ADVFN III Morning Euro Markets Bulletin (January 23, 2013).

ADVFN III Morning Euro Markets Bulletin

Daily world financial news Wednesday, 23 January 2013

London Market Report

FTSE 100 Euronext Dax perf CAC 40 Please click on the images to view our interactive charts

Stocks rise ahead of US debt-ceiling vote     Market Movers     techMARK 2,230.57 +0.33%     FTSE 100 6,192.96 +0.22%     FTSE 250 12,930.47 -0.21% Well-received earnings from some Wall-Street heavyweights were boosting market sentiment on Wednesday morning, with London's FTSE 100 making moderate gains early on. Both Google and IBM impressed the US market late last night with better-than-expected fourth-quarter results. Markets will likely be keeping a close eye on results from McDonald's and Apple later on. However, the focus the market today is likely to be the US House of Representatives vote on whether to extend the government's debt ceiling until May 19th. A White House spokesman said that President Barack Obama "won't stand in the way" of this short-term fix. Also on the agenda today will be the release of the minutes of the latest Bank of England policy meeting. They are expected to show a unanimous vote against further quantitative easing and a rate cut. Nevertheless, as market analyst James Hughes from Alpari explains this morning: "The vote next month is unlikely to be this straightforward with data released Friday expected to show the UK contracted in the fourth quarter, raising the risk of a third recession in four years. "One thing we could get from the minutes is whether any members were leaning towards further stimulus in the January meeting. This would raise the probability of further stimulus next month and could push the pound lower against the other major currencies, while further supporting the FTSE 100." FTSE 100: TUI Travel falls after TUI quashes bid speculation Travel and leisure group TUI Travel was a heavy faller this morning after its Germany parent company TUI AG said it has no intention of making an offer. TUI Travel said last week that it had received an approach from TUI AG, which owns a 56.4% stake in the firm. Utilities group SSE and contract caterer Compass were also in the red after going ex-dividend this morning. Consumer products titan Unilever was on the rise after double-digit growth in emerging markets helped push its turnover past the €50bn-mark in 2012. Revenue growth was 10.5% last year. Real estate investment trust Land Securities rose after saying that the third quarter saw a "strong operating performance across out investment portfolio". Business software firm Sage however was subdued after an in-line trading statement. The group said that revenue trends had varied across its geographies, with good growth seen in the UK and Ireland and challenging conditions noted in mainland Europe. Diversified mining giant BHP Billiton was wanted after saying it expects to deliver a compound annual growth rate of 10% in copper equivalent terms over the next two years. FTSE 250: EnQuest up after acquisition Oil and gas group EnQuest was in demand after agreeing with CIECO Energy UK to acquire two of its affiliate companies which together hold a total of 8% non-operated interest in the producing oil field Alba. High Street retailer WH Smith edged higher despite reporting a 40% decline in total sales in the 20 weeks to January 20th. However, gross margin improved in the period in line with plan and costs were tightly managed, reflecting the trading conditions, according to the group.

