London open: Footsie pulls back despite strong showing by banks
Market Movers
- techMARK 2,166.16 -0.35%
- FTSE 100 6,079.50 -0.17%
- FTSE 250 12,690.76 -0.03%
After hitting a near two-year high the previous trading session, profit-taking
meant that the FTSE 100 opened slightly lower on Monday morning. This
was despite relative strength in the banking sector on the back of some
better-than-expected news on regulation.
The FTSE 100 finished Friday at 6,090; just one point shy of the February 8th 2011 high of 6,091.
"With little to stimulate stock markets today given the lack of
economic data and ongoing concerns about the next showdown between US
lawmakers, traders are taking profit," said market strategist Ishaq Siddiqi from ETX Capital.
"Most major stock markets are trading near fresh 12-month highs; this
provides traders the perfect opportunity to take some cash off the table
ahead of another week of key global macroeconomic data," he said.
Investors will be keeping close eyes on decisions from central banks this week. Neither the Bank of England (BoE) nor the European Central Bank (ECB) are expected to make a move this week.
However, until the budget negotiations Stateside are decisively
concluded, economic uncertainty is expected to continue to cast a cloud
over decision making, albeit to a lesser extent than was feared before
last week's fiscal cliff agreement, "so that the need for further easing
cannot be dismissed", according to analysts at Digital Look. "Unwelcome
surprises out of the Eurozone" would also be a factor, they said.
FTSE 100: Morrisons shrugs off "disappointing" Christmas
Despite saying that it was disappointed with its sales performance during Christmas, supermarket giant Morrisons
was making gains early on, as investors shrugged off the news that
sales (ex fuel) fell 0.9% in the six months to December 30th.
Nevertheless, the company did say that its full-year performance would
be in line with expectations.
Seymour Pierce this morning reduced its target for the stock from 250p to 230p, maintaining its 'reduce' rating. Sector peers Tesco and Sainsbury were also in demand.
Insurance giant Legal & General gained
after saying that it has improved the return on equity (RoE) and
profitability of new business within its American subsidiary after
completing a further phase of its capital efficiency programme.
Power systems giant Rolls-Royce
was under the weather on reports of further bribery allegations. The
latest rumours suggest that the company paid bribes to a person involved
in deals worth $2bn with two Chinese airlines.
Banking peers RBS, Lloyds and Barclays
were high risers after regulators eased rules on cash buffers, giving
lenders more time and greater flexibility to comply with Basel III
liquid coverage ratio requirements.
Market analyst Michael
Hewson from CMC Markets said: "The banks have been lobbying persistently
over the past months to the effect that the strict timetable was
impairing their ability to lend to the real economy, thus hampering the
broader economic recovery. They also claimed that the narrow definition
of assets they were allowed to hold was hampering their ability to make
profits. It appears the banks have got their way in this regard."
FTSE 250: Bumi gains after battling agains weak coal prices
Mining group Bumi
rose after saying that it continues to target a medium-term production
target of 30mt each year and in light of the weak coal price
environment, it will focus on lower cost pits and defer some of its
expansion plans.
Support services and construction group Interserve
also rose after saying it is to expand its operational footprint in the
oil and gas services market with the acquisition of a majority stake in
Willbros Middle East.
Euromoney, the international
online information and events group, was higher after moving into the
technology sector with an $8m-offer to buy up Californian outfit
TTI/Vanguard.
High Street betting shop Ladbrokes gained after confirming speculation that it is in talks to buy Irish betting exchange Betdaq.
Also flying higher was budget airline easyJet after it managed to increase both its passenger numbers and load factor in last month.
| UK Event Calendar |
Monday January 07
TRADING ANNOUNCEMENTS
Morrisons
INTERIM DIVIDEND PAYMENT DATE
Hill & Smith Holdings, London Stock Exchange Group, May Gurney Integrated Services
INTERNATIONAL ECOBNOMIC ANNOUNCEMENTS
Producer prices (EU-19) (Nov)
GMS
Gemfields, Ideagen
SPECIAL DIVIDEND PAYMENT DATE
British Empire Securities & General Trust
FINAL DIVIDEND PAYMENT DATE
British Empire Securities & General Trust, Origin Enterprises
FINAL EX-DIVIDEND DATE
Barloworld Ltd.
