Evening Euro Markets Bulletin

ADVFN III Evening Euro Markets Bulletin Daily world financial news Wednesday, 21 February 2018 21:35:06 Monitor Quote Charts News CFD's Compare Brokers Free BB   Get Your FREE Weekly Bitcoin Newsletter From Guardian Stockbrokers Click Here To Subscribe For FREE Today All trading involves risk. Losses can exceed deposits. London close: FTSE ends up as Lloyds, Glencore rally; pound slips on jobs data FTSE 100 Euronext Dax perf CAC 40 Please click on the images to view our interactive charts London stocks reversed earlier losses to end Wednesday's session higher, helped along by well-received results from the likes of Lloyds and Glencore, as the pound slipped following an uptick in the UK unemployment rate. The FTSE 100 closed up 0.5% at 7,281.57, as the pound fell 0.3% versus the dollar to 1.3949 and 0.2%% against the euro to 1.1326 after figures revealed that UK unemployment unexpectedly rose at the end of last year, while wage data was mixed. A weaker pound tends to benefit the top-flight index as around 70% of its constituents derive most of their earnings from overseas. Sterling was off earlier lows, however, having briefly turned higher after Bank of England governor Mark Carney and other policymakers suggested that the BoE could raise rates again as early as May. The headline unemployment rate for the three months to December rose to 4.4% from 4.3% a month earlier, at which level it was expected to remain. This was the first increase in the unemployment rate in nearly two years. The Office for National Statistics also revealed an 88,000 increase in employment change in the period, which was half the 165,000 expected, but that it was a rise in the participation rate that pushed the unemployment rate up. More timely data on the January claimant count showed a 7,200 decline to 0.823m, versus an expected 4,100 increase. UK average weekly earnings for the three months to December remained 2.5% higher than the same period a year before for the third consecutive reading, as expected, though it jumped by 2.8% if the month of December was taken alone. Growth in weekly earnings excluding bonuses rose to 2.5%, higher than the average estimate of 2.4% and the figure for the month before, which was revised down to 2.3%. And private sector pay growth accelerated to 2.6% from 2.3%. With consumer price inflation at 3.0%, the stubbornly low wage growth means household real incomes continue be squeezed. Earnings also helped to underpin the FTSE on Wednesday. Lloyds Banking Group rose despite missing expectations on full-year profit, as it announced a £1bn share buyback and increased its annual dividend by a fifth. Joshua Mahony at IG said: "Lloyds is grabbing the attention of the markets today, as the UK bank pushes onwards and upwards in its first year as a private bank post-crisis. Question-marks over whether the government’s stake would hold the firm back have been firmly answered, with the bank posting the highest pre-tax profit since 2006. With the Bank of England pointing towards three rate hikes in the coming years, there is reason to believe that Lloyds will emerge as one of the main investment plays to take advantage of that shift given their recent re-emergence into fully private hands." Glencore gained after it declared a $2.9bn dividend to be paid out in two equal instalments in 2018 as profits surged higher and it looked confidently to the future. Fidessa was flying high again as it agreed to a £1.4bn takeover by Swiss banking software company Temenos a day after confirming that the two were in talks. Spire Healthcare racked up strong gains as the FT reported market chatter regarding possible interest from US rival HCA in taking Mediclinic's 29.9% stake in Spire off its hands. Housebuilder Barratt Developments edged up after posting a record first-half profit thanks to strong demand, while Unite Groupticked higher as it launched a £170m placement to fund two near university projects and said pre-tax profit rose 14% in the year t the end of December. On the downside, roadside assistance and insurance company AAtanked after warning on profits and slashing its dividend, whileMetro Bank slumped even as it reported record results and its first annual profit, as underlying pre-tax profit missed expectations. Capital & Counties retreated after it said its Earls Court interests were now valued at 1bn, down from £1.1bn in 2016, and posted a drop in full-year revenues to £87.7m from £94m. Hochschild Mining was in the red as it reported a drop in full-year earnings on the back of higher costs and increased investment in brownfield exploration, but said production is expected to double