Stocks unchanged on 'fiscal cliff' developments
Market Movers
techMARK 2,106.72 -0.01%
FTSE 100 5,869.91 -0.01%
FTSE 250 12,059.65 +0.28%
The
FTSE 100 opened flat on Friday morning as investors showed caution
following some mixed comments from US politicians regarding the 'fiscal cliff'.
Markus Huber, head of German HNW trading at ETX Capital, said:
"European equities are trading little changed this morning despite less
encouraging news out of Washington where a deal put to the Republicans
by the Democrats received a frosty reception and showed that the parties
might actually be further apart than many had hoped." He said that this
leaves"a big question mark if a deal will be reached soon."
In spite of saying on Wednesday that he was “optimistic" about a deal
being made on the 'fiscal cliff', US Republican Speaker of the House John Boehner
quashed hopes yesterday by saying that "there is a real danger of going
off the fiscal cliff" unless Democrats "get serious about real spending
cuts".
ETX Capital's Huber said: "The lack of a deal to avoid
the fiscal cliff not only poses problems to US businesses but also
traders and investors alike are finding it more difficult dealing with
the ongoing wrangling as quick shifts in sentiment can lead to erratic
short-term moves, which in turn is keeping more and more traders on the
sidelines until the situation what the fiscal cliff is concerned is
becoming clearer."
In domestic news, UK consumer confidence
measured by GfK surged to an 18-month high in November, rising to -22
from -30 the month before. Consensus estimates were for no change.
There's plenty of other economic data for investors to digest today,
including: Eurozone unemployment rate figures; Eurozone inflation;
Canadian GDP and US personal consumption expenditure. Meanwhile, today
will also see the German parliament vote on the latest Greek rescue
package.
Kingfisher falls after broker downgrade
B&Q owner Kingfisher
was a heavy faller this morning after UBS cut its rating on the stock
to 'neutral' and reduced its target from 300p to 290p following
yesterday's third-quarter results. The company reported that
third-quarter revenue was up 0.8% at constant currency to £2.7bn.
In contrast, water supplier Pennon was higher after Citigroup upgraded the shares to 'neutral' and quality and safety testing group Intertek rose after Berenberg upped to stock to 'buy' and raised its target from 2,710p to 3,340p.
Mining giant Rio Tinto
was on the rise after Jefferies recommended to buy the stock, saying
that the group can deliver around 40% earnings per share growth from
2012 to 2015 "even if commodity prices do not increase from average 2012
levels as significant volume growth and cost cutting should lead to
better unit margins and higher overall profitability for the company."
Sector peers ENRC, Polymetal, Kazakhmys and Vedanta were
also in demand after industrial production figures from Japan beat
forecasts overnight and the Japanese government approved a $10.7bn
stimulus package.
Real estate investment group British Land gained after letting 24,392 square foot of office space at its new West End development at 10 Portman Square.
Coal and coke producer New World Resources jumped despite announcing that a 23-year-old worker died at its CSM Mine in the Czech Republic yesterday.
