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Jan 31, 2018

Morning Euro Markets Bulletin

 
ADVFN  Morning Euro Markets Bulletin
Daily world financial news Wednesday, 31 January 2018 10:03:38
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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 steady as investors eye Fed, Capita tumbles on profit warning

London stocks were steady in early trade on Wednesday following heavy losses in the previous session, as investors eyed the latest policy announcement from the Federal Reserve, amid weakness in the housebuilder sector and a profit warning from outsourcer Capita.

At 0825 GMT, the FTSE 100 was flat at 7,585.19, while the pound was down 0.1% against the euro at 1.1398 but up 0.3% against the dollar at 1.4186.

Market participants were mulling over a consumer sentiment survey released overnight.

GfK's consumer confidence index rose four points to -9 in January, beating expectations for the reading to be unchanged at -13.

Joe Staton, head of market dynamics at GfK, said: "Having survived Christmas, New Year, the January Sales and Blue Monday, bullish Brits report a more upbeat view of their financial prospects for 2018 this month. From expectations for their personal financial situation to the outlook for the UK economy and major purchase index, we are reporting a rebound in levels of optimism across the board after two years of the overall index score sitting at zero or in negative territory."

The main focus on Wednesday will come after the UK market close, when the Fed makes its rate announcement at 1900 GMT. Although the meeting itself isn't expected to contain many surprises, it will be Janet Yellen's last as Chair as she passes the baton to Jerome Powell.

CMC Markets analyst Michael Hewson said: "Given that today is likely to be fairly straightforward in the context of the actual announcement with no change expected investors will be looking very closely at the statement and the FOMC's expectations about the glide path for inflation given the recent tax reform measures, along with the recent announcements of US dollar repatriation, inward investment, bonus payments and pay rises.

"Any indication that the Fed might be thinking in terms of more than two to three rate rises this year could push yields even higher, and that may well prompt the Fed to adopt a cautious tone and not deviate too much from what they said in December."

Markets are currently pricing in more than 90% probability of another 25 basis point hike at the March meeting.

Housebuilders were the biggest drag in equity markets, with Persimmon, Barratt Developments, Taylor Wimpey and Berkeley Group all firmly in the red following a report in The Times that property developers are set to lose planning permission on unused land if they fail to hit construction targets under moves to kickstart housebuilding.

In company news, Capita tumbled more than 30% after it announced a rights issue for this year, shelved its dividend plans and warned over its 2018 profit.

Tritax Big Box REIT edged lower as it confirmed that it had acquired 11 new 'big box' investments in 2017 with an aggregate purchase price of £435m, along with 124 acres of prime London distribution development land for a total consideration of £62.5m.

Gold miner Centamin fell as reported a 13% drop in core profit for 2017 and said gold production declined.

FTSE 250 soft drinks maker Britvic was in the red after it said first-quarter revenue rose 3.3%, although on an organic basis excluding the acquisition of Bela Ischia, it was up a more modest 0.7%. The group also highlighted uncertainty from the introduction of the soft drinks levy.

Budget airline Wizz Air flew lower as its net profit guidance of between €265m and €280m for 2018 fell short of analysts' expectations.

SSE rallied as it upgraded its estimate for annual earnings and reported progress in delivery of operations and returns from long-term investments.

On the upside, Dairy Crest advanced after saying that revenue in the nine months to the end of December 2017 was "well ahead" of the previous year thanks to a strong performance from its key brands, while Polypipe as it said it has entered into exclusive negotiations to sell its French operations.

Paddy Power was boosted by an upgraded to 'buy' at Investec, while Softcat was lifted by an upgrade to 'hold' at the same outfit and Informa was higher after an upgrade to 'buy' at Panmure Gordon.

Tullow Oil gushed lower after a downgrade to 'hold' at Canaccord, while Micro Focus was hit by a downgrade to 'sell' at Investec.

SSP was trading lower after being cut to 'sell' at Goldman Sachs and Hargreaves Lansdown slipped after a downgrade to 'underperform' at Credit Suisse.


