| | | | | | | Banking Sector Outlook for 2017 In the first of a two-part series, this report covers the sector and its main players ahead of a barrage of full year results releases. We take an in-depth look at how US & UK Banks fared during 2016, reporting dates and forecasts for 2017, and what early US results have shown us. Get your copy of the Banking Sector Outlook for 2017 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 open: Chinese data lifts Footsie in early trading, Greece in background Shares were expected to start the session higher, tracking a record close overnight on Wall Street and on the heels of better than expected Chinese trade data.
As of 0829 GMT the FTSE 100 was up by 34.08 points or 0.47% to 7,263.85.
In parallel, the Shanghai Stock Exchange's Composite Index finished the session 0.42% higher at 3,196.70.
Asia's largest economy recorded a foreign trade surplus of $51.4bn, a six-month high, with both exports and imports easily surpassing economists' forecasts for the month of January.
Chinese exports jumped 7.9% year-on-year (consensus: 3.2%) while imports rose by 16.7% (consensus: 10.0%).
"Stepping back, the big picture is that Chinese trade values have been picking up in recent months thanks to a revival in global manufacturing, the continued strength of China's domestic economy and the rebound in global commodity prices. We expect this improvement to be sustained in the short-run, even as Chinese New Year distortions mean that headline trade growth is likely to fall back sharply in February," said Julian Evans-Pritchard, China economist at Capital Economics.
Commenting on US President Donald Trump's promise on Thursday of "something phenomenal on tax in the next two to three weeks", which stoked stock market gains in the US, Michael Hewson, chief market analyst at CMC Markets UK said: "It is hard to imagine that he will be able to promise anything tangible within a two to three week window, however whatever the realities investors appear happy to take him at his word, as US markets closed well above their previous peaks, while the US dollar index looks set to post its first positive week this year."
Acting as a backdrop, traders were keeping an eye on Greece with one referencing a Bloomberg report that the country's creditors, the European Commission, ECB, ESM and IMF might present it with a framework agreement to break the deadlock over its bailout programme.
On the economic calendar for Friday are UK industrial production figures for January at 0930 GMT, followed by US data on import prices and consumer sentiment at 1330 GMT and 1500 GMT, respectively.
Reckitt Benckiser bags Mead Johnson
Nurofen and Durex maker Reckitt Benckiser confirmed that it will buy US baby milk company Mead Johnson for up to $17.9bn, while it also said that revenue and earnings grew in 2016 despite challenging markets and products.
The FTSE 100 company is to buy Mead Johnson for $90 per share in cash, valuing Mead Johnson's equity at $16.6bn with the total value of the deal coming to $17.9bn including net debt.
Online food ordering and delivery service Just Eat announced on Friday that, due to urgent family matters, David Buttress had informed the board of his intention to step down from his role as chief executive officer.The FTSE 250 company said Buttress would continue to work full time in the company until the end of the first quarter, at which time John Hughes - who has been chairman of the board for almost six years - will assume the role of executive chairman.
Pub group Greene King reported strong trading over the Christmas period on Friday as it sounded an upbeat note on its outlook. In the 40 weeks to 4 February, like-for-like sales grew 1.1%. Excluding Fayre & Square, LFL sales were up 1.6% over the period.
Over the last 16 weeks, the company said it had seen strong Christmas trading, alongside the usual quieter months of November and January.
Advent International has completed the sale of its remaining interest in DFS Furniture held through Advent Diamond.
The disposal was conducted through a placing of 25,661,359 existing ordinary shares in the company to institutional investors by means of an accelerated bookbuild at a price of 228p per share, raising gross proceeds of £58.5m.
Electrocomponents' revenue grew as it implemented initiatives to stabilise its gross margin and reduce costs.
For the four months ended 31 January, the electronics distributor reported that sales increased 6% when compared to the previous year, with growth seen across all its main geographical regions.
