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Showing posts with label ADVFN III Morning Euro Markets Bulletin - Monday. Show all posts
Showing posts with label ADVFN III Morning Euro Markets Bulletin - Monday. Show all posts

Aug 6, 2012

ADVFN III Morning Euro Markets Bulletin - Monday, 06 August 2012


ADVFN III Morning Euro Markets Bulletin  
Daily world financial news

Monday, 06 August 2012



London Market Report
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London open: Eurozone fears weigh on stocks early on
Market Movers

  • techMARK 2,102.49 -0.10%
  • FTSE 100 5,769.34 -0.31%
  • FTSE 250 11,355.62 +0.48%
- Eurozone back in the spotlight
- Monti warns about Eurozone break-up
- M&S up on bid rumours

The Footsie declined in early trading on Monday as Eurozone concerns dampened sentiment; stocks were pulling back from a strong surge on Friday after US jobs data smashed expectations.

Analyst Moyeen Islam said this morning: "After the market was disappointed by the ECB press conference on Thursday, there was a decent recovery in risk appetite after the US employment report. Overnight, the Asian exchanges have picked up the baton and performed well following more positive statements form Eurozone policymakers over the weekend."

Bank of Italy Governor Ignazio Visco told La Repubblica that if the Eurozone economy continues to contract, "we can expect a more accommodating monetary policy in the next few months".

However, according to Italy's Prime Minister Mario Monti in an interview with German publication Der Spiegel, the Eurozone tensions "bear the traits of a psychological dissolution of Europe." Talking about the growing resentment between southern and northern European nations, he said that "it is very alarming, and we have to fight against it".

In other news, the People's Bank of China (PBoC) has issued a statement saying that "in the second half, we must continue to reinforce fine-tuning and pre-emptive adjustment in monetary policy and improve credit policy to support the development of the real economy."

With those same aims in mind the central bank has said that it will increase research into the economic situation so as to better steer policy and help maintain stable growth.

M&S up on M&A speculation

Company news was thin on the ground this morning, with just a few stocks on the FTSE 350 releasing updates.

M&S was a high riser on the FTSE 100 after the Sunday Telegraph reported that the High Street giant is the subject of takeover talks. The paper said that bankers at a number of London institutions have assessed the possibility of providing debt finance for a speculative bid of £6bn.

Insurance firm Catlin Group rose after jumping back into the black in the first half of 2012 as premiums rose and its London hub sprang back into life.

Data centre operator TeleCity Group was also up after saying demand for its services remains strong in all of its markets, as it made good on its promise to declare a maiden dividend.

No frills airline easyJet was flying higher after it reported a strong rise in both passenger numbers and load factor in July. The total number of people booking on flights in the month was 5,860,272, up 8% on July 2011.

Upstream exploration and production group Heritage Oil saw losses widen significantly in the six months to June 30th, though it is waiting to complete a "transformational" acquisition in Nigeria before production really ramps up.

Airline group IAG was pressured lower after Credit Suisse downgraded its rating on the stock to 'neutral' and cut its target from 176p to 160p. Meanwhile, SSE and Centrica were also down after Deutsche Bank cut its recommendations on the shares to 'hold'.

AIM-listed E&P group Falkland Oil & Gas jumped after saying that it will farm-out an interest in its Northern Area Licences to US firm Noble Energy which should "substantially" improve its financial position.

FTSE 100 - Risers
Marks & Spencer Group (MKS) 349.80p +2.55%
Burberry Group (BRBY) 1,323.00p +1.38%
CRH (CRH) 1,200.00p +1.27%
GKN (GKN) 213.00p +1.14%
IMI (IMI) 848.50p +1.13%
Glencore International (GLEN) 324.60p +1.12%
Eurasian Natural Resources Corp. (ENRC) 391.50p +0.85%
Meggitt (MGGT) 393.60p +0.77%
Weir Group (WEIR) 1,706.00p +0.71%
Whitbread (WTB) 2,149.00p +0.70%

FTSE 100 - Fallers
Johnson Matthey (JMAT) 2,183.00p -4.59%
Centrica (CNA) 318.60p -1.51%
HSBC Holdings (HSBA) 553.30p -1.28%
AstraZeneca (AZN) 3,061.50p -1.11%
Severn Trent (SVT) 1,719.00p -1.09%
Standard Chartered (STAN) 1,552.00p -0.96%
Xstrata (XTA) 871.00p -0.94%
Unilever (ULVR) 2,313.00p -0.90%
Reed Elsevier (REL) 560.50p -0.88%
Standard Life (SL.) 251.10p -0.87%

FTSE 250 - Risers
Berkeley Group Holdings (The) (BKG) 1,486.00p +3.92%
Berendsen (BRSN) 527.50p +3.43%
Talvivaara Mining Company (TALV) 145.30p +3.12%
Telecity Group (TCY) 864.50p +3.10%
Catlin Group Ltd. (CGL) 445.20p +3.06%
CSR (CSR) 331.80p +2.66%
Domino's Pizza Group (DOM) 524.00p +2.64%
Barr (A.G.) (BAG) 443.00p +2.55%
Redrow (RDW) 134.10p +2.52%
Sports Direct International (SPD) 297.00p +2.41%

