| | | London stocks started on the back foot on Tuesday, on the back of renewed tensions around Italy's debt pile and in the geopolitical space between the US and China. After a quarter of an hour of trading, the FTSE 100 was down 18.8 points or 0.26% to 7,475.97 despite a 0.3% fall in the pound below $1.30. Sterling was dropping despite reports that Prime Minister Theresa May is working on a major new offer to unblock talks with the European Union over the crucial issue of the Irish border. The Times said May was ready to propose a "grand bargain" which would keep Britain tied to European customs rules on goods after the transition period ends in December 2020. In parallel, the yield on benchmark 10-year Italian government notes was jumping eight basis points to 3.38% after Eurozone finance leaders failed to endorse the country's budget plans for 2019 overnight. Overnight, US markets finished mostly higher, but the Dow Jones Industrials and S&P 500 were unable to notch up fresh record highs while the Russell 2000 of small-cap stocks saw a big drop, continuing its recent trend lower. That was despite news that Ottawa and Washington had agreed on how to move forward on a revamped trade deal together with Mexico. Commenting on the situation in markets on Tuesday morning, said Michael Hewson, chief market analyst at CMC Markets UK: "The downside, if there is one, is that the apparent resolution of one problem usually opens up another front, and President Trump went on to aim a few barbs towards the EU, as well as China, at his press conference yesterday, with no signs of a resolution on the China question, after reports that US defence secretary James Mattis was cancelling his trip to China later this month. "This appears to have weighed on markets in Asia, as Hong Kong shares slid back, though on the plus side the Nikkei continues to remain well supported." On that note, on Monday evening the US Navy accused China's military of "unsafe and unprofessional" behaviour at the weekend around one of the reefs occupied by the Asian giant in the South China Sea. Against that backdrop, both Asian stock markets and emerging market currencies saw selling pressure overnight. The economic calendar was light on Tuesday, although Bank of England chief economist, Andrew Haldane, was set to chair a session at the Rebuilding Macroeconomics Annual Conference on "Bringing Psychology and Social Sciences into Macroeconomics", at 0945 BST, in London. UK house prices have remained stable, year on year, according to research by mortgage lender Nationwide, with home prices continuing to rise at a 2.0% pace year-on-year in September. Through the day, investors will also be keeping an eye out for any potentially market-moving headlines out of the Conservative party conference in Birmingham. In corporate news, Ferguson was falling despite proposing to 're-base' its dividend upwards 10% and lift its final payout 21% ahead of last year, as the plumbing products supplier highlighted its "excellent cash generation and a strong balance sheet". However, full year pre-tax profits fell to $1.1bn from $1.42bn as tough trading conditions continued in the UK and the company took a $122m impairment charge on its stake in Swiss associate Meier Tobler Group. Standard Chartered was continuing the decline begun the day before when Bloomberg reported that the Asia-focused bank could be fined $1.5bn by Us authorities over Iran sanctions, 50% larger than the previous estimate of $1bn. Sports Direct was also moving slightly lower on news that emerged late the previous day, when the retail put out a short statement after the close that it has dismissed the former directors and senior managers of its new House of Fraser acquisition. Likewise, Royal Mail was down another 7% after releasing a late-afternoon profit warning the day before on the back of lower letter volumes, a dip in parcel profits and slower progress with cost cutting since resolving industrial action in March. Following its own profit warning at the start of the week, Ryanair put out September traffic figures on Tuesday showing an 11%, or up 6% excluding Laudamotion, impacted by strikes as 400 flights were cancelled. Load factor was unchanged at 97%. Shell gave the green light to proceed with a major liquified natural gas (LNG) project in Canada where it has a a 40% working interest. Construction will start immediately with first LNG expected before the middle of the next decade, the company said, adding that it forecast an integrated internal rate of return of around 13%, with “significant, long life and resilient” cash flow. Meggitt was boosted by winning a $323m new contract with the US Defense Logistics Agency to supply wheels, brakes and related spare parts for the F-16 Falcon jet and H-60 Blackhawk and CH-47 Chinook choppers. | | | | | Bargain Blue Chips 5 stocks trading significantly below their 2018 highs Seeking out undervalued companies that can offer attractive potential for a bounce back to what investors feel represents their "fair value" is a strategy often favoured by FTSE investors. With this approach in mind, our latest report looks at 5 Bargain Blue Chip stocks; medium-term charts, potential support and resistance levels, broker recommendations and target prices 78% of retail clients lose money, consider affordability. 