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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: Stocks succumb to selling as Russia controversy envelops US administration London stocks ended the Friday session on a down note as reports began to break that ex-US national security agency chief Michael Flynn might testify against his previous boss, the US president. The FTSE finished 0.36% or 26.18 points lower to 7,300.49, while the pound was down by 0.1% against the euro at 1.1341 and 0.1% lower versus the dollar at 1.3511, although the latter was well off its intra-day lows as the US dollar weakened. Friday's late spike in risk aversion was especially clear in government bond markets, with the yield on the benchmark 10-year Gilt down by an outsized ten basis points to 1.23%. Earlier, Flynn pleaded guilty to charges that he lied to the Federal Bureau of Investigation regarding conversations with the Russian ambassador as part of the new administration's transition following their election victory. That was followed by a report from ABC according to which Flynn had agreed to testify against Trump. Back home, reported activity in the UK manufacturing sector picked up in November, hitting its highest level since August 2013, according to a survey released earlier. The Markit/CIPS manufacturing purchasing managers' index rose to 58.2 from October's 56.6, which was revised up from 56.3. This marked a 51-month high and was ahead of analysts' expectations for a reading of 56.5. A reading above 50.0 indicates expansion, while a reading below signals contraction. Manufacturing production expanded at the fastest pace since September 2016 and to one of the greatest extents during the past four years. This was attributed to stronger inflows of new orders, reflecting solid domestic demand and steeper gains in new export business. Howard Archer, chief economic adviser at the EY ITEM Club, said "The outlook for manufacturing appears mixed. Domestic conditions look challenging despite November's healthy orders. Increased prices for capital goods and big-ticket consumer durable goods, weakened consumer purchasing power, and economic and political uncertainty threaten to hamper manufacturers. Businesses' willingness to invest and buy capital goods is being tested by persistent weak UK economic activity as well as Brexit uncertainties." On the export side, Archer noted that the very competitive pound and healthy global demand were helping UK manufacturers compete in foreign markets. "The weakened pound also appears to be encouraging some companies to switch to domestic sources for supplies. Significantly, the Bank of England regional agents reported in their November survey of business conditions that some manufacturers reported increased sourcing from domestic customers." Investors were also mulling news that the US Senate late on Thursday delayed a vote on the Republicans' tax reform bill until Friday due to problems with an amendment to address a large expansion of the federal budget deficit that is expected to result from the measure. In corporate news, Royal Bank of Scotland was in the red after saying it will close 259 branches and cut 680 jobs as customers shift to online banking. Barclays and Lloyds also traded lower. Barclays was also in focus after it completed the sale of a 7.0% stake in Barclays Africa Group Limited to bring down its total shareholding to 14.9%. Countryside Properties was on the back foot after private equity firm Oaktree Capital - its largest shareholder - sold a 15% stake in the group. Indivior bucked trend, surging as it received approval from the US drug regulator to market its once-monthly injectable treatment for moderate to severe opioid use disorder, which analysts believe could lift company sales well north of $1bn. In broker note action, Royal Mail was dented by a downgrade to 'sell' from 'hold' at Deutsche Bank, while Babcock International was under the cosh after Morgan Stanley downgraded the stock to 'equalweight' from 'overweight' and slashed its target. Pendragon was lower as JPMorgan initiated coverage of the stock at 'underweight', while Vesuvius was hit by an initiation at 'underweight' by Barclays. |