FTSE 250 - Fallers
QinetiQ Group (QQ.) 169.00p -1.74%
Hikma Pharmaceuticals (HIK) 736.00p -1.14%
Cranswick (CWK) 849.00p -1.05%
Euromoney Institutional Investor (ERM) 718.65p -0.88%
F&C Asset Management (FCAM) 87.35p -0.85%
Scottish Mortgage Inv Trust (SMT) 671.00p -0.81%
Big Yellow Group (BYG) 311.50p -0.80%
Genesis Emerging Markets Fund Ltd. (GSS) 501.50p -0.79%
African Barrick Gold (ABG) 380.10p -0.76%
UK Event Calendar
Monday August 06

INTERIMS
Catlin Group Ltd., Morgan Sindall Group, PostNL NV, Puricore, Share Plc, Telecity Group

INTERIM DIVIDEND PAYMENT DATE
CareTech Holding

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Harmonised Competitiveness Indicators (EU) (09:00)
PMI Construction (GER) (08:55)

Q2
PostNL NV

ANNUAL REPORT
Speymill

SPECIAL EX-DIVIDEND PAYMENT DATE
Johnson Matthey

AGMS
Geopark Holdings Ltd., Speymill

UK ECONOMIC ANNOUNCEMENTS
New Car Registrations (09:30)

FINAL DIVIDEND PAYMENT DATE
Bisichi Mining, Investec
Europe Market Report
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Europe open: Stark and Issing issue warnings
-Monti warns of psychological dissolution of Eurozone
-S&P raises Italy´s economic risk rating
-Stark (ex-ECB) says central bank independence threatened
-Banks deposit 300bn euros overnight at ECB
-Progress in talks over the weekend between Greece and Troika
-German BDI warns of incalculable risks if Euro breaks up
-Spanish and Italian bonds head higher

FTSE-100: -0.17%
Dax-30: -0.02%
Cac-40:-0.20%
FTSE-Mib 30: 0.03%
Ibex 35: 0.64%
Stoxx 600: -0.16%

European equity benchmarks have begun today´s session on a mixed footing but have since turned lower. That following the sharp bounce-back seen in equities on Friday and on a day on which little is expected in terms of the macroeconomic calendar.

Very much worth noting perhaps, the first criticisms of Draghi´s bond plan have come out of Germany over the weekend, and from two influential opinion leaders in that country as well as in the wider Eurozone, Juergen Stark and Otmar Issing. The former, who left the European Central Bank (ECB) over disagreements with its President over the central bank´s purchases of sovereign debt, has warned that the ECB´s independence is coming under threat. Mr. Issing, an ex-ECB chief economist, sees potentially massive inflationary threats arising from the ECB´s new plans.

The President of Germany´s BDI industrial association, on the other hand, has warned of the incalculable risks for Germany should the single currency break up.

Of some interest as well, economists at Barclays have been cited as saying that the ECB will only buy Eurozone government bills, not 2 year debt. That as analysts debate just what exactly "short-term" means. In the economic literature "short-term" usually means up to two years and sometimes even three, comment analysts at Digital Look.

As far as strategists´ reactions are concerned, these are mixed this morning. Goldman Sachs, Credit Suisse and Bank of America are being cited as waxing optimistic, whereas Barclays and JP Morgan are being cited as more wary.

On Sunday, Bank of Italy Governor Ignazio Visco said that at the moment his country does not need to ask the euro zone's rescue funds for aid. That came as Italy´s President warned in the German press that, "the tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe."

GM more pessimistic on the Eurozone?



French luxury goods group Richemont has said that operating and net profit are likely to increase by between 20% and 40% in the first half of 2012 as sales surged.

General Motors said it may have to write down the value of its 7% stake in French automaker Peugeot SA owing to the deepening fiscal crisis in Europe.

From a sector stand-point the worst performance on the DJ Stoxx 600 is now to be seen in the following industrial groups: health care (-0.86%), telecommunications (-0.86%) and utilities (-0.82%).

Investor confidence drops



The Sentix gauge of Eurozone investor confidence fell to -31 points for August from -29.6 in the month before.

Slight fall in crude futures



Front month Brent crude futures are now off by 0.48 dollars, at 108.43 dollars per barrel on the ICE.

The euro/dollar is now 0.18% lower, at 1.2370.
US Market Report
US close: Markets celebrate jobs data
    Dow Jones: 13,096 (+1.69%)
    Nasdaq: 2,968 (+2.00%)
    S&P 500: 1,391 (+1.90%)
US benchmarks surged on Friday after some better-than-expected jobs data provided a lift to sentiment.; in fact, the Dow Jones Industrial Average registered its best weekly gain of 2012 so far.

