Evening Euro Markets Bulletin

ADVFN III Evening Euro Markets Bulletin Daily world financial news Tuesday, 06 March 2018 18:56:27 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: Stocks extend gains as new rifts emerge over trade FTSE 100 Euronext Dax perf CAC 40 Please click on the images to view our interactive charts London equities extended their winning run to a second day on Tuesday, underpinned by excitement in the paper and packaging sector after Smurfit Kappa rejected a takeover bid, as concerns about a US trade war ebbed and flowed. The FTSE 100 closed off its late morning highs but almost 31 points or 0.4% higher for the day at 7,146.75.  The pound was 0.4% weaker against the euro at 1.1186, approaching levels last seen in December, but up 0.2% versus the dollar at 1.3882, off earlier highs. Stocks in the US started mostly on the back foot as trade remained the chief topic. After some senior Republicans voiced their concerns over a possible trade war on Monday, Tuesday saw stocks slip on news that President Donald Trump's chief economic adviser, Gary Cohn, was threatening to quit over the trade issue. The President is convinced the former Goldman Sachs executive, who was a champion of the tax reforms enacted late last year, was poised to leave if the White House follows through with the threat to impose tariffs, according to a report by Bloomberg. Unless the White House backs down, a full blow trade war looks likely, said Joshua Mahony, a market analyst at IG. "With the EU set to discuss the ramping up of taxes on around $3.5bn worth of US goods across manufacturing, cosmetics, and agriculture, there is a real threat that we will see the trade war escalate later on in the week." Back in the UK, investors were digesting the latest data from the British Retail Consortium, which showed like-like-sales volumes were up 0.6% on the year in February, unchanged from the previously month but above the expected 0.4% increase. Meanwhile, year-on-year growth in total sales rose 1.6% from 1.4% in January. Non-food retail sales fell by 1.1% on a like-for-like basis and were down 2.4% in store, while food sales increased 2.8% on a LFL basis. The BRC’s measure of shop price inflation eased to -0.8% in January, from -0.5% in January. Pantheon Macroeconomics said: "Growth in retail sales continued to match last year’s average rate in February, indicating that consumers’ spending is not about to step up and make a bigger contribution to GDP growth." In corporate news, Smurfit Kappa surged after saying it has rejected an “unsolicited and highly opportunistic” takeover approach from International Paper Company of the US. The proposed acquisition would have meant International Paper paying cash and shares for Smurfit Kappa, leaving shareholders of the Dublin-based company with a minority stake in the combined business. Peers Mondi and DS Smith gained ground, with Mondi also boosted by an upgrade to 'outperform' from 'neutral' at Credit Suisse. Supermarket retailers were in focus following the release of the two surveys, both of which found that Sainsbury's was the slowest growing of the big four supermarkets. Its shares fell more than 3%, while Tesco was up 3% and Morrisons just in positive territory. According to Kantar Worldpanel, overall supermarket sales were up 3.2% in the 12 weeks to 25 February compared to the same period last year. Meanwhile, a rival survey from Nielsen found that volumes improved in the four weeks to 24 February, but the amount shoppers spent fell bac slightly last month as inflation started to peak. Bookmaker William Hill advanced after agreeing to dispose of its Australian business for AUD300m to CrownBet. Intertek, the inspection, product testing and certification company, rallied after it posted a jump in full-year pre-tax profit as revenue grew and the group lifted its dividend. Anglo American was in the black as it said sales of rough diamonds at De Beers fell on the month but rose on the year in the second cycle of 2018. Bodycote rose as it posted a 27% jump in 2017 pre-tax profit, partly thanks to a return to growth in general industrial markets, while brick maker Ibstock racked up strong gains despite reporting a drop in full-year profit, as adjusted earnings rose 7%. Office space provider IWG slipped initially but climbed out of its hole after posting a 14% drop in full-year pre-tax profit following a weak third-quarter for its mature business in the UK, with London a weak spot, although it struck an upbeat note on the outlook. On the downside, Just Eat tumbled 13% as it delivered full-year results with extra toppings of strong revenues and profits, which exceeded analysts' forecast, but investors were left unimpressed by the higher-than-expected level of investment unveiled by the new