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| | Market Movers FTSE 100 (UKX) 7,300.49 -0.36%
FTSE 250 (MCX) 19,854.40 -0.49%
techMARK (TASX) 3,418.36 -0.47% FTSE 100 - Risers Convatec Group (CTEC) 199.50p 2.84%
British American Tobacco (BATS) 4,784.50p 2.04%
Anglo American (AAL) 1,384.00p 1.84%
Randgold Resources Ltd. (RRS) 6,885.00p 1.62%
easyJet (EZJ) 1,425.00p 1.35%
Fresnillo (FRES) 1,308.00p 1.32%
Paddy Power Betfair (PPB) 8,430.00p 1.26%
GlaxoSmithKline (GSK) 1,290.00p 0.82%
Pearson (PSON) 713.50p 0.78%
Tesco (TSCO) 195.50p 0.75% FTSE 100 - Fallers Associated British Foods (ABF) 2,870.00p -2.65%
Severn Trent (SVT) 2,046.00p -2.53%
Prudential (PRU) 1,815.00p -2.37%
Royal Bank of Scotland Group (RBS) 270.10p -2.35%
SSE (SSE) 1,338.00p -2.26%
Smurfit Kappa Group (SKG) 2,301.00p -2.25%
Scottish Mortgage Inv Trust (SMT) 440.60p -2.22%
Rolls-Royce Holdings (RR.) 838.00p -2.22%
G4S (GFS) 251.10p -2.14%
Barclays (BARC) 189.40p -2.12% FTSE 250 - Risers Inmarsat (ISAT) 507.00p 4.99%
Wizz Air Holdings (WIZZ) 3,469.00p 3.35%
Tullow Oil (TLW) 184.20p 3.19%
Ocado Group (OCDO) 363.50p 3.09%
Cairn Energy (CNE) 217.90p 3.03%
Indivior (INDV) 382.00p 3.02%
P2P Global Investments (P2P) 813.50p 2.92%
Go-Ahead Group (GOG) 1,598.00p 2.83%
Petrofac Ltd. (PFC) 432.30p 2.78%
Dixons Carphone (DC.) 162.70p 2.39% FTSE 250 - Fallers Countryside Properties (CSP) 338.00p -7.27%
Dignity (DTY) 1,624.00p -6.24%
Computacenter (CCC) 1,078.00p -4.26%
Travis Perkins (TPK) 1,544.00p -4.04%
Royal Mail (RMG) 424.60p -3.91%
Grafton Group Units (GFTU) 743.75p -3.76%
Renishaw (RSW) 5,125.00p -3.57%
Sophos Group (SOPH) 548.50p -3.52%
Pets at Home Group (PETS) 168.30p -3.50% |
| | Following the financial crisis, high street banks have funded fewer SME housebuilders | | Alternative finance providers are stepping in to fill this void, offering investors high margins and attractive returns. One of these lenders, Clearwell Capital is currently fundraising with a 3-year secured bond paying 10% per annum. Click here to find out more. Capital at risk. |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Midday rally smothered out by US political controversy Stocks on the Continent have begun the new month in poor form, with a late advance into the black breaking down as news of the brewing political controversy in the US hit the wires. By the closing bell, the benchmark Stoxx 600 was down by 0.70% or 2.72 points at 383.97, alongside a 1.25% or 162.49 point fall for the German Dax to 12,861.49 and with the Cac-40 down by 1.04% or 55.90 points to 5,316.89. In parallel, euro/dollar was edging higher by 0.08% to 1.1900. Earlier, ex-US National Security Agency chief Michael Flynn pleaded guilty to charges that he lied to the Federal Bureau of Investigation regarding conversations with the Russian ambassador as part of the new administration's transition following their election victory. That was followed by a report from ABC according to which Flynn had agreed to testify against Trump. The news drowned out optimism among traders regarding the prospects for US tax reforms, amid reports that Senate Republicans had secured sufficient support to secure passage of their proposals through the upper chamber. In economic news, IHS Markit's euro area factory sector purchasing managers' index jumped from a reading of 58.5 for October to 60.1 in November (preliminary: 60.0). That was its best level since April 2000, as subindices linked to output and new orders hit multi-year highs, amid record levels of job creation, the survey compiler said. Elsewhere, ISTAT revised down its initial estimate of Italian GDP growth in the third quarter of 2017 from 0.5% quarter-on-quarter to 0.4%. On the corporate front, shares of Italian oil field services group Saipem found a bid after announcing it had inked a new offshore contract in Saudi Arabia. |
