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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 end higher, but traders wary ahead of US CPI data London stocks finished in the black tracking a late rebound on Wall Street at the end of last week, but worries remained about rising inflation and higher interest rates, with an upcoming release on consumer prices in the US the main talking point in markets. The FTSE 100 was up 1.2% to 7,177.06 at the close of trading, with just eleven stocks ending the session in the red, while the pound was roughly unchanged against the US dollar at 1.3818 and 0.24% lower versus the euro at 1.1261. Chris Beauchamp, chief market analyst at IG, said: "As noted on Friday, the kind of dip we have seen usually ends well over a longer-term time frame, for example six months, and indeed the next five days may also see a bounce, but previous sell-offs have faltered within a month, and it is this medium term view that should worry them. The worst may not yet be over." Back in the UK, with interest rates and inflation at the forefront of investors' minds, comments from Bank of England policymaker Gertjan Vlieghe were a highlight on Monday, as he set out reasons why he was becoming increasingly hawkish over rates. Speaking as a panellist at a Resolution Foundation event in London earlier, he said three rate hikes from the BoE would still leave some excess demand in the economy but he wanted to stress’ that there is "huge uncertainty" around the rate path, with rates possibly rising faster or more slowly. Following the more hawkish turn from the Bank's monetary policy committee last week, deputy governor Vlieghe said there was "increased evidence that tight labour markets are finally starting to have some upward effect on wages". For his part, in remarks published by the Newcastle Chronicle on Sunday, BoE chief economist Andy Haldane said: "We're in no rush, rates won't remotely go back to levels we've seen in the past, but nonetheless keeping the cost of living under control is, we think, the single best and most important thing we can do to help the economy." On Tuesday, investors will be looking to the release of the latest UK inflation figures. Acting as a backdrop, there was also a keen interest in Wednesday's US CPI report for January. Commenting on the outlook for that key data point, Jim Reid atDeutsche Bank told clients: "This number has been slightly complicated as the BLS have recently made some seasonal adjustments. Before this, January's print (i.e. this week's number) had consistently exceeded expectations in the last 25 years and February's had consistently missed. So all a bit uncertain." In corporate news, Wood Group rallied after saying it had won a new multi-million dollar, five-year contract to provide engineering and project management services on Saudi Aramco's Marjan oil field. Shares of FTSE 250 over-50s travel and insurance group Sagaalso advanced after saying that it has signed a new reinsurance agreement with NewRe and Hannover Re and that trading continues to be in line with the guidance given in December 2017. BGEO stock gained as it said its board has approved the demerger announced last July and that its investment business, Georgia Capital, plans to increase its stake in Bank of Georgia to 19.9%, up from the previously announced 9.9%. Barclays on the other hand reversed an earlier advance to trade a little lower as it emerged that its core banking business was being charged by the Serious Fraud Office over its fundraising deal with Qatar at the height of the financial crisis, adding to the charge already brought against the parent holding company and four former executives. Acacia Mining retreated 4%, but recovered from an early slump of nearly 15% as it scrapped its dividend and reported a drop in full-year earnings after it took a hit from an export ban by the Tanzanian government, while Euromoney slipped after announcing the sale of its Global Markets Intelligence unit for $180.5m in cash to a consortium. In broker note action, Evraz was one of the best performers after an upgrade to 'buy' at Goldman Sachs, while oil giant BP was boosted by an upgrade at Societe Generale and Victrex was up after a double upgrade to 'buy' out of analysts at Bank of America- Merrill Lynch. Cineworld was higher after an upgrade to 'buy' at Peel Hunt, but Moneysupermarket ticked down as it was cut to 'sector perform' by RBC Capital Markets. Market Movers FTSE 100 (UKX) 7,177.06 1.19%
FTSE 250 (MCX) 19,379.33 0.84%
techMARK (TASX) 3,255.68 0.89% FTSE 100 - Risers Evraz (EVR) 353.60p 6.15%
NMC Health (NMC) 3,250.00p 4.50%
Shire Plc (SHP) 3,197.00p 3.97%
Rio Tinto (RIO) 3,895.50p 2.82%
Scottish Mortgage Inv Trust (SMT) 439.80p 2.76%
DCC (DCC) 6,900.00p 2.68%