UK ECONOMIC ANNOUNCEMENTS
New car registrations (UK) (Dec)
|
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Europe open: Global authorities ease bank liquidity rules
-Supervisors ease implementation of global liquidity rules
-china sovereign weath fund goes shopping in Germany
-Epiphany feast day in Southern Europe
-No major economic releases expected
FTSE-100: -0.24%
Dax-30: -0.25%
Cac-40: 0.21%
FTSE Mibtel 30: 0.53%
Ibex 35: 0.46%
Stoxx 600: -0.04%
The main European equity benchmarks have begun the day on a mixed
footing. That ahead of this week's rate-setting meetings of the Bank of
England and European Central Bank (ECB). Nevertheless, some market
commentary holds that the ECB's will be a 'non-event' given recent signs
of cyclical improvement. Those same analysts will be training their
sights, instead, on the first Italian and Spanish sovereign bond
auctions of the year, which are scheduled to take place later in the
week. For their part, analysts at Unicredit highlight that both issues
will embed so-called 'collective action clauses' (CACs).
Perhaps lessening the need for monetary authorities to act further,
yesterday evening the Group of Governors and Heads of Supervision (GHOS)
announced modifications to the global liquidity rules set to come into
effect for the world's main lenders. The new agreement prolongs the
implementation phase for the so-called liquidity coverage ratio (LCR)
and expands the types of assets eligible.
Acting as a
backdrop, over the weekend US Senate majority leader Mitch Mc.Connell
indicated that Republicans are not willing to raise taxes any further.
This initial stance may just be a part of the negotiation process
expected to take place over the next month approximately. Also worth
mentioning, as far as market 'technicals' are concerned are: European
equityies are near 22 month highs, after rising by 20% Chinese equities
have entered a 'bull market', levels of volatility have hit relative new
lows in the US (the VIX fell below 14 last Friday).
Today is
the feast day of the Epiphany in several Southern European nations,
which may weigh on trading volumes in their respective bourses.
China goes shopping in Germany
Shares of Daimler
are adding 1% following a report that sovereign wealth fund China
Investment Corp. may buy a stake in the company. CIC may acquire up to a
10% stake.
Infineon Technologies has been downgraded to underperform, the equivalent of a sell recommendation, from neutral at Bank of America Corp.
From a sector stand-point the best performance on the DJ Stoxx 600 is
now to be seen in shares of Banks (2.09%), Insurance (0.52%) and
Financial services (0.33%).
No major macroeconomic releases are slated for release today
Investors now net long the single currency
The euro/dollar is moving slightly lower at the moment, by 0.36% to the
1.3022 dollar mark. The latest weekly IMM data showed euro positioning
turn marginally net long for the first time since August 2011. For many
that means that the risk of weakness in that currency unit is now
proportionately higher.
Front month Brent crude futures are down by 0.415 dollars to the 110.85 dollar level on the ICE. |
| US Market Report |
US close: Slight gains after employment report
- Fed (Bullard): QE dependant on economy not dates
- Fed (Lacker): Sees increased risks of higher inflation in 2014
- Republican Senator threatens with government shutdown
- Gold futures fall after FOMC
Dow Jones Industrials: 0.33%
Nasdaq Comp.: 0.04%
S&P 500: 0.49%
The main US equity benchmarks ended the day slightly in the blue
following the release of better than expected data on the US services
sector.
In turn, that came on the back of what at first glance
appeared to have been an over - all better than expected monthly
employment report, with the only exception of an unexpected up-tick in
the unemployment rate.
Of interest, some market commentary was
calling attention to comments by Texas Republican Senator, John Cornyn,
who sits on the Senate Finance Committee, threatening a government
shutdown if President Obama and Democrats don't agree to cut government
spending in the coming months.
UBS believes that a downgrade
of the country´s long-term debt rating by Moody´s is likely in the next
three months if there is no debt agreement.
Gold was again on
the retreat after Thursday night´s minutes of the Federal Reserve´s last
policy meeting showed support for further quantitative easing to be on
the wane.
