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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 close: FTSE gains on mining, oil stocks ahead of BoE on Thursday Equities in London pushed higher with mining and oil heavyweights pacing gains, seemingly ignoring low-level sterling strength on the dollar and ahead of Thursday's much-anticipated Bank of England news.
The UK central bank was expected to leave interest rates unchanged, but much attention will be focused on its inflation report.
Monex analysts said the inflation report would offer the BoE a chance to revise its outlook for the economy, potentially in a slightly more hawkish direction given resilient economic growth, rising inflation, and an improving labour market.
The FTSE 100 closed Wednesday up 0.59% or 43.03 points to 7,385.24, and the FTSE 250 closed up by 0.30% to 19,876.81. Wall St and Europe were mostly mildly lower.
"The FTSE is gaining ground even amid the furore over Trump's sacking of FBI Director James Comey," said IG market analyst Joshua Mahony.
"Parallels have been drawn with the Nixon scandal, and should this unfold in a similar manner, we could be looking at one of the most incredible political episodes in the history of the United States," opined Mahony.
"Crucially for markets, as the chances of an impeachment hearing increase, so we will have to see the Trump trade unwind, raising the vulnerability of US stocks in particular," he said.
Connor Campbell, financial analyst at Spreadex, said the thrust of the FTSE's momentum stemmed from the commodity sector.
BP and Shell were racing ahead after two sets of US data showed bigger than expected falls in stores of the black liquid in that country last week.
"Mining stocks ignored copper's stagnation to instead focus on gold's gains," he said. This saw Anglo American, BHP Billiton and others rise.
"Tomorrow will push the pound back into the spotlight, however, as the Bank of England both votes on interest rates and reveals its latest inflation report," said Campbell.
Michael Hewson, chief market analyst at CMC Markets UK, said European markets had held up fairly well on Wednesday.
"Amongst the best performers has been house builder Barratt Developments who reported that it expected that its profits for the full year would be at the top end of expectations," he said.
Barratt expected its full-year pre-tax profit be at the top end of analyst estimates for £675m-£733m, saying completions would hit their highest level in nine years at about 17,350.
"Retail stocks have also enjoyed a respite after some positive broker notes which have helped lift Primark-owner Associated British Foods, as well as Next and Marks & Spencer."
Other sectors performing well in London include utilities, insurance and banks, while several pharmaceuticals and commercial property outfits were retreating.
Barclays was in positive territory after chief executive Jes Staley apologised to shareholders for his attempts to identify an internal whistleblower, adding the bank did not currently see a need to shift British jobs or significant operations elsewhere.
Catering company Compass edged higher after it reported a rise in first-half revenue as it benefited from a weaker pound and announced a £1bn special dividend.
Defence contractor BAE Systems firmed as it started the year with good momentum, adding that trading was in line with its expectations.
ITV softened after it said advertising revenue fell in the first quarter and was expected to remain down for the first half. |
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| Market Movers
FTSE 100 (UKX) 7,385.24 0.59%
FTSE 250 (MCX) 19,876.81 0.30%
techMARK (TASX) 3,555.23 -0.12%
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 1,446.00p 2.70%
Associated British Foods (ABF) 2,877.00p 2.38%
Barclays (BARC) 210.15p 2.36%
Anglo American (AAL) 1,042.50p 2.16%
Barratt Developments (BDEV) 609.00p 2.10%
SSE (SSE) 1,460.00p 2.03%
BT Group (BT.A) 311.90p 1.93%
Standard Chartered (STAN) 734.40p 1.87%
Kingfisher (KGF) 348.60p 1.72%
Burberry Group (BRBY) 1,629.00p 1.69%
FTSE 100 - Fallers
ITV (ITV) 196.20p -2.29%
Rolls-Royce Holdings (RR.) 873.00p -1.91%
Pearson (PSON) 722.00p -1.63%
Micro Focus International (MCRO) 2,461.00p -1.16%
Hikma Pharmaceuticals (HIK) 1,956.00p -1.16%
Sage Group (SGE) 691.00p -1.07%
Intu Properties (INTU) 274.40p -0.87%
Informa (INF) 650.50p -0.84%
Experian (EXPN) 1,675.00p -0.83%
RSA Insurance Group (RSA) 617.00p -0.80%
FTSE 250 - Risers
Vesuvius (VSVS) 591.00p 8.84%
Petra Diamonds Ltd.(DI) (PDL) 135.40p 5.53%
Marshalls (MSLH) 411.60p 4.73%
Greencore Group (GNC) 241.70p 3.91%
Ferrexpo (FXPO) 163.90p 3.87%
Nostrum Oil & Gas (NOG) 474.30p 3.67%
Vedanta Resources (VED) 626.00p 3.56%
IP Group (IPO) 145.10p 3.20%
Hill & Smith Holdings (HILS) 1,387.00p 2.89%
Indivior (INDV) 339.20p 2.79%
FTSE 250 - Fallers
TalkTalk Telecom Group (TALK) 168.80p -7.51%
Euromoney Institutional Investor (ERM) 1,045.00p -4.04%
Vectura Group (VEC) 145.00p -3.27%
Renishaw (RSW) 3,492.00p -3.16%
Spectris (SXS) 2,746.00p -3.11%
Cobham (COB) 133.90p -2.26%
Serco Group (SRP) 117.10p -2.25%
Allied Minds (ALM) 144.90p -2.16%
ZPG Plc (ZPG) 359.80p -1.99% |
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| | US Market Report | | US open: Stocks mixed after FBI director fired with crude futures rising Wall Street was trading on a mixed note as investors digested news that President Trump has fired FBI director James Comey and amid another rebound for crude oil futures.