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Market Movers

FTSE 100 (UKX) 7,585.19 -0.04%
FTSE 250 (MCX) 20,278.87 -0.45%
techMARK (TASX) 3,443.31 -0.09%

FTSE 100 - Risers

Paddy Power Betfair (PPB) 8,265.00p 1.79%
SSE (SSE) 1,312.00p 1.67%
Centrica (CNA) 134.25p 1.44%
Halma (HLMA) 1,292.00p 1.33%
United Utilities Group (UU.) 744.80p 1.28%
Severn Trent (SVT) 1,985.00p 1.20%
Rolls-Royce Holdings (RR.) 869.60p 1.19%
Associated British Foods (ABF) 2,815.00p 1.19%
Ferguson (FERG) 5,520.00p 1.10%
Reckitt Benckiser Group (RB.) 6,953.00p 1.06%

FTSE 100 - Fallers

Persimmon (PSN) 2,514.00p -2.22%
Hargreaves Lansdown (HL.) 1,844.08p -1.78%
Taylor Wimpey (TW.) 191.65p -1.77%
Berkeley Group Holdings (The) (BKG) 3,986.00p -1.63%
Micro Focus International (MCRO) 2,148.00p -1.42%
Rio Tinto (RIO) 3,904.50p -1.33%
Barratt Developments (BDEV) 594.80p -1.00%
Anglo American (AAL) 1,699.80p -0.97%
BHP Billiton (BLT) 1,554.80p -0.96%
Admiral Group (ADM) 1,838.50p -0.94%

FTSE 250 - Risers

Softcat (SCT) 528.00p 1.93%
Ocado Group (OCDO) 500.00p 1.81%
Howden Joinery Group (HWDN) 462.40p 1.63%
RDI Reit (RDI) 34.75p 1.61%
Ted Baker (TED) 3,022.00p 1.34%
ZPG Plc (ZPG) 351.00p 1.33%
Diploma (DPLM) 1,185.00p 1.20%
Pennon Group (PNN) 719.40p 1.07%
TI Fluid Systems (TIFS) 258.00p 1.02%
Dignity (DTY) 870.00p 0.93%

FTSE 250 - Fallers

Babcock International Group (BAB) 679.00p -3.47%
Wizz Air Holdings (WIZZ) 3,460.03p -3.24%
SSP Group (SSPG) 602.00p -2.90%
Kaz Minerals (KAZ) 806.40p -2.25%
Mitie Group (MTO) 176.80p -1.89%
Kier Group (KIE) 1,055.00p -1.86%
Serco Group (SRP) 92.90p -1.85%
TalkTalk Telecom Group (TALK) 128.70p -1.53%
B&M European Value Retail S.A. (DI) (BME) 411.70p -1.51%


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 10,117 -0.33%
2 Ethereum (ETH) 116,198,773,627 1,084 +0.95%
3 Ripple (XRP) 51,937,181,375 1.09 -1.84%
4 Bitcoin Cash / BCC (BCH) 28,488,145,957 1,483 +0.84%

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US Market Report

US close: Wall St ill as healthcare stocks plunge; rising bond yields weigh

Rising US bonds yields and weaker healthcare stocks helped send the Dow more than 350 points lower at the close on Tuesday as the equities sell-off continued.

The Dow Jones Industrial Average fell 362.59 points, or 1.37%, to 26,077.65, the S&P 500 was 31.10 points, or 1.09%, lower at 2,822.47 and the Nasdaq Composite dropped 64.02 points, or 0.86%, to 7,402.48.

Investors were also looking to President Donald Trump's State of the Union address and keeping an eye on the first day of the Federal Reserve's two-day rate-setting meeting, particularly as higher bond yields had been attributed to expectations that policymakers could revise their economic forecasts higher in light of recent tax changes brought in by the administration.

Healthcare was the biggest decliner, with United Healthcare recording the largest losses on the Dow.

The plunge came after Amazon, Berkshire Hathaway and JP Morgan declared they would shake up the sector through a joint venture aimed at cutting the healthcare costs of their workers, estimated at around one million people.

