Market News -Friday 19th October 2012

 

The FTSE 100 ground its way marginally higher yesterday as a rise in mining stocks was offset by the fall in the banking sector as Barclays announced a further provision for PPI. However, this morning any momentum seems to have all but gone as the markets are just drifting sideways and lacking direction. A spark may be ignited at 0930 when the UK government releases its borrowing figures for September allowing the market can see if George Osborne’s austerity plans are on track.

 

Corporate News

 

• Aggreko reported a robust Q3 performance with revenues up 22% and margins similar to last year’s level. However, exchange rates and bad debt provisions will knock 2.5% off anticipated profits -7.3%

 

• William Hill reported its operating profit rose 26 percent in the third quarter and was 17 percent higher in year to date. Unch

 

• Petrofac said it was on track to post net profit growth of at least 15 percent in 2012 and it expected to win new contracts in the coming months as bidding activity in its key Middle East and North African markets picked up +0.4%

 

• Spectris Q3 sales rose 12% and remains well positioned to deliver on its expectations for the year +7%

 

• Rank Group reported a 4% rise in Q3 Revenue but stated that the outlook for the UK consumer is expected to remain challenging Unch

 

• WM Morrison cut to underweight at Barclays -0.7%

 

• Standard Life cut to Sell at Berenberg -0.5%

 

Economic Data Releases

 

• 09.30 United Kingdom-Public Sector Borrowing (Sep)

 

• 15.00 United States-Existing Homes

Market News - 18th October 2012

It’s hard to call it a rally, but with the FTSE 100 climbing for the last 3 days and being all but unchanged this morning, it has buoyed investor confidence after the falls of last week. China was in focus again overnight as it reported Q3 GDP expansion of 7.4% which was ahead of expectations pushing Asian Markets Higher. However, it should also be noted that although this figure seems high compared to Europe and the States, it is the slowest rate of growth in China since Q1 in 2009.

Corporate News

• RBS, 82% owned by the British Government said yesterday that it is preparing for the British government to start selling its shares in the bank in 2014. It has also left the APS saving it £125 million per quarter in insurance fees. +0.3%

• SABMiller reported lager volumes for the first six months that are 4% ahead of the prior year -1.3%

• Man Group the struggling Hedge Fund Manager, saw Q3 net out flows of $2.2 Bln as investors pulled their money out for the 5th consecutive quarter as its flagship fund is only up 0.6% for the year. -3.2%

• Fuller Smith & Turner shares climbed yesterday as reports of  a £10 per share offer from rival Young & Co were reported in the Daily Mail.

• Evraz the Russian steel maker, reported a 3% fall in output in Q3 as it closed it Czech Plant for a month on low demand.  +1.8%

• Informa rated New Buy at Jefferies with a price Target of 474p -0.4%

• Shell cut to Sell at Goldman Sachs -0.5%

Economic Data Releases

• 0930 - United Kingdom-Retail sales

• 1330 - United States-Jobless claims

• 1500 - United States-Leading indicators

Market News - Monday 15th October 2012

 

The FTSE 100 started the week in positive territory but is still only slightly above the 5800 level and looks to be lacking direction once again.  China put some context on how bad things have got in Europe over the last year as it reported that exports to the region had fallen 10%, where as worldwide exports were up 9.9% from the world’s second biggest economy.

Corporate News

• RBS opened lower after Santander pulled out of a deal to buy 316 branches that it was forced to sell as a condition of the bailout it received in 2008. However, reports suggest Virgin Money may be willing to step into Santander’s shoes  -1%

• Fresnilo, the world's largest silver producer, posted a 2.6 percent rise in silver production in Q3 compared to 2011, and said it was on track to meet its 2012 targets -0.4%

• BAE System plans to spend the proceeds of a Saudi arms deal on a share buyback to appease investors following the collapse of its $45 billion merger with EADS last week according to the Sunday Times. +0.1%

• Optos reported revenues are expected to exceed $190M, ahead of market expectations at the retinal Imaging company +6.7%

• Filtrona reported revenues in Q3 up 26% compared to 2011 and overall performance was in line with the board's expectations +1.7%

