| London open: Stocks edge lower ahead of NFP but Intu surges | | | | | London stocks edged lower in early trade on Friday as investors eyed the release of the latest US non-farm payrolls report and continued to keep an eye on the US bond market. At 0830 BST, the FTSE 100 was down 0.3% to 7,399.70, while the pound was up 0.2% against the dollar at 1.3049 and 0.3% firmer versus the euro at 1.1345 following reports that Brexit negotiators see a divorce deal as being very close. The UK and EU were inching closer to a deal on a backstop solution for the Irish border that would break the impasse in Brexit talks, The Times reported, while Reuters revealed that EU negotiators had told national diplomats in Brussels late on Thursday that a divorce deal with Britain was "very close". Traders and analysts were still very much focused on yields, with CMC Markets analyst Michael Hewson saying this week's surge in US 10-year yields to their highest levels since 2011 "could gain further traction" in the event of a decent US jobs report later. "Having seen the ADP payrolls report post 230,000 new jobs in September, and seeing the latest ISM non-manufacturing survey post a big gain in the employment component, expectations have risen that we could well see a payrolls figure in excess of 200,000, raising the expectations that September could well see the two reports combined post a figure close to 500,000." The payrolls report, unemployment rate and average earnings are due at 1330 BST. Consensus is for 185,000 jobs to have been added in September, down from 201,000 the month before, while the unemployment rate is expected to have ticked down to 3.8% from 3.9% in August. In UK corporate news, Intu Properties bucked the trend, surging nearly 25% as it emerged that one of the company's senior directors is leading a consortium of investment companies to buy the shopping centre owner. Deputy chairman John Whittaker's Peel Group has teamed up with Saudi conglomerate Olayan Group and Canary Wharf owner Brookfield Property Group to launch possible offer for Intu. British Land, Land Securities, Hammerson and Capital & Counties all rallied on the news. Unilever edged higher as the company said its directors have decided to withdraw their proposal to move out of the UK to a single Netherlands headquarters after growing opposition from shareholders large and small. Greencoat UK Wind nudged up after announcing the acquisition of Belltown Power's 75% stake in Scotland's Tom nan Clach wind farm for £126m. Centamin lost ground after the gold miner cut its full-year production target as it posted a drop in quarterly output. Real estate investment trust Assura was in the red as it said it had completed a further three acquisitions for £50m, taking its total spend for the year to £158m. In broker note action, Antofagasta was hit by a downgrade to 'sell' at Goldman Sachs, while Bodycote was lifted to 'buy' at HSBC and Intertek was boosted to 'buy' by Berenberg. Rentokil was upgraded to 'buy' at Stifel and Royal Mail was cut to 'sell' at Citi. CLS Holdings was started at 'buy' by Berenberg, while CYBG and Metro Bank were initiated at 'sell' and 'buy' respectively by Societe Generale. | | | | | Exclusive Opportunity Disruptive cyber-crime prevention technology that will revolutionise the anti-virus market as we know it! Huge potential gains. Click here to find out more | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor | 
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| | | eToro Daily Update 05/10/2018 | | | | Today’s highlights: Global markets mostly lower - Wall Street turns red as the Nasdaq dips 1.8%: US markets closed significantly lower yesterday, as the Dow Jones recorded its largest single-day drop in 2 months, the Nasdaq fell 1.8% and the S&P 500 dipped more than 0.8%. The tech sector displayed a slowdown as Facebook, Amazon, Alphabet (Google) and Netflix each registered losses of at least 2%. The recent losses are attributed to rising interest rates, which lead to 10-year Treasury note yields reaching a 7-year high, and reports of spy chips inserted into several tech companies’ networks.
- Crypto markets revert to losses: Negative momentum was felt in the cryptocurrency market over the past 24 hours, as 9 of the top 10 cryptos were seen lower. Bitcoin fell less than 1%, holding above the $6,500 mark, while XRP registered the largest losses of all top 10 cryptos, down by more than 3.6% at the time of writing. EOS beat the trend, as it was the only top 10 crypto coin to register gains.
- Asia seen lower: Markets in the East followed Wall Street’s lead, as the Nikkei, Hang Seng and China50 indices all registered losses this morning. Banks in China remain closed today, in observance of a national holiday.