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| | | | | Invest in the revolutionary combustion technology that’s reducing emissions and cutting costs – with 400% Projected ROI by year 3 Find Out More | | | US close: Stocks kick-off fourth quarter on a mixed note | | | | | Wall Street trading began the week and the quarter with mixed results, despite news of a last-minute breakthrough in trade talks between the US and Canada, as weaker-than-expected readings on factory sector activity weighed on sentiment. By the end of the session, the Dow Jones Industrials was ahead 0.73% or 192.90 points at 26,651.21, while the S&P 500 was up 0.36% or 10.61 points at 2,924.59 but the Nasdaq Composite had slipped 0.11% or 9.05 points to finish at 8,037.30. Pacing gains at the sector level were Automobiles, which jumped 3.30%, followed close behind by Diversified Industrials (2.25%) and Pipelines (1.90%). Boosting the latter was a 3.07% rise in West Texas Intermediate crude oil futures to $75.57 per barrel on the NYMEX. "The agreement between US and Canadian trade delegates was struck just hours before the midnight deadline, and President Trump will be delighted that he managed to replace the North American Free Trade Agreement," said David Madden at CMC Markets UK. "The Mexican component of the deal was reached in August and now that the Canadian element has fallen into place, bullish sentiment is sweeping across global markets." According to Bloomberg, the two North American nations agreed on a revamped North American Free Trade Area that would allow US firms greater access to Canada's dairy market, together with improved rules on intellectual property and tighter rules-of-origin for auto manufacturers. However, it was later reported that the recently-enacted steel and aluminium tariffs would remain in place. On the corporate front, Tesla shares took off 17.35% after American financial securities watchdog, the SEC, backpedalled from a push to replace Elon Musk at the helm of the carmaker. General Electric stock was up 7.09% after the industrial conglomerate announced that Lawrence Culp would replace John Flannery as its chief executive officer with immediate effect. GE also disclosed it would book a roughly $23bn non-cash charge to write-down "substantially all" of the "goodwill" of its power business. Medical cannabis-maker Tilray meanwhile continued its recent sharp run higher, adding 14.87%. In economic news, the Institute for Supply Management revealed that its manufacturing index had fallen to a reading of 59.8% in September from its previous 61.3% figure. Economists were expecting a reading of 60.7%. Separately, IHS Markit's manufacturing purchasing managers index reached a four-month high of 55.6 last month. In other news, spending on construction projects edged up 0.1% across the US in August - with a strong gain in government spending helping to offset weakness in home building and non-residential construction. The Commerce Department revealed that the rise, which came fresh on the heels of a 0.2% increase recorded in July, put total construction at a seasonally adjusted annual rate of $1.32trn - a 0.4% drop from the record high set back in May. Longer-term Treasury note yields were also higher at the start of the week, with those on the benchmark 10-year note advancing by two basis points to 3.09%. To take note of, in remarks prepared for a speech on Monday evening, Boston Fed chief, Eric Rosengren, argued for continuing to move from "mildly accommodative" policy settings to "mildly restrictive" ones. That, Rosengren said: "is fully consistent with a forecast of GDP growth above potential that leads to further tightening of labour markets, and inflation mildly overshooting the Federal Reserve's 2% target." | | | eToro Daily Update 02/10/2018 | | | | Today’s highlights: US-Canada trade deal lifts Wall Street - Canada trade deal pushes Wall Street higher: Both the Dow Jones and S&P 500 closed higher yesterday, following news that Canada has joined the new trade deal between the US and Mexico, replacing the old North American Free Trade Agreement (NAFTA). The Nasdaq closed slightly lower, offset by losses seen in Facebook and Intel. Several stocks reached new all-time highs, including Microsoft, Visa, NVIDIA and Boeing.