• Tullow Oil said it would look for oil in Greenland through a partnership deal with Maersk Oil +0.5%

Economic Data Releases

• 1330 - United States-Retail Sales

• 1500 - United States-Business inventories

Market News -Friday 12th October 2012

Shares were slightly lower this morning with the FTSE 100 off slightly but still holding above the 5800 level. With no significant economic data out today, the focus will shift to JP Morgan’s earnings to be released before the opening bell in New York. Consensus estimates for the Quarter of $1.21 per share, which if hit would give it a solid annual growth rate of 19%, despite the unfortunate loss of $4.4 billion by the ‘London Whale’ in its Chief Investment Office earlier in the year.

Corporate News

• Morgan Crucible issued a profits warning stating that group revenue in the third quarter was 10% below H1 average levels and performance for the full year likely to be materially below the board's previous expectations -14%

• Hargreaves Lansdown reported an increase is assets under administration of £2.2 billion in the three months to 30 September to £28.5 billion and record quarterly  revenues of £68.7M +0.7%

• Informa continued its push higher from yesterday as high volumes and  talk of a 550p share from Germanys Axel Springer surfaced +0.5%

• Travis Perkins posted a 3.5 percent decline in underlying sales after poor weather and tough competition crimped trading in its third quarter. -2.8%

• Evraz cut to underperform at Credit Suisse -1.9%

• Antofagasta cut to underweight at HSBC -1.75%

Economic Data Releases

• 10:00 Eurozone August Industrial Production, -0.3% exp. 0.5% previous

• 13:30 US September PPI, 0.7% exp. 1.7% previous

• 14:55 US October University of Michigan Confidence, 77.8 exp. 78.3 previous

Market News -Thursday 11th October 2012

 

The FTSE 100 has just about ventured into positive territory this morning after a sell off on wall street last night and the downgrade of Spanish Government debt to BBB-, which is just one notch above Junk status . Having experienced negative moves for the previous 3 sessions, traders around the city are starting to hunt out a few bargains where stocks have been oversold.

 

Corporate News

• Direct Line shares on their first day of trading and opened up +3.4% at 181p

• Greggs  reported a fall of 2.6% in like for like sales in Q3 and does not anticipate any improvement in the remaining quarter -4.2%

• Burberry confirmed retail sales growth slowed sharply in Q2 as demand eased in the UK and China after its profit warning last month, but announced it will directly operate its fragrance and beauty products following the end of its existing licence relationship with Interparfums +7%

• WH Smiths had mixed news with Pre Tax profits rising 10% to £102 Million but like for like sales falling 5%. The final dividend was raised to 26.9p -7%

• United Utilities is reported to be a potential bid target for Goldman Sachs Infrastructure Fund and China Investment Corporation  Unch at 728p

• Morrison cut to neutral at Credit Suisse -1%

Economic Data Releases

• 13:30 US August Trade Balance, -$44.0bn exp. -$42.0bn previous

• 13:30 US Initial Jobless Claims, 365k exp. 328k previous

Market News - Wednesday 10th October 2012

 

Even with a strong start to US earning season from Alcoa with better than expected results, the FTSE 100 struggled to venture into positive territory this morning and is marginally down. China is starting to become more of a concern to investors with Toyota and Nissan reporting a falling increase in sales  in the country and the stock market hovering  just above the 3 year lows, the incoming ‘government’  looks set for a baptism of fire to avoid a hard landing.

 

Corporate News

 

• Man Group the hedge fund manager, rallied on speculation that Blackrock who already owns 9.35%, could be lining up a bid for the firm. +4%

 

• Netplay reported a 52%increase in new casino players compared to Q3 last year and a 107% rise in mobile and Tablet revenues. +4%

 

• Ferrexpo saw a 2.8% increase in iron ore pellet production in the last quarter +0.8%

 

• Capita cut to a sell at Panmure -0.9%

 

• Smith and Nephew coverage started with a sell rating at SocGen -2.75%

 

Economic Data Releases

 

• 12.00 United States-MBA - MBA 30-yr mortgage rate

 

• 15.00 United States-Wholesale Inventories

Market News - Tuesday 9th October 2012

There was a strong showing from the Asian markets overnight as reports of a huge Infrastructure and Railroad investment plan in China surfaced which helped the FTSE open higher but it has since given back all its gains and is now just into negative territory. It’s the start of US earning seasons today with Alcoa traditionally the first to report which should begin to give some further insight as to how corporate America is fairing and if their results can back up the 4.3% rise in the Dow in the last quarter.

