Financial Daily News : Evening Euro Markets Bulletin

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: Stocks hit as Fed's Powell sends bond yields higher

To view the charts please add newsdesk@advfn.com to your contact list

FTSE 100	Euronext	Dax perf	CAC 40

Please click on the images to view our interactive charts

An early advance for London stocks faltered in the final hour of trading , despite strong earnings from the likes of Persimmon and a counter bid for Sky from Comcast, as the first congressional testimony from new Federal Reserve Chair Jerome Powell sent government bond yields higher on both sides of the Atlantic.

In his first remarks before the US Congress as the head of the country's central bank, recently-appointed chair Jerome Powell said that "the economic outlook remains strong".

"The robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment," he said.

Significantly, in response to a question from one of the Congressmen, Powell responded: "My personal outlook for the economy has strengthened since December."

His comments sent the FTSE 100 0.1% lower to 7,282.45, alongside a 0.49% drop in the pound's value against the dollar to 1.3900, although against Europe's single currency it was a tad stronger, adding 0.21% to 1.1364, as yields on Gilts chased those on US Treasuries higher.

Thus, by the closing bell the yield on the benchmark 10-year Gilt was five basis points higher at 1.56%, trailing a six point increase in those on similarly-dated US Treasuries to 2.92%.

Following Powell's testimony, James Knightley at ING revised his call for the number of interest rate hikes expected from the Federal Reserve this year from three to four.

"At the moment the Fed are projecting three rate hikes this year while financial markets are currently pricing in around 80bp of rate hikes. Given our above consensus 3% GDP growth forecast for 2018 and the potential for inflation to rise more quickly than many in the market anticipate (wages, dollar weakness, medical care costs, cell phone data distortions, commodity prices), we are now forecasting four rate rises this year. We look for one every quarter – starting with the March 21 FOMC meeting," he said.

Acting as a backdrop, investors were digesting the latest data from the European Commission, which showed UK economic sentiment dipped in February. The EC's Economic Sentiment Indicator fell to 109.5 from 111.1 in January, dragged down by a decline in confidence in the industrial sector to its lowest level since April.

In corporate news, Sky surged as US cable TV company Comcastmade a £22.1bn takeover bid for the broadcaster, outbidding 21st Century Fox.

Standard Chartered edged up after saying it will resume its dividend as it swung to a net profit of $774m for 2017 from a loss of $478m the year before.

Doorstep lender Provident Financial rocketed as investors welcomed the announcement of a smaller-than-expected rights issue, although the company also said it swung to a pre-tax loss in 2017 from a profit the year before.

Housebuilder Persimmon rose sharply as it pledged to pay out double its previously promised surplus cash via bumper dividends over this and the next two years and reported profits growth and encouraging recent sales. Peers Barratt Developments, Berkeley and Taylor Wimpey all gained.

FTSE 250 challenger bank Virgin Money rallied after it reported a 28% increase in underlying full-year profit amid robust customer demand and growth across its core products while Derwent London was up as it proposed a special dividend and said net asset value rose in 2017.

Greggs gained after well-received full-year numbers, while Drax powered ahead as its full-year core earnings beat expectations.

Thread maker Coats Group racked up stellar gains after saying its full-year adjusted operating profit increased 11% to $174m and RBS was just in the black even as the Treasury Select Committee criticised the bank over the rebranding of its Global Restructuring Group.

Insurer Direct Line turned lower despite announcing bumper dividend payments and posting a more than 50% increase in annual operating profit.

Speciality chemical company Croda International declined even as it posted a record full-year profit as sales grew thanks to a strong performance across sectors and regions, while Fresnillo slid as the precious metals miner reported a small jump in full-year profit amid record silver production.

Engineer GKN, which is currently fending off a hostile bid from turnaround specialist Melrose Industries, recovered from an early swoon after posting a 125% jump in full-year reported pre-tax profit.

Market Movers

FTSE 100 (UKX) 7,282.45 -0.10%
FTSE 250 (MCX) 19,860.22 0.16%
techMARK (TASX) 3,327.65 -0.09%

FTSE 100 - Risers

Sky (SKY) 1,328.00p 20.18%
Persimmon (PSN) 2,609.00p 4.86%
Evraz (EVR) 438.00p 2.84%
Ashtead Group (AHT) 2,108.00p 1.84%
Pearson (PSON) 727.00p 1.82%
Shire Plc (SHP) 3,054.00p 1.72%
Barclays (BARC) 212.00p 1.68%
TUI AG Reg Shs (DI) (TUI) 1,553.00p 1.54%
InterContinental Hotels Group (IHG) 4,701.00p 1.21%
Mediclinic International (MDC) 607.20p 1.20%

FTSE 100 - Fallers

Fresnillo (FRES) 1,273.00p -4.43%
Randgold Resources Ltd. (RRS) 5,948.00p -2.33%
Reckitt Benckiser Group (RB.) 5,843.00p -2.29%
Associated British Foods (ABF) 2,664.00p -2.27%
Unilever (ULVR) 3,752.00p -2.07%
British Land Company (BLND) 637.20p -2.00%
Hammerson (HMSO) 456.50p -2.00%
SEGRO (SGRO) 575.20p -1.84%
St James's Place (STJ) 1,124.50p -1.70%
British American Tobacco (BATS) 4,397.50p -1.50%