The prospect of rising interest rates also started to weigh on the sunny sentiment that has characterised the market's record breaking run since the start of the year.

The yield on the benchmark 10 year Treasury note jumped to 2.72%, remaining at levels not seen for almost three years.

"The fear that interest rates may have to rise faster than markets had initially priced in amid concerns of faster inflation is starting to weigh on trading decisions," said Fiona Cincotta Senior Market Analyst at City Index

"The dollar is back on the front foot finding support from higher yields, although investors will turn towards the Fed FOMC announcement due on Thursday and President Trump's State of the Nation address this evening."

Shares in healthcare heavweight Pfizer were also looking green around the gills as the company said it expected to pay tax at an adjusted rate of around 17%, higher than some investors had expected, and sending its shares more than 3% lower.

Harley-Davidson slumped after it said that 2017 shipments were at the low end of expectations, while McDonald's nudged lower despite its quarterly earnings and sales beating forecasts.

In economic news, the latest data from the Conference Board provided a bright spot, showing that US consumer confidence rose in January following a drop the month before.

The board's consumer confidence index rose to 125.4 from December's reading of 123.1, which was revised up from 122.1 previously. Analysts had been expecting a reading of 123.0.

The present situation index fell slightly to 155.3 from 156.5, while the expectations index rose to 105.5 this month from 100.8 in December.

Elsewhere, US house price growth was as expected in November, according to the S&P/Case-Shiller National Home Price Index.

The 20-city index rose 6.4% on the year, up from 6.3% growth the previous month and in line with economists' expectations.

Meanwhile, the national home price NSA index covering all nine US census divisions was up 6.2% on the year, compared to a 6.1% increase the month before.

Dow Jones - Risers

Caterpillar Inc. (CAT) $163.72 0.70%
Procter & Gamble Co. (PG) $86.96 0.12%
United Technologies Corp. (UTX) $136.51 -0.12%
Travelers Company Inc. (TRV) $148.72 -0.16%
Nike Inc. (NKE) $67.34 -0.36%
Verizon Communications Inc. (VZ) $53.91 -0.41%
Apple Inc. (AAPL) $166.97 -0.59%
Coca-Cola Co. (KO) $47.41 -0.61%
American Express Co. (AXP) $98.73 -0.68%
Johnson & Johnson (JNJ) $142.44 -0.86%

Dow Jones - Fallers

Unitedhealth Group Inc. (UNH) $236.68 -4.34%
Pfizer Inc. (PFE) $37.80 -3.13%
McDonald's Corp. (MCD) $172.48 -2.98%
Chevron Corp. (CVX) $125.23 -2.53%
Intel Corp. (INTC) $48.79 -2.38%
General Electric Co. (GE) $15.95 -2.03%
International Business Machines Corp. (IBM) $163.59 -1.92%
3M Co. (MMM) $251.56 -1.74%
Wal-Mart Stores Inc. (WMT) $107.73 -1.66%
Merck & Co. Inc. (MRK) $60.64 -1.61%

S&P 500 - Risers

Harris Corp. (HRS) $156.27 6.17%
Wynn Resorts Ltd. (WYNN) $171.45 4.88%
Qorvo, Inc. (QRVO) $70.67 3.64%
Dover Corp. (DOV) $107.09 3.29%
Tenet Healthcare Corp. (THC) $19.62 2.51%
United Continental Holdings Inc. (UAL) $67.01 1.87%
Universal Health Services Inc. (UHS) $122.51 1.86%
Southern Co. (SO) $44.80 1.84%
Dr Pepper Snapple Group Inc. (DPS) $119.00 1.65%
F5 Networks Inc. (FFIV) $140.95 1.48%

S&P 500 - Fallers

Mallinckrodt Plc Ordinary Shares (MNK) $18.37 -9.51%
MetLife Inc. (MET) $49.70 -8.64%
Harley-Davidson Inc. (HOG) $50.74 -8.23%
CIGNA Corp. (CI) $207.90 -7.15%
Chesapeake Energy Corp. (CHK) $3.63 -6.44%
Southwestern Energy Co. (SWN) $4.45 -6.32%
United States Steel Corp. (X) $38.62 -6.15%
SCANA Corp. (SCG) $40.77 -5.86%
Corning Inc. (GLW) $32.33 -5.61%
Noble Energy Inc. (NBL) $30.40 -5.38%