Corporate News

• Centamin said gold output fell 21% in Q3 compared to Q2 but was still 20% higher compared to the corresponding Q3 in 2011. -1.8%
 

• Barclays is buying the deposits, mortgages and business assets of ING Direct UK, as it looks to expand its retail operations and minimise exposure to a shrinking investment banking market. +0.3%

• Hays the recruitment firm, reported a fall of Q1 net fees of 1% overall but a large disparity throughout the world, with the UK and Asia Pacific regions both down 9% but Europe and the rest of the world up 16% +6.25%

• Inmarsat the satellite communication company saw trading during the third quarter consistent with their guidance for the full year and saw strong take up of FleetBroadband, with over 2,100 net additions -0.1%

• William Hill raised to a Buy at Jefferies with a Price target of 370p +0.9% at 335p

• Aggreko Cut to Neutral by HSBC -2.9%

• FTSE 100 EX Dividend Shares Tomorrow, Kingfisher 3.09, Smith & Nephew PLC $0.099, TESCO PLC 4.63, Wolseley 60, WPP 8.80

Economic Data Releases
 

• 0930 United Kingdom-Trade Balance

• 0930 United Kingdom-Industrial output

• 0930 United Kingdom-Manufacturing output

Monday 8th October 2012 - Market News

After a strong last week boosted by a larger than expected fall in US unemployment on Friday, the FTSE 100 has started this week with 0.7% decline as the Chinese markets opened down after their Golden week holiday and the World Bank cut its economic growth forecasts for the East Asia and Pacific region, warning that the slowdown in China could get worse and last longer than expected . The focus will fall back on Spain and Greece later today as the European Finance Ministers meet again to discuss the ever worsening debt crisis in the region.

Corporate News

• Cookson, down 15%, warned that weak trading in its division which makes products for the global steel industry would cause it to miss its profit forecasts for the year.

• BAE Systems largest shareholder Invesco Perpetual, issued a long list of objections to the group's proposed $45 billion merger with EADS.-0.4%

• Michael Page, the recruitment firm said that it expects its full year profit to be below market expectations as economic uncertainty and weak confidence drag on results. Group gross profit for the three months to end-September was 126.5 million pounds, 11 percent down on a year ago. -4.25%

• Cranswick, was off 2.5% although it stated First half performance has been in line with management's expectations and underlying turnover in the six months to 30 September was up 5 per cent.

• Mondi was raised to outperform at Credit Suisse

• EasyJet was raised to a buy at Deutsche Bank

 

Economic Data Releases

• 09.30 Euro zone -Sentix index

Friday 5th October 2012 - Market News

 

The FTSE 100 opened up a touch higher this morning at 5840, but as it is the first Friday of the month  the whole market is waiting for the Non Farm Payroll numbers out of the US at 1330. Expectations are high for the US employment market with 113,000 jobs predicted to have been added in the last month, and if the good results from the ADP Employment report (162,000) on Wednesday are true. the actual number could be significantly higher providing a further boost to world indices.

Corporate News

 

• Rentokil Initial up 0.7% the pest control to mail delivery firm was up on rumours that a 2.63 billion (145p) private equity bid may be forthcoming.