Acting as a backdrop, and as might have been
expected after yesterday´s Fed minutes, different Fed speakers were
being cited as having put forth different – and contradictory - policy
views.
Goldman positive on Citigroup
Meantime, and on the corporate front, analysts at Goldman Sachs on Friday added Citigroup to their Conviction Buy list, although they shifted their stance on JP Morgan down to buy from Conviction buy.
Grocery retailer Supervalu rocketed higher on reports that private equity firm Cerberus could buy some of its assets and take a stake in others.
Pharmceutical giant Eli Lilly jumped as it forecast 2013 earnings ahead of analysts´ expectations.
Johnson & Johnson
has shown interest in Warburg Pincus LLC's contact-lens manufacturer
Bausch & Lomb. Warburg wants at least $10bn for the business,
according to people familiar with the situation, Bloomberg reported.
Furthermore, analysts at Deutsche Bank upgraded shares of the company to buy from hold.
From a sector stand-point the best performance was to be seen in the
following industry groups: Autmobiles (2.43%), Investment services
(2.66%) and Asset managers (2.21%).
Better than forecast services data
US non-farm payrolls rose by 155,000 in December, slightly ahead of the
152.000 forecast by the consensus. As well, the previous month´s data
was revised up slightly. More notably, earnings per hour came in quite a
bit better than expected.
The Institute for Supply
Management´s index of U.S. non-manufacturing businesses rose to 56.1 in
December from 54.7 a month earlier (Consensus: 54.1).
Factory orders remained unchanged in November in month-on-month terms of change (Consensus: 0.4%). Slight fall in crude futures
Front month West Texas crude futures closed 0.29% higher at the 93.19
dollar per barrel mark on NYMEX after an 11.1m barrel drop in commercial
crude inventories last week.
10 year US Treasury yields were down by 1 basis point, at 1.90%.
S&P 500 - Risers
Windstream Corp. (WIN) $9.32 +4.95%
Federated Investors Inc. (FII) $22.55 +4.79%
CME Group Inc. (CME) $53.77 +4.29%
AutoNation Inc. (AN) $42.23 +4.07%
Chesapeake Energy Corp. (CHK) $17.45 +4.05%
Advanced Micro Devices Inc. (AMD) $2.59 +4.02%
First Horizon National Corp. (FHN) $10.46 +3.98%
Eli Lilly and Company (LLY) $51.56 +3.70%
PerkinElmer Inc. (PKI) $33.17 +3.66%
Western Union Co. (WU) $14.02 +3.62%
S&P 500 - Fallers
Apple Inc. (AAPL) $527.00 -2.78%
Tesoro Corp. (TSO) $42.54 -2.72%
Scripps Network Interactive Inc. (SNI) $58.31 -2.61%
First Solar Inc. (FSLR) $33.59 -2.40%
Microsoft Corp. (MSFT) $26.74 -1.87%
Cliffs Natural Resources Inc. (CLF) $37.49 -1.78%
Analog Devices Inc. (ADI) $42.52 -1.78%
Walgreen Co. (WAG) $37.18 -1.61%
QUALCOMM Inc. (QCOM) $63.50 -1.47%
Ross Stores Inc. (ROST) $57.95 -1.41%
Dow Jones I.A - Risers
Alcoa Inc. (AA) $9.26 +2.09%
Walt Disney Co. (DIS) $52.19 +1.91%
JP Morgan Chase & Co. (JPM) $45.36 +1.77%
Bank of America Corp. (BAC) $12.11 +1.25%
Johnson & Johnson (JNJ) $71.55 +1.15%
American Express Co. (AXP) $59.61 +1.03%
E.I. du Pont de Nemours and Co. (DD) $45.73 +0.97%
Travelers Company Inc. (TRV) $74.06 +0.87%
United Technologies Corp. (UTX) $84.98 +0.79%
3M Co. (MMM) $95.37 +0.74%
Dow Jones I.A - Fallers
Microsoft Corp. (MSFT) $26.74 -1.87%
McDonald's Corp. (MCD) $89.85 -0.86%
Merck & Co. Inc. (MRK) $41.97 -0.85%
Intel Corp. (INTC) $21.16 -0.75%
International Business Machines Corp. (IBM) $193.99 -0.66%
Home Depot Inc. (HD) $63.18 -0.19%
Hewlett-Packard Co. (HPQ) $15.14 -0.00%
Nasdaq 100 - Risers
Facebook Inc. (FB) $28.76 +3.56%
Nvidia Corp. (NVDA) $13.15 +3.30%
Expedia Inc. (EXPE) $64.46 +2.59%
