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Jan 30, 2018

Morning Euro Markets Bulletin

 
ADVFN  Morning Euro Markets Bulletin
Daily world financial news Tuesday, 30 January 2018 10:00:30
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The Top 10 Stocks for 2018

What does the year hold for these 10 blue chips?

A look at some of the key themes in the coming 12-months, the key numbers from 2017, FTSE 100 companies that reached record highs… and those that fell to all-time lows, and our Top Stock Picks for 2018. Losses can exceed deposits.

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London Market Report
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London open: Stocks fall on weak Wall St cues, pound hit by Brexit woes

London stocks fell in early trade on Tuesday, taking their cue from a downbeat session in the US amid rising bond yields, as Brexit concerns hit the pound.

At 0835 GMT, the FTSE100 was down 0.3% to 7,647.19, while the pound was down 0.5% against the greenback to 1.4002 and 0.3% lower versus the euro at 1.1344 after a secret Brexit impact report for the Cabinet was leaked overnight.

Spreadex analyst Connor Campbell said a lot of sterling's weakness stems from the week's early focus on Brexit and the "innumerable issues" attached.

"Yesterday it was all about Theresa May's shaky position atop the Tory party and the UK's lack of ability to secure an EU divorce bill. Today, however, investors are concerned about a leaked cabinet report highlighting the myriad ways Brexit will be bad for the UK economy, regardless of whether Britain comes out the other side with a wide-ranging free trade deal, single market access or no deal at all."

Bond markets were in focus after yields in Europe and the US rose on Monday following comments from Dutch Central Bank president and European Central Bank governing council member Klaas Knot and ahead of this week's rate announcement by the Federal Reserve.

The 10-year US Treasury yield pushed above the 2.7% level for the first time since April 2014 and the two-year yield hit its highest level since September 2008.

Eurozone yields were driven by Knot's comments, after he said the European Central Bank's asset purchase programme should "as soon as possible". He argued that there is not a single reason left to continue the quantitative easing in the euro area and said the ECB's bond buying programme has already achieved "what could realistically be expected of it". Some fairly hawkish rhetoric from ECB board member Benoit Coeure pushed yields higher.

Meanwhile, the move higher in US yields was prompted by the prospect that US policymakers could revise their forecasts higher for the US economy in light of the recent tax changes brought in by the Trump administration.

On the UK data front, net lending to individuals, consumer credit and mortgage approvals are at 0930 GMT.

In corporate news, Anglo American fell as it said the value of rough diamond sales for De Beers' first sales cycle of 2018 came to $665m.

Imperial Leather and Original Source maker PZ Cussons was weaker as it reported a drop in adjusted interim profit amid margin pressures and "tough" trading conditions, while CYBG was in the red despite posting a jump in first-quarter lending.

Film and television producer and distributor Entertainment One slipped after it confirmed that it had raised £53m in an placing with City institutions at a price of 305p as part of its plan to snap up the rest of US television producer The Mark Gordon Company.

On the upside, Irish convenience foods group Greencore was trading higher after it said revenue grew 54% in the 13 weeks to 29 December.

Zoopla and uSwitch operator ZPG advanced as it reported a good start to the financial year across both divisions, with its websites and mobile apps attracting 53 million average monthly visits during the three months to 31 December.

UBM rallied after agreeing to be bought by Informa for £3.9bn, as it looks to create a business-to-business information giant that will operate as a single business by the start of 2019. Informa edged higher

Domino's Pizza was on the front foot after saying it expects annual profit to beat market forecasts after strong performance in the fourth quarter as British families ordered pizza while watching television.

UDG Healthcare gained after saying it expects adjusted earnings per share to rise by 18% to 21% in 2018 following strong trading in the first quarter.

Dechra Pharmaceuticals was boosted by an upgrade to buy at Jefferies, but Mediclinic was hit by a downgrade to neutral at UBS.