Old Mutual (OML) 232.30p 2.52%
Anglo American (AAL) 1,642.40p 2.37%
Royal Dutch Shell 'B' (RDSB) 2,306.50p 2.35%
Smurfit Kappa Group (SKG) 2,442.00p 2.35% FTSE 100 - Fallers Severn Trent (SVT) 1,790.00p -1.68%
United Utilities Group (UU.) 685.80p -1.10%
Paddy Power Betfair (PPB) 8,080.00p -0.86%
SSE (SSE) 1,182.00p -0.63%
Barratt Developments (BDEV) 552.60p -0.25%
BT Group (BT.A) 230.40p -0.24%
Lloyds Banking Group (LLOY) 66.47p -0.12%
Taylor Wimpey (TW.) 184.25p -0.08%
National Grid (NG.) 748.90p -0.08%
Johnson Matthey (JMAT) 3,109.00p -0.03% FTSE 250 - Risers Ferrexpo (FXPO) 271.60p 4.06%
TalkTalk Telecom Group (TALK) 109.00p 3.81%
Saga (SAGA) 115.90p 3.67%
Wizz Air Holdings (WIZZ) 3,321.00p 3.52%
Aveva Group (AVV) 2,836.00p 3.35%
Polypipe Group (PLP) 386.40p 3.32%
Victrex plc (VCT) 2,504.00p 3.30%
F&C Global Smaller Companies (FCS) 1,315.00p 3.14%
Weir Group (WEIR) 2,034.00p 3.12%
Petrofac Ltd. (PFC) 420.80p 3.11% FTSE 250 - Fallers Stobart Group Ltd. (STOB) 249.00p -4.41%
Card Factory (CARD) 189.10p -3.96%
Acacia Mining (ACA) 165.25p -3.87%
Renewi (RWI) 93.70p -3.60%
BCA Marketplace (BCA) 166.20p -2.81%
Pennon Group (PNN) 632.80p -2.59%
Provident Financial (PFG) 664.80p -2.58%
Sophos Group (SOPH) 492.00p -2.57%
Capita (CPI) 191.15p -2.07%
Tate & Lyle (TATE) 571.40p -1.82% |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks track bounce on Wall Street, end slightly higher Stocks held onto early gains, tracking a late advance on Wall Street last Friday after the S&P 500 bounced off a key level of technical support, its 200-day moving average, although traders remained wary. Commenting on the situation in markets, Chris Beauchamp at IG said: "At the very least, volatility is back, while the waning strength of earnings season means that this week’s US CPI figure takes on greater importance. "As noted on Friday, the kind of dip we have seen usually ends well over a longer-term time frame, for example six months, and indeed the next five days may also see a bounce, but previous sell-offs have faltered within a month, and it is this medium term view that should worry them. The worst may not yet be over." Analysts at UniCredit Research held a similar view, saying: "historically, corrections have tended to last longer than a couple of weeks, so caution is still warranted. What seems increasingly likely is that (even the gradual) withdrawal of monetary policy accommodation has put an end to the period of extremely low volatility." Against that backdrop, at the closing bell the benchmark Stoxx 600 was standing 1.17% or 4.32 points higher at 372.93, alongside a rise of 1.45% or 175.29 points to 12,282.77 on the German Dax and an advance of 1.20% or 60.85 points to 5,140.06 for the Cac-40. In parallel, the yield on the benchmark 10-year German bund had added one basis point to 0.757% after having traded just below its 52-week high of 0.806%, while euro/dollar was edging higher by 0.13% to 1.2267. On Friday, the S&P 500 finished higher by 1.5% at 2,619.55, bouncing back from an intra-day low that was just a smidgen below its 200-day moving average, then at 2,557.56, althoughWebFG UK's chief technical analyst, Jose Maria Rodriguez, said investors would do best by keeping an eye on 200-week support, then at 2,175.5. To take note of, in remarks to Austria's ORF at the weekend, European Central Bank governing council member Ewald Nowotny reiterated his concerns that the US might be attempting to talk down the Greenback. Nowotny also pointed out that recent positive economic data in the States was the inheritance from the Obama administration years and not the result of the current president's policies. There was little on the economic agenda for Monday, although US president Donald Trump was expected to release his $1.5trn infrastructure plan later the same evening. To take note of, analysts at UniCredit were skeptical on that score as well. "Not only is the 6.5:1 leverage ratio extremely optimistic, but many conservative lawmakers have already voiced their opposition against spending another USD 200bn at a time when deficits are already ballooning. The president has pledged to pay for the outlays through thus far unspecified spending cuts elsewhere," they said. Sourced reports indicated the White House's intention was to provide $200bn in cornerstone funding in order to attract a further $1.3trn from state and local authorities, together with funds from the private sector. Meanwhile, in corporate news, Airbus shares saw some added selling pressure after the company was forced to suspend the delivery of its A320neo aircraft due to issues related to their Pratt & Whitney engines. Elsewhere, some market commentary has picked up on a Frankfurter Allgemeine Sonntagszeitung report that BMW may be about to ink a 10-year supply contract for lithium and cobalt. |
| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Bitcoin (BTC) | 148,625,958,000 | 8,730.42 | +11.12% |  | | 2 |  | Ethereum (ETH) | 84,998,910,899 | 860.99 | +10.05% |  | | 3 |  | Ripple (XRP) | 42,720,942,725 | 1.05 | +16.42% |  | | 4 |  | Bitcoin Cash / BCC (BCH) | 21,990,478,770 | 1,279 | +7.27% |  | | 5 |  | Cardano (ADA) | 10,132,713,999 | 0.37586 | +7.76% |  | | 6 |  | Litecoin (LTC) | 8,889,528,292 | 160.66 | +13.28% |  | |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
| | US Market Report | | US open: Wall Street opens higher, extending last week's bounce Wall Street's main indexes started higher on Monday, as stocks extended the bounce that began late on Friday, driven by technology and financial issues as stocks do their best to recover from their worst week since 2016. As of 1500 GMT, the Dow Jones Industrial Average was up 1.17%, while the S&P 500 and Nasdaq were tacking on 0.97% and 1.09%, respectively. In parallel, the Chicago Board of Options Exchange's volatility index was down by 5.20% to 27.55. Connor Campbell, financial analyst at SpreadEx, said, "The Dow displayed a broadly positive, if jittery, vibe after the bell, rising anywhere between 200 and 300 points to lurk around 24450, having fallen as low as 23250 at moments during last week’s turbulence. There is still a while to go in terms of the US session, however, and the Dow Jones has shown a predilection for saving its wilder behaviour for later in the day, so it’s really far too early to speak with any confidence about the index’s performance." There are no major data points due, but after worries about inflation and rising interest rates prompted a selloff in equity markets last week, investors will be eyeing the release of the consumer price index for January on Wednesday. Economists expect headline inflation to rise 0.3%, while core inflation - which excludes food and energy costs - is seen edging up 0.2% David Cheetham, chief market analyst at XTB, said, "Should this metric increase further than forecast then the body of evidence supporting stronger inflationary pressures in the world’s largest economy will increase. The fear amongst some investors is that bond yields have been steadily creeping higher for some time now and in doing so they are showing signs of possibly breaking out of a downtrend that has been in place for the past three decades. "Should yields continue to make sustained gains going forward then the recent declines in stocks may be just the beginning of a larger correction that is, by historical terms at least, becoming long overdue." Investors were also on the lookout for comments from President Trump, who was set to outline his administration's infrastructure plans. Republicans' plans were centred on using $200bn in federal money to leverage local and state tax dollars to fix the nation's "crumbling" infrastructure, such as roads, highways, ports and airports. "Every federal dollar should be leveraged by partnering with state and local governments and where appropriate tapping into private sector investment to permanently fix the infrastructure deficit," Trump said in his State of the Union address in January. Rabobank's senior FX strategist Jane Foley said: "Along with healthcare and tax reform, this was a key election pledge. Following on from concerns about how this could be funding, the $1.5trn proposal is expected to heavily rely on state and local governments for financing. $200bn in federal support is expected to be promised today and funded by cuts to existing programmes. "Trump is scheduled to host both Democrat and Republican leaders at the White House on Wednesday to discuss the way forward for the proposals. The White House plan marks only a starting point for an infrastructure overhaul. It faces a difficult path given a deeply divided Senate and congressional elections later in the year." In corporate news, shares in government IT business CSRArocketed as much as 31.28% after it agreed to be bought out by General Dynamics for $9.6bn, and shares in Ryder Systemedged ahead after announcing it would lift its quarterly dividend by 13% to $0.52 per share thanks to the boost to earnings as a result of recent changes to the US tax system. Iconix shares rose as much as 35.20% to $1.69 a share after it unveiled a cost savings plan alongside its new deal with retail giant Target, while Cisco Systems nudged ahead 2.07% after having its stock upgraded to 'buy' from 'neutral' by analysts at Instinet. Elsewhere, front month West Texas Intermediate was up by 1.15% to $59.88 a barrel as OPEC raised its crude supply forecasts for this year, saying that strengthening global demand would continue to help eat up the excess supply of crude reserves. The cartel added that supplies from producers outside OPEC would increase around 1.4m barrels a day throughout 2018 – with 1.3m barrels a day of the growth to come from the US itself. |
