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| | London close: FTSE starts March lower as WPP and ex-divs drag |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | London stocks staggered lower as Thursday's session went on, dragged lower by disappointing results from advertising giant WPP, mixed economic data and a heavyweight group of stocks going ex-dividend. The FTSE 100 finished 0.8% lower at 7,175.64, while the pound struggled for direction against the dollar, testing new six-week lows 1.374, and flattered to deceive against the euro, ending down 0.2% at 1.1257. Sterling was largely lackluste after Prime Minister Theresa May's rejection of the EU’s latest draft text on the Irish border issue the day before. The text also left out any reference to an extended transition period, which the UK has requested. "European stocks are sliding again, as continued fears over a high interest rate environment continue to plague market sentiment," said IG analyst Joshua Mahony. "The start of a new month has done little to ease the global stock slide, with the FTSE looking likely to close out a third consecutive negative close." US stocks were having an up-and-down first half to Thursday's session as Federal Reserve chair Jerome Powell testified in the Capitol for the second time this week. Answering questions from the Senate Banking Committee, Powell said that he expected more wage increases would come as the labour market continued to tighten an saw “no evidence that the economy is currently overheating”. The yield on 10-year US T-bills were as low as 2.82% and as high as 2.86% at various times over the session. High bond yields have been depressing stocks of late, but there was a slight easing after US headline and core PCE price inflation came in as expected, at up by 1.7% and 1.5% year-on-year respectively. "The yield on the 10-year US Treasury is still dangerously close to breaking above 3% - a move which could lead to a deeper and more protracted sell-off in equities," said analyst David Morrison at GKFX. UK manufacturing data did little to lift the mood or the pound, showing growth in the sector slowed slightly in February, with a major fall in the output balance to its lowest level in almost a year. The IHS Markit CIPS manufacturing purchasing managers' index fell to 55.2 in February from 55.3 in January, which took the index to its lowest level since June 2017, though was not as bad as the 55.0 the market had expected. Figures on mortgage approvals were cheerier, however, showing a bounce back in January. According to the Bank of England, mortgage approvals rose to 67,478 in January from a one-year low of 61,692 in December. Earlier, the latest housing market survey from Nationwide showed UK house prices unexpectedly fell in February. House prices were down 0.3% on the month following a 0.8% increase in January, missing expectations of a 0.2% gain. On the year, house prices were up 2.2%, slowing down from a 3.2% jump the month before and well below the 2.6% rise expected. In corporate news, advertising giant WPP tumbled as it blamed technological disruption and squeezed marketing budgets for flatlining revenue as it reported profit in line with muted market expectations. The world’s biggest advertising company said it made a slow start to 2018, saying advertisers remained under pressure from investors to cut costs. Rentokil was in the red on the back of slower organic growth, although analysts said its results looked OK at the underlying level. Hastings tumbled as it reported a 39% jump in 2017 operating profits but gross written premiums disappointed. Miners were down again, as the strong dollar weighed on metals prices. Rio Tinto and Fresnillo were the biggest fallers in the FTSE 100's commodities heavyweights. The retail sector was in focus again a day after Maplin and Toys R Us went into administration, with Carpetright losing a quarter of its market value after it issued its second profit warning of the year. On the upside, Russian steelmaker Evraz was not feeling the cold and marched higher on the back of full-year profits up 70% to $2.6bn, boosted by higher market prices. Revenues were up 40.4% to $10.8bn driven partially by higher volumes but mostly by an upswing in prices for steel and coal products amid more favourable market trends. Burberry donned its checked scarf and strutted