- Asia seen lower: Despite the positive news out of Wall Street, tensions still run high between the US and China, impacting Asian markets. While the Nikkei was seen slightly higher this morning, the Hang Seng index suffered heavy losses, down by approximately 1.9% at the time of writing. Markets in China are closed today, due to a national holiday.
Read More.. | | | Tuesday newspaper round-up: Brexit, Sports Direct, Unilever, Google | | | | | Theresa May is preparing to limit Britain’s ability to strike free-trade deals after Brexit in a significant concession to the European Union aimed at breaking the deadlock in negotiations. The prime minister is ready to propose a “grand bargain”, according to her colleagues, which would keep Britain tied to European customs rules on goods after the transition period ends in December 2020. - The Times A curb on low-skilled workers from the European Union will be at the centre of Britain’s post-Brexit immigration policy, Theresa May has announced. The Prime Minister confirmed that free movement will end completely, with a single immigration system that treats EU countries the same as non-EU countries.- Telegraph EU diplomats have rejected Theresa May’s conference pitch that Brussels must move first to break the deadlock over negotiations as Jean-Claude Juncker said British people were only “finding out now” about the scale of the problems caused by Brexit. The European commission president told an audience in Germany that he regretted that the voters had not been properly informed ahead of the Brexit referendum in 2016. He claimed that UK ministers were only now discovering the costs. - Guardian The former directors and senior management of House of Fraser have been sacked by Sports Direct amid calls for an investigation into the collapse of the department store group. The dismissals were announced in a statement that was released to investors after the London stock market closed. - Telegraph J Sainsbury is planning to take on Boots, Superdrug and Debenhams by launching a revamped beauty range that will be sold “department store-style”, with dedicated beauty assistants. Sainsbury’s said that its new range would double in size, with up to 3,000 items, including more than 1,500 new products from brands such as Revlon, Mane 'n Tail and Burt’s Bees. - The Times Standard Chartered is facing a fine of about $1.5 billion, higher than expected, for again violating American sanctions against Iran, according to a report. Shares in the emerging markets bank fell by more than 3 per cent after Bloomberg reported the possible size of the penalty, citing a preliminary assessment based on communications between the bank and regulators. The US, Canada and Mexico have reached a deal to revamp the North American Free Trade Agreement (Nafta), ending months of bitter dispute between the world’s largest economy and its closest neighbours. Donald Trump declared the United States-Mexico-Canada Agreement (USMCA) - the new name for the world’s second-biggest economic bloc behind the European Union - a “wonderful new trade deal”, which came through an 11th-hour agreement late on Sunday. - Guardian Schroders has come out against Unilever’s plans to relocate to the Netherlands, delivering a further setback for the consumer goods group. Jessica Ground, global head of stewardship at Schroders, a top 30 shareholder with a stake of about 0.8 per cent, said that it “understood the company’s desire for simplification, but we do not believe this is the right decision for Unilever plc shareholders”. - The Times A French state school where children are taught in English is being held up as a symbol of Parisian determination to lure financial workers from London after Brexit. The Lucie-Aubrac international school, which opened last month near La Défense, the business district, is preparing for an influx of pupils as executives cross the Channel after Britain leaves the European Union. - The Times Would-be passengers have been warned not to turn up for Primera Air flights after the discount airline ceased operations ahead of filing for bankruptcy. Stansted said on Monday that travellers due to fly with the airline should not travel to the airport, from which Primera operated flights to Spain and the US. - Guardian Google is allowing fraudsters to advertise at the top of search results despite its pledge to tackle the practice, an investigation has found. The search giant has been condemned as irresponsible after selling adverts under search terms such as “buy fake ID”, “buy fake passport” and “buy fake reviews”. - The Times | |
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