goods were up 0.1% month-on-month to $227.3bn after rising 3.6% in July, beating estimates for no change.
In company news, Twitter rallied amid speculation that the social media company could consider takeover bids this week.
Chesapeake Energy Corp. advanced as the rise in oil prices boosted energy shares.
Agribusiness giant Monsanto Co. was on the front foot after reporting better-than-expected quarterly earnings. |
| | 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 
|
| | Broker Tips | | Broker tips: Water utilities, Tesco, Henderson Severn Trent and United Utilities were under the cosh on Wednesday after RBC Capital Markets downgraded both stocks as it took a look at the UK water sector.
The bank cut Severn Trent to 'underperform' from 'sector perform' on valuation grounds but lifted the price target to 2,300p from 2,200p. RBC said it has updated its return on regulated equity calculation and valuation approaches such that the target rises, but with -5% implied total return, it downgraded the rating.
"We believe SVT will continue to be one of the better-held UK water stocks by investors. Its management presents SVT's investment case strongly and largely receives a positive feedback from those who have met them."
RBC downgraded United Utilities to 'underperform' from 'sector perform', also on valuation, noting 4% implied total return, but lifted the price target to 1,000 from 975p.
The Canadian bank said its ratings on both stocks reflect its view that their current trading valuation implies a total return that compares unfavourably to the rest of the European utilities sector.
RBC highlighted a preference for outperform-ratedPennon, which it said offers a "one-stop shop for investors seeking exposure to various long-term themes, including water/waste, safety amidst Brexit, macro recovery (relative to SVT/UU), income-play, earnings growth and UK Water M&A."
RBC lifted its price target for Pennon to 950p from 925p.
Shore Capital reiterated a 'hold' rating and target of 189p on Tesco on Wednesday after the supermarket reported its first half results.
The company reported group sales grew 3.3% to £24.4bn and UK like-for-like sales improved to a 0.6% increase from the 0.3% rise the same period a year earlier. However, its pension deficit soared to a whopping £5.9bn from £3.2bn, reflecting lower bond yields.
Chief executive Dave Lewis also laid out his ambitious plans for growing profit margins. Lewis aims to lift group operating margin from its current 2.2% to 3.5-4.0% by the 2019/20 financial year, helped by cost cutting and a solid level of capital expenditure.
"The results themselves represent demonstrable operational improvement from the business with cash sales and not just volumes now positive in the UK in particular alongside much needed margin accretion. We welcome this progress," said ShoreCap.
"However, the operations in isolation do not characterise the Tesco investment thesis. The burden of broad level indebtedness and the corresponding high solvency ratios, continue to prevent us from taking a more positive view on the group's shares."
Shorecap said it may upgrade its current pre-tax profit forecast for fiscal year 2017 of £682m. Further out, the broker predicts an earnings before interest and tax margin of 3.7% in 2020.
"Indeed, whilst there may be some understandable excitement today on Tesco's new margin ambitions and the greater confidence of management, it is important to point out the back-end weighted nature of the plan, wholly consistent with our understanding of the business and investment thesis on the stock."
Barclays reiterated an 'equal weight' rating on Henderson Group but raised its target to 270p from 215p on Wednesday after the investment firm agreed to buy US rival Janus Capital.
The merger will create a combined portfolio of assets under management worth £320bn and the two firms will be renamed Janus Henderson Global Investments. The companies hope to cut costs of $110m per year within three years of closing from areas including IT and office space.
"We believe investors were particularly excited about management's projection of double-digit accretion as well as the possible future benefits from lower group tax and incremental flows," Barclays said.
"However, we believe the $110m cost synergies (16% of EBITDA or 7% of costs) are likely to come under more scrutiny given the complementary geography and products of the group."
Barclays said it believes management need to provide more detail around the $110m of cost savings to convince the market since much emphasis was placed on complementary investment capabilities and distribution strength.
"This is particularly true given that management specified the majority of the benefit would be realised inside 12 months but did not make it so obvious where back office or investment teams are to be rationalised." | | |
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