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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: US political storm rains on Footsie's parade London's top flight index finished the day on the backfoot but off its intra-session lows as gains in the shares of precious metals miners and index heavyweights Lloyds and Tesco helped to offset the drag from the gathering political storm clouds on the other side of the Atlantic.
The FTSE 100 edged lower by 18.56 points to end the day at 7,503.47, while the second-tier FTSE 250 closed down by 0.51% at 19,773.59.
Overnight, The New York Times said US president Donald Trump had asked Federal Bureau of Investigation chief James Comey to "let go" of an investigation into his former national security adviser, Michael Flynn.
That sent the Chicago Board of Options Exchange's VIX volatility index, or the so-called 'fear gauge' as it is known to traders, rocketed 25.54% to 13.37. In parallel, other traditional safe have assets such as gold futures and Gilts also found a strong bid.
Gold futures were up by 1.67% to $1,257.30/oz. alongside a six basis point drop in the yield on the benchmark 10-year Gilt.
Helping to buoy sentiment in the UK, jobs data released earlier on Wednesday showed the unemployment rate hit a 42-year low, even as real wage growth slowed down.
The unemployment rate unexpectedly fell to 4.6% from 4.7%, according to data from the Office for National Statistics, beating expectations for it to remain unchanged.
But despite the tightness of the labour market, employers are not increasing pay. Average weekly earnings excluding bonuses fell 0.2% in real terms compared with a year earlier, though was up 0.1% if bonuses are included.
In nominal terms, average weekly earnings rose 2.1% ex-bonuses, which was worse than the 2.2% increase the market expected and the smallest gain since July of last year, while the 2.4% gain including bonuses was in line with forecasts.
On a related note, economists at Oxford Economics said on Wednesday that the so-called equilibrium rate of unemployment might well lie much lower than the 4.5% estimated by the Bank of England.
"The predicament facing pay is the same as that facing the economy as a whole - how to restore what history suggests should be readily-attainable rates of progress in a world where policymakers' pessimism errs towards accepting that this is as good as it gets," said Oxford Economics's Martin Beck.
On the UK corporate front, precious metals miner Fresnillo was the standout gainer as gold prices rallied on safe-haven demand amid worries about Trump.
Lloyds gained following news the government had sold its last 638,437,059 remaining shares in the lender on the previous day.
Energy supplier SSE turned higher after posting results that were better than it expected and lifting its total dividend.
Lloyds Banking Group was on the front foot after the UK government sold down its remaining shares in the bank, returning it to full private ownership.
Countryside Properties rallied after it said full-year profit was likely to be ahead of market expectations and reported a 31% jump in half-year completions and an increase in profit, while Tullow Oil gushed higher after making an "important" discovery in Northern Kenya.
Cyber security company Sophos - whose shares have benefited from the recent WannaCry security hack - racked up strong gains after its full-year results beat expectations with reported billings up 18.2% and a big hike in the dividend.
Rio Tinto was lifted by an upgrade to 'top pick' at RBC Capital Markets, while Virgin Money got a boost from a Credit Suisse upgrade.
Goingthe other way, British Land fell despite reporting a much stronger net asset value at its year end than the market was expecting and, despite the ongoing uncertainty around the economy, saying it was confident of generating better returns in the year ahead.
Pub group Mitchells & Butlers was in the red as it posted a drop in profit for the 28 weeks to 8 April despite a rise in sales, pointing to increased costs and exchange rate movements.
Spectris was also weaker as it appointed a new chairman and highlighted mixed trading in the year to date, while shares in estate agency Foxtons fell after it reported a 25% drop in revenues for the quarter to the end of March.
