London midday: Hargreaves leads risers in morning trade
Market Movers
- techMARK 2,096.91 +0.23%
- FTSE 100 5,822.67 +0.51%
- FTSE 250 11,871.55 +0.28%
- Chinese export data beats forecasts
- Eyes on Greece and Spain
- Hargreaves Lansdown extends gains.
Better-than-expected Chinese export data and hopes for the Eurozone
were lifting stocks on Monday morning, with the Footsie up 0.5 per cent
by lunchtime.
Chinese exports increased at an annual
rate of 9.9% in September, well ahead of the prior month's 2.7% rise and
better than the consensus estimate of a 5.5% gain. Imports, up 2.4%
year-on-year, were in line with expectations.
Meanwhile, market analyst Craig Erlam from Alpari said that this could be a "game-changing week" for the Eurozone ahead of the EU Summit on Thursday. Greece is expected to agree on €13.5bn of spending cuts in order to access the third tranche of the bailout.
Erlam said: "A Spanish bailout
has been in the pipeline for weeks now, since Mario Draghi announced
the ECB's new bond buying program. Spain have resisted asking for aid
until now, potentially allowing them time to take the initiative with
the cuts to avoid the humiliation Greece have had to endure."
FTSE 100: Hargreaves continues to rise
Financial services provider Hargreaves Lansdown
continues to make gains following Friday's interim results, in which it
reported record levels of revenue, assets under administration and
client numbers in the second quarter. The stock has steadily risen over
the past half year: shares were trading around the 730p mark this
morning, up from the 500p level seen six months ago.
Babcock,
the engineering support services firm, was also making headway after
Bank of America Merrill Lynch hiked its target on the stock by over 20%
from 870p to 1,050p. However, the broker maintained its 'neutral'
rating.
Shares in Anglo American, Evraz, Kazakhmys and Rio Tinto were being weighed down this morning after Goldman Sachs lowered its views on the mining stocks.
Heading the other way was sweeteners and food products group Tate & Lyle
after Jefferies upgraded the stock from 'hold' to 'buy' and hiked its
target from 690p to 800p. The broker said this morning that the company
has laid a strong foundation for a sustainable growth profile and it
sees the current valuation as a "compelling buying opportunity".
Part-nationalised lender Royal Bank of Scotland
(RBS) fell after confirming that Spanish banking giant Santander is
going back on its agreement to purchase 316 RBS branches in the UK.
Irish oil titan Tullow Oil
gained after saying that it is to take a stake in Block 9 (Tooq
licence), Baffin Bay, north-western Greenland, which is operated by
Maersk Oil.
FTSE 250: SDL sinks on third-quarter tech slowdown
Information management firm SDL
fell after saying that first-half trends had continued into the third
quarter: services sales are strong but technology revenues continue to
be "suppressed".
Investec downgraded the stock from 'buy' to
'hold' today, saying: "We continue to see SDL as an appealing investment
proposition due to its position of strength in multiple growth markets.
However to justify a premium rating we believe the company will need to
deliver on its growth potential within the technology business as well
as the services business."
Nickel and zinc miner Talvivaara
was unwanted after saying that heavy rainfall in the third quarter is
proving a major obstacle in its aim of mining 17,000 tonnes of nickel
this year.
Rentokil Initial gained after the Sunday
Telegraph said that the firm is working to spin-off its loss-making City
Link business by the end of the year.
Foam products supplier Filtrona was in demand after firing on all cylinders in the third quarter with like-for-like sales up by one-tenth year-on-year.