In Europe revenue grew 4%, with growth of 7% and 12% in Asia Pacific and North America, respectively. |
| Market Movers
FTSE 100 (UKX) 7,270.45 0.57%
FTSE 250 (MCX) 18,658.23 0.16%
techMARK (TASX) 3,346.81 0.40%
FTSE 100 - Risers
Anglo American (AAL) 1,339.00p 3.36%
Rio Tinto (RIO) 3,480.00p 2.90%
Antofagasta (ANTO) 847.50p 2.42%
BHP Billiton (BLT) 1,369.50p 2.35%
Glencore (GLEN) 319.20p 2.24%
CRH (CRH) 2,788.00p 1.75%
Direct Line Insurance Group (DLG) 368.70p 1.51%
Sage Group (SGE) 646.50p 1.49%
Mondi (MNDI) 1,818.00p 1.39%
AstraZeneca (AZN) 4,636.00p 1.33%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 7,310.00p -1.48%
Fresnillo (FRES) 1,515.00p -0.92%
BT Group (BT.A) 306.20p -0.68%
Smith & Nephew (SN.) 1,190.00p -0.67%
Convatec Group (CTEC) 242.40p -0.66%
SSE (SSE) 1,537.00p -0.45%
Dixons Carphone (DC.) 310.00p -0.42%
Hikma Pharmaceuticals (HIK) 1,947.00p -0.41%
Land Securities Group (LAND) 1,042.00p -0.38%
Admiral Group (ADM) 1,871.00p -0.37%
FTSE 250 - Risers
Elementis (ELM) 299.10p 8.68%
Ashmore Group (ASHM) 347.20p 3.64%
Kaz Minerals (KAZ) 541.50p 3.14%
Ferrexpo (FXPO) 159.00p 2.65%
Vedanta Resources (VED) 1,070.00p 2.49%
Amec Foster Wheeler (AMFW) 454.40p 2.18%
Evraz (EVR) 246.40p 2.03%
Redefine International (RDI) 38.53p 1.45%
Hunting (HTG) 576.50p 1.41%
Aberdeen Asset Management (ADN) 257.80p 1.30%
FTSE 250 - Fallers
Just Eat (JE.) 522.50p -5.77%
Senior (SNR) 189.70p -4.24%
Hochschild Mining (HOC) 257.60p -3.01%
Acacia Mining (ACA) 445.30p -2.22%
Electrocomponents (ECM) 495.90p -1.61%
Greene King (GNK) 690.50p -1.50%
Polymetal International (POLY) 966.50p -1.18%
OneSavings Bank (OSB) 358.50p -1.13%
Assura (AGR) 56.45p -0.96% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: Stocks edge up as miners boosted by China data European stocks edged higher in early trade, with miners supported by encouraging Chinese trade figures, as investors sifted through corporate releases.
At 0910 GMT, the benchmark Stoxx Europe 600 index was up 0.2%, Germany's DAX was 0.4% higher and France's CAC 40 was up 0.2%.
Meanwhile, oil prices ticked higher, with West Texas Intermediate up 0.6% at $53.31 a barrel and Brent crude up 0.7% at $56.01.
Sentiment got a lift on Friday after data released earlier showed Chinese exports rose 7.9% in January in dollar terms, marking the fastest pace in almost two years, while imports rose 16.7%. Both sets of figures beat economists' expectations.
Basic resources were the standout gainers, with the Stoxx 600 sub-index for the sector up 2.1% as copper prices were boosted by supply concerns after the Chinese trade data suggested a strong demand outlook for the metal.
Results from steel giant ArcelorMittal also underpinned gains in the sector, as it said 2016 earnings rose to $6.3bn from $5.2bn the previous year.
French car maker Renault rallied after it said profit jumped 38% in 2016, while Reckitt Benckiser pushed up as it agreed to buy US infant formula maker Mead Johnson Nutrition for $16.6bn.
Luxury brand Kering rose after its 2016 profit beat analysts' forecasts, but Belgian car parts maker Umicore was under pressure as it posted a mere 1% increase in full-year revenue.
Elsewhere, investors continued to keep a watchful eye on developments in Greece.
