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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: Rare Chinese trade deficit leaves traders scratching heads Investors continued to play it safe ahead of the UK Budget later in the day, not to mention a key policy meeting at the European Central Bank the next day and monthly US jobs data out on Friday.
Complicating matters further, data released overnight revealed a trade deficit in China during the month of February, a rare occurrence, but perhaps a timely one, showing how the world economy was in a state of flux.
As of 0823 GMT the Footsie was down by 0.06% or 4.36 points to 7,334.74.
"Calls for a negative open come after yet another down day on Wall St that was emulated in Asia overnight," said Michael Van Dulken, head of research at Accendo Markets.
"Dragging on sentiment is China trade data showing a plunge to its first deficit since early 2014 with markets cautious about how to interpret the key data points ahead of a potential Fed rate hike."
The Chancellor will present his Budget at 1230 GMT against that daunting backdrop. Although he is expected to reveal an improvement in public finance figures from the Office for Budget Responsibility, Philip Hammond is expected to try and balance the calls for further investment in health and social care, supporting working families with continued belt tightening.
This budget is even more of a balancing act than usual, said Rebecca O'Keeffe, head of investment at Interactive Investor.
"Hammond needs to present Britain as being robust and ready for Brexit, while also building a war chest just in case. Previous budgets have often benefited individual sectors, such as house-builders, but although higher growth forecasts and higher tax receipts potentially give the Chancellor more room to manoeuvre, the Chancellor is likely to remain defensive on spending and the scope for pleasant surprises is limited."
China fell into a $8.79bn trade deficit in February, its first since 2014, as the country's imports surged.
According to the State Customs Administration, China's imports soared, expanding at an annualised clip of 44.7% (consensus: 20.0%), which was up from a 25.2% rise in January. Meanwhile, exports grew at a 4.2% year-on-year clip in February (consensus: 13%), after a rise of 15.9% in the month before.
Nonetheless, if both January and February data are combined in order to eliminate distortions from the Chinese Lunar New Year, then exports were ahead by 11% and imports by 34.1%, Julian Evans-Pritchard at Capital Economics said.
"Looking ahead, we expect external demand to remain fairly strong during the coming quarters which should continue to support exports. However, we doubt that the current pace of import growth can be sustained. For a start, the favourable base effects that have boosted commodity price inflation, and therefore import values, will reverse before long. And more fundamentally, with growth in China currently running above trend and both monetary and fiscal policy being tightened, it is only a matter of time before we see a slowdown in domestic demand," Evans Pritchard said.
The monthly US ADP payrolls report for February is scheduled for release at 1315 GMT.
As far as early actions from the main brokers were concerned, HSBC upped its target on GKN from 395p to 445p while reiterating a 'Buy'. The same broker also expressed favourable opinions towards AB Foods and B+M.
CMC makes a move Down Under
Online retail trading provider CMC Markets announced a major new stockbroking partnership with Australia and New Zealand Banking Group on Wednesday, which would result in CMC becoming the second largest stockbroker in Australia by both number of clients and trades executed.Following a transition period, CMC will service more than 500,000 ANZ retail stockbroking clients under the ANZ Share Investing brand, with gross revenue projected to increase by approximately AUD 40m.
Insurer Legal & General said full year pre-tax profits rose 17% to £1.6bn as the net cash increased 12% to £1.4bn.Adjusted operating profits rose to £1.6bn from £1.4bn. Earnings per share were up 19% at 22.2p. The full year dividend was up 7% 14.35p a share."With further political and economic uncertainty anticipated in 2017 and beyond, we expect further market volatility. The risk of slowing global economic activity remains and no business model can be fully immunised," L&G said. "However, we believe the opportunities available to the Group, primarily in the UK and US, remain attractive."
Admiral shares slipped as full year profits fell by a quarter due to the government's recent changes to the 'Ogden' rate at which personal injury claims are calculated, though the non-life insurer's hefty dividend was held steady as underlying profits edged higher. With customer numbers increasing 16% on the previous year to 5.15m, turnover for calendar-2016 grew 22% to £2.6bn and revenue by 13% to £1.02bn. Profit fell 25% to £284.3m due to the effect of Ogden, though if that was excluded it would have risen 3% to £389.7m.