higher after investors liked the cut of its new chief creative officer's jib. The fashion house has appointed Riccardo Tisci, who, under Burberry's CEO Marco Gobetti helped turn around the fortunes at Givenchy. Asset manager Schroders gained after it posted a 23% jump in full-year pre-tax profit as assets under management and net inflows rose amid growth across the group. Irish building materials group CRH was trading higher after saying it generated an acceleration in profits growth towards the end of the year and saw good potential for more in the US and Europe in 2018. FTSE 250 builders’ merchant Grafton Group, which recently acquired specialist decorators’ merchant Leyland SDM for £82.4m, rose as it reported a 15% jump in full-year profit amid record revenue. BBA Aviation was in the black after saying it swung to a pre-tax profit in 2017, while oilfield services provider Petrofac gushed higher as its full-year core profit beat expectations. Legoland and Thorpe Park operator Merlin Entertainments racked up strong gains on better-than-expected 2017 core earnings, while aerospace and defence group Cobham surged after posting better-than-expected full-year pre-tax profit. National Express edged up as it reported a 12% rise in full-year pre-tax profit as revenues increased 6%, while Vesuvius rallied as its full-year revenues came in a touch ahead of expectations. FTSE 250 housebuilder Bovis Homes, which saw off two takeover approaches last year, was up as it posted a drop in full-year in line with expectations and said it has seen good demand in the first eight weeks of 2018, while Hunting advanced thanks to a small beat on the top line in its 2017 results. In broker note action, Elementis was upgraded by Jefferies, while ITV was cut to ‘equalweight’ by Barclays, and Card Factory was initiated at ‘hold’ by Berenberg. Aveva, Barclays, Beazley, Berkeley Group, EasyJet, Hays, RSA Insurance and Rio Tinto were among the companies whose stock went ex-dividend on Thursday.
Market Movers FTSE 100 (UKX) 7,175.64 -0.78%
FTSE 250 (MCX) 19,551.70 -0.69%
techMARK (TASX) 3,318.01 0.01% FTSE 100 - Risers Evraz (EVR) 447.00p 4.66%
Burberry Group (BRBY) 1,596.00p 4.08%
Shire Plc (SHP) 3,215.75p 3.43%
Admiral Group (ADM) 1,879.50p 1.98%
CRH (CRH) 2,445.00p 1.79%
Sky (SKY) 1,372.00p 1.78%
International Consolidated Airlines Group SA (CDI) (IAG) 623.60p 1.46%
United Utilities Group (UU.) 673.80p 1.14%
Severn Trent (SVT) 1,724.50p 1.00%
Smith & Nephew (SN.) 1,277.00p 0.67% FTSE 100 - Fallers Rentokil Initial (RTO) 263.50p -9.01%
WPP (WPP) 1,278.50p -8.29%
easyJet (EZJ) 1,601.50p -4.62%
Rio Tinto (RIO) 3,769.00p -4.00%
Ashtead Group (AHT) 2,033.00p -3.83%
Hargreaves Lansdown (HL.) 1,666.50p -3.42%
Mondi (MNDI) 1,840.00p -3.26%
InterContinental Hotels Group (IHG) 4,555.00p -3.06%
Kingfisher (KGF) 347.40p -2.93%
ITV (ITV) 155.40p -2.88% FTSE 250 - Risers Hunting (HTG) 674.50p 10.85%
Cobham (COB) 124.85p 10.05%
Merlin Entertainments (MERL) 372.00p 9.41%
Howden Joinery Group (HWDN) 480.30p 8.15%
Vesuvius (VSVS) 623.50p 5.59%
National Express Group (NEX) 362.40p 3.78%
TBC Bank Group (TBCG) 1,616.00p 3.32%
Elementis (ELM) 299.40p 2.60%
Fisher (James) & Sons (FSJ) 1,598.00p 2.30%
Sirius Minerals (SXX) 28.01p 1.85% FTSE 250 - Fallers Aveva Group (AVV) 1,810.00p -37.28%
Hastings Group Holdings (HSTG) 275.00p -12.03%
Ultra Electronics Holdings (ULE) 1,480.00p -6.92%
Petrofac Ltd. (PFC) 428.70p -5.13%
BCA Marketplace (BCA) 156.60p -5.09%
Capita (CPI) 167.40p -4.97%
Sophos Group (SOPH) 475.00p -4.70%
Galliford Try (GFRD) 875.00p -4.68%
Man Group (EMG) 164.00p -4.51%
IP Group (IPO) 110.00p -4.18% |
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| | Europe close: Stocks begin month on back foot |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | European stocks finished lower on the first session the month, with traders trying and digest the potential implication for equities of a modestly more hawkish policy bias from rate-setters in the US and ahead of two key votes at the weekend in Italy and Germany. As of 1700 GMT, the benchmark Stoxx 600 was down by 1.26% to 374.86, alongside a fall of 1.97% or 244.91 points to 12,190.94 on the German Dax, while the FTSE Mibtel was under by 0.70% and trading at 22,448.38. Meanwhile, the yield on the benchmark 10-year German bund was three basis points lower to 0.63%, with the yield gap