 

• John Wood Group up 1.4% reported this morning that it was confident of achieving full year performance in line with expectations and that the engineering division is performing well and our order book and future prospects remain strong

 

• Telecom Plus up 2.6% said it expects to post a higher pretax profit for the first half of the year as it added more customers and that shareholders can expect a significant increase in the interim dividend payment

 

• Great Portland Estates, British Land and Land Securities have all been cut to Neutral by Goldman Sachs

 

• Mitchells and Butlers has been raised to a Buy at Peel Hunt

 

• Kingfisher was cut to equal weight by Morgan Stanley

Economic Data Releases

 

• 11:00 German August Factory Orders, -0.3% exp. 0.5% previous

 

• 13:30 US September Unemployment Rate, 7.3% exp. 7.3% previous

 

• 13:30 US September Change in Non Farm Payrolls, 113k exp. 96k previous

 

• 13:30 US September Unemployment Rate 8.2% exp. 8.1% previous

Thursday 4th October 2012 - Market News

The FTSE is holding on to its early gains up 14 points as Asian markets rebounded after a sell off earlier in the week. However, all eyes this morning are looking towards a Spanish debt auction as it aims to sell between 3 and 4 billion Euros of 2,3 and 5 Year bonds. Spanish bondholders would like to see the country asking for a rescue package that would pave the way for the ECB to buy its debt. Both the BofE and the ECB will be announcing their rate decisions at 12.00 and 12.45 respectively, but both are expected to remain unchanged. The real excitement could come in the ECB press conference afterwards at 13.30 where Mario Draghi  will surely be given the Spanish inquisition. 

Corporate News

·       Ted Baker, the fashion retailer saw profits rise 10.4% in the first half boosting its shares 1.5%

·       Carillion up 2% this morning reported Q3 results in line with expectations but continues to see full year revenue lower than 2011

·       Halfords was up 14% as it reported strong summer sales as bicycles sales soared as customers were inspired by the Tour de France and Olympic cycling success

·       Gulf Keystone is to raise $200 million via convertible bonds due in Oct 2017 to bolster its resources as it pushes to expand the commercial oil find made at its Shaikan block in Kurdistan and explore neighbouring blocks. The share opened down 2%

·       Promethean World, the Interactive whiteboard maker, crashed 35% as it expects full-year results to be below market expectations after facing a slump in its key education markets

·       Sports Direct raised to a buy at Seymour Pierce

·       Tate & Lyle raised to outperform at Credit Suisse

Economic Data Releases

·       12:00 UK Bank of England Rate Announcement, 0.5% Unchanged exp.

·       12:45 ECB Rate Announcement, 0.75% Unchanged exp.

·       13:30 US Weekly Initial Jobless Claims, 365k exp. 359k exp.

·       15:00 US August Factory Orders, -0.2.5% exp. 2.8% previous

·       19:00 US Fed Meeting Minutes

Wednesday 3rd October 2012 - Market News

The FTSE opened slightly lower this morning at 5790.0 after small declines in Asia overnight as investors continue to be wary over global growth prospects. Spain may not be as close to a bailout as some had predicted with the Spanish Prime Minister last night saying that a request for European aid is not imminent, although this could be politically motivated as it tries to negotiate better terms.


Corporate News

·        Sportingbet, currently a bid target of William Hill saw growth in its key Australian market of 82% as it reported earnings of £56.8 million. Commenting on the bid it said it "significantly undervalues" it, but left the door open for a higher bid.

·        Tesco posted a small rise in quarterly underlying sales of 0.1 in the UK but first half group trading profit fell 10.5 percent to 1.6 billion pounds. The shares are down 0.8% at 334p

·        Sainsbury posted better than expected sales growth of 1.9% in its second quarter and saw a 20% growth in its online business and is opening its smaller convenience stores at the rate of 2 a week.

·        Easyjet was up 2 % as it raised its full year profit guidance after a summer of strong demand to European beach routes from London. It also stated that a third of seats in the first quarter of its new fiscal year had already been sold.

·        FirstGroup fell 15% after the government cancelled its West Coast rail franchise that it thought it had won off Virgin 2 months ago.

·        Lamprell, the UAE based Oil rig maker plunged 31% after it released its 4th profit warning since the spring after problems delivering 2 wind farm vessels.

·        Schroders was cut to a sell by UBS

 

Economic Data Releases

·        10.00 Euro zone August Retail Sales

·        12.00 United States-MBA - MBA 30-yr mortgage rate

·        13.15 United States-ADP - ADP National Employment

·        15.30 United States-EIA OIL STOCKS - EIA weekly crude stocks

The FTSE 100 shed 25 points on the open giving back a portion of yesterday’s gains after a decline on Wall Street and concerns ahead of a Euro Group meeting as to whether Spain will ask for a bailout . Australia in contrast had a strong session after the  RBA cut interest rates by a quarter to 3.25%.