AIM/Small Cap Report

FTSE 100 - Risers Unilever (ULVR) 2,508.00p +2.33% United Utilities Group (UU.) 729.00p +1.67% Randgold Resources Ltd. (RRS) 6,120.00p +1.66% BHP Billiton (BLT) 2,106.50p +1.23% BT Group (BT.A) 252.40p +1.08% Diageo (DGE) 1,855.50p +1.06% Hammerson (HMSO) 495.10p +1.02% Severn Trent (SVT) 1,617.00p +1.00% Evraz (EVR) 309.90p +0.98% Rexam (REX) 463.40p +0.96% FTSE 100 - Fallers TUI Travel (TT.) 280.80p -3.87% Compass Group (CPG) 745.50p -1.84% InterContinental Hotels Group (IHG) 1,808.00p -1.20% ITV (ITV) 114.10p -1.13% Lloyds Banking Group (LLOY) 52.28p -1.02% Kingfisher (KGF) 270.30p -0.99% Smiths Group (SMIN) 1,226.00p -0.97% Fresnillo (FRES) 1,709.00p -0.93% Resolution Ltd. (RSL) 264.80p -0.82% International Consolidated Airlines Group SA (CDI) (IAG) 209.90p -0.80% FTSE 250 - Risers Stobart Group Ltd. (STOB) 100.00p +2.88% EnQuest (ENQ) 126.70p +1.85% Bumi (BUMI) 330.00p +1.69% Rightmove (RMV) 1,626.00p +1.69% Kenmare Resources (KMR) 34.56p +1.65% Centamin (DI) (CEY) 59.00p +1.37% Betfair Group (BET) 680.00p +1.34% Computacenter (CCC) 449.50p +1.24% WH Smith (SMWH) 660.00p +1.23% Michael Page International (MPI) 408.90p +1.21% FTSE 250 - Fallers Redrow (RDW) 185.00p -3.80% Taylor Wimpey (TW.) 70.70p -3.48% Bovis Homes Group (BVS) 609.50p -3.25% Barratt Developments (BDEV) 221.30p -2.34% Ocado Group (OCDO) 99.05p -1.93% Savills (SVS) 475.00p -1.86% Bellway (BWY) 1,088.00p -1.81% Carillion (CLLN) 312.00p -1.67% Galliford Try (GFRD) 801.50p -1.66% Man Group (EMG) 95.00p -1.45% UK Event Calendar FTSE 100 Euronext Dax perf CAC 40 INTERIM DIVIDEND PAYMENT DATE Home Retail Group, Latham (James) INTERIM EX-DIVIDEND DATE Anite, Fletcher King, IG Group Holdings, NCC Group, SSE QUARTERLY PAYMENT DATE Assura Group Ltd. QUARTERLY EX-DIVIDEND DATE City of London Inv Trust INTERNATIONAL ECONOMIC ANNOUNCEMENTS Consumer Confidence Indicator (EU) (10:00) IMF World Economic Outlook US House of Representatives votes on debt ceiling increase Q4 Unilever FINALS Unilever IMSS Britvic, Findel, Land Securities Group, Sage Group EGMS Global Ports Investments GDR (REG S) AGMS Britvic, Enegi Oil, Hargreave Hale AIM VCT 1, Independent Resources, MoneySwap, Polar Capital Global Healthcare Growth & Income Trust, Redefine International, Topps Tiles, WH Smith TRADING ANNOUNCEMENTS Close Brothers Group, WH Smith UK ECONOMIC ANNOUNCEMENTS Claimant Count Rate (09:30) Unemployment Rate (09:30) MPC Minutes (09:30) FINAL DIVIDEND PAYMENT DATE Diploma, Majedie Investments FINAL EX-DIVIDEND DATE Avation, Compass Group, Gooch & Housego, Impax Asset Management Group, RWS Holdings, Shaftesbury, Titon Holdings US Market Report Stocks Close Mostly Higher On Positive Reaction To Earnings Stocks moved mostly higher over the course of the trading day on Tuesday, extending a recent move to the upside. The markets benefited from a positive reaction to the latest earnings news, although buying interest was somewhat subdued. The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 62.43 points or 0.5 percent to 13,712.13, the Nasdaq climbed 8.47 points or 0.3 percent to 3,143.18 and the S&P 500 advanced 6.53 points or 0.4 percent to 1,492.51. With the gains on the day, the Dow and the S&P 500 reached new five-year closing highs, while the Nasdaq ended the session at its best closing level in well over three months. Stocks initially turned in a lackluster performance as traders expressed uncertainty about the outlook for the markets following the recent strength. A positive reaction to the latest batch of earnings news eventually generated some buying interest, with DuPont (DD), Travelers (TRV), and Delta Air Lines (DAL) all posting notable gains after reporting their quarterly results. Shares of DuPont rose by 1.8 percent after the chemical giant reported fourth quarter earnings that fell year-over-year but came in above analyst estimates. The company also forecast better than expected results in 2013. Insurance giant Travelers ended the day up by 2.2 percent after reporting fourth quarter earnings that came in well above expectations. Delta advanced by 2.9 percent after its fourth quarter adjusted earnings matched estimates. On the other hand, shares of Johnson & Johnson (JNJ) moved to the downside after the healthcare giant reported better than expected fourth quarter earnings but provided disappointing guidance. The markets may have also benefited from a statement from the White House indicating that President Barack Obama would not oppose a House Republican bill that would tie a short-term increase in the debt limit to the passage of a budget. The House is scheduled to vote on the bill on Wednesday. Meanwhile, traders largely shrugged off a report from the National Association of Realtors showing an unexpected drop by existing home sales in the month of December. Sector News Computer hardware stocks showed a strong move to the upside over the course of the trading day, driving the NYSE Arca Computer Hardware Index up by 2.2 percent. The gain extended a recent upward move by the index, which ended the day at a four-month closing high. Seagate technology (STX) and Western Digital (WDC) turned in two of the hardware sector's best performances, jumping by 7.1 percent and 5.7 percent, respectively. Considerable strength also emerged among health insurance stocks, as reflected by the 2.1 percent gain posted by the Morgan Stanley Healthcare Payor Index. With the gain, the index reached its best closing level in nine