CEO. £50m extra will be pumped into the business as it looks to grow in North America and Down Under, while holding off challenges from the likes of Uber Eats and Deliveroo. Construction equipment group Ashtead fell after supplying unchanged guidance for the full year alongside its third quarter update. The quarter saw rapid growth, with rental revenues up 24% and operating profits rising 23%, with growth driven by an increase in equipment on rent, with prices broadly flat on last year. “Despite an exceptionally strong performance so far this year, guidance for the full year remains unchanged and that’s a bit disappointing," said Nicholas Hyett, analyst at Hargreaves Lansdown. "Management caution seems to be driven by conditions in the foreign exchange markets." EasyJet flew lower even as it said passenger numbers rose 4% last month, while the load factor ticked up to 93% from 92% in February last year. Rotork fell as it posted an 11.5% decline in full-year pre-tax profit, while retirement housebuilder McCarthy & Stone was in the red as it said it expects first-half revenues of £240m versus full-year expectations of £730m. Yorkshire mine developer Sirius Minerals retreated following the release of its 2017 results that showed wider losses at it nears production. The FTSE 250 company said it was “essential” for the government to finalise a Treasury debt guarantee for $2bn of the $3bn funding it needs to develop the world’s largest deposit of polyhalite fertiliser. Temporary power provider Aggreko finished off its worst losses but remained in the red after pre-tax profit for 2017 declined 12% to £195m. In broker note action, Petrofac was upped to 'buy' from 'hold' at Jefferies, while Travis Perkins was cut to 'hold' at the same outfit. Lloyds Banking Group was downgraded to 'neutral' at Exane, whileHastings was cut to 'neutral' at UBS.   Market Movers FTSE 100 (UKX) 7,146.75 0.43% FTSE 250 (MCX) 19,690.31 0.63% techMARK (TASX) 3,348.06 0.81% FTSE 100 - Risers Smurfit Kappa Group (SKG) 3,042.00p 19.67% Smith (DS) (SMDS) 505.80p 5.64% Intertek Group (ITRK) 5,092.00p 4.60% Anglo American (AAL) 1,757.80p 3.96% Tesco (TSCO) 211.61p 3.43% BAE Systems (BA.) 587.00p 2.55% Antofagasta (ANTO) 884.20p 2.48% Mondi (MNDI) 1,949.50p 2.28% DCC (DCC) 6,740.00p 2.20% BHP Billiton (BLT) 1,468.00p 2.16% FTSE 100 - Fallers Just Eat (JE.) 744.80p -12.56% Ashtead Group (AHT) 1,917.50p -5.50% Sainsbury (J) (SBRY) 244.70p -3.24% easyJet (EZJ) 1,552.50p -2.82% GKN (GKN) 421.10p -1.13% Sky (SKY) 1,345.50p -0.92% ITV (ITV) 153.60p -0.90% CRH (CRH) 2,439.00p -0.89% British Land Company (BLND) 629.40p -0.88% Rentokil Initial (RTO) 258.70p -0.88% FTSE 250 - Risers Ibstock (IBST) 279.80p 6.71% Dignity (DTY) 862.00p 6.42% Bodycote (BOY) 975.00p 5.71% Aveva Group (AVV) 2,036.00p 5.66% FirstGroup (FGP) 87.40p 5.24% Kaz Minerals (KAZ) 899.60p 5.19% Vectura Group (VEC) 79.95p 5.06% Petrofac Ltd. (PFC) 463.30p 4.87% TBC Bank Group (TBCG) 1,750.00p 4.29% Hochschild Mining (HOC) 210.30p 4.11% FTSE 250 - Fallers Rotork (ROR) 264.30p -7.55% Aggreko (AGK) 695.40p -3.95% Spire Healthcare Group (SPI) 211.80p -3.29% Sirius Minerals (SXX) 27.30p -3.19% Provident Financial (PFG) 939.60p -2.83% IMI (IMI) 1,103.00p -2.30% Capita (CPI) 151.65p -2.22% Equiniti Group (EQN) 285.50p -2.05% Nex Group (NXG) 670.50p -1.90% Greggs (GRG) 1,206.00p -1.88% 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: Italian stocks bounce back with a vengeance FTSE 100 Euronext Dax perf CAC 40 Stocks across the Continent rose slightly on Tuesday, apparently buoyed by hopes that the White House's plans to slap tariffs on imports of steel and aluminium might finally be curtailed or watered down in one way or another. Significantly too, according to South Korean officials, Pyongyang might be willing to restrict its nuclear weapons programme if it obtains security guarantees. By the close of trading, the benchmark Stoxx 600 had edged higher by 0.13% or 0.50 points to 371.37, alongside an advance of 0.19% or 23.0 points to 12,113.87 on the German Dax and a rise of 0.06% or 3.0 points to 5,170.23 for the Cac-40. In parallel, Milan's FTSE Mibtel bounced back sharply from the prior day's election-inspired losses, even as strategists at Credit Suisse downgraded the country's equities from 'benchmark' to 'underweight', citing their roughly 5% advance since December. According to the Swiss broker, the risk of a so-called Italexit or a sovereign a default were both extremely low. However, they added, "We have not had a single question on Italy this year, and we have seen how political uncertainty has the ability to drive investor disengagement in the case of UK equities over the last 18 months or so." In the view of economists at Credit Suisse, the most likely outcome was a coalition government between