 

Corporate News

·        Wolseley, the British plumbing and building supplies group posted a 10 percent rise in full-year profit, underpinned by growth in its core U.S. business, and said it proposed a special dividend of 350 million pounds but was down 1%

·        First Group, up 1.5% said that trading in the first six months of the year was in line with expectations and it was committed to dividend growth of 7 percent

·        Babcock International, up 1.4% said it had a strong first half as it continues to benefit from the governments farming out more work to the private sector to cut costs.

·        Hammerson was upgraded to a hold by Investec with a price target of 465.

·        ITV was up 2% as it was reported that private equity firms CVC partners and Apax Partners were lining up a 140p cash bid.

Economic Data Releases

·        09:30 UK September PMI Construction, 50.0 exp. 49.0 previous

·        10:00 Eurozone August PPI 0.5% exp. 0.4% previous

FTSE has posted modest gains this morning to stand at 5785 at the time of writing.This slight improvement comes after news broke over night the Bank of Japan would embark on a further round of QE in effort to head off deflation and weaken the yen. However after nearly two decades of unorthodox monetary policy in the land of the "rising sun" we are reminded of the famous Einstein quote on insanity, of which he said “Insanity is doing the same thing, over and over again, but expecting different results.”

 

As far as individual movers are concerned this morning Kazakhmys and United Utilities top the pile of winners both are better by more than 2.5% on the day and are being given a run for their money by Rexam and Fresnillo which are up by 2.17 & 1.64% respectively.

 

Whilst Barclays Bank are the top faller down by 1.64% on the day.

Volumes are however frankly pathetic with only 242 million shares traded  at just after mid day  and almost half of that volume can be accounted for by Lloyds, Vodafone and Barclays. That concentration of volume and the limited turnover elsewhere will be of great concern to all market participants.

London markets have sold off by some 40 points or more this morning with the FTSE testing back to and below 5850. The weakness can be attributed to the ongoing crisis in Spain and the perception in the markets that for all the rhetoric over recent weeks from European leaders - they have done little to change the situation on the ground or to halt what some see as the inevitability of Spain having to be bailed out.

 

Figures this morning which showed a continued and worsening rise in bad debts at Spanish banks have done nothing to ease those fears. The Euro has eased against the US$ this morning whilst yields on Spanish bonds have risen once more.

 

As far as individual stock are concerned the biggest faller in London's top flight today is Aviva which have fallen  by some 4.8% sector peer prudential are also lower by 2.8%.

 

There are few gainers in what can genuinely be called a broad based sell off  and only 5 stocks led by the defensive favourite Imperial Tobacco are up by more than one percent the day at the time of writing. Volumes remain on the low side with just over 300 million shares traded in London's topflight as we approach 13.00 hours.

 

Ahead of the US open futures markets suggest a weaker start for  New York equities and both Gold and Crude oil will go into the North American session weaker on the day.

FTSE has traded lower this morning giving back around 17 points on the day so far the biggest faller in the top flight is luxury fashion group Burberry down by more than 18% as I type. Burberry spooked the market this morning with the release of what amounted to a profits warning  for its full year prospects. The company highlighted falling sales growth on a global basis and said that profits for the full year to March will be at the lower end of market estimates. Luxury brands such as Burberry have enjoyed  high ratings and earnings multiples over the last two to three years as sales boomed in Asia and other emerging markets.  But with sales in China falling off dramatically it seems that sector could come back down to earth with a bang.

 

Mining stocks have also taken a knock this morning despite a buy recommendation for the sector from strategist at a leading Swiss bank  names like Vedanta, Anglo American and Kazakhmys are down by at least 3% and given the influential sectors weakness its a wonder that London is not down much more sharply.

 

Modest gains in defensive names are offsetting the cyclical miners but  the  diggers and drillers are much more volatile as a group  and a betting man would think that the miners will win  out in this tug of war.