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Market Movers

FTSE 100 (UKX) 7,647.19 -0.32%
FTSE 250 (MCX) 20,537.65 -0.20%
techMARK (TASX) 3,480.26 0.08%

FTSE 100 - Risers

Reckitt Benckiser Group (RB.) 6,860.00p 1.08%
Relx plc (REL) 1,568.50p 0.51%
Compass Group (CPG) 1,500.50p 0.47%
BAE Systems (BA.) 591.00p 0.44%
Rolls-Royce Holdings (RR.) 865.80p 0.44%
Tesco (TSCO) 211.40p 0.28%
WPP (WPP) 1,293.50p 0.23%
Imperial Brands (IMB) 2,921.00p 0.21%
Rentokil Initial (RTO) 297.00p 0.20%
Shire Plc (SHP) 3,481.50p 0.20%

FTSE 100 - Fallers

Anglo American (AAL) 1,717.00p -2.22%
Mediclinic International (MDC) 600.00p -1.64%
BHP Billiton (BLT) 1,575.40p -1.54%
Antofagasta (ANTO) 937.80p -1.51%
Micro Focus International (MCRO) 2,163.00p -1.50%
Glencore (GLEN) 409.45p -1.34%
Rio Tinto (RIO) 3,974.50p -1.24%
Standard Chartered (STAN) 828.30p -1.24%
3i Group (III) 929.00p -1.19%
Evraz (EVR) 380.60p -1.14%

FTSE 250 - Risers

Domino's Pizza Group (DOM) 365.10p 4.17%
Greencore Group (GNC) 209.70p 3.71%
UBM (UBM) 895.00p 2.93%
ZPG Plc (ZPG) 355.00p 2.07%
Dechra Pharmaceuticals (DPH) 2,370.00p 2.07%
Renishaw (RSW) 4,881.00p 1.69%
UDG Healthcare Public Limited Company (UDG) 824.50p 1.54%
RDI Reit (RDI) 35.70p 1.42%
Herald Investment Trust (HRI) 1,223.35p 1.10%
Sanne Group (SNN) 765.00p 1.06%

FTSE 250 - Fallers

PZ Cussons (PZC) 316.20p -4.18%
Hill & Smith Holdings (HILS) 1,195.00p -2.05%
Cineworld Group (CINE) 505.00p -1.94%
Ferrexpo (FXPO) 304.70p -1.90%
CYBG (CYBG) 325.20p -1.81%
Intermediate Capital Group (ICP) 1,143.00p -1.80%
Kier Group (KIE) 1,079.45p -1.78%
Tullow Oil (TLW) 206.67p -1.77%
Hochschild Mining (HOC) 225.00p -1.75%


Share Tips for 2018

The Share Centre’s investment research analyst Ian Forrest, comments on five equities, an investment trust as well as an ETF that our expert research team think could flourish in 2018.  Read more. Capital at risk.


Hargreaves Lansdown

Top of the stocks

Number of Deals Bought

Place EPIC Equity name %
1 IQE IQE plc 2.45
2 SMT Scottish Mortgage Investment Trust 1.84
3 BOO Boohoo.com 1.33
4 FEVR Fevertree Drinks plc 1.31
5 NG. National Grid 1.30
6 LGEN Legal & General Group plc 1.21
7 LLOY Lloyds Banking Group plc 1.13
8 IMB Imperial Brands Group 1.09
9 SOPH Sophos Group plc 1.05
10 SXX Sirius Minerals plc 0.95

Number of Deals Sold

Place EPIC Equity name %
1 IQE IQE plc 2.75
2 LLOY Lloyds Banking Group plc 2.52
3 BARC Barclays plc 1.33
4 NG. National Grid 1.13
5 GSK GlaxoSmithKline plc 0.95
6 FEVR Fevertree Drinks plc 0.91
7 EZJ easyJet plc 0.91
8 BOO Boohoo.com 0.88
9 SXX Sirius Minerals plc 0.77
10 PRSM Blue Prism plc 0.76

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Cryptocurrencies Report

Top Cryptocurrencies

# Name Market Cap($) Price(%) Change Price Graph(3m)
1 Bitcoin (BTC) 190,773,058,196 10,936.91 -2.68%
2 Ethereum (ETH) 116,198,773,627 1,165.3 -0.85%
3 Ripple (XRP) 51,937,181,375 1.22 -4.08%
4 Bitcoin Cash / BCC (BCH) 28,488,145,957 1,628.7 -1.46%

Atlantic Advisory - Share Tips of the Year 2018

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US Market Report

US close: Stocks drop as Treasury yields rise; Apple under pressure

US stocks fell on Monday as Treasury yields rose, with investors looking ahead to a busy week on the corporate front and a key speech by president Trump.

The Dow Jones Industrial Average ended down 0.7% at 26,439.48, while the S&P 500 fell 0.7% to 2,853.53 and the Nasdaq closed 0.5% weaker at 7,466.51.