the centre-left PD and the 5Star party, with the latter having recently commited to respecting the 3% budget deficit ceiling required by the European Union. Back on the international trade front, reports on Tuesday afternoon were indicating that White House economic adviser Gary Cohn was set to lead talks between the Trump administration and key US industry figures aimed at curtailing or blocking the introduction of any tariffs. However, there were also reports that Cohn might be set to table his resignation. Acting as a backdrop, overnight officials in Brussels had discussed a list of $2.8bn-worth of goods imported from the States on which the European Union would impose retaliatory tariffs of 25% if the US president pushed ahead with his plans. No major economic reports were published in Europe on Tuesday. On the company front, citing industry sources, Reuters reported that Airbus was shooting to triple services revenues form its commercial aircraft unit. In parallel, Volskwagen's chief reportedly said the manufacturer was pondering a stock sale of its truck and bus division in a bid to boost the manufacturer's efficiency. US open: Trading bounces between small gains and losses as Korean tensions die down US stocks kept swiching between gains and losses in early trading on Tuesday as news from discussions between North and South Korea, reported to include plans for the first major summit between the two in over a decade, pointed to a de-escalation of tensions and the easing of one of the market's biggest geopolitical uncertainties. At 1530 GMT, the Dow Jones Industrial Average and the S&P were up 0.06% and 0.18%, respectively, while the Nasdaq had shot up 1.55%. Stocks ended comfortably in the black on Monday after Paul Ryan and other Republicans voiced their concerns over a possible trade war, urging the White House not to go ahead with the President's plans to impose tariffs on imported steel and aluminium later in the week.  Craig Erlam, senior market analyst at Oanda, said: "Investors may have been rattled by the prospect of a trade war after Donald Trump’s recent tariffs announcement, but equity markets are once again recovering as it becomes clear that the US President does not have the full backing of his party of this one. "Some Republicans, including House Speaker Paul Ryan, have warned against starting a trade war that could damage the economy and undo the benefits of the recently passed tax reforms, highlighting that Trump is lacking the full support of his party on this particular issue. Trump’s comments linking the tariffs to NAFTA negotiations also suggested that they could be dropped if a new agreement is signed, suggesting he may simply be using the threat of tariffs to put pressure on others to deliver what he considers to be fair and reciprocal trade. "That may enable Trump to extract some concessions from Mexico and Canada, or at least allow him to claim credit for securing a better deal, but it’s unlikely to work as well with the European Union and China, among others. The prospect of a trade war will be a big concern for markets, with many of the view that such action would drive up prices for all and weigh on economic growth." The positive tone was also underpinned by reports that the leaders of North and South Korea are planning to hold a summit between the two countries next month. Reports indicating that North Korean leader, Kim Jong Un, is willing to begin negotiations with the US about abandoning its nuclear weapons also lifted the mood in markets. In terms of economic data, new orders for manufactured goods saw their largest drop in six months in January as business spending on equipment appeared to be reducing after strong growth in 2017, according to the Commerce Department's factory orders report. Factory goods orders fell 1.4% in the month following five straight monthly increases. January's drop was broadly in line with economists' expectations. Orders picked up 8.4% on a year-on-year basis. The dollar pared its losses against a basket of currencies following comments made by Dallas Federal Reserve President Robert Kaplan ahead of a moderated discussion at an annual energy conference in Houston on Tuesday, where he said that current US trade negotiations had not impacted his economic forecast. Later in the day, nvestors were expected to turn their attention to speeches from New York Fed President William Dudley and Fed Governor Lael Brainard. On the corporate front, shares of Ciena Corp gained 9.08% after its quarterly earnings beat expectations, but discount retailer Targetlost as much as 3.71% after its fourth-quarter profit missed analysts' forecasts. Earnings were still due from discount retailer Dollar Tree, Brown-Forman Corp and Costco. 