this year. FirstGroup tumbled after saying annual earnings are expected to be slightly lower, while Polymetal ticked down as it signed its first offtake contract for Kyzyl concentrate. In broker note action, BT was upgraded to 'hold' at Deutsche Bank, while 3i Infrastructure was lifted to 'buy' at Jefferies. HSBC was cut to 'hold' by Societe Generale and Dunelm was downgraded to 'equalweight' from 'overweight' by Barclays. Still to come, market participants will eye the release of the minutes from the FOMC meeting at the end of January. David Morrison, senior market strategist at GKFX, said: "The market has just about fully priced in the likelihood of three 25 basis point rate hikes in 2018. This brings it in line with the FOMC’s forecast taken from the committee’s Summary of Economic Projections in December last year. However, the recent spike in inflation as measured by the latest CPI and average hourly earnings releases has begun to impact expectations going forward. "There is growing feeling that the Fed may be in danger of falling behind the curve when it comes to tightening monetary policy. Therefore, there’s growing speculation that tonight’s minutes may indicate a shift towards raising rates by a full percentage point this year - something yet to be priced in by markets."   Market Movers FTSE 100 (UKX) 7,281.57 0.48% FTSE 250 (MCX) 19,788.89 -0.07% techMARK (TASX) 3,348.38 0.30% FTSE 100 - Risers Glencore (GLEN) 404.55p 5.24% Anglo American (AAL) 1,801.40p 3.54% Mediclinic International (MDC) 605.00p 2.89% Lloyds Banking Group (LLOY) 69.72p 2.76% InterContinental Hotels Group (IHG) 4,686.00p 2.58% TUI AG Reg Shs (DI) (TUI) 1,579.00p 2.37% Relx plc (REL) 1,522.50p 1.98% AstraZeneca (AZN) 4,814.00p 1.95% London Stock Exchange Group (LSE) 4,079.00p 1.85% Old Mutual (OML) 253.00p 1.69% FTSE 100 - Fallers Shire Plc (SHP) 2,992.00p -2.62% WPP (WPP) 1,379.00p -1.50% British Land Company (BLND) 639.80p -1.20% Evraz (EVR) 427.50p -1.20% Smurfit Kappa Group (SKG) 2,609.69p -1.15% Reckitt Benckiser Group (RB.) 5,869.00p -1.00% British American Tobacco (BATS) 4,450.00p -0.96% Morrison (Wm) Supermarkets (MRW) 221.90p -0.63% BP (BP.) 472.20p -0.59% Land Securities Group (LAND) 933.10p -0.58% FTSE 250 - Risers Spire Healthcare Group (SPI) 246.60p 5.84% Lancashire Holdings Limited (LRE) 593.00p 5.61% RHI Magnesita N.V. (DI) (RHIM) 4,475.00p 5.05% Fidessa Group (FDSA) 3,750.00p 5.04% Equiniti Group (EQN) 289.50p 3.95% SSP Group (SSPG) 631.50p 3.44% Marshalls (MSLH) 421.00p 3.44% Sirius Minerals (SXX) 24.83p 3.27% NewRiver REIT (NRR) 314.50p 3.11% Homeserve (HSV) 741.00p 3.06% FTSE 250 - Fallers AA (AA.) 83.58p -28.13% FirstGroup (FGP) 84.40p -12.13% TalkTalk Telecom Group (TALK) 94.50p -6.16% Capita (CPI) 171.35p -5.02% Hochschild Mining (HOC) 209.90p -4.63% Dignity (DTY) 761.50p -4.51% Inmarsat (ISAT) 459.00p -4.12% Vectura Group (VEC) 74.30p -4.07% Sanne Group (SNN) 606.00p -3.96% Hikma Pharmaceuticals (HIK) 950.00p -3.61% Crypto Pizza Evening with Clem Chambers, CEO of Online Blockchain In May 2010, programmer Laszlo Hanyecz bought two pizzas from Papa Johns for 10,000 bitcoins. Had he kept the coins, as of today they would be worth a cool $86,000,000. Join us on Wednesday 14 March for a crypto pizza 'Bite' on Clem Chambers, the CEO of the first London-listed British blockchain company - Click Here To Register For Free  Europe close: Stocks higher as euro dips FTSE 100 Euronext Dax perf CAC 40 European stocks held onto their early gains with following the long weekend in the States against a backdrop of rising government bond yields, a dip in the euro and ahead of a wave of debt sales scheduled for later on the other side of the Pond. By the closing bell, the benchmark Stoxx 600 was 0.60% or 2.27 points higher to 380.51, alongside an advance of 0.83% or 102.30 points to 12,487.90 on the German Dax and a gain of 0.64% or 33.68 points to 5,289.66 for the Cac-40. Meanwhile, the euro/dollar was 0.56% lower to 1.2341. Acting as a backdrop, analysts at Morgan Stanley were in the market spotlight on Tuesday after reportedly pointing out to clients how, in inflation-adjusted terms, government bond yields in the US had yet to break-out from their recent trading range. Hence, in their opinion, the early February correction in stocks had been just the "appetiser, not the main course". Their comments came ahead of the sale of $151bn of US Treasury bills scheduled for later on Tuesday, alongside an auction of $28bn in two-year debt. Back in European news, Germany's Ministry of Finance reported that the year-on-year rate of advance in consumer prices in the euro area's largest economy slipped to 2.1% for January, versus 