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| | US Market Report | | US open: Wall Street down after report ex-NSA Michael Flynn might testify against Trump The spotlight on Wall Street shifted rapidly, from Friday afternoon's expected Senate vote on that chamber's proposed tax reforms to the political arena, after news broke that ex-US national security adviser Michael Flynn would testify against the president. At 1615 GMT, the Dow Jones Industrial Average was trading down by 1.07% or 259.78 points at 23,991.37, while the S&P 500 was off by 1.24% or 32.55 points to 2,614.24 and the Nasdaq Composite by 1.54% or 109.81 to 6,758.73. Presciently, IG's chief market analyst Chris Beauchamp said: "The day has not seen fresh highs in the US yet, but given the way the Dow moved yesterday it would only be a small matter to clock up yet another record. But there is a fly in the ointment; as former NSA director Michael Flynn pleads guilty, the way could be open to dramatic developments in the Russia collusion probe. "This year, equities have defied everything else that was thrown at them. Can they withstand the potential implicating of the President of the United States in backroom deals with a foreign power?" On Friday afternoon, ABC reported that Flynn would testify against his old boss, setting off an avalanche of selling in stocks. That was reflected in the day's sector moves, with arguably the US president's favoured sector, coal, at the bottom of the pile with a drop of 5.75%, followed by Electronic Office Equipment (-4.28%) and Marine Transportation (-3.71%). Relegated to a side show for now, reports indicated that US Senate Republicans had clinched sufficient support in order to secure approval of their tax cut plans through the upper house of Congress. The day before, optimism over the Senate passing a bill to overhaul the US tax code helped to propel the Dow to a close above 24,000 for the first time, while the S&P 500 also ended at an all-time high. Economic data at the end of the week was supportive as well, with the ISM's manufacturing sector purchasing managers´ index slipping from a reading of 58.7 in October to 58.2 for November (consensus: 58.3). Nevertheless, the PMI continued to point to very solid levels of factory activity, analysts said. US construction sector spending was even stronger, rising by 1.4% month-on-month in October (consensus: 0.5%). Dow Jones - Risers Merck & Co. Inc. (MRK) $55.49 0.40%
Chevron Corp. (CVX) $119.25 0.22%
International Business Machines Corp. (IBM) $153.92 -0.03%
Travelers Company Inc. (TRV) $135.45 -0.09%
Johnson & Johnson (JNJ) $139.13 -0.14%
Exxon Mobil Corp. (XOM) $83.15 -0.17%
Microsoft Corp. (MSFT) $84.01 -0.19%
Procter & Gamble Co. (PG) $89.78 -0.23%
Goldman Sachs Group Inc. (GS) $246.98 -0.27%
Cisco Systems Inc. (CSCO) $37.19 -0.29% Dow Jones - Fallers Visa Inc. (V) $110.41 -1.94%
General Electric Co. (GE) $17.95 -1.83%
Intel Corp. (INTC) $44.14 -1.56%
Unitedhealth Group Inc. (UNH) $224.67 -1.53%
United Technologies Corp. (UTX) $119.76 -1.39%
Boeing Co. (BA) $273.35 -1.25%
Dowdupont Inc. (DWDP) $71.07 -1.24%
3M Co. (MMM) $240.32 -1.16%
Apple Inc. (AAPL) $170.00 -1.08%
American Express Co. (AXP) $96.69 -1.04% S&P 500 - Risers Transocean Ltd. (RIG) $10.71 5.62%
Apache Corp. (APA) $43.66 4.37%
Murphy Oil Corp. (MUR) $29.04 3.90%
Mylan Inc. (MYL) $37.91 3.78%
Diamond Offshore Drilling Inc. (DO) $16.54 3.12%
Halliburton Co. (HAL) $43.07 3.09%