| AIM/Small Cap Report |
FTSE 100 - Risers
Intertek Group (ITRK) 3,116.00p +1.86%
Johnson Matthey (JMAT) 2,428.00p +1.68%
Polymetal International (POLY) 1,060.00p +1.15%
Kazakhmys (KAZ) 726.50p +1.04%
Whitbread (WTB) 2,400.00p +0.93%
Weir Group (WEIR) 1,896.00p +0.90%
Glencore International (GLEN) 345.20p +0.86%
Eurasian Natural Resources Corp. (ENRC) 277.00p +0.80%
Xstrata (XTA) 1,031.50p +0.78%
IMI (IMI) 1,048.00p +0.77%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 294.10p -1.64%
Kingfisher (KGF) 275.20p -1.36%
British Sky Broadcasting Group (BSY) 764.50p -0.91%
BT Group (BT.A) 231.70p -0.77%
Hargreaves Lansdown (HL.) 745.00p -0.73%
GlaxoSmithKline (GSK) 1,342.00p -0.67%
Centrica (CNA) 326.00p -0.64%
SSE (SSE) 1,427.00p -0.63%
Old Mutual (OML) 170.10p -0.58%
Lloyds Banking Group (LLOY) 46.40p -0.53%
FTSE 250 - Risers
New World Resources A Shares (NWR) 273.50p +4.35%
Soco International (SIA) 367.40p +3.09%
Man Group (EMG) 78.50p +2.55%
Dixons Retail (DXNS) 26.35p +2.29%
Rank Group (RNK) 147.30p +2.29%
Taylor Wimpey (TW.) 60.60p +2.28%
Brown (N.) Group (BWNG) 365.80p +1.89%
Bellway (BWY) 1,005.00p +1.77%
Invensys (ISYS) 310.30p +1.74%
Domino Printing Sciences (DNO) 591.00p +1.72%
FTSE 250 - Fallers
Stobart Group Ltd. (STOB) 100.10p -2.91%
Perform Group (PER) 380.70p -2.18%
Kentz Corporation Ltd. (KENZ) 363.67p -1.69%
CSR (CSR) 358.80p -1.67%
Ruspetro (RPO) 84.65p -1.57%
Playtech Ltd. (PTEC) 416.80p -1.51%
Euromoney Institutional Investor (ERM) 753.50p -1.50%
Shanks Group (SKS) 79.70p -1.48%
Fidelity China Special Situations (FCSS) 75.75p -1.37%
Savills (SVS) 450.00p -1.19%
| UK Event Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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INTERIMS
Acal, Creightons
INTERIM DIVIDEND PAYMENT DATE
BAE Systems, Bloomsbury Publishing, Booker Group, Charles Taylor, DCC,
Development Securities, Downing Planned Exit VCT 2 'C' Shares, Downing
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Downing Planned Exit VCT 2011 (General Shares), Downing Planned Exit VCT
2011 (Low Carbon Shares), Downing Planned Exit VCT 2011 (Structured
Shares), Downing Planned Exit VCT 3 'C' Shares, Downing Planned Exit VCT
3 'D' Shares , Downing Planned Exit VCT 3 F Shares, Hargreave Hale AIM
VCT 2, Hilton Food Group, Howden Joinery Group, ITV, Laird, Lookers,
Octopus AIM VCT, Old Mutual, Panther Securities, Provident Financial,
Senior
QUARTERLY PAYMENT DATE
City of London Inv
Trust, F&C Commercial Property Trust Ltd., Henderson International
Income Trust, Picton Property Income Ltd
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Chicago PMI (US) (13:45)
International Reserves (EU) (11:00)
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
Retail Sales (GER) (07:00)
Unemployment Rate (EU) (10:00)
Q3
Frontline Ltd.
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FINALS
Cambria Africa
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EGMS
Alpha Real Trust Ltd.
AGMS
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Wolseley
| US Market |
Stocks close up despite Boehner comments
Dow 13,022 +37
Nasdaq 3,012 +20
S&P 500 1,416 +6
The main US equity
benchmarks made decent gains on Thursday after some volatility
throughout the session. That volatility came after remarks from leading
politicians took a noticeable turn for the worse late in the afternoon.
This time, US Republican speaker of the House John Boehner said that
Obama's actions have not matched his statements.
The White
House retorted by saying that it would be "deeply irresponsible" if
Congressional leaders asked for concessions in exchange for raising the
debt limit.
This followed comments the previous day from
Boehner who gave markets a boost after he said that he was “optimistic
that we can continue to work together to avert this crisis sooner rather
than later.” He said that Republicans were willing to put “revenue on
the table” as long as it is accompanied by spending cuts.
Ed Yardeni, the Chief Investment Strategist at Yardeni Research, wrote in a research note that he is "still expecting a deal".
He continued: "On the tax side, 98% of Americans will get to keep their
Bush tax cuts on a permanent basis. Both sides of the partisan divide
agree that this should happen. That’s actually a very big deal and very
good for the economy."
In addition to their positive reaction
in the fact of Boehner's most recent comments, traders seemed to brush
aside what at first glance looked to have been some rather weak economic
data out before today's opening bell.
GDP Expands at a Rate of 2.7%
US
gross domestic product expanded at a 2.7% pace in the third quarter
(Consensus: 2.8%) according to the Bureau of Economic Analysis’s second
estimate, following a reading of 2.0% for the previous three months.