months. Natural gas also saw significant strength on the day amid optimism that an arctic blast that hit the U.S. Midwest and Northeast will boost demand. Airline, gold, and healthcare provider stocks also posted notable gains. Other Markets In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index ended the day down by 0.4 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent. In the bond market, treasuries turned higher over the course of the session after showing a notable move to the downside in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by less than a basis point to 1.835 percent after reaching a high of 1.874 percent. Looking Ahead Earnings news is likely to be in focus on Wednesday, with tech giants Google (GOOG) and IBM (IBM) among the companies releasing their quarterly results after the close of today's trading. McDonald's (MCD) and United Technologies (UTX) are also among the companies due to report their quarterly results before the start of trading on Wednesday. Wednesday newspaper round-up Barclays, Rolls-Royce, Bank of England... Barclays is planning to offshore hundreds of roles at its troubled investment banking unit to India in a bid to cut costs, The Independent has learnt. The bank is understood to have dispatched a team to recruit and train new staff there to replace workers in both London and New York. Separately, the bank announced consultations with UK staff at the investment bank over what could be substantial job losses as a result of new chief executive Antony Jenkins' 'Transform' programme. They are designed, said the bank, to 'optimise the business'. [The Independent] Aerospace firm Rolls-Royce is to cut almost 400 jobs at its Ansty site near Coventry, in a blow to the local workforce, a union has claimed. The company is consulting on staff reductions in its defence workforce at the Midlands plant, with Unite the union claiming 378 “highly skilled” jobs are at risk. Unite has further claimed Rolls-Royce is proposing to shut the plant in the next few years, but has put the blame for the company’s decision on the Government for what it called “short-sighted” cuts to the national defence budget. [The Telegraph] A former member of the Bank of England’s Monetary Policy Committee has launched a ferocious attack on the Bank’s culture and the autocratic nature of the Governor. Adam Posen claimed yesterday that the Court — the directors — of the Bank of England was “excessively weak” and allowed Sir Mervyn King to get away with whatever he wants. In an explosive appearance in front of the Treasury Select Committee, Dr Posen accused the Bank’s supervisory panel of having effectively “abdicated responsibility” and said that there was a “very strong culture and precedent” that if the Governor and other executives made a decision, there “was no point in challenging them”. He also accused the Treasury of being “unwilling to take on the Governor in an internal or public fight”. [The Times] A record 202 million people could be unemployed across the world in 2013, the International Labour Organization (ILO) said on Tuesday. Five years on from the onset of the financial crisis, unemployment is on the rise again as economies around the world lose jobs and the fragile recovery is threatened by "incoherent monetary policy" in the US and Europe, said the ILO. According to United Nation's agency's latest report, Global EmploymentTrends 2013, 6% of the world's workforce were without a job in 2012. The number of jobless people around the world rose by 4m in 2012 to 197m. Young people were the worst affected: nearly 13% of those under 24 were unemployed. Some 35% of all young unemployed people have been out of work for six months or longer in advanced economies, up from 28.5% in 2007. [The Guardian] David Cameron will on Wednesday vow to settle Britain’s future in the European Union with a straight in-out referendum by 2017, in a high-risk strategy which will test the willingness of Paris and Berlin to cut the UK a better membership deal. The prime minister will tell the rest of the EU that Britain could “drift towards the exit” unless he is able to win an improved deal, and will lay down a tight timetable for a renegotiation. In a long-awaited speech on Europe, Mr Cameron will say: “It is time for the British people to have their say. It is time to settle this European question in British politics.” [Financial Times] Google cheered investors with news of better than expected earnings last night, with the Californian search giant reporting signs of stability in its advertising rates. The firm said the average that advertisers pay every time users click their ads had declined by 6 per cent in the fourth quarter of last year – a marked improvement from the 15 per cent decline recorded in the previous quarter. Rates have been easing for five consecutive quarters, as advertisers show an unwillingness to pay up to promote their business on mobile devices such as smartphones. But the improvement was welcomed by investors, who sent Google shares higher in extended trading hours last night. [The Independent] Ikea’s chief executive hit out at European governments for holding back thousands of jobs and billions of euros in investment through cumbersome planning laws and red tape. Mikael Ohlsson, head of the world’s largest furniture retailer, told the Financial Times that the Swedish group was unlikely to double the pace of its store openings as quickly as it would have liked. [Financial Times]