While the US jobless rate increased from 8.2% to 8.3% in July, the US economy increased payrolls by 163,000, much better than the 100,000 gain expected. "A stronger-than-expected report, despite the small increase in the unemployment rate, and one that should partially ease the concerns of policymakers," said analyst Peter Newland from Barclays Capital.

The positive surprise may herald a small trend that could, at the least, see the Federal Reserve postpone any further round of quantitative easing past September.

Meanwhile, markets were still reacting to yesterday's comments from ECB President Mario Draghi. Speaking yesterday after a key interest rate meeting he indicated ECB bond purchases will be "on the short end of the yield curve."

At the time this was an anti-climax after a week during which the market had begun to believe on intervention across the full range of maturities was on the cards. But with 24 hours of reflection, investors are beginning to see what the Eurozone has up its sleeve.

COMPANIES

Investors were tracking shares of Facebook, which today came close to a new record-low to then go and bounce higher, although its peer Linkedin was moving up on the back of its latest quarterly figures.

Boeing won 94 orders for its 737 aircraft from Singapore Airlines and China Southern Airlines; when combined those two deals have a list price of $8.3bn.
Newspaper Round Up
Monday newspaper round-up: Shell, IAG, Manufacturing
Royal Dutch Shell is pulling some of its funds out of European banks over fears stirred by the Eurozone's mounting debt crisis, according to reports. The company's chief financial officer, Simon Henry, told The Times newspaper that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations. "There's been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit," Mr Henry is quoted as saying. Asked whether Shell regarded risk as different in Germany compared with some of the Eurozone's southern and heavily indebted members, he said: "We differentiate between different credit risk." Mr Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15bn of cash in non-European assets, such as US Treasuries and US bank accounts, The Telegraph reports.

Amazon will overtake Wal-Mart as the world's biggest retailer by 2020 amid a fundamental shift in the world's shopping habits, according to Andy Bond, the former chief executive of Asda. Highlighting a "period of vast change", Mr Bond said the online retailer would come to eclipse Wal-Mart, Asda's US owner. Amazon currently has a market value of $106bn (£68bn), compared to Wal-Mart's $252bn capitalisation. In an interview with The Daily Telegraph, Mr Bond also warned of up to a decade of economic pain for UK consumers, branded pay for some top company directors "gratuitous", and threatened to inflame the milk industry row by calling for supermarkets to do more to help farmers.

International Airlines Group (IAG), British Airways' parent company, is considering buying a small stake in its embattled partner American Airlines to protect their alliance. Willie Walsh, IAG's chief executive, revealed in an interview that the tactic could be used to deliver "additional strategic value" for BA and its Oneworld global airline alliance. A cross investment could also act as a poison pill for any rival attempt to lure American away from Oneworld, which would be potentially damaging for IAG. Delta Airlines is reported to be considering a bid for American, which would almost certainly result in it joining Delta's SkyTeam alliance – leaving a hole in IAG's lucrative North Atlantic route network. The prospect of IAG's stake building has arisen due to the financial problems at AMR, American's parent company. AMR filed for Chapter 11 bankruptcy protection in November and is currently seeking an agreement with creditors to reduce its debt burden, The Telegraph writes.

Australia's giant liquefied natural gas (LNG) projects could be delayed or cancelled because of their spiralling costs, analysts have warned. A pipeline of $200bn worth of LNG projects has been sanctioned that, if built as planned over the next five years, would turn Australia into one of the world's biggest gas exporters. But soaring wages and construction costs, as well as a strong Australian dollar, have made the hugely complex projects even more challenging. Chevron said ten days ago that it was reviewing the costs of its Gorgon LNG scheme, Australia's biggest resource project in which Shell has a 25% stake. When the American energy company gave it the go-ahead almost three years ago, costs were estimated at $37bn, but a senior executive told The Times of industry speculation that put the final cost at $100bn. Chevron will provide details about the revised costs towards the end of the year.

A new pan-European stock exchange for entrepreneurs is being planned by NYSE Euronext to plug the gap in funding for small companies and help them raise money from investors more easily. The exchange – dubbed the "Entrepreneurs' Exchange" by NYSE Euronext – will facilitate fundraising via issues of bonds as well as equity. Companies would carry out both initial public offerings of shares and initial bond offerings, and even a "Pre-IPO" of convertibles, that is investments that would in time convert from bonds into equities. The new exchange, which will be carved out of existing Euronext and Alternext markets, is the latest attempt by policy makers and exchange operators to boost corporate growth following the financial crisis, The Financial Times says.

Fears of a protracted recession will intensify today amid signs that Britain's manufacturing engine room is running out of steam. Publishing its latest SME trends survey, the CBI said sentiment among small- and medium-sized manufacturers had deteriorated, while output had fallen for the first time since autumn 2009. The business lobby group, which polled hundreds of firms across the UK for the quarterly report, warned of a "challenging" domestic backdrop, uncertainty over the Eurozone and a "broader loss of momentum" in the global economy. There were a couple of brighter spots, though, with firms expecting output to be broadly flat in the coming quarter. Many respondents are also sticking with their plans to take on additional staff, The Scotsman says.

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