FTSE 100 - Risers
Hargreaves Lansdown (HL.) 730.00p +2.53%
Kingfisher (KGF) 273.80p +1.97%
Standard Chartered (STAN) 1,455.00p +1.93%
Bunzl (BNZL) 1,114.00p +1.83%
British Land Co (BLND) 531.50p +1.82%
Whitbread (WTB) 2,390.00p +1.75%
ITV (ITV) 91.10p +1.73%
Babcock International Group (BAB) 978.00p +1.66%
Capita (CPI) 747.00p +1.49%
Land Securities Group (LAND) 796.00p +1.47%
FTSE 100 - Fallers
Kazakhmys (KAZ) 697.50p -2.52%
Anglo American (AAL) 1,797.00p -1.51%
Evraz (EVR) 231.20p -1.32%
Eurasian Natural Resources Corp. (ENRC) 325.00p -1.19%
Royal Bank of Scotland Group (RBS) 267.90p -1.11%
Rio Tinto (RIO) 2,990.50p -1.04%
Tesco (TSCO) 308.35p -0.53%
Vedanta Resources (VED) 1,080.00p -0.46%
ARM Holdings (ARM) 576.00p -0.43%
Vodafone Group (VOD) 174.30p -0.29%
FTSE 250 - Risers
Filtrona PLC (FLTR) 531.50p +4.22%
Brown (N.) Group (BWNG) 275.00p +3.00%
Savills (SVS) 404.40p +2.95%
Kenmare Resources (KMR) 37.59p +2.85%
Capital & Counties Properties (CAPC) 230.80p +2.81%
Bovis Homes Group (BVS) 508.50p +2.79%
JD Sports Fashion (JD.) 770.00p +2.74%
Hikma Pharmaceuticals (HIK) 742.00p +2.70%
Rentokil Initial (RTO) 87.50p +2.70%
Kentz Corporation Ltd. (KENZ) 419.80p +2.64%
FTSE 250 - Fallers
SDL (SDL) 545.50p -14.77%
Bumi (BUMI) 244.10p -12.82%
Talvivaara Mining Company (TALV) 136.80p -6.43%
Domino Printing Sciences (DNO) 554.50p -3.06%
Ocado Group (OCDO) 64.50p -2.93%
Petropavlovsk (POG) 421.90p -2.83%
Morgan Crucible Co (MGCR) 221.90p -2.38%
Investec (INVP) 361.10p -2.35%
Chemring Group (CHG) 334.90p -2.28%
UK Event Calendar
Monday October 15
INTERIM DIVIDEND PAYMENT DATE
Capita, Chesnara, Cookson Group, Lavendon Group, Savills, UTV Media
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Business Inventories (US) (13:30)
Manufacturing Inventories (US) (15:00)
Retail Sales (US) (13:45)
Retail Sales Inventories (US) (15:15)
GMS
Diamond Circle Capital
IMSS
Fresnillo
EGMS
Nord Gold NV GDR (Reg S)
AGMS
Mcbride, Medilink-Global UK Ltd.
TRADING ANNOUNCEMENTS
Software Radio Technology
FINAL DIVIDEND PAYMENT DATE
Best of the Best, Coral Products, Goodwin Plc
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Europe open: Troikas asks that Greece be given more time
-Troika recommends giving Greece 2 more years
-Investors worried by weak prospects in emerging markets
-Draghi says common bank regulator in force only in 2014
-Buybacks will fall by 67% in 2012-Bbg
FTSE-100: 0.29%
Dax-30: 0.69%
Cac-40: 0.92%
FTSE-Mibtel 30: 0.79%
Ibex 35: 0.73%
Stoxx 600: 0.46%
European equities are being buoyed this morning by reports that the
Troika has asked the Eurogroup for another two years' time for Greece to
be able to meet its commitments as regards fiscal adjustment. Said
proposal is expected to be discussed at this next Thursday's summit of
Eurozone leaders.
Also worth noting, European Central Bank
(ECB) President Mario Draghi said that common banking supervision in the
euro area is likely to become operational only in 2014, even if the
council regulation enters into force in January 2013.
Acting
as a backdrop, there is quite a bit of market chatter today regarding
the relatively poor prospects for growth this year in emerging markets.
That comes ahead of Chinese second quaryer gross domestic product data
expected out later in the week.
As an aside, Bloomberg
is commenting on how corporate buybacks minus equity sales will fall by
67% to less than €10bn ($13bn) in 2012 even as cash held by Stoxx 600
companies climbed to a record last quarter. That would mark the smallest
total since 2009, when equity offerings exceeded repurchases. Takeovers
slumped to a two-year low of $92bn last quarter.