Frankie & Benny's and Chiquito owner Restaurant Group said 2016 was "challenging" following poor trading across its leisure brands with like-for-ike sales down. Revenue was up 3.7% to £710.7m but like-for-like sales were down 3.9% compared to to the previous year.
G4S was higher as it reported good progress with its transformation strategy, with revenue up 6.3% and earnings growth of 16.6%.
Shares in Dignity slumped as the funeral service provider revised its medium-term target underlying earnings per share growth rate to 8% per year from 10% due to increasing competition in each of its markets. |
| | 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 |
| | Market Movers
FTSE 100 (UKX) 7,333.14 -0.08%
FTSE 250 (MCX) 18,879.63 -0.03%
techMARK (TASX) 3,427.99 -0.04%
FTSE 100 - Risers
Glencore (GLEN) 324.80p 1.50%
Intertek Group (ITRK) 3,803.00p 1.01%
Paddy Power Betfair (PPB) 8,350.00p 0.97%
Rio Tinto (RIO) 3,318.50p 0.88%
Antofagasta (ANTO) 787.00p 0.77%
AstraZeneca (AZN) 4,747.00p 0.65%
Worldpay Group (WPG) 274.20p 0.62%
Anglo American (AAL) 1,233.50p 0.53%
WPP (WPP) 1,732.00p 0.52%
Convatec Group (CTEC) 258.90p 0.47%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 7,040.00p -1.74%
Capita (CPI) 510.00p -1.54%
Babcock International Group (BAB) 894.00p -1.27%
BT Group (BT.A) 328.50p -1.20%
Admiral Group (ADM) 1,778.00p -1.17%
easyJet (EZJ) 943.50p -1.10%
Dixons Carphone (DC.) 301.30p -1.05%
Royal Mail (RMG) 399.80p -0.92%
RSA Insurance Group (RSA) 587.50p -0.76%
Informa (INF) 657.50p -0.75%
FTSE 250 - Risers
G4S (GFS) 285.80p 6.88%
CMC Markets (CMCX) 127.30p 5.21%
Hill & Smith Holdings (HILS) 1,209.00p 5.13%
Inmarsat (ISAT) 719.50p 5.11%
Just Eat (JE.) 569.50p 5.07%
Restaurant Group (RTN) 342.90p 4.77%
CLS Holdings (CLI) 1,780.00p 4.71%
Aldermore Group (ALD) 242.60p 1.98%
AO World (AO.) 150.40p 1.55%
Ferrexpo (FXPO) 155.20p 1.44%
FTSE 250 - Fallers
Dignity (DTY) 2,455.00p -11.18%
Aggreko (AGK) 887.00p -3.69%
Go-Ahead Group (GOG) 1,738.00p -2.74%
Sports Direct International (SPD) 278.30p -2.45%
Berendsen (BRSN) 780.00p -2.13%
Cobham (COB) 124.60p -1.81%
Greene King (GNK) 667.50p -1.48%
Paysafe Group (PAYS) 404.40p -1.15%
TalkTalk Telecom Group (TALK) 168.70p -1.11%
Carillion (CLLN) 224.20p -1.06% |
| | UK Event Calendar | | Wednesday March 08
INTERIM DIVIDEND PAYMENT DATE
Stagecoach Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Industrial Production (GER) (07:00)
MBA Mortgage Applications (US) (12:00)
Wholesales Inventories (US) (14:00)
FINALS
Admiral Group, BATM Advanced Communications Ltd., CLS Holdings, Dignity, FDM Group (Holdings), Foxtons Group , Hill & Smith Holdings, Legal & General Group, Lookers, Loopup Group , Menzies(John), Microgen, NMC Health, Pagegroup, Restaurant Group, Stock Spirits Group , WANdisco, XP Power Ltd. (DI)
ANNUAL REPORT
Legal & General Group
AGMS
Blackrock Income And Growth Investment Trust, Impax Asset Management Group
FINAL DIVIDEND PAYMENT DATE
Elegant Hotels Group
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| | US Market Report | | US close: Stocks slide for second session amid healthcare headache US stocks retreated again on Tuesday as the rally in cyclical stocks stalled, health stocks stumbled as Donald Trump held firm on his election promises on healthcare, and the dollar also gained. The Dow Jones Industrial Average closed down 0.15% at 20,924.76, the S&P 500 and Nasdaw both lost almost 0.3% to close at 5,833.93 and 2,368.39. Crude oil prices were lower, after a mid-session spike flattered to deceive, with West Texas Intermediate down 0.2% to $53.07 per barrel and Brent crude 0.3% lower at $55.86. The dollar was up 0.25% on sterling at 1.22, 0.1% on the euro and the yen at 1.0568 and 114.02 respectively. "While headline equity indexes remain close to their record high, the rally in cyclical stocks has stalled, signaling possible hurdles for the equity market and economic activity at a time when the Fed is ready to raise interest rates sooner and more than