Shares in estate agency Foxtons fell after it reported a 25% drop in revenues for the quarter to the end of March, while Dunelm and Halfords were hit by downgrades at HSBC and Hikma was dented by a downgrade at Jefferies. |
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| Market Movers
FTSE 100 (UKX) 7,503.47 -0.25%
FTSE 250 (MCX) 19,773.59 -0.51%
techMARK (TASX) 3,598.78 -0.44%
FTSE 100 - Risers
Fresnillo (FRES) 1,606.00p 2.75%
Tesco (TSCO) 182.30p 2.16%
Kingfisher (KGF) 365.70p 2.09%
Randgold Resources Ltd. (RRS) 7,470.00p 2.05%
Lloyds Banking Group (LLOY) 71.52p 1.95%
DCC (DCC) 7,405.00p 1.86%
Hargreaves Lansdown (HL.) 1,347.00p 1.74%
Taylor Wimpey (TW.) 199.60p 1.58%
Reckitt Benckiser Group (RB.) 7,611.00p 1.26%
Royal Mail (RMG) 430.80p 1.25%
FTSE 100 - Fallers
Ashtead Group (AHT) 1,560.00p -3.82%
CRH (CRH) 2,774.00p -3.48%
British Land Company (BLND) 651.50p -3.34%
Hikma Pharmaceuticals (HIK) 1,717.00p -2.77%
Rolls-Royce Holdings (RR.) 842.50p -2.60%
Glencore (GLEN) 290.00p -2.24%
Prudential (PRU) 1,731.00p -2.15%
Schroders (SDR) 3,141.00p -2.03%
Smurfit Kappa Group (SKG) 2,113.00p -1.99%
Legal & General Group (LGEN) 252.20p -1.94%
FTSE 250 - Risers
Sophos Group (SOPH) 395.40p 6.92%
IP Group (IPO) 150.00p 4.82%
CLS Holdings (CLI) 206.20p 4.14%
SIG (SHI) 131.90p 3.86%
Hochschild Mining (HOC) 280.70p 3.58%
Countryside Properties (CSP) 300.10p 2.81%
Acacia Mining (ACA) 438.10p 2.79%
Centamin (DI) (CEY) 164.90p 2.68%
Euromoney Institutional Investor (ERM) 1,119.00p 2.66%
Inchcape (INCH) 857.00p 2.63%
FTSE 250 - Fallers
Spectris (SXS) 2,563.00p -6.32%
Mitchells & Butlers (MAB) 258.00p -6.18%
Dunelm Group (DNLM) 591.50p -3.98%
Wetherspoon (J.D.) (JDW) 1,023.00p -3.50%
Auto Trader Group (AUTO) 405.50p -3.29%
Hill & Smith Holdings (HILS) 1,343.00p -3.24%
Keller Group (KLR) 916.50p -3.02%
Kaz Minerals (KAZ) 478.70p -2.98%
Electra Private Equity (ELTA) 2,665.00p -2.88% |
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| | US Market Report | | US open: Volatility spikes as political stormclouds gather over Capitol Hill Fresh allegations of improprieties in the Oval Office are finally provoking a response from Wall Street, sending some traders dashing to buy protection from downside risks.
Overnight, The New York Times said US president Donald Trump had asked Federal Bureau of Investigation chief James Comey to "let go" of an investigation into his former national security adviser, Michael Flynn.
At 1603 BST, the Chicago Board of Options Exchange's VIX volatility index was 15.49% higher to 12.30 - a still relatively subdued level by historical norms.
Meanwhile, the Dow Jones Industrial Average was down by 1.16% to 20,736.52 with the S&P 500 shedding 1.10% alongside it to 2,374.29 and the Nasdaq Composite off by 1.33% at 6,087.12.
Nevertheless, IG's Chris Beauchamp sounded a word of prudence, telling clients not to rush to the assumption that Donald Trump was inevitably headed towards impeachment hearings.
Perhaps, yet gold futures, the most standard of safe haven assets, was up by 1.58% to $1,255.90/oz. on COMEX. US Treasuries, another favourite of investors in dangerous times, were also wanted, sending the yield on the benchmark 10-year US Treasury note seven basis points lower to 2.25%.
"Over-eager bears should tread with care," Beauchamp said.
"His election campaign always seemed one day away from disaster, and his presidency thus far has been remarkably similar. But the campaign won out in the end, and it would be unwise to assume that impeachment is now a given."
On that note, Republican Senator John McCain, one of Trump's most vociferous critics said: "We've seen this movie before. It's reaching Watergate size and scale. ... This is not good for the country."
The Energy Information Administration, the Department of Energy's statistical arm was set to publish its weekly taly of US oil stockpile sat 1530 BST.