to the US the widest in over 20 years. The euro was hit bit by the upward move in the US dollar and the cooling of eurozone manufacturing sector. "The momentum in the market recovery has run out of steam, and now traders are undecided whether the market will turnover on itself again, or if this is a breather before another leg higher," said analyst David Madden at CMC Markets. "The economic outlook hasn’t changed, but with the Italian election over the weekend we could see traders adopt a risk-off strategy." On 4 March, Italian voters will be called on to vote in parliamentary elections, amid concerns that political gridlock in the Eurozone's third largest economy would stymie efforts aimed at economic reforms. That same day, the results would be revealed of a ballot among members of Germany's SPD on whether to form a grand coalition with the CDU/CSU. Eurozone manufacturers reported a slight easing in growth, IHS Markit's PMI survey revealed, slipped from a reading of 59.6 for January to a reading of 58.6 in February, which was nevertheless a tad ahead of the consensus forecast of 58.5. Italian, French and German manufacturing all grew at a slower pace in February, and all the reports missed economists’ expectations. Commenting on the data, Claus Vistesen, chief euro area economist at Pantheon Macroeconomics said: "Overall, these data signal solid momentum in Eurozone manufacturing albeit at a slightly slower pace in February compared to the breakneck pace at the start of the year. Growth is strongest in the investment good sector, but all industries are enjoying solid demand conditions. "The expansion continues to push firms closer to their capacity limits; work backlogs are rising and companies are scrambling to find workers to meet increasing demand. Finally, both input and output price gauges point to much higher inflation pressures in coming months, although we haven’t seen much of this in the CPI data yet." In parallel, Eurostat reported that the Eurozone's rate of unemployment dipped by a tenth of a percentage point last month to 8.6%, as expected by economists. Investors sifted through a barrage of US economic data, including the latest reading on the 'core' personal consumption expenditures prices - the US central bank's preferred inflation gauge, which said personal income and spending sprinted ahead of forecasts at the start of the year, alongside a hefty 0.9% jump in disposable incomes as recently approved tax cuts kicked-in, according to figures from the Department of Commerce. Despite that, key inflation gauges contained within the same report - including the Federal Reserve's preferred inflation index - came in just as expected, rising at the same clip as in December. At the headline level, the year-on-year rate of gain on the price deflator for personal consumption expenditures held at 1.7%, while at the 'core' level, excluding food and energy, the PCE price index came in at 1.5%. Investors were also expected to keep a close eye on recently-appointed Fed chair Jerome Powell's second day of testimony, this time before the US Senate's banking committee. On the corporate front, investors were keeping an eye on Deutsche Post which fell 2.90% to €36.50 per share after negotiations with its main union Verdi where its latest offer for higher wages was said to be below expectations. Also in Germany, and of potential interest for investors in Airbus - down 1.32% to €97.03, the country's defence ministry said it would give European jets preference over US made rivals in an upcoming tender to replace its veteran fleet of Tornado jets. |
| | US open: Stocks mixed as investors await Powell's second testimony this week | Wall Street trading opened on a mixed note on Thursday as investors sifted through a slew of economic data while awaiting new Fed Chair Jerome Powell’s second testimony this week. At 1500 GMT, the Dow Jones Industrial Average was up 0.22%, while the S&P 500 and Nasdaq gained 0.26% and 0.12%, respectively. Investors have been on edge since Tuesday when a hawkish first congressional testimony by Powell spooked markets by adding weight to expectations of four rate hikes rather than three this year. Oanda analyst Craig Erlam said: "Powell’s testimony in front of the House Financial Services Committee on Tuesday was very bullish on the economy and led many to believe that a fourth-rate