Stormy times for Cape
Market Movers
- techMARK 2,071.21 +0.10%
- FTSE 100 5,653.76 +0.33%
- FTSE 250 11,142.72 +0.05%
London
has got off to a quiet start, with investors adopting a wait-and-see
attitude ahead of today's completion of the meeting of the US Federal
Reserve's policy making committee.
"It seems hope and
sentiment for further stimulus from the US Fed Chairman and the ECB
[European Central Bank] President have been key ideals supporting losses
as well as enhancing gains over the last few days within the markets,"
suggests Shavaz Dhalla, a trader at spread betting firm Spreadex.
"However, over the next few days investors are hoping that such
sentiment will lead to a stimulus announcement from policy makers. A
failure to do so, could result in a marathon of volatility within the
global markets," Dhalla speculated.
Cape plunges on profits warning
The
response to trading updates from FTSE 100 heavyweights Standard
Chartered and Next has been positive, but it is in the FTSE 250 space
where the drama is, as energy support services firm Cape issued a profit warning.
The group is unlikely to meet previous expectations for 2012, with
problems likely to continue into 2013, despite a restructure of this
part of its business.
Looking at the hammering Cape is getting
in the market, the assertion from Peter Sands, the Chief Executive
Officer of banking giant Standard Chartered, that there is "some virtue in being boring" is carrying extra weight.
The emerging markets focused bank saw profit before tax for the six
months to the end of June was up 9% to $3,636m from $3,139m the year
before, in line with operating income, which improved to $9,511m from
$8.764m in the first half of 2011.
Fashion firm Next
continues to march to a different drum in the retail sector, with its
online and catalogue sales coming to the rescue in a period when
umbrellas were the must-have accessory to any outfit.
Total
sales for the first half of 2012 were up 4.5% against last year, the
firm said, topping its prediction of growth between 1% and 4%.
Like-for-like sales came in at 2%, beating some analysts' expectations of a rise of just 1%.
Sales at its online and catalogue Next Directory arm were up 13.3% on
last year making up for high street retail sales which crept up just
0.2%.
Can maker Rexam is getting a bit of a kicking and
must be looking forward to getting shot of its loss-making Personal
Care unit, which ensured that the packaging giant's bottom line was
written in red at the halfway point of the year.
Gilts steady, oil little changed
The benchmark 10-year gilt is little changed in early trading. The yield has edged up from 1.47% to 1.48%.
The most widely traded contract for Brent Crude is down 12 cents at $104.80 a barrel.
FTSE 100 - Risers
Next (NXT) 3,344.00p +3.88%
Standard Chartered (STAN) 1,495.50p +2.12%
Antofagasta (ANTO) 1,088.00p +1.49%
Rolls-Royce Holdings (RR.) 863.00p +1.47%
Admiral Group (ADM) 1,108.00p +1.47%
Aviva (AV.) 295.50p +1.34%
HSBC Holdings (HSBA) 540.10p +1.16%
ARM Holdings (ARM) 557.50p +1.09%
Reed Elsevier (REL) 543.50p +1.02%
Intertek Group (ITRK) 2,762.00p +1.02%
FTSE 100 - Fallers
Rexam (REX) 420.30p -3.27%
Whitbread (WTB) 2,103.00p -1.54%
Weir Group (WEIR) 1,632.00p -1.39%
Johnson Matthey (JMAT) 2,151.00p -1.33%
Eurasian Natural Resources Corp. (ENRC) 389.10p -0.99%
Fresnillo (FRES) 1,442.00p -0.96%
Randgold Resources Ltd. (RRS) 5,750.00p -0.86%
Petrofac Ltd. (PFC) 1,480.00p -0.74%
BT Group (BT.A) 215.80p -0.69%
GKN (GKN) 209.20p -0.57%
FTSE 250 - Risers
Rightmove (RMV) 1,545.00p +3.55%
Avocet Mining (AVM) 77.20p +2.93%
Laird (LRD) 222.10p +2.35%
Filtrona PLC (FLTR) 475.80p +2.32%
Jupiter Fund Management (JUP) 221.30p +1.98%
RIT Capital Partners (RCP) 1,215.00p +1.67%
New World Resources A Shares (NWR) 300.00p +1.63%
UBM (UBM) 650.50p +1.56%
Lancashire Holdings (LRE) 795.00p +1.53%
Centamin (DI) (CEY) 67.50p +1.35%
FTSE 250 - Fallers
Cape (CIU) 174.90p -39.67%
Ruspetro (RPO) 140.78p -2.91%
African Barrick Gold (ABG) 368.00p -2.13%
Restaurant Group (RTN) 319.60p -1.99%
Kentz Corporation Ltd. (KENZ) 379.74p -1.82%
Home Retail Group (HOME) 76.15p -1.74%
JD Sports Fashion (JD.) 677.00p -1.60%
Beazley (BEZ) 156.30p -1.51%
Aberforth Smaller Companies Trust (ASL) 586.00p -1.51%
F&C Asset Management (FCAM) 86.70p -1.48%
| FX round-up |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Dollar slips ahead of policy meetings
Hopes
have been high that both the US and the European Central Bank will hint
of further stimulus measures the bolster growth and help contain the
Eurozone crisis. However by Tuesday traders had a change of heart and
concern that action would not be taken by the Federal Reserve and the
European Central Bank kept buyers at bay.