From a sector standpoint, banks were the worst performing corner of the market at the start of trading on Wednesday, with the KBW index of lenders' shares getting walloped for 2.61%.
That came along losses for Investment services (-2.66%), Apparel retailers (2.46%), Toys (2.39%) and Leisure goods (2.39%).
Stock in American Eagle Outfitters was also lower as the retailer became the latest in the growing list of companies in its sector to disappoint investors.
The teen apparel retailer posted first quarter earnings per share of 16 cents (consensus: 17 cents); although it did beat on sales its guidance fell short of Wall Street estimates.
Target Corp. on the other hand pleased markets after posting better than expected first quarter EPS of $1.21, with management reaffirming its annual guidance for profits.
Shares in Concert Pharmaceuticals slid after the FDA put its hair loss drug on clinical hold.
Cisco Systems's latest quarterly financials - whose shares have risen on the back of the recent 'WannaCry' ransomware attack - are on tap after the close.
Dow Jones - Risers
Wal-Mart Stores Inc. (WMT) $75.39 0.37%
Coca-Cola Co. (KO) $43.96 0.24%
Procter & Gamble Co. (PG) $86.43 0.23%
Travelers Company Inc. (TRV) $120.13 0.17%
McDonald's Corp. (MCD) $147.44 0.10%
International Business Machines Corp. (IBM) $153.80 0.08%
Nike Inc. (NKE) $52.77 -0.02%
Cisco Systems Inc. (CSCO) $34.26 -0.10%
Intel Corp. (INTC) $35.78 -0.11%
Pfizer Inc. (PFE) $32.53 -0.21%
Dow Jones - Fallers
Goldman Sachs Group Inc. (GS) $220.80 -2.13%
JP Morgan Chase & Co. (JPM) $85.88 -1.97%
Walt Disney Co. (DIS) $105.90 -1.93%
Chevron Corp. (CVX) $105.74 -1.41%
Boeing Co. (BA) $180.15 -1.40%
American Express Co. (AXP) $77.06 -1.37%
3M Co. (MMM) $195.40 -1.27%
Caterpillar Inc. (CAT) $101.08 -1.23%
United Technologies Corp. (UTX) $120.04 -1.12%
Apple Inc. (AAPL) $153.91 -1.00%
S&P 500 - Risers
Colgate-Palmolive Co. (CL) $74.21 3.67%
Target Corp. (TGT) $56.25 3.15%
Newmont Mining Corp. (NEM) $34.39 1.90%
Ventas Inc. (VTR) $65.98 1.48%
Nordstrom Inc. (JWN) $41.23 1.46%
Crown Castle International (CCI) $97.33 1.46%
Progressive Corp. (PGR) $40.66 1.35%
Simon Property Group Inc. (SPG) $155.97 1.19%
Extra Space Storage (EXR) $72.64 1.18%
HCP Inc. (HCP) $31.36 1.16%
S&P 500 - Fallers
Ball Corp (BLL) $40.33 -50.09%
Electronic Arts Inc. (EA) $107.27 -4.02%
Citizens Financial Group, Inc. (CFG) $35.73 -3.64%
Urban Outfitters Inc. (URBN) $19.80 -3.23%
CVS Health Corp (CVS) $76.68 -3.08%
Comerica Inc. (CMA) $69.17 -2.96%
United Rentals Inc. (URI) $108.43 -2.94%
TripAdvisor Inc. (TRIP) $44.28 -2.94%
Charles Schwab Corp. (SCHW) $39.50 -2.88%
Vulcan Materials Co. (VMC) $124.66 -2.86%
Nasdaq 100 - Risers
Dish Network Corp. (DISH) $64.22 3.13%
Vodafone Group Plc ADS (VOD) $29.06 1.30%
Incyte Corp. (INCY) $118.14 0.32%
Kraft Heinz Co. (KHC) $89.37 0.29%
Dollar Tree Inc (DLTR) $79.28 0.23%
Monster Beverage Corp (MNST) $46.91 0.21%
Tractor Supply Company (TSCO) $58.80 0.19%
Ross Stores Inc. (ROST) $61.73 0.16%
Starbucks Corp. (SBUX) $60.06 0.13%
Mondelez International Inc. (MDLZ) $45.48 0.05%
Nasdaq 100 - Fallers
Electronic Arts Inc. (EA) $108.13 -3.25%
Mattel Inc. (MAT) $22.06 -2.61%
Micron Technology Inc. (MU) $28.31 -2.46%
NetEase Inc. Ads (NTES) $283.28 -2.22%
Nvidia Corp. (NVDA) $134.28 -1.85%
Symantec Corp. (SYMC) $30.75 -1.82%
Walgreens Boots Alliance, Inc. (WBA) $83.07 -1.70%
Activision Blizzard Inc. (ATVI) $55.83 -1.67%
Western Digital Corp. (WDC) $87.54 -1.60% |
| | Market Analysis 12/05/2017 Today’s highlights: Indices low while oil and gold show gains - Wall Street closes lower: All three major indices finished in the red at the end of yesterday’s trading day. Macy’s earnings report missed predictions, causing its stock to tank 17%.