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) 184,035,653,010 10,716 -7.04% 2 Ethereum (ETH) 80,690,010,470 815.18 -4.32% 3 Ripple (XRP) 36,586,162,281 0.91123 -3.78% 4 Bitcoin Cash / BCC (BCH) 20,393,623,088 1,193.69 -5.54% 5 Litecoin (LTC) 11,039,891,570 196.84 -6.55% 6 Cardano (ADA) 7,506,120,264 0.28322 -4.16% Atlantic Advisory - Share Tips of the Year 2018 Download Our Latest Report Here Losses can exceed deposits Broker tips: Ultra Electronics, Mondi, Just Eat JP Morgan has downgraded Ultra Electronics to ‘neutral’, citing a reduced outlook for 2018 earnings and increased competition for providing sonobuoys to the US Navy. Ultra’s 2017 results, posted a day earlier, were in line with expectations but there was “a lot of info to digest”, the JP Morgan analysts said.  Earnings for 2018 are likely to be about 6% lower than JP Morgan’s forecast due to an accounting change, currency fluctuations and higher research costs. Ultra also said its acquisition of US rival Sparton was blocked on competition grounds. Ultra and Sparton have a joint venture that sells sonobuoys to the US Navy. The US Department of Justice has announced an investigation into the joint venture and the navy has said it wants more competition for its purchases of sonobuoys. Sonobuoys make up about 15% of Ultra’s group sales and the US Navy contract is a core part of the company’s business, the analysts said. The analysts reduced their December 2018 price target for Ultra’s shares to 1,535p from 1,675p, reflecting lower earnings and a slightly lower target multiple due to the prospect of increased competition to sell the US Navy sonobuoys. “Given our lower price target, and the rally in the shares from recent lows, we downgrade to 'neutral' from ‘overweight’, the analysts said. Mondi, which announced a bumper special dividend last week, rose on Tuesday as news that Smurfit Kappa has rejected a takeover proposal from International Paper and an upgrade by Credit Suisse provided a boost. CS upped the stock to 'outperform' from 'neutral' and lifted the price target to 2,345p from 2,220p, saying that it's attractively priced. It noted the shares have basically flat-lined over the last 12 months, while earnings prospects and valuation metrics have improved materially. The bank bumped up it 2018 earnings per share forecast by 6% and its estimate for 2019 by 7%, and introduced a 2020 EPS estimate of €1.89. Mondi, which announced a bumper special dividend last week, rose on Tuesday as news that Smurfit Kappa has rejected a takeover proposal from International Paper and an upgrade by Credit Suisse provided a boost. CS upped the stock to 'outperform' from 'neutral' and lifted the price target to 2,345p from 2,220p, saying that it's attractively priced. It noted the shares have basically flat-lined over the last 12 months, while earnings prospects and valuation metrics have improved materially. Analysts also remained fairly confident in backing Just Eat's shares but while results were ahead of consensus expectations, management guidance for 2018 profits was significantly below consensus. Guidance for 2018 was for £165-185m of underlying earnings before interest, tax, depreciation and amortisation, which implies a 19-27% downgrade to consensus, said RBC Capital Markets. Management guided for revenues of £660-700m, the mid-point of which is 1% ahead of consensus, but underlying EBITDA was lower than the consensus at £227m as investment was increased due to intensifying competition in certain markets. "Just Eat is attractively positioned, in our view, enjoying a leading position in all of its markets and should sustain high levels of growth. We see potential upside to revenue expectations, although believe investments in own delivery to weigh on share price performance near-term," RBC said. RBC kept its 'sector perform' rating, with a target price of 840p. Canaccord Genuity said EBITDA guidance was "disappointing" in light of another year of significant investment. "£50m is a really big hike in investment. This is the second time JE has done something like this. The first time (post 2017 interims), the market reacted negatively and then shrugged it off. We expect a similar reaction again." Canaccord sees international territories becoming a material source of profits over the next few years, with established market revenue nearly doubled to £148m, but investment reducing EBITDA 12% to £12m. Developing markets also recorded rapid growth and a decline in EBITDA losses to £4m. Analysts at Numis said as a consequence of the new guidance being 23% below consensus at the midpoint, they would put their recommendation under review, "until we get comfortable with the economics of the delivery model".   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. 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