2.3% in December (consensus: 1.8%). Also in Germany, the ZEW institute's economic confidence gauge for Germany in February slipped 2.6 points to a reading of 17.8 (consensus: 16.2). Later in the day, Eurostat reported that its gauge of euro area consumer confidence fell to a reading of 0.1 for February from an upwardly revised 1.4 in January (consensus: 1.1). Arcelor Mittal stock was unchanged despite a Bloomberg report that its bid for Essar Steel India might be disqualified because when it filed its bid it still held a 29.1% stake in Uttam Galva, a company that was classified as a delinquent borrower. Market Analysis 21/02/2018 Today's highlights: Global markets mostly lower Cryptocurrency seesaw continues: The crypto market continued to zigzag, as all top 10 currencies registered losses over the past 24 hours. Despite the negative momentum, Bitcoin held above the $11,000 mark. Nvidia reaches all-time high: The popular chipmaker went against the market, registering gains of more than 2% and notching an all-time high. eCommerce company Shopify and web hosting service GoDaddy also reached record heights yesterday. Asia seen higher: Leading indices in Asia, such as the Nikkei and China50, were seen higher this morning. Markets in China are still closed due to the Spring Festival celebrations. Read More... US open: Stocks start on front foot ahead of FOMC minutes Wall Street stocks rebounded on Wednesday, with the mood lifted by a pair of positive business surveys ahead of the release of the minutes from the latest Federal Reserve policy meeting. At 1500 GMT, the Dow Jones Industrial Average and S&P 500 were up 0.27% and 0.44% respectively, while the Nasdaq had seen a 0.57% uptick. The looming release of the FOMC meeting minutes saw currency traders sitting on their hands. Craig Erlam, senior market analyst at Oanda, reminded that the sell-off in the markets earlier this month was initially triggered by a more hawkish sounding Fed, with the jobs report then being the straw that broke the camel’s back two days later. "While the minutes may not generate quite the same response, traders will likely monitor what they say very closely for signs that policy makers are now leaning more towards three to four rate hikes this year, rather than two or three," he said. Capital Economics analyst Andrew Hunter said the minutes from the meeting on 31 January may bolster expectations of a 25 basis points rate hike in March, although this is almost fully discounted in markets already. "The policy statement provided a more upbeat assessment of activity while revealing a growing confidence among Fed officials that inflation is set to rebound this year. The minutes will provide more detail on how many officials shared that view. While January’s meeting preceded the sharp falls in equity prices over the past couple of weeks, officials have not sounded too concerned and the stock market now appears to be rebounding." Macro data was showing continued strength in the US economy, with IHS Markit's flash manufacturing purchasing managers' index for February rising to a three-and-a-half-year high of 55.9 from 55.5, while a similar services barometer posted a climb from 53.3 to 55.9. Looking at prices, a key concern of the FOMS, the report pointed out that the cost of raw and partly finished materials rose to their highest level since 2013, potentially indicating a rise in inflation. "Business activity growth accelerated markedly in February, suggesting the economy is growing at its fastest pace for over two years," said Chris Williamson, chief business economist at IHS Markit. "Even faster growth is signalled for coming months." Elsewhere, existing-home sales came in at a seasonally adjusted annual pace of 5.38m in January, according to the National Association of Realtors, as sales of previously-owned homes slid 3.2% in January, the second consecutive monthly decline, with sales as a whole coming in 4.8% lower than twelve months earlier, the steepest annual decline in more than three years. "Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year," said Lawrence Yun, NAR's chief economist. However, "sales failed to follow course and far lagged last January's pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth." Minutes from the FOMC's latest meeting are due at 1900 GMT. In corporate news, Dish Network had fallen 1.95% to $43.70 per share despite posting a big rise in fourth-quarter profit. Retailer Walmart had dropped 2.30%, seemingly continuing on from heavy losses in the previous session when it reported a weaker-than-expected fourth-quarter profit. Foot Locker gained 2.18% after saying late on Tuesday that it was