Deutsche Bank's Jim Reid said: "It's the standoff between the IMF and EU that is really the focus at the moment. Yesterday the IMF dug their heels in once again with spokesman Gerry Rice saying that the Fund stand by their analysis and reiterated their view that Greece should target a primary surplus target of 1.5% accompanied by significant debt relief. That contrasts to what the EU has been pushing for in no debt relief but more austerity and a primary surplus target of 3.5%. |
| | UK Event Calendar | | Friday 10 February
INTERIM DIVIDEND PAYMENT DATE
Bisichi Mining, QinetiQ Group
QUARTERLY PAYMENT DATE
British Land Company
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (GER) (07:00)
Import and Export Price Indices (US) (13:30)
EGMS
GCP Infrastructure Investments Ltd
AGMS
GCP Infrastructure Investments Ltd, Keras Resources , Numis Corporation, Port Erin Biopharma Investments Ltd
TRADING ANNOUNCEMENTS
Electrocomponents
UK ECONOMIC ANNOUNCEMENTS
Balance of Trade (09:30)
Industrial Production (09:30)
FINAL DIVIDEND PAYMENT DATE
Connect Group, Daily Mail and General Trust A (Non.V), Dunedin Smaller Companies Inv Trust, Game Digital, Grainger, Henderson European Focus Trust, Numis Corporation, Octopus VCT 3, Octopus VCT 4, Patisserie Holdings , Servoca, Tracsis |
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| | US Market Report | | US close: Trump's 'phenomenal' comments lift stocks US stocks were led higher on Thursday as consumer and finance stocks were bucked up President Donald Trump's pledge to unveil something "phenomenal" on tax plan in the coming weeks.
The Dow Jones Industrial Average closed up 0.59% at 20,172.40, while the S&P 500 and Nasdaq composite both gained 0.58% to finish at 2,307.87 and 5,715.18.
A plunge in weekly jobless claims to their lowest levels since November, 234k, and a rally in oil prices provided further lubrication for the markets.
Following heavy losses for crude in the previous session, West Texas Intermediate bounced back 1.3% to $53.03 per barrel and Brent crude was almost 1% firmer at $55.65.
The dollar, meanwhile, topped 113 against the yen Trump's meeting with Japanese Prime Minister Shinzo Abe on Friday.
Against the pound and the euro the greenback was 0.35% higher at $1.2497 and $1.0659.
Analyst Naeem Aslam at Think Markets said EURUSD had the potential to revisit 1.0451.
"Trump who had a dovish stance is no longer sure if weaker or stronger dollar is good for the economy and we are anticipating that he may be changing his view. Any strength in the dollar is going to push the euro lower."
With the dollar yen testing stronger ground again and gold out of favour, IG analyst Chris Beauchamp said markets may be "on the cusp of a fresh recovery in risk assets, just a day after the market seemed poised to fall heavily".
"A fresh all-time high in the S&P 500 could be taken as proof that the rally is back on, but with a weekend looming traders may find it difficult to muster up much enthusiasm. Particular signs of strength are seen in US energy stocks, with the sector ETF up 1.1% today and 3% off the lows of the week. A turn in risk appetite needs the support of key sectors like this to be sustainable," Beauchamp said.
In corporate news, President Trump was also having an effect on Twitter, said Michael Hewson, chief market analyst at CMC Markets, as the social media company's shares fell sharply on release of quarterly numbers.
"It does appear that the Trump effect has helped Twitter to boost its user base, with a 4% rise in monthly active users, with daily active users also rising due to the Presidential debates," Hewson said.
While headline earnings came in ahead of expectations, revenues fell short and management's guidance for revenues was slashed to between $75m to $95m, "a horrendous mark down and well down from the $190m most had been expecting" Hewson said.
In other corporate news, consumer focused Nike topped the Dow as it completed its best four-day move in 14 months, on no specific news, while Walmart was second biggest riser.
Goldman Sachs and JP Morgan Chase followed, in a rally linked to Trump's tax comments.
Dun & Bradstreet was given a lower rating by investors after its fourth quarter earnings missed forecasts but revenues beat expectations.
Coca-Cola lost some fizz as it predicted a fall in 2017 profit, but Dunkin' Brands made investors some extra dough by swinging to a profit and beating earnings expectations.
Kellogg's made a splash as profit rose above expectations, even though it cut sales forecast for 2017.
Electric car maker Tesla crawled higher following a report it will produce test versions of its Model 3 vehicle.
Viacom clicked higher after posting a better-than-expected quarterly profit.