Orkla has agreed to combine units with Norsk Hydro to provide aluminum profiles, building systems and tubing in North America and Europe.
The Fashion retailer H&M is advancing after reporting a 15% increase in total sales for September. Like-for-like sales rose by 6%.
From a sector stand-point the best performers within the DJ Stoxx 600
are now to be seen in the following industrial groups: Media (0.84%),
Banks (0.78%) and Insurance (0.70%).
No significant economic data releases are expected today in Europe.
Slight gain in the euro
The euro/dollar is now up by 0.06% to the 1.2961 dollar mark.
Front month Brent crude futures are now down by 0.149 dollars to the 114.5 dollar mark on the ICE.
| US Market Report |
US Close: Consumer confidence (almost) back at pre-crisis levels
-Workday rockets 74 per cent after IPO
-Lacker (Fed) believes risks to growth will dissipate next year
-Citi cuts probability of Grexit to 60% from 80% for next 12-18 months
-S&P 500 at 50 day moving average
Dow Jones Industrial: 0.02%
Nasdaq Comp.: -0.07%
S&P 500: -0.30%
US stocks finished the session in a mixed fashion despite upbeat
economic data out this morning. That as investors reacted to worries
regarding the outlook for growth in China and the Eurozone, not to
mention the looming "fiscal cliff" at home, in the US.
Thus,
banks were one of the weakest sectors as the S&P 500 teetered in the
proximity of its 50 day moving average (in the 1,420 point area); what
it does at this point -bounce back or fall through support- will decide
the markets´ direction in the most extreme short-run.
Banks down as net interest margins fall
Two
banking giants had varying fortunes as the third quarter results season
got under-way, with JP Morgan topping expectations and Wells Fargo
falling short of them. Citigroup's earnings are scheduled for Monday.
JP Morgan
reported third quarter earnings per share (EPS) of $1.40, 20 cents
above the $1.20 that the market consensus was anticipating. The bank
reported a profit of $5.7bn compared to $4.3bn generated in the year-ago
period.
Revenue rose by 6% to $25.9bn compared to $23.76bn a year earlier and the $24.12bn expected by the market.
JP Morgan Chief Executive Jamie Dimon said that the US housing market
"has turned the corner" and that the bank would be reducing the amount
set aside to cover losses from mortgages. Dimon also said that there has
been continued momentum and a strong performance across all businesses.
Revenue rose in every business line. Nevertheless, litigation charges
are expected to remain high for some time to come.
Wells Fargo's
third quarter revenue was a shade shy of the $21.41bn Wall Street was
expecting at $21.37. EPS of 88 cents was slightly above the 87 cents
median forecast, however.
The lender has been benefitting from
intense mortgage activity, but the drop in its net interest margins led
to the above "revenue miss."
Computer chip firm Advanced Micro Devices
continues to struggle. After the bell last night it warned that third
quarter revenue would be below expectations. The firm now expects third
quarter revenues will be about a tenth lower than in the second quarter,
instead of one hundredth less. There are now reports that the firm may
cut 30% of its headcount. Furthermore, and as a result of its "warning",
there is now speculation of imminent cuts from the major debt rating
agencies.
Wal Mart was raised to buy at Jefferies, while Sun Trust Banks was downgraded by BTIG.
The worst performing sectors were: Platinum (-4.72%), Coal (-2.63%) and Banks (-2.31%).
Consumer expectations (almost) back at levels from before the crisis
The Thomson Reuters/University of Michigan preliminary October consumer
sentiment index had been tipped to slide to 78.0 from 78.3 in September
(Consensus: 74), but in fact rose to 83.1. That is no less than its
highest level since September of 2007.
Improved expectations
for the labour market are the main explanation for the above, some are
saying, although other economists are warning not to read too much into
the report as far as its implications for short-term spending or the
economy are concerned.
For their part, this is what Barclays Research
had to say: "We expect that consumer sentiment will continue to move
higher as the labor market recovery picks up and income trends improve.
One major headwind remains the fiscal cliff, which has the potential to
drag on growth at the start of 2013; consumers clearly expect that the
cliff will not hit in full, given that income trends and perceptions of
government economic policy have been either inching higher or moving
sideways.