At 1640 BST, the Dow Jones Industrials Average was off by 0.08% at 20,958.55, while the S&P 500 was edging higher to 0.04% to 2,398.06 and the Nasdaq Composite was lower by 0.10% to 6,114.08.
Spreadex analyst Connor Campbell said: "While Comey's shock dismissal doesn't technically have any immediate consequences for the market, it is another reminder of the unpredictable and irresponsible nature of Trump's governance."
In an unexpected announcement late on Tuesday, the White House confirmed that Comey had been removed from his position due to his handling of the inquiry into Hillary Clinton's email server. Trump's decision was made based on recommendations given by Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein.
News that US oil stockpiles dropped sharply last week sent front month West Texas Intermediate crude oil futures higher by 2.74% to $50.10 a barrel on the NYMEX.
On Wednesday, the Energy Information Administration reported a 5.2m barrel drop in US commercial crude oil inventories for the week ending on 5 May.
Acting as a backdrop, overnight the president of the Federal Reserve bank of Dallas told an audience that three interest rate hikes in 2017 continued to be his baseline scenario.
On the economic front, US import prices rose at a 0.5% month-on-month clip in April (consensus: 0.2%).
His remarks weighed on longer-term US government yields, with those on the benchmark 10-year US Treasury note slipping by two basis points to 2.38%.
In corporate news, Priceline was weaker after it issued a weak earnings outlook late on Tuesday.
Shares in video game-maker Electronic Arts began the session trading on the frontfoot following better-than-expected earnings. Stock in Walt Disney on the other hand slipped following stronger-than-expected earnings, even as it missed revenue.
Dow Jones - Risers
Chevron Corp. (CVX) $106.79 1.62%
Caterpillar Inc. (CAT) $100.47 1.19%
Travelers Company Inc. (TRV) $120.71 0.63%
JP Morgan Chase & Co. (JPM) $87.25 0.58%
Goldman Sachs Group Inc. (GS) $224.92 0.52%
Procter & Gamble Co. (PG) $86.73 0.38%
Merck & Co. Inc. (MRK) $63.49 0.31%
Home Depot Inc. (HD) $157.95 0.17%
E.I. du Pont de Nemours and Co. (DD) $79.56 0.09%
Microsoft Corp. (MSFT) $69.06 0.03%
Dow Jones - Fallers
Walt Disney Co. (DIS) $108.95 -2.78%
Pfizer Inc. (PFE) $32.97 -1.23%
Cisco Systems Inc. (CSCO) $33.62 -0.84%
Intel Corp. (INTC) $36.08 -0.81%
Boeing Co. (BA) $185.49 -0.76%
Apple Inc. (AAPL) $153.07 -0.60%
3M Co. (MMM) $196.82 -0.58%
Johnson & Johnson (JNJ) $122.63 -0.47%
Wal-Mart Stores Inc. (WMT) $76.45 -0.35%
General Electric Co. (GE) $28.85 -0.26%
S&P 500 - Risers
Nvidia Corp. (NVDA) $117.46 14.11%
Electronic Arts Inc. (EA) $109.36 13.90%
Chesapeake Energy Corp. (CHK) $5.68 5.19%
Vulcan Materials Co. (VMC) $131.50 4.27%
Newfield Exploration Co (NFX) $35.40 3.96%
Eog Resources Inc. (EOG) $95.00 3.67%
Diamond Offshore Drilling Inc. (DO) $15.18 3.34%
Marathon Oil Corp. (MRO) $14.85 3.13%
Hess Corp. (HES) $49.32 3.12%
Devon Energy Corp. (DVN) $39.00 2.93%
S&P 500 - Fallers
Frontier Communications Co. (FTR) $1.35 -5.94%
Priceline Group Inc (PCLN) $1,824.19 -4.55%
TEGNA Inc (TGNA) $23.23 -3.41%
Viacom Inc. Class B (VIAB) $35.02 -3.34%
United States Steel Corp. (X) $20.15 -3.10%
Allergan plc (AGN) $231.39 -2.99%
Walt Disney Co. (DIS) $108.95 -2.78%
CBS Corp. (CBS) $61.99 -2.48%
Quanta Services Inc. (PWR) $33.66 -2.46%
Navient Corporation (NAVI) $14.28 -2.19%
Nasdaq 100 - Risers
Nvidia Corp. (NVDA) $117.46 14.11%
Electronic Arts Inc. (EA) $109.36 13.90%
NetEase Inc. Ads (NTES) $278.96 2.60%
Microchip Technology Inc. (MCHP) $78.17 2.24%
Activision Blizzard Inc. (ATVI) $55.55 1.70%
Applied Materials Inc. (AMAT) $42.62 1.38%
Tesla Inc (TSLA) $325.15 1.21%
American Airlines Group (AAL) $47.60 1.10%
T-Mobile Us, Inc. (TMUS) $66.21 1.09%
Netflix Inc. (NFLX) $159.01 0.98%
Nasdaq 100 - Fallers
Priceline Group Inc (PCLN) $1,824.19 -4.55%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $53.86 -3.44%
Viacom Inc. Class B (VIAB) $35.02 -3.34%