hike is on the table this year. While this isn’t a million miles from what markets are pricing in, it did trigger another negative response from markets with US indices falling around two and a half percent since and positioned for further losses today. "It would appear markets are bracing for more hawkish commentary from Powell today when he appears before the Senate Banking Committee, once again discussing the semi-annual monetary policy report. Given everything that he said on Tuesday, it seems pretty clear that economic forecasts will be revised higher this month and the pace of tightening will likely, therefore, pick up, which may make today’s less eventful as he reiterates many of the views already expressed. That said, should he wish to backpedal on anything or clarify points that have been misinterpreted, it may attract some attention." In economic news, personal income and spending printed ahead of forecasts at the start of the year, alongside a hefty 0.9% jump in disposable incomes as recently approved tax cuts kicked-in, according to figures from the Department of Commerce. Despite that, key inflation gauges contained within the same report - including the Federal Reserve's preferred inflation index - came in just as expected, rising at the same clip as in December. At the headline level, the year-on-year rate of gain on the price deflator for personal consumption expenditures held at 1.7%, while at the 'core' level, excluding food and energy, the PCE price index came in at 1.5%. Meanwhile, personal income and spending rose by 0.4% and 0.2% month-on-month, respectively, which was ahead of economists' forecasts for a reading of 0.2% for both measures. Elsewhere, the number of Americans filing for unemployment benefits hit its lowest level in 49 years last week, according to data from the Labor Department. US initial jobless claims declined by 10,000 to 210,000 from the previous week’s level, which was revised down by 2,000. Economists had been expecting claims of 226,000. This marked the lowest level of claims since 6 December 1969, when it was 202,000. The manufacturing sector was also in focus following releases from the Institute for Supply Management and IHS Markit. IHS Markit’s final manufacturing purchasing managers’ index slipped to 55.3 from January’s 34-month high of 55.5, but data from the ISM showed growth in the manufacturing sector unexpectedly rose in February, to its strongest rate in almost 14 years. The ISM’s headline manufacturing index increased to 60.8 from 59.1 in January, beating expectations for a drop to 58.7. A reading above 50 indicates expansion, while a reading below signals contraction. Timothy R. Fiore, chair of the ISM, said: "This indicates growth in manufacturing for the 18th consecutive month at strong levels led by continued expansion in new orders, production activity, employment and inventories, with suppliers continuing to struggle delivering to demand. The PMI at 60.8 is the highest level of expansion seen since May 2004, when it reached 61.4." In corporate news, Best Buy added 2.51% after seeing its sales jump during its key holiday trading quarter, and Kohl's slipped 7.75% despite its own strong holiday sales fuelling a big earnings beat. AMC Entertainment ticked ahead 2.01% following the release of its quarterly earnings that showed a record fourth-quarter revenue. Elsewhere, Victoria’s Secret parent L Brands lost 10.40% after its quarterly outlook late on Wednesday left investors disappointed. Software company Salesforce.com picked up 2.92% on the back of better-than-expected quarterly results. |
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| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Bitcoin (BTC) | 183,675,335,690 | 10,909.08 | +5.79% |  | | 2 |  | Ethereum (ETH) | 85,867,851,163 | 875.7 | +2.6% |  | | 3 |  | Ripple (XRP) | 36,446,676,671 | 0.9228 | +4.29% |  | | 4 |  | Bitcoin Cash / BCC (BCH) | 21,924,281,925 | 1,292.52 | +7.93% |  | | 5 |  | Litecoin (LTC) | 11,871,278,506 | 213.94 | +6.17% |  | | 6 |  | NEO (NEO) | 8,509,150,000 | 129.5 | -1.67% |  | |
| | Atlantic Advisory - Share Tips of the Year 2018 | | Download Our Latest Report Here Losses can exceed deposits |