FTSE 250 - Risers

Provident Financial (PFG) 998.98p 69.89%
Coats Group (COA) 83.00p 11.11%
Sirius Minerals (SXX) 28.50p 6.18%
FirstGroup (FGP) 86.50p 5.49%
Virgin Money Holdings (UK) (VM.) 278.60p 5.33%
IP Group (IPO) 117.60p 5.00%
Dechra Pharmaceuticals (DPH) 2,478.00p 4.21%
Go-Ahead Group (GOG) 1,598.00p 3.97%
Jardine Lloyd Thompson Group (JLT) 1,366.00p 3.80%
Petrofac Ltd. (PFC) 453.60p 3.61%

FTSE 250 - Fallers

Jupiter Fund Management (JUP) 505.40p -4.06%
Moneysupermarket.com Group (MONY) 265.70p -3.73%
Stobart Group Ltd. (STOB) 246.00p -3.53%
Meggitt (MGGT) 451.10p -3.32%
Workspace Group (WKP) 952.00p -3.01%
TBC Bank Group (TBCG) 1,582.00p -2.94%
Capital & Counties Properties (CAPC) 267.90p -2.86%
Acacia Mining (ACA) 139.95p -2.81%
AA (AA.) 73.48p -2.70%
SSP Group (SSPG) 616.50p -2.68%

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 flat as traders digest new Fed chief's views

FTSE 100	Euronext	Dax perf	CAC 40

Stocks finished near the unchanged mark on Tuesday, even as new US Fed chair Jerome Powell told lawmakers that in his view the country's economy had strengthened, which served to dampen the mood on the other side of the Atlantic.

In his semi-annual testimony before the US House of Representatives' Financial Services Committee, Powell had said that "my personal outlook for the economy has strengthened since December."

Nevertheless, and despite a speech peppered with the word "strong", for now at least the Federal Reserve's new chief stuck to the monetary authority's insistence on pursuing a "gradual" pace of rate hikes.

Against that backdrop, the benchmark Stoxx 600 edging lower by 0.18% or 0.70 points to end the day at 382.36, alongside a fall of 0.29% or 36.31 points for Germany's Dax to 12,490.73.

Periphery stocks faring slightly better, with the FTSE Mibtel adding 0.08% or 18.25 points to trade at 22,724.46 while the Cac-40 was essntially flat at 5,343.93.

In parallel, the yield on the benchmark 10-year German government bond was higher by three basis points to 0.68%.

Also weighing on sentiment a tad, the latest reading on Spanish consumer prices printed well ahead of forecasts, with INE reporting a rise of 1.2% on the year in February, versus the 0.9% increase that economists had penciled in.

However, preliminary data out of Germany revealing a larger than expected moderation in the rate of gains in headline inflation in the euro area's largest economy, to 1.2% year-on-year, versus a January reading of 1.4% (consensus: 1.3%), acted as more than an offset.

To take note of, in remarks to the European parliament the day before, European Central Bank president Mario Draghi had said "[on inflation] we're generally more confident that it is proceeding towards our target, [we] have to be persistent and patient because the underlying inflation has yet to show more convincing signs of a sustained upward adjustment".

Also of interest, overnight German Chancellor Angela Merkel's CDU/CSU party came out solidly in favour of a coalition deal with the SPD.

Nonetheless, and as Jim Reid at Deutsche Bank pointed out: "This was never really in doubt, the key test remains this weekend when the SPD membership votes on the deal, where support for the deal is much more divisive, while the Italian election on the same day, 4th March also has the potential to introduce fresh uncertainty into European politics."

Back in the corporate space, America's largest cable operator Comcast's £22.1bn hostile bid for UK rival Sky pushed the Stoxx 600 Media sector gauge higher by 1.36% to 274.87.

Media wasn't the only space in the European equity universe seeing M&A-related news flow, with E.On said to be interested in German rival RWE's stake in Innogy, Boersen Zeitung reported.

A consortium including Australia's Macquarie was another possible suitor mentioned.

German chemicals giant BASF was also in focus after telling markets it was targeting a rise in operating profits for this year of as much as 10%.

Going the other way, following an analysis into Akorn's data integrity, Fresenius might pull out from a bid.

Shares in France's Safran were lower even after the company announced better-than-expected profits and sales for 2017.

Market Analysis 23/02/2018

Today’s highlights: Fed minutes push global markets down

Wall Street closes lower: A volatile session in the US yesterday, as leading indices started the day with sharp gains, but eventually closed lower. The trend reversal occurred following the release of minutes from the latest FOMC meeting, which showed the Fed could be planning more rate hikes. Despite the negative momentum, some stocks continued to show gains, such as Domino’s Pizza, which climbed more than 4% to reach a new all-time high.