The euro gained
against the greenback and the yen on Tuesday however any advance is
expected to be short-lived on concern that policy makers will not take
aggressive enough action to tackle the global economic slowdown.
The euro traded at $1.2311 from $1.2256 on Monday and rose 0.3% against the Japanese yen to ¥96.08.
The dollar index, which measures the US currency against a basket of six other currencies, fell to 82.619 from 82.829 on Monday.
Against the yen, the dollar traded at ¥78.18 from ¥78.19 before.
The British pound bought $1.5682 compared to $1.5704 on Monday as traders prepare for Bank of England's policy meeting on Thursday.
UK Event Calendar
INTERIMS
Avocet
Mining, F&C Asset Management, Fiberweb, Filtrona PLC, First Quantum
Minerals Ltd., International Power, Jupiter Fund Management , Rexam,
Rightmove, Shire Plc, Smurfit Kappa Group, Standard Chartered, StatPro
Group, Taylor Wimpey, Vernalis, Xchanging
INTERIM DIVIDEND PAYMENT DATE
Electronic Data Processing
INTERIM EX-DIVIDEND DATE
BG Group, Brunner Inv Trust, Domino's Pizza Group, Impellam Group, Mecom Group, Microgen, Nichols, Porvair
QUARTERLY PAYMENT DATE
Mercantile Investment Trust (The), Torchmark Corp., Verizon Communications
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
Construction Spending (US) (15:00)
Crude Oil Inventories (US) (15:30)
FOMC Interest Rate (US) (17:15)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
MBA Mortgage Applications (US) (12:00)
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
Q2
Avocet Mining, First Quantum Minerals Ltd., Shire Plc, Smurfit Kappa Group
EGMS
Transense Technologies
AGMS
Atkins (WS), CML Microsystems, Cranswick, Cropper (James)
TRADING ANNOUNCEMENTS
Next
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
Homeserve,
Next, Phoenix IT Group, Record, Shanks Group, TR Property Inv Trust, TR
Property Inv Trust Sigma Shares, Vodafone Group
FINAL EX-DIVIDEND DATE
Aberdeen
New Dawn Inv Trust, Creston, Heath (Samuel) & Sons, Johnson
Matthey, JPMorgan Euro Small Co. Trust, Latham (James), ProVen Growth
& Income VCT
PRODUCTION UPDATE
Antofagasta, ENRC
|
| US Market Report |
Eurozone doubts rattle equities
Dow Jones Industrial: -64 at 13,009
S&P 500: -6 at 1,379
NASDAQ Composite: -6 at 2,940
US
equities followed Europe lower as doubts grew that Europe might not be
able to deliver the whole-hearted commitment to saving the Eurozone that
the region's leaders have recently been promising.
Closer to
home, pundits were in two minds over whether the Federal Reserve would
announce another round of quantitative easing when its policy-making
committee finishes its monthly meeting tomorrow.
Consumers keep their purses closed
Disappointing
US consumer spending data also depressed sentiment. Personal spending
fell for the second month in succession in June. On a similar theme,
retailer Coach moved sharply into reverse as like-for-like sales
growth declined to 1.7%, down from 10% year-on-year growth a year
earlier. Sector peers Lowe's and Abercrombie & Fitch fell in sympathy.
Humana was another stock heading south as the provider of Medicare benefits cut its 2012 profit forecast.
Archer Daniels's
quarterly results failed to hit the target, as the corn processor's
fiscal fourth quarter numbers were hit by falling ethanol prices and
higher production costs as a result of the recent drought across large
parts of the country.
Amongst those companies on the rise were heavyweights such as Pfizer and Apple.
Pfizer is set to spin off up to one-fifth of its animal health unit
through a stock market flotation. Apple, meanwhile, is expected to
launch a new version of its ubiquitous iPhone as early as this
September, according to various media reports.
Also gaining traction was Goodyear Tire & Rubber,
the US's largest maker of tyres, after second quarter earnings came in
ahead of expectations, though the group did lower its full year sales
guidance for the second time this year.
Cummins, which makes engines for lorries, was another company which beat analyst forecasts with its earnings, as was steel-maker US Steel.