Fossil Inc. (FOSL) $97.12 +2.19%
Mylan Inc. (MYL) $28.20 +2.10%
Google Inc. (GOOG) $737.97 +1.98%
Vodafone Group Plc ADS (VOD) $25.81 +1.94%
Expeditors International Of Washington Inc. (EXPD) $41.82 +1.93%
Viacom Inc. Class B (VIAB) $57.51 +1.88%
CA Inc. (CA) $23.05 +1.77%
Nasdaq 100 - Fallers
Apple Inc. (AAPL) $527.00 -2.78%
Randgold Resources Ltd. Ads (GOLD) $95.83 -2.01%
Microsoft Corp. (MSFT) $26.74 -1.87%
Maxim Integrated Products Inc. (MXIM) $29.80 -1.84%
Analog Devices Inc. (ADI) $42.52 -1.78%
QUALCOMM Inc. (QCOM) $63.50 -1.47%
Ross Stores Inc. (ROST) $57.95 -1.41%
Xilinx Inc. (XLNX) $36.50 -1.40%
Biogen Idec Inc. (BIIB) $145.93 -1.31%
Akamai Technologies Inc. (AKAM) $40.43 -1.27% |
| FX and Commodities round-up |
FX round-up: Dollar remains firm after US jobs report
The
dollar remained strong against the yen and the euro on Friday but off
recent highs as the latest report showed the US economy continued to add
jobs in December but at a slightly slower rate than the month before.
The dollar index, which measures the US currency against a basket of
six others, rose to a high of 80.834 before later trading at 80.440
after the US jobs report.
The US Department of Labor said
155,000 jobs were added in December compared to an upwardly revised
increase of 161,000 in November. The unemployment rate remained at 7.8%.
Dollar gains were also pressured slightly after minutes from
the Federal Reserve's December meeting indicated policymakers may wind
down their quantitative easing programme at the end of this year.
Against the euro, the dollar changed hands at $1.3082 compared to $1.3053 on Thursday.
The greenback traded at ¥88.13 from ¥87.26 the previous session while
the euro rose to ¥115.29 compared to ¥113.84 on Thursday.
Sterling declined to $1.6078 from $1.6102.
Commodities: Crude rises in wake of inventories report
US
oil futures nudged higher on Friday as traders mulled a hefty draw on
weekly crude stockpiles while non-farm payrolls data also provided some
support.
Crude for February delivery climbed 17 cents to
settle at $93.09 a barrel on the New York Mercantile Exchange although
the stronger dollar kept gains in check. Oil prices have risen 2.5%
since the start of 2013.
Prices had spiked earlier in the week after US lawmakers approved a last minute deal to avoid the fiscal cliff.
By Friday focus turned to the Energy Information Administration report,
which showed crude supplies fell by a massive 11m barrels compared to a
forecast for a decline of 0.9m barrels.
The report, which was
two days later than usual because of the New Year holiday, also showed
gasoline supplies rose by 2.6m barrels instead of an expected rise of
2.3m barrels. Meanwhile distillates rose 4.6m barrels. Analysts had
predicted distillates to rise 1.6m barrels.
Following the
supply report, markets digested the latest report from the US Department
of Labor, that showed 155,000 jobs were added in December, down
slightly from an upwardly revised increase of 161,000 in November. The
unemployment rate remained at 7.8%.
Among precious metals gold
nursed a 1.5% loss on Friday as traders bet that the Federal Reserve
could wind down its quantitative easing programme in 2013 after minutes
from its last meeting on Thursday.
Gold for February delivery
dropped $25.70 to settle at $1,648.90 an ounce on the Comex division of
the New York Mercantile Exchange after plummeting to an intra-day low of
$1,626.
Bullion recovered from lows after Friday's US job report although the dollar's strength kept gold in negative territory.
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