However, estimates of personal consumption expenditures were revised
down as were those for Americans’ after-tax income. The latter is now
thought to have increased at a 0.5% annual rate once adjusted for
inflation, compared with a previously estimated 0.8% pace. Stockpiles
contributed 0.77 percentage points to growth, compared with a prior
estimate that showed they subtracted 0.12 percentage points.
Initial weekly unemployment claims fell by 27,000 to 393,000 (Consensus:
390,000) in the seven day up until last Saturday. Pending home sales
data rose by grew by 5.2% month-on-month in October (Consensus: 1.0%).
Company news
Research in Motion rose following an upgrade from Goldman Sachs from neutral to buy. Data-centre technology company Infoblox made strong gains after it beat expectations and improved its outlook. Book retailer Barnes & Noble took a hit after revealing a less-than-impressive performance by its brick-and-mortar business.
Supermarket chain operator Kroger released better than expected quarterly earnings and sales.
Walt Disney unveiled a 25% increase in its quarterly dividend. Fashion retailer TJX Cos. announced a 3% rise in its same store sales for this past month of November. Retailer Target published a 1% fall for its same store sales in November, well below what the company itself had expected.
Other Markets
10-year
US Treasuries yield was at the 1.61% mark. Front month West Texas
crude futures rose by 1.83% to the $88.07 level on NYMEX.
S&P 500 - Risers
Kroger Co. (KR) $26.26 +4.79%
Advanced Micro Devices Inc. (AMD) $2.04 +4.08%
Marriott International Inc. (MAR) $36.63 +4.03%
Goodyear Tire & Rubber Co. (GT) $12.34 +3.70%
Vulcan Materials Co. (VMC) $51.29 +3.22%
Unitedhealth Group Inc. (UNH) $54.37 +3.07%
Fastenal Co. (FAST) $42.23 +2.95%
Citrix Systems Inc. (CTXS) $62.56 +2.81%
Beam Inc. Common Stock (BEAM) $55.61 +2.68%
Alpha Natural Res (ANR) $7.18 +2.57%
S&P 500 - Fallers
Kohls Corp. (KSS) $45.02 -11.98%
Tiffany & Co. (TIF) $59.79 -6.18%
Macy's Inc. (M) $38.61 -4.34%
Gap Inc. (GPS) $34.35 -4.10%
Sears Holdings Corp. (SHLD) $43.05 -3.21%
Best Buy Co. Inc. (BBY) $12.95 -3.00%
Intel Corp. (INTC) $19.52 -2.84%
Range Resources Corp. (RRC) $65.66 -2.62%
AutoNation Inc. (AN) $38.89 -2.53%
Metropcs Communications Inc. (PCS) $10.14 -2.41%
Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $86.26 +1.55%
Hewlett-Packard Co. (HPQ) $12.90 +1.34%
Coca-Cola Co. (KO) $37.97 +1.09%
Verizon Communications Inc. (VZ) $44.03 +1.08%
Walt Disney Co. (DIS) $49.70 +1.02%
Cisco Systems Inc. (CSCO) $19.02 +1.01%
AT&T Inc. (T) $33.95 +0.98%
JP Morgan Chase & Co. (JPM) $41.22 +0.96%
Pfizer Inc. (PFE) $24.86 +0.77%
American Express Co. (AXP) $55.93 +0.76%
Dow Jones I.A - Fallers
Intel Corp. (INTC) $19.52 -2.84%
Microsoft Corp. (MSFT) $26.94 -1.54%
Home Depot Inc. (HD) $64.23 -0.93%
3M Co. (MMM) $90.65 -0.31%
International Business Machines Corp. (IBM) $191.54 -0.23%
Johnson & Johnson (JNJ) $69.23 -0.09%
United Technologies Corp. (UTX) $79.76 -0.05%
McDonald's Corp. (MCD) $86.48 -0.05%
|
| Friday newspaper round-up |
Direct Line, British banks, The Independent takeover...