Financial information provider Dun & Bradstreet was the top performing blue-chip on reports that the group is contemplating putting itself up for sale.
Oil refiner Valero Energy
was wanted after reporting a rise in second quarter profits on the back
of improved margins. The group unveiled plans to spin off its retail
operations.
Manufacturing orders rise, according to the Chicago NAPM
Personal
incomes grew by 0.5% month-on-month in June, slightly ahead of the 0.4%
expected by the consensus. Worth noting however, personal income and
savings data for all three of the past three years have been revised
downwards.
In monthly terms consumption figures, on the other hand, came in weaker than forecast.
The Chicago NAPM´s purchasing managers index (PMI) for the month of
July has come in ahead of expectations, at 53.7, after 52.9 in the month
before. Gains in new orders and order backlogs contributed to the rise.
Economists at Barclays had this to say of the PMI
data: "the broader picture mirrors the modest increases that we saw in
the Empire State and Philly Fed indices for July, and is consistent with
our forecast of a modest rebound in the ISM tomorrow to 50.5. While
below the levels seen during Q1, such a print would reaffirm that the
pace of growth in manufacturing activity has slowed rather than
contracted in recent months."
The Conference Board´s consumer
confidence index for the month of July showed an improvement, rising to
65.9 after 63.7 in June (Consensus: 61.8).
The expectations
sub-index improved to 79.1 from 73.4 in June. Oil inventories in the
week ended July 27th fell by 11.6m barrels.
Oil slides to two-week low
West
Texas crude for September delivery fell $1.72 to $88.06 a barrel on the
NYMEX. 10-year US Treasuries rose by 10/32 dollars, with yields easing
to 1.47%.
S&P 500 - Risers
Dun & Bradstreet Corp. (DNB) $80.19 +13.42%
Goodyear Tire & Rubber Co. (GT) $11.45 +10.41%
Supervalu Inc. (SVU) $2.47 +10.27%
First Solar Inc. (FSLR) $15.54 +9.36%
United States Steel Corp. (X) $20.65 +9.14%
Cummins Inc. (CMI) $95.90 +5.99%
AK Steel Holding Corp. (AKS) $5.32 +5.56%
MEMC Electronic Materials (WFR) $1.92 +5.49%
Valero Energy Corp. (VLO) $27.50 +5.44%
S&P 500 - Fallers
Coach Inc. (COH) $49.33 -18.57%
Humana Inc. (HUM) $61.60 -12.69%
Masco Corp. (MAS) $12.03 -8.31%
Lowe's Companies Inc. (LOW) $25.37 -5.55%
Archer-Daniels-Midland Co. (ADM) $26.09 -5.09%
Nabors Industries Ltd. (NBR) $13.84 -5.08%
Abercrombie & Fitch Co. (ANF) $33.80 -4.49%
Unitedhealth Group Inc. (UNH) $51.09 -4.07%
Dow Jones I.A - Risers
Pfizer Inc. (PFE) $24.04 +1.39%
AT&T Inc. (T) $37.92 +1.31%
Bank of America Corp. (BAC) $7.34 +0.82%
Cisco Systems Inc. (CSCO) $15.95 +0.50%
Dow Jones I.A - Fallers
Home Depot Inc. (HD) $52.18 -2.01%
Caterpillar Inc. (CAT) $84.21 -1.73%
Walt Disney Co. (DIS) $49.14 -1.33%
Boeing Co. (BA) $73.91 -1.27%
American Express Co. (AXP) $57.71 -1.00%
Nasdaq 100 - Risers
First Solar Inc. (FSLR) $15.54 +9.36%
Apple Inc. (AAPL) $610.76 +2.64%
Symantec Corp. (SYMC) $15.75 +1.81%
Nvidia Corp. (NVDA) $13.54 +1.58%
Expedia Inc. (EXPE) $56.99 +1.55%
Nasdaq 100 - Fallers
Starbucks Corp. (SBUX) $45.28 -3.41%
Priceline.Com Inc. (PCLN) $661.74 -3.05%
Fiserv Inc. (FISV) $70.13 -2.93%
Vertex Pharmaceuticals Inc. (VRTX) $48.51 -2.90%
eBay Inc. (EBAY) $44.30 -2.85%
Patterson Companies Inc. (PDCO) $34.10 -2.79%
Bed Bath & Beyond Inc. (BBBY) $60.95 -2.67%
Henry Schein Inc. (HSIC) $74.81 -2.59%
|
| Newspaper Round Up |
BoE, Euro break-up, Tesco
Four leading economists have called on the Bank of England's
Monetary Policy Committee to cut interest rates from their already
historic low in an attempt to kickstart growth. The members of The
Times' Shadow MPC — Michael Saunders, UK economist at Citigroup; Sushil
Wadhwani, of Wadhwani Asset Management; Sir Steve Robson, the former
second permanent secretary to the Treasury; and Charles Goodhart, of the
London School of Economics — urged the Bank to cut rates by a quarter
point to 0.25 per cent. "The economic outlook has worsened since the
July meeting and inflation prospects have improved further. More
stimulus is needed to prevent inflation falling below target over time,"
Mr Saunders said before the MPC's two-day meeting, which begins today.