- Boeing stock drops following 737 problem: Aviation powerhouse Boeing saw its stock price drop yesterday, after announcing it is suspending flights for its 737 Max model due to an engine problem. While prices recovered after the announcement, they fell slightly again after-hours.
- Asia seen lower: Indices in Asia were trading lower this morning, with the ASX 200 and Nikkei losing 0.87% and 0.57% respectively.
- Volatility expected for US Dollar today: CPI and Retail reports will be released at 12:30 GMT today. These reports..
Read More... |
| | Broker Tips | | Broker tips: Halfords, Kingfisher, Rio Tinto, Hikma Pharmaceuticals With the retail sector's risk profile increasing as the UK discretionary consumer outlook deteriorates, HSBC downgraded and cut the targets for Dunelm and Halfords, but upgraded Kingfisher to 'buy' due to its transformation plans.
HSBC has taken a more cautious view of retail due to a backdrop of increasing macroeconomic risk, as the strong data post the Brexit referendum has begun to be riven by cracks.
Not only have inflationary headwinds become increasingly obvious, demonstrated by Tuesday's CPI of 2.7%, but consumers' budgets are being squeezed as real wage growth has turned negative, creating increasing threats to demand for retailers.
"In addition, inflation in inelastic areas such as food is accelerating, which will further squeeze discretionary demand," the bank's analysts said.
"The situation is made worse for non-food retailers as cost inflation is feeding through as hedging programmes roll off."
This suggested the second half of the year will see non-food retailers face a period of falling demand and rising costs - "a toxic combination".
RBC Capital Markets has upgraded Rio Tinto to 'top pick' from 'outperform', saying the stock is as inexpensive as it's been over the past five years following the recent pullback.
"We believe the market is taking too negative a view on the medium-term iron ore market, and this is obscuring a growing, low cost, high free cash flow story," RBC said, adding that Rio's low-cost operations, strong balance sheet, and potential for increased cash returns should see the market tighten the valuation over the coming months.
The Canadian bank pointed to a sustained recovery in iron ore prices as a possible catalyst for the stock. It argued that if prices rise or remain at current levels, there is a big change for consensus earnings upgrades and a further re-rating alongside a reduction in balance sheet risk. It also argued that Rio's valuation is likely to improve once general sentiment around China improves.
However, if iron ore prices were to fall, this would hit Rio as the concentration in cash flow generation in iron ore leaves the company exposed to falling prices.
Hikma Pharmaceuticals was under pressure on Wednesday as Jefferies downgraded the stock to 'underperform' from 'buy' and slashed the price target to 1,450p from 2,162p.
Jefferies pointed to delays to the US Food and Drug Administration's approval of its generic Advair Diskus asthma treatment. It said that while Hikma hasn't completely ruled out approval this year, this is unlikely.
"We believe the delay could be until 2H 2018 at the earliest assuming three months to get an FDA meeting, six months to put together a resubmission package and six months for a class 2 review; however if another trial is needed we estimate it could add six to nine months." Hikma could provide further details at the first-quarter update this week, but Jefferies reckons there will be a "sizeable consensus downgrade" with any updated guidance.
In addition, the bank said the delay limits the commercial potential before other entrants potentially enter the market. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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