Read More.. | | | US close: Stocks drop as bond yields rise; eyes on payrolls | | | | | US stocks ended Thursday’s session in the red as Treasury yields continued to rise. The Dow Jones Industrial Average and the S&P 500 closed down 0.8% at 26,627.48 and 2,901.61, respectively, and the Nasdaq fell 1.8% to 7,879.51. Both the S&P and the Nasdaq suffered their worst losses since June. Meanwhile, the yield on the benchmark 10-year Treasury note rose to a seven-year high of 3.232%, marking its biggest daily increase since 2016 following the release of more solid economic data, this time in the form of factory orders and jobless claims. On Wednesday, the 10-year yield hit its highest level since July 2011 following the release of strong ADP data, a good reading on the services sector and hawkish comments from Federal Reserve chairman Jerome Powell. Fiona Cincotta, senior market analyst at City Index, said: "Suddenly the US stocks trading at all time high levels are looking potentially slightly overpriced and more of a risky asset than the relatively risk-free government papers. "Although some market watchers argue that the US indices had been pulled higher over the last months by a few good stocks the overall domestic economic data underpins the case for a strong market. Tomorrow’s non-farm payrolls and unemployment data is expected to provide more evidence of a strong economy." Figures from the Labor Department showed the number of Americans filing for unemployment benefits fell more than expected last week. US initial jobless claims fell by 8,000 to 207,000 from the previous week's level, which was revised up by 1,000 from 214,000. Economists had been expecting a smaller drop to 213,000. The Labor Department said claims for South and North Carolina were affected by Hurricane Florence, which hit the region in mid-September. Meanwhile, the four-week moving average rose by 500 to 207,000 from the previous week's average, which was revised up by 250 from 206,250. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market. Pantheon Macroeconomics said the Florence hit was very small and is unwinding "The increase in jobless claims triggered by Hurricane Florence was very modest, and smaller than we expected. It is now fading, and claims likely will soon hit new cycle lows, breaching the 200k mark for the first time since 1969," said economist Ian Shepherdson. "The labour force is more than twice as big as in 1969, and claims as a share of employment are at a record low. With strong growth likely to persist for some time, fuelled by fiscal easing, claims likely will hit further lows over the next few months as the number of businesses in trouble declines." Meanwhile, data from the Department of Commerce showed that factory goods orders shot higher in August, buoyed by a large increase in those made to last for more than three years. Total orders from the manufacturing sector grew by 2.3% month-on-month to reach $510.5bn That was more than twice the 1.0% advance that economists had pencilled in. Versus a year ago, factory goods orders were 8.6% higher. Orders for durable goods, or those made to last more than three years, jumped by 4.4% versus July to reach $259.55bn, powered by a 69.1% gain in those for non-defence aircraft and parts. A preliminary reading had revealed a 4.5% rise in durable goods orders. Those for non-durable goods meanwhile increased by 0.2% month-on-month to reach $250.9bn. Given the recent strong run of data, all eyes will be on Friday’s non-farm payrolls report and unemployment rate. Analysts are expecting payrolls to come in at 185,000 for September, down from August’s reading of 201,000. In corporate news, drug company Eli Lilly rose after the company said that data from a mid-stage trial of its experimental diabetes drug showed promise and Constellation Brands advanced after lifting its earnings outlook for 2019. Cloudera and Hortonworks both rallied after announcing an agreement to merge, while bookstore chain Barnes & Noble surged after saying that its board of directors has decided to enter a formal review process to evaluate "strategic alternatives". Elsewhere, retailer Pier 1 Imports declined after posting a wider loss for the second quarter, and Arrowhead Pharmaceuticals tumbled after entering a $3.7bn license and cooperation agreement with Janssen Pharmaceuticals. | | | | | Invest in the revolutionary combustion technology that’s reducing emissions and cutting costs – with 400% Projected ROI by year 3 Find Out More | | | Friday newspaper round-up: Brexit, Intu, RBS, piracy | | | | | The UK and EU are moving closer to a deal on a backstop solution for the Irish border that would break the impasse in Brexit talks, senior sources said last night. It is understood that British negotiators have informally tabled a proposal, first revealed by The Times, that would involve the whole of the UK remaining in a customs union with the EU until a longer term solution can be found to avoid the return of a hard Irish border. - The Times Ireland’s prime minister has urged Theresa May to publish her revised Brexit border plan “as soon as possible” so the UK and EU can seal a Brexit deal in November. Leo Varadkar said the UK must not delay until a few days before a crunch summit on 17-18 October because the EU needed time to “respond to it in a meaningful way” if talks were to advance. - Guardian The European Union is ready to offer Britain a form of “Canada-plus” Brexit trade deal, Donald Tusk has said in a move described as a “superb way forward” by arch-critic Boris Johnson. Mr Tusk, the European Council president, also demanded that Theresa May’s government “get down to business” and solve the Irish border issue to seal a Brexit deal. - Telegraph John Whittaker, the billionaire owner of Peel Group, is trying to orchestrate a multibillion-pound deal to take Intu Properties private, only months after the shopping centre owner’s proposed merger with Hammerson failed. In a