Direct Line
has announced another 236 jobs cuts as the newly-floated insurance
giant moves towards slicing costs by 100 million pounds by the end of
2014. The fresh round of streamlining comes on top of
previously-announced plans to shed 970 jobs across the group’s UK
operations, which employed about 15,000 prior to the cost-saving drive.
However, spokeswoman Jennifer Thomas said this latest phase would have a
“very minimal impact” in Glasgow, where Direct Line has nearly 1,000
people working mainly in call centre activities. [The Scotsman]
British banks
will have to raise £20bn-£50bn of new capital or dramatically
restructure their businesses after the Bank of England made it clear it
did not trust the way they value their books. The BoE’s new Financial
Policy Committee yesterday said banks must report capital ratios which
reflect a “proper valuation” of their assets and a “realistic
assessment” of the cost of recent scandals, such as the manipulation of
Libor and mis-selling of insurance products. [Financial Times]
Millionaire businessman David Rowland is in the running to take over The Independent and The Independent on Sunday,
it has emerged. The Tory party donor is understood to have held talks
with current owners, the Lebedev family, about a £10m to £15m deal for
the loss-making newspapers. Any deal could separate the titles from
their sister publication, The Evening Standard. News of the bid follows
increasing speculation about the future of the struggling titles and
comes a day after Alexander Lebedev admitted he was looking for
investment to support the papers. [The Telegraph]
Not content with dominating the e-book market, Amazon
is planning to muscle in on the physical book publishing industry in
Europe by releasing original works under its own imprint. The online
retailer is to launch a European publishing wing which will pitch it
against the might of Bloomsbury, Random House and HarperCollins, owned
by News Corporation, parent company of The Times. In a letter to
literary agents, Amazon said that the new division was part of its
European expansion and would be based in Luxembourg. It will include a
team of editors and marketers. [The TImes]
The EU's general court has blocked an attempt to force the European Central Bank to release files showing how Greece
used derivatives to hide its debt in the run-up to the financial
crisis. The case was brought by Bloomberg News under the EU's freedom of
information rules in August 2010 but was thrown out on Thursday by the
court in Luxembourg. "Disclosure of those documents would have
undermined the protection of the public interest so far as concerns the
economic policy of the EU and Greece," the EU's general court said. [The Guardian]
Coventry Building Society
has become the latest High Street lender to pull the plug on borrowers
who want to take out an interest-only mortgage. It announced today that
it will no longer offer these once popular loans to new borrowers. It
follows hot on the heels of Royal Bank of Scotland, NatWest, Nationwide
and Co-operative Bank, which have already pulled out of interest-only
lending. Other lenders have tightened the screw on borrowers by making
it much more difficult to take out these loans. Woolwich, the mortgage
arm of Barclays, now offer loans on this basis only if the amount is
£300,000 or more, and Santander will only lend up to 50 per cent of the
property’s value. [The TImes]
Accounting giant Ernst & Young
is to be sued over the collapse of Anglo Irish Bank in 2009. In what is
the first time an Irish bank has taken legal action against its
ex-auditor, the firm is being taken to court by the state-owned Irish
Bank Resolution Corporation (IBRC), which took over the running of the
collapsed Anglo three years ago. While full details of the case have not
been revealed, it is believed the accountant will be accused of failing
to spot Anglo's massive exposure to the Irish property bubble, which
led to it being nationalised. [The Independent]
Hong Kong Exchanges & Clearing
raised $1bn from equity markets on Thursday, after receiving clearance
from the UK’s Financial Services Authority for its $2.2bn acquisition of
the London Metal Exchange. The blessing of the UK regulator for the
deal clears the way for the closure of the transaction after a court
hearing to confirm capital reduction plans on December 5, after which
the deal will become unconditional. [Financial Times]
The United Nations
has laid the finger of blame for food price rises on trading in
agricultural commodities, but says it is the trade in futures contracts –
an agreement to buy at a set price sometime in the future – rather than
the actual food stocks that causes the most damage. David Bicchetti,
associate economic officer at UN conference on trade and development
(UNCTAD), said "enormous, humongous" amounts of money are traded on
commodities that don't actually exist. "Over $400bn [of paper money] is
traded – that's 20-30 times the physical production of the commodity." [The Guardian]
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