Newfield Exploration Co (NFX) $31.79 2.78%
Spectra Energy Corp. (SE) $11.92 2.76%
Noble Energy Inc. (NBL) $27.00 2.66%
Tiffany & Co. (TIF) $97.00 2.65% S&P 500 - Fallers Qorvo, Inc. (QRVO) $73.27 -4.32%
Broadcom Limited (AVGO) $267.13 -3.89%
Patterson Companies Inc. (PDCO) $35.16 -3.80%
Lam Research Corp. (LRCX) $185.45 -3.58%
Textron Inc. (TXT) $53.78 -3.46%
H&R Block Inc. (HRB) $25.29 -3.40%
Roper Technologies Inc (ROP) $258.19 -3.38%
Raytheon Co. (RTN) $184.71 -3.37%
Micron Technology Inc. (MU) $40.98 -3.33%
Vulcan Materials Co. (VMC) $121.51 -3.29% Nasdaq 100 - Risers Mylan Inc. (MYL) $37.91 3.78%
Liberty Global Plc Lilac Class C (LILAK) $21.19 2.12%
Charter Communications Inc. (CHTR) $332.43 1.91%
Liberty Global Plc Lilac Class A (LILA) $21.16 1.73%
Regeneron Pharmaceuticals Inc. (REGN) $367.95 1.68%
Comcast Corp. (CMCSA) $38.15 1.61%
Liberty Interactive Corporation - Series A Liberty Ventures (LVNTA) $56.26 0.81%
eBay Inc. (EBAY) $34.87 0.58%
Ctrip.Com International Ltd. Ads (CTRP) $46.25 0.37%
Celgene Corp. (CELG) $101.05 0.22% Nasdaq 100 - Fallers Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $203.06 -8.41%
Broadcom Limited (AVGO) $267.13 -3.89%
Align Technology Inc. (ALGN) $251.25 -3.69%
Lam Research Corp. (LRCX) $185.45 -3.58%
Micron Technology Inc. (MU) $40.98 -3.33%
Skyworks Solutions Inc. (SWKS) $101.49 -3.10%
Applied Materials Inc. (AMAT) $51.36 -2.67%
J.B. Hunt Transport Services Inc. (JBHT) $108.27 -2.58%
Hologic Inc. (HOLX) $40.67 -2.50% |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
| | Broker Tips | | Broker tips: SIG, Barclays, Cineworld Jefferies upgraded insulation and roofing supplier SIG to 'buy' from 'hold' and lifted the price target to 200p from 150p saying the recent strategy day mapped out a credible turnaround plan. "The road will not be straight, but we expect management to fully deliver on their 5% margin targets in the medium term. Much of the turnaround lies within the group's control and is not predicated on rapid recovery in the group's end markets" it said. Jefferies pointed out that SIG's strategy is to achieve 5% return on sales and 15% return on capital employed margins in the medium term, while reducing leverage to less than 1x. It said that in essence, the strategy involves doing more with what the group already has. Management has identified three strategic levers, customer service, customer value and operational efficiency, supported by enhanced data and IT services.
Threadneedle Street's stress tests are "somewhat negative" for the UK listed domestic banks, said Exane BNP Paribas on Tuesday, warning that it "raises questions over the speed to dividend normalisation".
Exane noted that the £50bn of losses revealed in the Bank of England's stress tests were much larger than seen in the 2016 stress test and "are likely to raise concerns over the extent to which PRA buffers are required". The Bank said no banks needed to make changes as a result of the test, the first time it has been able to do this since the tests started in 2014, but its Financial Policy Committee will now review whether an additional capital cushion is needed. Such an extra buffer would be determined by the Prudential Regulation Authority. Exane added that by the time fully loaded requirements become binding at the start of 2019 these numbers might have changed markedly, with misconduct costs expected to fall markedly over the next year or two, "but the size of these losses will still raise question marks over these banks". Exane said its initial view is that Barclays "looks most vulnerable of the UK domestic banks to a PRA buffer" at the start of 2019, particularly given it also lost 450bps in last year's test and the PRA does not focus on just one year's numbers. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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