Stocks flat ahead of UK GDP data
Market Movers
techMARK 2,247.21 +0.05%
FTSE 100 6,265.66 +0.01%
FTSE 250 13,089.56 +0.18%
The FTSE 100 opened broadly flat on Friday morning as traders became nervous ahead of a fourth-quarter reading of UK gross domestic product (GDP) growth in the UK.
"European markets opened cautiously today as a lack of corporate data
due today provided bulls with an excuse to take profits amidst some
markets which have recently hit four-and-a-half year highs," said
financial trader Shavaz Dhalla from Spreadex.
"Many markets
are still only trading slightly south from yesterday’s close. Thus, even
in the face of mixed corporate data, economic problems with some
Eurozone nations as well as continuing debt problems in the US,
investors still believe that there could be value for money within the
stock markets."
London's benchmark index surged by over one
per cent on Thursday following some better-than-expected manufacturing
data from China and the US, and an improved composite purchasing
managers' index in the Eurozone.
Today, however, the focus will be on the UK fourth-quarter GDP reading due out at 09:30. Consensus forecasts are for a 0.1% quarter-on-quarter contraction in the UK economy in the fourth quarter of 2012, compared with the 0.9% growth seen in the third.
FTSE 100: IAG, Polymetal flying high after upgrades
Airline IAG was a high riser this morning after JPMorgan Cazenove raised its rating for the stock to 'overweight'.
Meanwhile, Polymetal
gained after UBS upgraded its recommendation from to 'buy' and hiked
its price target by 11%. The broker said: "We think that now is the
right moment to use weakness in the stock price as potential merger with
Polyus Gold may be a strong driver.
Diversified miner Anglo American
edged higher despite admitting that strikes held back production of
platinum and iron ore in the fourth quarter. Nevertheless, most other
commodity classes delivered 'solid' increases in output. Xstrata was also up after saying that the definitive estimate for the Las Bambas project in southern Peru is $5.2bn.
Other miners however slipped into the red, with EVRAZ, Rio Tinto and BHP Billiton among the worst performers early on.
FTSE 250: easyJet lifted by UBS upgrade
Shares in budget airline easyJet
were higher after UBS raised its rating to 'buy' after yesterday's
better-than-expected first-quarter results. The broker said that growth
is gaining momentum with the company "becoming more positive on 1H
performance".
Telecoms group Cable & Wireless Comms was lower after HSBC cut its rating to 'neutral'.
| AIM/Small Cap Report |
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 225.00p +3.02%
Polymetal International (POLY) 1,107.00p +1.56%
Sage Group (SGE) 322.90p +1.51%
Aberdeen Asset Management (ADN) 411.10p +1.38%
TUI Travel (TT.) 285.60p +1.28%
United Utilities Group (UU.) 756.50p +1.20%
Reckitt Benckiser Group (RB.) 4,157.00p +0.97%
BT Group (BT.A) 251.60p +0.96%
Marks & Spencer Group (MKS) 383.00p +0.87%
Imperial Tobacco Group (IMT) 2,410.00p +0.84%
FTSE 100 - Fallers
Evraz (EVR) 302.50p -1.43%
BP (BP.) 462.50p -1.11%
Eurasian Natural Resources Corp. (ENRC) 336.30p -0.85%
BAE Systems (BA.) 339.90p -0.85%
BHP Billiton (BLT) 2,120.50p -0.84%
Hargreaves Lansdown (HL.) 719.50p -0.83%
BG Group (BG.) 1,162.50p -0.73%
Lloyds Banking Group (LLOY) 53.17p -0.58%
Randgold Resources Ltd. (RRS) 6,130.00p -0.57%
Rio Tinto (RIO) 3,555.50p -0.55%
FTSE 250 - Risers
easyJet (EZJ) 928.00p +3.28%
United Drug (UDG) 272.80p +2.94%
Enterprise Inns (ETI) 97.15p +2.26%
Afren (AFR) 154.00p +1.72%
Premier Farnell (PFL) 212.60p +1.72%
Alent (ALNT) 336.50p +1.66%
Debenhams (DEB) 106.20p +1.63%
Inmarsat (ISAT) 619.50p +1.56%
Ladbrokes (LAD) 209.20p +1.50%
Barratt Developments (BDEV) 225.90p +1.44%
FTSE 250 - Fallers
ITE Group (ITE) 267.00p -2.34%
London & Stamford Property (LSP) 114.50p -2.22%
Petropavlovsk (POG) 381.20p -2.03%
SIG (SHI) 132.00p -1.93%
Hochschild Mining (HOC) 431.70p -1.57%
Rank Group (RNK) 150.50p -1.31%
BH Macro Ltd. EUR Shares (BHME) € 19.60 -1.26%
F&C Asset Management (FCAM) 108.40p -1.09%
Chemring Group (CHG) 293.70p -1.08%
Victrex (VCT) 1,603.00p -1.05%
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| UK Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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INTERIM DIVIDEND PAYMENT DATE
Aberdeen New Dawn Inv Trust, Betfair Group, Burberry Group, Cranswick,
Ensor Holdings, Falkland Islands Holdings, Greene King, Ground Rents
Income Fund, Halfords Group, Micro Focus International, RPC Group,
Speedy Hire, Vertu Motors
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
German IFO Business climate index (Jan.)(09:00)
US New Home Sales (Dec.)
Q4
Polski Koncern Naftowy Orlen S.A. GDR(Reg S)
GMS
Petards Group
FINALS
Polski Koncern Naftowy Orlen S.A. GDR(Reg S)
EGMS
Coal of Africa Ltd.