move that could trigger an auction for the struggling Intu, Peel Group confirmed that it had formed a consortium for a potential bid with Olayan Group, a Saudi conglomerate, and Brookfield, a Canadian private equity group. - The Times Lloyds Banking Group has been ordered to tighten its procedures by the competition watchdog after it failed to tell thousands of customers about their right to cancel their payment protection insurance. The Competition and Markets Authority said it is taking action against the bank for "serious breaches" after it failed to remind 14,000 customers between 2012 and 2018 that they still have a policy and can cancel. It also sent incorrect information to 2,884 others. - Telegraph Ending austerity will cost £20 billion if it involves raising public-sector wages, the Institute for Fiscal Studies has said. Theresa May said at the Conservative Party conference that austerity would come to an end in next year’s spending review when Philip Hammond, the chancellor, sets out departmental spending totals. Santander has launched its campaign to win a large grant from the Royal Bank of Scotland’s £775 million fund to increase competition and innovation in business banking by making its 123 current account available for business customers. The Spanish bank is regarded as one of the most likely contenders. However, its choice would be controversial as it has about 10 per cent of the business current account market and held talks with RBS about buying part of its business that it was meant to divest under state aid rules, only for those negotiations to fall through. - The Times Travelodge is ramping up its expansion into the business market, with a £100m initiative to target sites near major conference centres. The budget hotel chain has identified 10 locations across the country, from London’s Olympia to Glasgow’s SEC Centre, where it is “actively looking” to run new hotels. - Telegraph Regulators have been accused of turning a blind eye to pensions mis-selling after deciding not to ban a controversial fee arrangement seen by some as encouraging vulnerable workers to surrender valuable retirement benefits. The Financial Conduct Authority said yesterday that it had decided not to outlaw so-called contingent charging. - The Times A decline in rail passenger journeys has been arrested despite May’s catastrophic timetable overhaul. Between April and June passenger journeys across Britain’s rail network totalled 428.9m. This was slightly higher, by 1m, than the first three months of 2018. - Telegraph Legal & General is backing a scheme to create a £1.8 billion network of science and technology centres in regional cities. The investment group has formed a joint venture with Bruntwood, the property company behind Manchester Science Partnerships, that will own and manage Britain’s largest portfolio of science and technology parks. - The Times Tesla shares fell as Elon Musk mocked the US financial markets watchdog on Twitter, describing it as the “Shortseller Enrichment Commission”. "Just want to that the Shortseller Enrichment Commission is doing incredible work," Mr Musk, a frequent critic of investors betting against the electric car company, wrote on Twitter. "And the name change is so on point!" - Telegraph The man letting himself into your home wearing plastic overshoes and a bodycam may look like something out of an episode of CSI, but in fact he’s here to deliver your groceries. Waitrose is set to take the convenience of internet shopping a step further by saying that customers do not even have to be at home when their orders arrive. The supermarket chain is trialing an “in-home” delivery service that gives drivers access to customers’ homes to unpack their shopping while they are out. - The Times Electra Private Equity has kicked off a jumble sale of its remaining assets after agreeing the disposal of its investments in Photobox and Knight Square. The quoted investment trust said that the sale of its minority stakes in Photobox, the online photo-printing business, and Knight Square, a residential property manager and healthcare provider, to Lexington Partners, an American private equity firm, would bring shareholders dividends totalling £161 million. - The Times Funding Circle has suffered one of the worst first-week performances for a British float after shares in the peer-to-peer lender fell sharply again yesterday. Its stock fell by almost 7 per cent to close at 340p, 100p below the price at which the company floated last Friday. - The Times Britain’s largest independent toy retailer has recorded another stellar year. The Entertainer said that its profits had surged by 38 per cent year-on-year to £11.9 million on total sales that rose by 7.4 per cent to £164 million, excluding VAT, in the 12 months to the end of January. - The Times Online piracy is on the rise once again after years of decline because there are so many television streaming services that people are unwilling to take out multiple subscriptions. TV fans embraced illicit file-sharing services in the late 1990s and early 2000s to watch programmes at their convenience, rather than be restricted by broadcasters’ schedules. - The Times Government plans to move 3 million people currently receiving tax credits and disability benefits on to universal credit from next April will trigger an explosion in food bank use, the Trussell Trust has warned. The trust - the UK’s biggest food bank network - said urgent changes to the “managed migration” programme are needed to protect vulnerable claimants from falling into hardship or dropping out of the benefit system altogether. - Guardian The average Briton buys enough clothing every year to fill a large suitcase, the most in Europe, a study has found. The clothes purchased weigh an average of 26.7kg, 10kg more than any other nationality and almost double that of the fashion-conscious Italians. - The Times | |
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