Nasdaq 100 - Risers

Wynn Resorts Ltd. (WYNN) $171.45 4.88%
Workday, Inc. (WDAY) $120.26 3.21%
Amazon.Com Inc. (AMZN) $1,437.82 1.42%
Cerner Corp. (CERN) $69.36 0.92%
Electronic Arts Inc. (EA) $118.70 0.89%
Verisk Analytics Inc. (VRSK) $99.12 0.89%
Comcast Corp. (CMCSA) $42.34 0.86%
Facebook Inc. (FB) $187.12 0.61%
Charter Communications Inc. (CHTR) $376.52 0.54%
Starbucks Corp. (SBUX) $57.19 0.30%

Nasdaq 100 - Fallers

Maxim Integrated Products Inc. (MXIM) $61.71 -6.88%
Walgreens Boots Alliance, Inc. (WBA) $76.13 -5.16%
Mylan Inc. (MYL) $44.02 -4.26%
PACCAR Inc. (PCAR) $75.74 -4.13%
Baidu Inc. (BIDU) $244.07 -3.81%
Micron Technology Inc. (MU) $41.67 -3.74%
Applied Materials Inc. (AMAT) $53.38 -3.52%
Alexion Pharmaceuticals Inc. (ALXN) $122.36 -3.49%
Amgen Inc. (AMGN) $191.27 -3.40%


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Newspaper Round Up

Wednesday newspaper round-up: Car production, RBS, Bitcoin, Carillion,

UK car production went into reverse last year for the first time since the depths of financial crisis in 2009, as Brexit fears took hold and consumers turned their backs on diesel vehicles. A total of 1.67m cars rolled off UK production lines in 2017, down 3% compared with 2016 as demand for British-made cars dropped both at home and abroad, according to the Society of Motor Manufacturers and Traders (SMMT). – Guardian

The Financial Conduct Authority has agreed to publish the full confidential report into the mistreatment of small businesses by the Royal Bank of Scotland, in a significant U-turn by the City watchdog. The announcement came hours after the bank's chief executive, Ross McEwan, and chair, Sir Howard Davies, told parliament's Treasury select committee that they would not prevent the report's release. The bankers accepted there had been a series of failings over how RBS had handled small business clients struggling in the wake of the 2008 financial crisis. ?" Guardian

Bitcoin's price slumped on Tuesday night as Facebook announced it would ban adverts promoting cryptocurrencies and US authorities launched a probe into a large online exchange. Facebook announced a new policy prohibiting adverts that relate to cryptocurrencies or initial coin offerings (ICOs) from the 2bn-user social network, saying they are "frequently associated with misleading or deceptive promotional practices". ?" Telegraph

The Governor of the Bank of England has urged the Government to abandon the use of the retail prices index (RPI) as a measure of inflation, especially in the issuance of government bonds. The intervention by Mark Carney could have profound implications for both savers and borrowers because RPI tends to run at 0.7 percentage points higher than the consumer prices index (CPI), which is increasingly considered to be a more reliable measure of inflation. Nevertheless, RPI is still widely used in government contracts. ?" Telegraph

The Financial Reporting Council has come under attack from MPs after admitting that it had first investigated Carillion two years ago, that it had been secretly monitoring the failed construction company since last summer without telling shareholders and creditors, and for claiming that it had no regulatory powers to raise the alarm before Carillion's collapse this month. ?" The Times

After she steps on to the tarmac of a freezing Wuhan airport today, Theresa May will be followed by one of Britain's biggest overseas trade delegations, intent on securing a share of the "golden fruits" that China's ambassador to London says are up for grabs. That feast, however, may depend not on their best efforts but on the prime minister's; specifically, her willingness to endorse President Xi's pet foreign policy project. ?" The Times

 

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