| | Broker tips: ITV, Elementis, Merlin Entertainments | ITV's results did not offer many positives for Barclays, which downgraded the shares and cut its target price.Barclays, which moved to an 'equal weight' rating and lowered its price target to 180p from 200p, said results for 2017 were "only in line, unlike previous years" and with the end of its previous special dividend as management want to keep some headroom for M&A. Moreover, financial pointers for the 2018 and 2019 led the bank to cut its forecasts, with £25m higher programming cost due to sporting events, 5% organic growth in Studios, £35m of adjusted net interest, an adjusted tax rate of 19%, £100m capex, £85m of cash exceptionals and £80m of pension deficit funding. "Furthermore, ITV new CEO Carolyn McCall’s strategic refresh might end up being eminently sensible but we won’t know its financial impact until, at best, interim results (end of July) or until September’s investor day. "This creates uncertainty and the fear of re-investment is an overhang," analysts wrote. Yes, they acknowledged the shares are inexpensive at 11.5 times 2018 forecast earnings, which is "arguably" discounting a 4% TV advertising decline forever, "but valuation without momentum almost never works in European media". Analysts said that unless advertising accelerates significantly from June onwards, they "struggle to see where momentum would come from". Elementis’ "legacy" personal care business has more growth potential than was previously apparent, Jefferies said as the broker upgraded the chemicals maker to ‘buy’. Jefferies analyst Joe Spooner said legacy personal care, though just 9% of group revenues, can play an important part in driving the company’s growth because of its high margins. Elementis’s reporting suggests the personal care business owned by the company before it bought SummitReheis a year ago has operating margins of 55%. These margins are defensible, Spooner wrote in a note to clients. The outlook for earnings is therefore more solid, he added, upgrading Elementis shares from ‘hold’. "We've previously underestimated the role ‘legacy’ personal care can play in driving group growth. We believe these sales are very high margin and with continued mid-teen growth can underpin the group growth outlook. [The] intention to provide more category margin detail from the interims may help demystify the moving parts." Elementis posted annual adjusted operating profit up 32% to $128m (£105m) on 27 February, driven by increased sales at the personal care business. The company said that business “benefited from the first time contribution of SummitReheis and strong growth in our legacy operations". Analysts at Citi and Deutsche Bank both took a look at theme park operator Merlin Entertainments, with both firms reiterating their 'buy' rating and target price of around 500p. With Merlin's financials ending in line with expectations, £1,594m in revenue compared to £1,589 estimates, Deutsche Bank made no changes to the firm's estimates for its current trading year, but noted it foresaw the first hald of the year to "remain subdued" against tough competition as a result of weakened tourism and a weakened sterling post-Brexit. Citi said, "The shares have rallied off lows following the announcement of activist investor ValueAct as a 5% shareholder. We don't expect any public commentary from either ValueAct or Management but it has helped to highlight the clear value in the shares which we think have been unfairly punished following last year's weak trading on the back of terrorist attacks. As management highlights this should not alter the longer term structural growth opportunity even if there is some short term displacement of travel flows." Whereas Deutsche's outlook recognised that it may take some time to restore confidence in the firm's growth trajectory following its Q3 losses, with its analysts saying, "We like Merlin's longer term selffunded growth trajectory, diversification by product/geography and the range of global investment opportunities. The reallocation of capex should restore growth, likely visible in FY19E. Therefore we believe the equity story remains intact and the arrival of an activist shareholder should further flag the that the valuation is too low." Deutsche issued Merlin with a target price of 515p, while Citi gave it a 500p target price. As of 1700 GMT, shares had picked up 9.41% to 372p. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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