While an orderly resolution would be a further boost
to consumer sentiment, the possibility of the full cliff hitting
remains a large downside risk."
So-called "core" producer
prices -which strip out the effect of changes in food and energy
inflation- remained flat during the month of September, versus August,
below the 0.2% gain expected.
The federal government´s ran a
surplus of $75bn in September, after "red ink" of -$62.4bn in August.
For the fiscal year 2012 to data the deficit run up was $1.089trn, 16%
less than in 2011 and below the $1.2trn which had been expected.
Barclays expects the spending over-runs to come down further, towards $1trn, in the next fiscal year.
Fed keeps buying debt
Crude oil for November delivery is falling 35 cents to $91.74 on the
New York Mercantile Exchange. For the week it rose over 2% on increased
Mid-East tensions.
US Treasuries finished up by 4/32 dollars,
with the yield on the benchmark 10-year note down to 1.66% from 1.67%
overnight. This after the Federal Reserve purchased $1.89bn in debt
maturing between 2036 and 2042.
S&P 500 - Risers
Monster Beverage Corp (MNST) $57.08 +4.85%
Carmax Inc. (KMX) $32.55 +4.16%
Ecolab Inc. (ECL) $66.24 +4.04%
Hasbro Inc (HAS) $39.30 +3.94%
Dell Inc. (DELL) $9.69 +3.64%
Helmerich & Payne Inc. (HP) $49.60 +2.78%
Electronic Arts Inc. (EA) $13.41 +2.76%
Teradata Corp. (TDC) $74.59 +2.18%
Mattel Inc. (MAT) $36.01 +2.16%
Dean Foods Co. (DF) $14.96 +2.12%
S&P 500 - Fallers
Advanced Micro Devices Inc. (AMD) $2.74 -14.38%
Alpha Natural Res (ANR) $7.88 -7.84%
Dollar Tree Stores Inc. (DLTR) $41.11 -5.01%
Regions Financial Corp. (RF) $7.28 -4.46%
First Horizon National Corp. (FHN) $9.52 -4.32%
R.R. Donnelley & Sons Co. (RRD) $10.66 -4.14%
Harris Corp. (HRS) $48.84 -3.95%
Fifth Third Bancorp (FITB) $15.27 -3.90%
Keycorp (KEY) $8.33 -3.48%
E*TRADE Financial Corp. (ETFC) $9.00 -3.43%
Dow Jones I.A - Risers
Boeing Co. (BA) $71.85 +1.44%
Hewlett-Packard Co. (HPQ) $14.41 +1.12%
Wal-Mart Stores Inc. (WMT) $75.81 +1.07%
International Business Machines Corp. (IBM) $207.80 +0.99%
Home Depot Inc. (HD) $59.56 +0.93%
Microsoft Corp. (MSFT) $29.20 +0.86%
Cisco Systems Inc. (CSCO) $18.41 +0.79%
Walt Disney Co. (DIS) $50.59 +0.50%
Merck & Co. Inc. (MRK) $45.62 +0.37%
Coca-Cola Co. (KO) $38.23 +0.31%
Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $9.12 -2.36%
AT&T Inc. (T) $35.63 -1.74%
Verizon Communications Inc. (VZ) $44.62 -1.28%
JP Morgan Chase & Co. (JPM) $41.62 -1.14%
American Express Co. (AXP) $57.89 -0.99%
Intel Corp. (INTC) $21.48 -0.92%
Alcoa Inc. (AA) $8.69 -0.91%
Chevron Corp. (CVX) $112.07 -0.88%
Travelers Company Inc. (TRV) $68.72 -0.64%
E.I. du Pont de Nemours and Co. (DD) $48.69 -0.18%
Nasdaq 100 - Risers
Monster Beverage Corp (MNST) $57.08 +4.85%
Dell Inc. (DELL) $9.69 +3.64%
Electronic Arts Inc. (EA) $13.41 +2.76%
Mattel Inc. (MAT) $36.01 +2.16%
Baidu Inc. (BIDU) $111.22 +2.00%
Comcast Corp. (CMCSA) $35.78 +1.85%
Sirius Satellite Radio Inc. (SIRI) $2.78 +1.83%
CH Robinson Worldwide Inc (CHRW) $59.94 +1.77%
Check Point Software Technologies Ltd. (CHKP) $46.05 +1.36%
Wynn Resorts Ltd. (WYNN) $113.81 +1.20%
Nasdaq 100 - Fallers
Infosys Technologies Ltd. (INFY) $44.54 -7.63%
Vertex Pharmaceuticals Inc. (VRTX) $53.53 -5.89%
Dollar Tree Stores Inc. (DLTR) $41.11 -5.01%
Staples Inc. (SPLS) $11.10 -2.97%
Netflix Inc. (NFLX) $64.33 -2.50%