lifting its quarterly cash dividend and cutting its yearly capital expenditure programme. Lending Club lost 5.34% after its fourth-quarter adjusted earnings and sales released late on Tuesday fell short of analysts' expectations. Looking for early access to investment opportunities? Make your own informed investment decisions. Get the right tools and information at Master Investor Show 2018. Register for free today Cryptocurrencies Report Top Cryptocurrencies # Name Market Cap($) Price(%) Change Price Graph(3m) 1 Bitcoin (BTC) 189,159,637,905 11,000 -1.79% 2 Ethereum (ETH) 87,400,665,228 884.47 +0.26% 3 Ripple (XRP) 41,277,211,647 1.01 -1.08% 4 Bitcoin Cash / BCC (BCH) 23,619,390,759 1,380.21 -0.59% 5 Litecoin (LTC) 12,407,482,111 220.6 -3.16% 6 Cardano (ADA) 9,546,114,028 0.346 -0.57% Atlantic Advisory - Share Tips of the Year 2018 Download Our Latest Report Here Losses can exceed deposits Broker tips: InterContinental Hotels, Dunelm Credit Suisse cut its price target on InterContinental Hotels Group to 5,500p from 5,800p, keeping the rating at 'outperform', following the company’s full-year results, saying its target price reduction was mostly down to FX, with the balance due to higher cash outflows. InterContinental Hotels reported a jump in full-year profit on Tuesday but said it would not be paying out any additional capital this year as it looks to reinvest savings in growth. In the year to the end of December 2017, operating profit rose 7% to $759m versus the consensus of $754m, while pre-tax profit was up 14.7% to $678m. Revenue edged up 4% to $1.8bn and group revenue per available room increased 2.7%. For the fourth quarter, RevPAR was up 4%. The company lifted its dividend by 11% for the year to 104 cents and announced a series of new initiatives to build on its strategy and drive an acceleration in its growth rate. Credit Suisse had been expecting a $500m special dividend with the results but said that it would far rather see the company invest in enhancing its long-term growth credentials with a restructuring plan to drive better allocation of the same resources. It argued that the 2.7% drop in the shares following the results was a buying opportunity, with the new target price implying 20% potential upside. "We estimate a one-off $200m cash return (the cost of the restructuring) would be circa 1.5% earnings per share enhancing whereas the aim to match industry-leading net room growth of circa 6% should have a material compounding effect and thus create more value for shareholders." The bank removed a $500m special dividend from its 2018 estimates but said net debt improves only around $200m due to the restructuring charges and the reversal of a system fund surplus. However, it still models $2.6bn of special dividends from 2019 to 2022, with the company committed to returning excess capital intact. Barclays downgraded its stance home furnishings retailer Dunelmto 'equal-weight' from 'overweight' on Wednesday and slashed the price target to 630p from 810p following "disappointing" first-half results and commentary on Worldstores. The bank said pre-tax profit of £60m was 5% below is the estimate, while the downgrade to guidance for Worldstores - which is now expected to incur a pre-tax loss of £7m to £8m for the year - is concerning. "Although we still believe the acquisition provides Dunelm with a better online platform than it had previously, we think the process of consolidating websites and reaping the benefits of the combined businesses may be slower and more challenging than we had previously anticipated," Barclays said. In addition, it highlighted concerns about store profitability, noting that while core Dunelm's online business has been growing well, in-store like-for-like sales have been less impressive. If this continues, it could hinder operating leverage as several store costs are relatively fixed in the medium term. "Ultimately, we recognise the drivers of the story including store roll-out, improved online capabilities and an optically cheap valuation; but we lack confidence on execution in the near term." The bank cut its underlying pre-tax profit estimate for 2018 to £114.5m from £122.2m and its estimate for 2019 to £128.6m from £141m. For 2020, it now sees an underlying pre-tax profit of £143.7m from £165.9m.   To advertise in the Euro Markets Bulletin please contact advertise@advfn.com     To unsubscribe from this news bulletin or edit your mailing list settings click here. Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gable, Fyfield Road, Ongar, CM5 0GA. Customer Support +44 (0) 207 0700 961. Company registered in England and Wales: Number 2374988 VAT No. GB 549 2130 49