markets had previously expected," said Kathy Bostjancic at Oxford Economics. "The pullback in cyclical stocks versus defensive stocks reflects investor concern about the lack of detail and progress on pro-growth economic policies such as corporate tax reform and infrastructure spending, and the large focus on immigration restrictions that hold back growth." Real yields remain low, which Bostjancic said reflected her view that while the fiscal expansion of 'Trumponomics' may well boost aggregate demand in 2018 but is unlikely to meaningfully lift the aggregate supply or significantly boost economic growth for very long. On opening, the S&P 500's healthcare sector collapsed into a pool of red on the back of another tweet from President Donald Trump that under a new system for the industry where "pricing for the American people will come way down". The Republican party also unveiled plans to dismantle the Affordable Care Act, commonly known as Obamacare. The plans would shrink the government's role in healthcare by scrapping the requirement for most people to have health insurance and roll back extra funding for those on lower incomes. Showing the twin fallout for companies focused on drugs prices and Obamacare, drugmaker Ionis Pharmaceuticals and healthcare services provider Tenet Healthcare fell 7%, while industry giants Pfizer and Merck were down around 1%. On the macroeconomic data front, the US trade deficit jumped to $48.5bn in January from $44.3bn, in line with the consensus forecast, $48.5bn. Imports rose to $197.6bn in January from $192.6bn the previous month , while total imports increased by $5.3bn to $240.6bn. The surplus on the services balance slipped to $21.2bn from $21.4bn. Meanwhile, as investors bet the Fed will hike rates at its meeting next week, analysts said investor focus will shift to the release of the non-farm payrolls report at the end of the week for signs of continued growth, with the US economy expected to have added 186,000 jobs last month. The unemployment rate and wage growth components will also be watched closely. In corporate news, Jack Daniel’s whiskey parent Brown-Forman Corp was down 2.21% after it reported that profit fell short of expectations and it cut its outlook for the year. Verizon was down a day after saying it would at last begin offering customers unlimited data plans, having held off for years as it argued they would lead to lower margins and network congestion. Dick’s Sporting Goods slumped 7.66% despite the retailer posting better than expected fourth-quarter results. Michaels Companies gained 2.92% after the arts and crafts retailer beat fourth-quarter earnings forecasts and gave an upbeat outlook for 2017. Snap’s dramatic reversal continued into a second session, with the Snapchat owner's stock down almost 10% having soared more than 40% after its IPO on Thursday, but reality dawned as several stock analysts initiated coverage with a sell rating. Dow Jones - Risers Intel Corp. (INTC) $35.80 0.65%
Boeing Co. (BA) $182.02 0.60%
United Technologies Corp. (UTX) $112.26 0.56%
Caterpillar Inc. (CAT) $95.93 0.28%
Microsoft Corp. (MSFT) $64.40 0.20%
Walt Disney Co. (DIS) $110.86 0.17%
Visa Inc. (V) $89.06 0.13%
Apple Inc. (AAPL) $139.52 0.13%
American Express Co. (AXP) $79.58 0.10%
3M Co. (MMM) $189.09 0.10% Dow Jones - Fallers Chevron Corp. (CVX) $111.81 -1.20%
Verizon Communications Inc. (VZ) $49.42 -1.18%
Pfizer Inc. (PFE) $33.99 -1.05%
Merck & Co. Inc. (MRK) $65.96 -0.77%
Home Depot Inc. (HD) $146.00 -0.75%
JP Morgan Chase & Co. (JPM) $91.40 -0.55%
E.I. du Pont de Nemours and Co. (DD) $79.39 -0.53%
General Electric Co. (GE) $29.86 -0.47%
Coca-Cola Co. (KO) $41.99 -0.45%
Goldman Sachs Group Inc. (GS) $250.90 -0.44% S&P 500 - Risers Humana Inc. (HUM) $217.87 2.45%
Viacom Inc. Class B (VIAB) $42.93 1.75%
F5 Networks Inc. (FFIV) $143.60 1.60%
Best Buy Co. Inc. (BBY) $44.55 1.50%
Lennar Corp. Class A (LEN) $50.70 1.48%
PulteGroup Inc. (PHM) $22.80 1.47%
D. R. Horton Inc. (DHI) $32.85 1.36%