Sears Holdings Corp. (SHLD) $59.92 -1.64%
F5 Networks Inc. (FFIV) $97.27 -1.54%
Marvell Technology Group Ltd. (MRVL) $8.75 -1.46%
Micron Technology Inc. (MU) $5.67 -1.39%
Research in Motion Ltd. (RIMM) $7.80 -1.39% |
| FX and Commodities round-up |
FX round-up: Euro up on speculation about Madrid aid request
The
dollar fell against the euro on Friday as markets eagerly await
clarification on when Spain will formally ask for a bailout.
The ICE dollar index, which measures the greenback against a basket of six currencies, fell to 79.676 from 79.782 on Thursday.
The euro traded 0.2% higher at $1.2953 on Friday but remained lower against the greenback for the week by about 0.6%.
A possible bailout is widely seen as beneficial to the euro as it
removes persistent uncertainty about the underlying health of financial
markets. It would also trigger the European Central Bank's bond-buying
programme, which is supposed to lower borrowing costs for struggling
Eurozone economies.
Appetite for risk was also spurred a
surprisingly upbeat US consumer sentiment report. A report by the
University of Michigan Thomson Reuters showed consumer sentiment surged
to its highest level in five years.
Meanwhile the euro was also boosted by data showing output at Eurozone factories grew more than expected in August.
The single currency firmed 0.3% to ¥101.55 on news that Japan's
Softbank will buy a majority stake in Sprint Nextel in a deal worth
around ¥1trn. The dollar bought ¥78.41 versus ¥78.34 the previous
session.
Sterling rose to $1.6078 from $1.6045 Thursday but
fell 0.4% for the week as speculation about Spain's bailout fuelled
demand for risk currencies. However concern about the weak UK economic
outlook and the potential of monetary easing kept bigger gains at bay.
The Australian dollar fell to $1.0231 from $1.0262 and gained 0.5% over the week.
Commodities: IEA report punctures crude gains
Crude
oil futures fell on Friday after the International Energy Agency
spooked markets with its estimates of how much demand is weakening in
2012.
Crude for November delivery settled down 21 cents at
$91.86 a barrel for the day on the New York Mercantile Exchange after
Thursday's gains. For the week crude captured a 2.2% gain, snapping a
three-week losing streak.
The IEA lowered its 2012 estimate of
oil demand by 100,000 barrels a day to 700,000 barrels a day sparking
concern about supply and demand. For 2013, the IEA reiterated its
estimate of global oil demand growth at 800,000 barrels a day.
A steep sell-off in gasoline markets also drove crude and the wider
energy market lower at the end of the week. Gasoline for November
dropped 6 cents or 2.1% to $2.89 a gallon and closed the week down 2%.
However concern about escalating tensions between Turkey and Syria kept crude losses to a minimum.
On ICE Futures Europe exchange Brent crude settled down 0.9% at $114.62 and over the week it was up 2.3%.
Among precious metals profit takers took a chunk out of gold prices on Friday after the previous session's gains.
Gold for December delivery fell $10.90 to settle at $1,759.70 an ounce. For the week the yellow metal settled 1.2% lower.
Elsewhere silver for December delivery lost 1.2% to close at $33.67 an
ounce while palladium reduced 1.8% to $639.05 an ounce. Platinum for
January declined 1.8% to $1,659.30 an ounce.
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