Asia follows Wall Street’s lead: Top indices in Asia, such as the Nikkei and China50, were seen lower this morning.

US open: Wall Street shares down after Fed chair delivers congressional testimony

Wall Street indexes kept jumping between minor gains and small losses on Tuesday after nerves kicked in as new Federal Reserve Chair Jerome Powell delivered his first congressional testimony.

At 1500 GMT, the Dow Jones Industrial Average and S&P 500 had gained 0.16% and 0.10%, respectively, while the Nasdaq had ticked ahead just 0.01%.

However, by 1600 the Dow was down 0.30%, with the S&P 500 dropping 0.41%, and the Nasdaq losing 0.49%.

"The FOMC will continue to strike a balance between avoiding an overheated economy and bringing PCE price inflation to 2% on a sustained basis," Powell said in remarks released by the House Financial Service committee at 1330 GMT.

On the basis of Powell's testimony, James Knightley at ING said: "At the moment the Fed are projecting three rate hikes this year while financial markets are currently pricing in around 80bp of rate hikes. Given our above consensus 3% GDP growth forecast for 2018 and the potential for inflation to rise more quickly than many in the market anticipate (wages, dollar weakness, medical care costs, cell phone data distortions, commodity prices), we are now forecasting four rate rises this year. We look for one every quarter – starting with the March 21 FOMC meeting."

For his part, before Powell began his verbal testimony, David Morrison, senior market strategist at GKFX, commented: "The expectation is that Mr Powell will indicate that the central bank is preparing to proceed with monetary tightening by raising rates by 75 basis points this year. However, if he intimates that the Fed may be prepared to make four 25 basis-point hikes rather than the predicted three, then this would result in another jump in bond yields and a corresponding sell-off in equities. But this does seem unlikely given that core PCE inflation, while picking up, still remains below the Fed’s 2% target. There seems little point in causing a market upset this early in the chairman’s tenure for no discernible gain."

Morrison also said Powell and his colleagues needed to consider fiscal stimulus in the form of Trump's tax cuts, regulatory reform and infrastructure spending.

"Not only is this stimulus inflationary, but it is also unfunded meaning it adds to the budget deficit and national debt. It also comes as the Fed is trying to turn off the monetary stimulus which has goosed markets for close to 10 years. So analysts will parse the testimony for any sign that the Fed is on guard against an inflationary spike outside their control."

On the data front, US consumer confidence jumped to 130.8 from 124.3, beating consensus forecasts of 126.5 to hit its highest reading since November 2000 as, according to the Conference Board's consumer confidence index, the drop in the stock market failed to upset consumers.

Elsewhere, new orders for American-made capital goods dropped for a second consecutive month in January, while shipments barely increased, pointing to a slowdown in spending on equipment following the robust levels of growth seen in 2017.

The Tuesday morning report from the Commerce Department came after weak January retail sales, industrial production and home sales data, all pointing to a slowdown in economic growth for the first quarter.

In another report released by the Commerce Department, data showed a widening in the goods trade deficit in January, with the shortfall on international trade widening 3% to $74.4bn in January, while exports of goods fell $3.1bn to $133.9bn and goods imports slipped $900m to $208.3bn.

The Commerce Department also reported a 0.7% increase in wholesale inventories in January, as retail inventories rose 0.8%

Lastly, the S&P CoreLogic Case-Shiller National Home Price Index rose 6.3% in December, up from the 6.1% seen in November, in line with analysts' estimates of a 6.35% year-over-year increase, as an all-time low inventory helped to push prices higher at the end of 2017.

"The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility," said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones.

In corporate news, cable TV company Comcast fell 5.58% after it made a £22.1bn bid for London-listed broadcaster Sky, outbidding 21st Century Fox.

SeaWorld shares fropped just 0.86% in early trading after the company reported a loss of £20.4bn for the fourth quarter, compared to an $11.9m in the same period a year ago.

Shares in generic pharmaceuticals group Akorn tanked as much as 31.64% after a probe into possible data breaches at the company could force it to ditch its planned $5b takeover.

Fitbit slid 12.77% after its quarterly revenue and earnings late on Monday missed analysts' expectations, while Macy's picked up 4.12% after beating earnings estimates.

Results were still to come from the likes of Square Inc, ExpressScripts Holding and Priceline.

Looking for early access to investment opportunities?

Make your own informed investment decisions. Get the right tools and information at Master Investor Show 2018.

Cryptocurrencies Report

Top Cryptocurrencies

#	Name		Market Cap($)	Price(%)	Change	Price Graph(3m)
1		Bitcoin (BTC)	180,774,417,127	10,680.04	+3.54%
2		Ethereum (ETH)	86,015,153,540	877.99	+1.27%
3		Ripple (XRP)	37,149,992,162	0.93789	+0.82%
4		Bitcoin Cash / BCC (BCH)	21,182,120,199	1,242.89	+0.17%
5		Litecoin (LTC)	11,979,608,700	215.44	-1.42%
6		NEO (NEO)	9,246,185,000	141.21	+5.11%