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| | Broker Tips | | Broker tips: Tesco, Moneysupermarket, Victrex Analyst Clive Black of Shore Capital believes that Tesco, which has hired consultants to look into a possible launch of a discount grocery chain to try and thwart the fast-growing rivals Aldi and Lidl, would have to make a major push to justify the move, could face a considerable challenge with customers and put pressure on its profit margins should the discount site cannibalise its own customer demand in trying to become "one of the LADs". He said Aldi and Lidl have prospered because they delivered private label products that for many years were lower in price and better in quality in the main than those offered by the major supermarkets. "So, if Tesco went the same way and offered a new private label that was cheaper and better in quality than its mainstream offer, then again what would that do for its footfall and gross margin?" Black pondered. "Whilst far from impenetrable, we sense that Tesco will be 'going some' to develop a meaningful discount chain that captures the public's imagination on a recurring basis and does not involve any cannibalisation. Should such a new fascia work, it raises the question as to whether it could feature in say Central Europe and Ireland, where its stores also face strong LAD competition." The reports about Tesco emerged as discounter Aldi was said to have taken over as Britain’s favourite supermarket, according to shopper survey from the Which? consumer group. Aldi impressed shoppers with the quality of its fresh and own-label food as well as its special offers, wrestling upmarket rival Waitrose off the top spot. RBC Capital Markets cut its stance on Moneysupermarket.com to 'sector perform' from 'outperform', chopping the target price to 350p from 425p, saying that while the company's diversified model makes it a winner over the longer-term, the near-term could be more challenging. The bank said that with the stock trading at a premium to its closest peer - it trades on 18.8x 2018 price-to-earnings versus Gocompare on 14.7x - there is little room for multiple expansion in the coming year and it would rather wait for a better entry point into what it still sees as an attractive long-term story. In addition, it argued that the near term could be more challenging than it previously thought for the company's Money and Home businesses, with interest rates remaining at low levels and few opportunities to run attractive collective switches in-home services as energy prices rise. The bank also pointed out that motor insurance prices are at their peak and look set to drop in 2018, having risen for nine consecutive quarters from the second quarter of 2015 to the second quarter of 2017. "We believe that any pressure on motor insurance prices will mean that momentum in insurance revenues is unlikely to bridge the revenue gap in the way that it did during 2017," RBC said, cutting its 2016-2021 estimates for revenue compound annual growth rate to 7% from 10%. "We believe that revenue growth will be more difficult to achieve. The largest reductions come in-home services and money products." Analysts at Numis downgraded their recommendation on shares of polymer manufacturer Victrex from 'add' to 'hold' on Monday, saying that although the company's business model remained "highly cash generative", an impending FX headwind was set to limit the upside in its share price. Numis said Victrex's first quarter results indicated a strong start to the year, with its industrial division offsetting much of the weakness experienced over in its medical wing. "Continued strength in Industrial offers upside to full-year expectations and we upgrade our 2018 adj. EPS estimate by 3.5% to reflect this, while we limit the upgrade to our 2019 adj. EPS estimate to just 1.5% as an FX headwind is building," a Monday morning research note read. Analyst Kevin Fogarty said currency hedges had positively impacted Victrex's financial performance through to the first quarter of 2018, but as the pound sterling continues to recover from losses experienced in the wake of the Brexit vote, Numis anticipated an FX headwind to build, leading it to lower its EPS growth rate for 2019 from 3% to just 1%. However, Numis did increase its target price on Victrex, from 2,300p to 2,550p. "We raise our DCF-derived target price to 2550p/share, from 2300p/share previously. However, given the limited upside to our target price, we move our recommendation to Hold from Add." |
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