Wadhwani and Mr Saunders also voted for more money to be pumped into the
flagging economy through quantitative easing.
Britain's heavily indebted economy would suffer a deeper slump than Germany's in the immediate aftermath of a break-up of the euro,
a leading consultancy has predicted. Fathom Financial Consulting
estimates that the UK's economic output would drop by 5.2% in 2013 in
the case of an implosion of the single currency and a full-blown banking
collapse. That compares with a 5% decline in gross domestic product in
Germany and a 4.3% drop in the United States. The UK would suffer
disproportionately in part because of its large financial sector and
overvalued housing market. A flood of cash into sterling would also
drive up the pound and crush exports, Danny Gabay, a director at Fathom,
said. Speaking at the consultancy's Monetary Policy Forum, he said that
the Bank of England would have to print £1tn in its quantitative easing
programme to stop the pound from skyrocketing, The Times reports.
The Serious Fraud Office vowed to press on with its controversial fraud investigation into property entrepreneur Robert Tchenguiz
despite suffering a damning High Court judgment on the case. The SFO
said the inquiry would continue with "renewed focus and vigour", just
hours after a High Court judge found it had illegally obtained search
warrants used in dawn raids against Mr Tchenguiz and his brother
Vincent. The decision means the multi-million pound investigation into
Mr Tchenguiz's links with failed Icelandic bank Kaupthing could run into
a fourth year. Work carried out by the SFO in relation to the Tchenguiz
investigation had already been labelled incompetent by the judge
presiding over the judicial review into their arrests and the searches
of their properties, The Telegraph says.
Apple was
"literally betting the company" when it introduced the iPhone, a US
court heard on the first full day of a patent trial in which the US
company is squaring up against Korean rival Samsung. The
keenly-anticipated clash has been called the 'patent battle of the
century' in which the competitors are suing each other for billions of
dollars in damages for alleged infringements of patents used in their
phones. Apple "were about to enter a field dominated by giants," Harold
McElhinny, a lawyer for Apple, told jurors at the court in San Jose,
California. But its designers created a "phone the world had never seen
before." In Apple's opening statement, jurors were shown an internal
review that Samsung did of the iPhone in late 2007 in which it is
described as "beautiful" and "easy to copy." Apple is seeking more than
$2.5bn (£1.6bn) in damages from Samsung, which has in turned sued Apple,
according to The Telegraph.
Switzerland is facing the
consequences of a vow to keep the franc weak. Figures released by the
Swiss National Bank on Tuesday show that its euro holdings have
ballooned in the second quarter of the year, as the bank battles haven
demand from investors and struggles to maintain a ceiling of SFr1.20
against the single currency. But that strategy carries risks. One of
these is that they'll be holding an asset that's viewed as being very
poor quality says Steven Englander, foreign exchange strategist at
Citigroup. Furthermore, The SNB is also creating a headache for other
central banks, faced with rising demand for their currencies as
Switzerland embarks on its rebalancing act. "Sweden will need to set
monetary policy now with the SNB in mind," says Mr Yu. As well, Geoffrey
Kendrick, foreign currency analyst at Nomura, estimates that, even if
the central bank bought no more euros, it still needs to sell SFr20bn of
euros to return to the same proportion of holdings it had in the first
quarter. Offloading that could push the single currency sharply lower
against other big currencies such as the dollar, The Financial Times
writes.
Tesco was dealt a blow yesterday after ratings
agency Standard & Poor's said it was considering cutting its credit
rating and suggested that the retailer sell off businesses to cut its
debt. S&P did not alter its "A-/A-2" rating – a grade that denotes
an "excellent" business risk profile – but changed its outlook from
"stable" to "negative" due to concerns about "weakening" profits at the
supermarket giant. In January Tesco issued its first profit warning in
20 years, a shock that was blamed on UK shoppers turning their backs on
its stores. "We believe that in light of currently difficult industry
conditions, a trend of weakening profitability and low top-line growth
will continue," said S&P. Its analysts said Tesco boss Philip
Clarke's plans to revitalise the business by hiring more staff and
revamping stores would "negatively affect its trading margins", and
added: "In our opinion, market conditions will continue to be extremely
competitive, particularly in the UK, with high pricing pressure
throughout the industry," The Guardian reports.
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