Mylan Inc. (MYL) $37.25 -2.00%
Liberty Global plc Series A (LBTYA) $30.25 -1.94%
J.B. Hunt Transport Services Inc. (JBHT) $85.92 -1.93%
Liberty Global plc Series C (LBTYK) $29.79 -1.88%
Amgen Inc. (AMGN) $160.46 -1.69%
Discovery Communications Inc. Class A (DISCA) $26.22 -1.65% |
| | Market Analysis 10/05/2017 Today’s highlights: Gains seen around the world - Wall Street ended last week with a bang: All three major indices closed in the green on Friday, including new records for the Nasdaq and S&P 500, and an all-time high for Apple. If the positive trend created by Macron’s win holds, markets in the US might also react and continue to climb.
- Europe opens higher: Fueled by Marcon’s victory, markets in Europe opened the trading week on a positive note. The FTSE was up 23 points, the DAX opened 85 points higher and the CAC w...
Read More... |
| | Broker Tips | | Broker tips: Burberry, Next, HSBC Burberry shares were in fashion on Wednesday as Credit Suisse upped the stock to 'neutral' from 'underperform' and lifted the price target to 1,550p from 1,300p, saying the bear case is now behind us.
CS said that after being negative for over two years on the basis of a growth slowdown weighing on margins, the bear thesis has largely played out. The bank said the bulk of the earnings downgrades could be behind us, noting that consensus pre-tax profit forecasts have come down 20% in the last two years or 40% after adjusting for the positive sterling effect.
"We believe earnings risk is now more limited as the bulk of the £100m of annualised cost savings announced last year start to feed through PBT from FY18. We note that FY19 consensus PBT of £525m assumes almost no organic profit growth," it said.
Deutsche Bank bumped up its target on shares of HSBC, hailing the restart of dividend payments in the US but cautioned that investors would need to be patient when it came to expectations for capital upstreaming from the States.
Analysts David Lock and Stephen Andrews welcomed the first dividends from HSBC's US unit in nearly 10 years.
While symbolic, they expected it would help fund future buybacks.
As well, they said the lender's first quarter results printed ahead of analysts' estimates, helped by a better performance from life insurance manufacturing and investment distribution.
However, commentary from management on the pace of capital upstreaming from the US was absent.
Lock and Andrews said it would still take more than three years for between seven to eight billion dollars of excess capital in the US to be returned to the holding company.
They penciled in $2.5bn of buybacks for 2017 with similar amounts for 2018 and 2019.
Next got a boost on Wednesday as Investec upped its stance on the retailer to 'buy' from 'hold' and lifted the price target to 4,750p from 3,900p.
It said that unlike peers, Next has been actively managing its portfolio over the last 10 years, something that is being overlooked by investors preoccupied by short-term trading.
"Next's estate is well-invested, and in our view margins appear sustainable, even if retail like-for-like sales continue to fall. Post FY18, profits should stabilise even if consumer demand remains weak, with some self-help. In our view, valuation doesn't reflect Next's qualities as a well-invested business with strong and sustainable cash flows."
The brokerage highlighted the fact that Next's store portfolio has undergone more than just a refit. 53% of Retail's square footage didn't exist 10 years ago, even though store numbers have risen by just 12% since the start of full-year 2008.
In addition, Investec said new space is highly profitable and reflect an active property strategy, with new stores contributing around 40% more than company average. "Profitable new space continues to generate a profit buffer each year versus negative LFLs," it said. | | | | To advertise in the Euro Markets Bulletin please contact [email protected] |
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