Dow Jones - Risers
Nike Inc. (NKE) $55.31 2.65%
Wal-Mart Stores Inc. (WMT) $69.08 1.87%
Goldman Sachs Group Inc. (GS) $241.55 1.61%
JP Morgan Chase & Co. (JPM) $87.20 1.44%
Microsoft Corp. (MSFT) $64.06 1.14%
Caterpillar Inc. (CAT) $93.96 1.13%
Verizon Communications Inc. (VZ) $48.81 0.91%
Travelers Company Inc. (TRV) $118.78 0.82%
Pfizer Inc. (PFE) $32.38 0.75%
Cisco Systems Inc. (CSCO) $31.50 0.74%
Dow Jones - Fallers
Intel Corp. (INTC) $35.46 -2.53%
Coca-Cola Co. (KO) $41.25 -1.83%
United Technologies Corp. (UTX) $110.09 -0.28%
McDonald's Corp. (MCD) $124.48 -0.15%
Unitedhealth Group Inc. (UNH) $160.44 0.08%
Merck & Co. Inc. (MRK) $64.39 0.11%
Boeing Co. (BA) $164.25 0.29%
Apple Inc. (AAPL) $132.42 0.29%
Procter & Gamble Co. (PG) $88.66 0.38%
Exxon Mobil Corp. (XOM) $81.84 0.44%
S&P 500 - Risers
Teradata Corp. (TDC) $32.74 8.52%
United States Steel Corp. (X) $37.38 8.25%
Allegion (ALLE) $71.73 6.11%
Pioneer Natural Resources Co. (PXD) $191.59 5.45%
Equifax Inc. (EFX) $128.12 5.03%
Roper Technologies Inc (ROP) $202.11 4.76%
Nucor Corp. (NUE) $60.97 4.62%
Viacom Inc. Class B (VIAB) $43.89 4.33%
Kellogg Co. (K) $76.44 4.01%
Humana Inc. (HUM) $207.03 3.70%
S&P 500 - Fallers
Dun & Bradstreet Corp. (DNB) $101.88 -16.81%
Sealed Air Corp. (SEE) $47.13 -6.13%
Microchip Technology Inc. (MCHP) $70.93 -3.89%
Westrock Company (WRK) $52.31 -3.17%
Intel Corp. (INTC) $35.46 -2.53%
Masco Corp. (MAS) $33.06 -2.16%
Nvidia Corp. (NVDA) $116.38 -1.88%
Gilead Sciences Inc. (GILD) $65.59 -1.86%
Coca-Cola Co. (KO) $41.25 -1.83% |
| | Newspaper Round Up | | Friday newspaper round-up: Greece, Sky, BHS, RBS The Greek government has expressed hope of an imminent deal with its EU creditors, despite a warning from the German finance minister, Wolfgang Schäuble, that the country could cut its debts only by leaving the single currency. Athens is in a familiar stand-off with the German finance ministry as it seeks easier repayment terms on its €330bn (£280bn) debt pile, which the International Monetary Fund has described as unsustainable and explosive. - Guardian
The former Labour leader Ed Miliband is leading a campaign for the media regulator Ofcom to launch a full inquiry into Rupert Murdoch's bid for ownership of the satellite broadcaster Sky. In a letter to Sharon White, the chief executive of Ofcom, Miliband is one of several senior cross-party politicians to demand that the regulator carry out a "fit and proper person" test following 21st Century Fox's bid for the 61% of Sky it does not already own. - Guardian
Two of the biggest global banks have told French politicians in brutally clear language that Paris has almost no chance of capturing serious business from the City of London without radical reform of the country's labour code. A special Brexit panel in the French Senate revealed just how difficult it will be for Paris to become Europe's pre-eminent financial centre once Britain leaves the EU. Any migration of business is more likely to go to Dublin, Frankfurt, or even to New York. - Telegraph
The Insolvency Service has engaged forensic accountants and senior lawyers as it investigates whether former BHS directors should be disqualified. The government last year ordered the service to launch a fast-track investigation into the collapse of BHS, rather than awaiting initial findings from the administrator. - The Times | | | | To advertise in the Euro Markets Bulletin please contact [email protected] |
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