Having notched more record closes at the end of last week, the Dow and the S&P 500 suffered their worst day so far this year as the 10-year US Treasury yield rose above 2.70%.

In currency markets, the dollar bounced back, trading up 0.6% versus the pound and 0.4% against the euro by the time of the stock markets close.

Investors were also digesting figures out earlier which showed consumer spending rose 0.4% in December following an upwardly-revised 0.8% increase the month before, marking the biggest rise in household spending since 2011 and in line with expectations.

However, this came at the expense of the savings rate, as total savings fell to $351.6bn from $365.1bn a month earlier. The savings rate dropped to 2.4% from 2.5% in November, marking the the lowest since September 2005.

Elsewhere, the personal consumption expenditures index nudged up 0.1% last month, while the core rate that excludes food and energy was up 0.2%. On the year, the PCE index fell to 1.7% from 1.8%, while the core index was flat at 1.5%.

Spreadex analyst Connor Campbell said the inflation data was "solid". He pointed out that even though at 0.2% the latest core PCE price index still leaves the annual rate below the Federal Reserve's 2% target, the greenback has continued its comeback.

It wasn't just rising yields and a stronger dollar putting pressure on equity markets on Monday. Investors were also wary ahead of a busy week that will include Donald Trump's State of the Union address, the first Federal Reserve meeting of 2018, the latest non-farm payrolls report and a slew of high-profile earnings from the likes of Apple, Alphabet, Amazon and Facebook.

In corporate news, shares in Apple dropped following reports that the technology giant could cut production of its iPhone X.

Marathon Petroleum gushed lower despite announcing a 15% dividend increase to 46 cents per share, while Wynn Resorts slumped again following a report that chairman and chief executive Steve Wynn is facing sexual assault accusations.

Avon Products reversed earlier gains to end lower after a report that activist investors are joining together to look for a buyer

There were some bright spots, however, with Dr Pepper Snapple ending up 22% after agreeing to merge with Keurig Green Mountain to form a beverage company with annual revenue of around $11bn.

Aerospace and defence contractor Lockheed Martin advanced as its fourth-quarter revenue beat expectations and the company said profit will rise in 2018.

Fuel cell company Ballard Power Systems racked up sharp gains on the back of a positive outlook for its 2017 results.


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Newspaper Round Up

Tuesday newspaper round-up: Brexit, Thomson Reuters, Waterstones, stock markets

Brexit would leave the UK worse off under three possible scenarios: a comprehensive free trade deal, single market access and no deal at all, according to a leaked government analysis of the economic impact of leaving the EU. The document was meant to be shown confidentially to cabinet ministers this week but was leaked in an embarrassing development for Theresa May and David Davis, the Brexit secretary. – Guardian

US private equity firm Blackstone Group LP is in advanced talks to buy an approximate 55% stake in the financial and risk business of Thomson ReutersCorp for more than $17bn (£12bn), three sources familiar with the matter said on Monday. Thomson Reuters' board, the sources said, is expected to meet on Tuesday to discuss Blackstone's all-cash offer for the F&R business, which supplies news, data and analytics to banks and investment houses around the world. The unit contributes more than half of Thomson Reuters' annual revenues. ?" Guardian

Elliott Advisors has reportedly lodged an offer to take a controlling stake in bookseller Waterstones, with talks between the pair ongoing. Reports emerged late on Monday that hedge fund Elliott had been granted a short period of exclusivity for the negotiations. - Telegraph

The UK is winning the race to clean up the energy system by taking a lead on rolling out renewable energy projects and cutting coal-fired power faster than its EU peers. A fresh report, to be published in Brussels today, shows that the UK is leading the way on support for wind and solar power, alongside Germany. - Telegraph

Recent years have not been the easiest for KPMG, the "Big Four" accountancy firm that provides audit and consultancy services to many of the world's largest companies. With such dominance has come controversy. Last September KPMG was cleared by the Financial Reporting Council over its audit of HBOS in the years before the lender's near-collapse, which was staved off only by a hastily arranged marriage with Lloyds TSB and the injection of £20 billion of taxpayers' money. ?" The Times

Stock markets are heading for sharp falls in the coming months but investors should use the dip to buy shares, Goldman Sachs has recommended. A correction was a "high probability" but would not be prolonged, the Wall Street investment bank predicted. Goldman Sachs is the world's best-known investment bank and has produced some of the most prominent figures in the financial world, including Mark Carney, governor of the Bank of England. Investors value its advice. ?" The Times

 

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