Electronic Arts Inc. (EA) $88.30 1.33%
Coca-Cola European Partners Limited (CCE) $35.39 1.29%
Stericycle Inc. (SRCL) $80.86 1.26% S&P 500 - Fallers Tenet Healthcare Corp. (THC) $19.32 -7.11%
Frontier Communications Co. (FTR) $2.62 -5.07%
Endo International Plc (ENDP) $10.90 -4.39%
Southwestern Energy Co. (SWN) $7.61 -4.16%
Express Scripts Holding Co (ESRX) $67.39 -3.80%
Signet Jewelers Ltd (SIG) $63.25 -3.58%
United States Steel Corp. (X) $36.15 -3.50%
Nordstrom Inc. (JWN) $44.01 -3.23%
Brown Forman Corp. Class B (BF.B) $46.96 -3.14%
Alexion Pharmaceuticals Inc. (ALXN) $129.18 -3.11% |
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| | Newspaper Round Up | | Wednesday newspaper round-up: UK Budget, North Korea warning, Brexit battles The United States and North Korea are racing towards a catastrophic "head-on collision", China's foreign minister has warned, amid Chinese fury at America's deployment of a controversial anti-missile system. Speaking in Beijing on Wednesday, Wang Yi said a "looming crisis" was brewing on the Korean peninsular. - Guardian
Chancellor Philip Hammond is to announce tax rises to meet a fresh round of spending commitments and reject calls to increase borrowing, when he unveils his maiden Budget later today. It is expected Mr Hammond will rely on taxes to raise extra spending for social care and business rates. - Telegraph
Philip Hammond will also present a sharp increase in economic growth, coupled with an improvement in the public finance figures. The Office for Budget Responsibility could all but erase the short-term downgrade to the borrowing figures delivered in last November's autumn statement after the Brexit result. - The Times
Philip Hammond is facing growing pressure from within the Conservative party to plough the proceeds of growing tax revenues into shoring up beleaguered public services. The Treasury has indicated that the chancellor will not shirk difficult decisions on tax as the government aims to steady the public finances before triggering article 50 and starting the formal process of Brexit. - Guardian
The Chancellor is planning to step in to help the aging North Sea oil and gas sector by investigating ways the tax system could help to extend the life of projects. The move will be announced by Philip Hammond when he delivers his first Budget to the House of Commons on Wednesday. - Telegraph
Landlords are exploiting legal loopholes such as by using snail farms, hot air balloons, tents and empty cardboard boxes to escape paying business rates at a cost to local authorities of £230 million a year, experts have claimed. Philip Hammond is set to use his budget today to quell the backlash against business rates rises by offering more relief to those who will be hit worst. - The Times
Supermarket giant Sainsbury's has dropped an ambitious target to get consumers to halve their household food waste after finding it was more difficult than expected to achieve behavioural change. Sainsbury's launched its "Waste Less, Save More" programme in 2016 - a £10m five-year plan to help customers save money by reducing their food waste. - Graun
Lord Heseltine was sacked last night as a government adviser for supporting a House of Lords rebellion that inflicted a historic defeat on the government. The former deputy prime minister was one of 13 Tory peers to rebel against the government by amending its Article 50 bill to give parliament the final say on any European Union agreement. - Times
Theresa May is heading for a fresh battle with Conservative MPs over her Brexit bill next week, after peers voted to give parliament the right to veto the final outcome of her EU talks. Downing Street said it would seek to overturn the amendment passed by the House of Lords on Tuesday by 366 to 268, arguing that giving parliament a blanket right of veto was against the national interest and would weaken May's negotiating hand. - Guardian |
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