AGMS
Advanced Power Components, Caledonian Trust, Henderson European Focus Trust, Nasstar, Scottish Inv Trust
TRADING ANNOUNCEMENTS
William Hill
UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
FINAL DIVIDEND PAYMENT DATE
Cambria Automobiles, Hargreave Hale AIM VCT 1, Jelf Group, Proactis Holdings
| US Market Report |
Stocks Volatile As Traders Digest Apple News, Upbeat Jobs Data
Stocks
fluctuated over the course of the trading day on Thursday, as traders
weighed upbeat jobs data and earnings news against disappointing
quarterly results from tech giant Apple (AAPL).
The major
averages eventually ended the day mixed, with the tech-heavy Nasdaq
posting a notable loss and the S&P 500 closing nearly flat after
briefly peeking above 1,500.
While the Nasdaq fell 23.29 points or 0.7 percent to 3,130.38, the S&P 500 inched up 0.01 points or less than a tenth of a percent to 1,494.82 and the Dow rose 46.00 points or 0.3 percent to 13,825.33.
The loss posted by the Nasdaq was due in large part to a steep drop by shares of Apple, with the iPad and iPhone maker falling by 12.4 percent to its lowest closing level in a year.
After the close of trading on Wednesday, Apple reported
better than expected first quarter earnings but on weaker than expected
sales. The company also reported iPhone sales that missed expectations
and provided disappointing second quarter revenue guidance.
Meanwhile, most stocks moved
to the upside on the heels of the release of a report from the Labor
Department showing that initial jobless claims unexpectedly fell to a
new five-year low in the week ended January 19th.
The report showed that initial jobless claims
dipped to 330,000, a decrease of 5,000 from the previous week's
unrevised figure of 335,000. The drop surprised economists, who had
expected jobless claims to climb to 355,000.
With the unexpected
decrease, jobless claims fell to their lowest level since hitting
318,000 in the week ended January 19, 2008.
While the Labor Department
said seasonal distortions are likely still in effect, Jennifer Lee,
senior economist at BMO Capital, said the news on the job front is
encouraging "even when you remove all of the noise."
Additionally, shares of Netflix (NFLX)
moved sharply higher on the day after the online video service provider
reported an unexpected fourth quarter profit. Netflix surged up by 42.2
percent to its best closing level in well over a year.
Bristol-Myers Squibb (BMY), Xerox (XRX), and United Continental (UAL) also posted notable gains after reporting their quarterly results before the start of trading.
Sector News
Despite
the volatility shown by the broader markets, trucking stocks saw
substantial strength throughout the trading day. The Dow Jones Trucking
Index surged up by 3.8 percent to a record closing high.
J.B. Hunt Transport Services (JBHT), Con-way (CNW), and Knight Transportation (KNX) turned in some of the trucking sector's best performances.
With
Netflix leading the way higher, considerable strength was also visible
among internet stocks. Reflecting the strength in the internet sector,
the NYSE Arca Internet Index jumped 2.2 percent to a twelve-year high.
Electronic storage, retail, and healthcare stocks also saw notable strength, while gold stocks came under significant selling pressure. The NYSE Arca Gold Bugs Index fell by 3.2 percent to its lowest closing level in over five months.
The weakness among gold stocks
came amid a notable decrease by the price of the precious metal, with
gold for February delivery sliding $16.80 to $1,669.90 an ounce.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance during trading on Thursday. While Japan's Nikkei 225 Index surged up by 1.3 percent, China's Shanghai Composite Index fell by 0.8 percent.
In the bond market, treasuries ended
the day modestly lower but well off their worst levels. As a result,
the yield on the benchmark ten-year note, which moves opposite of its
price, edged up by 1.1 basis points to 1.844 percent after reaching a
high of 1.87 percent.
Looking Ahead
Trading on Friday is likely to be impacted by reaction to the latest batch of earnings news, with Microsoft (MSFT), AT&T (T) and Starbucks (SBUX) among the big-name companies releasing their quarterly results after the close of today's trading.
Additionally, Procter & Gamble (PG), Honeywell (HON), and Halliburton (HAL) are among the companies due to release their results before the start of trading on Friday.
Traders
are also likely to keep an eye on the Commerce Department's report on
new home sales in the month of December, with economists expecting new
home sales to climb to an annual rate of 388,000.
| Friday newspaper round-up |
British Gas, UK austerity, Microsoft...
Hundreds of workers in the insulation industry are at risk of losing their jobs after British Gas
broke a promise to insulate thousands of homes free of charge, The
Times has learnt. Britain’s biggest energy supplier prematurely pulled a
multimillion-pound programme to insulate an estimated 40,000 homes,
despite having contracted the UK’s biggest insulation installers to
carry out the work. The installers are now having to contact the
households that had arranged to have the work done to tell them it has
been cancelled. [The Times]
George Osborne insists he will press ahead with the government's austerity plans
despite a warning from the International Monetary Fund that the
chancellor should slow the pace of cuts. On the eve of the latest GDP
growth figures for the UK economy, the chancellor said the credibility
Britain had built up by setting out a tough package of tax rises and
spending plans had been "hard won, and easily lost", adding that it
would be "a huge mistake to put that at risk". The IMF's chief
economist, Olivier Blanchard, said the time had come for the chancellor
to act on the Fund's repeated warnings that if the economy remained weak
he should moderate his plans. [The Guardian]
Disappointing sales of Microsoft’s
new Windows operating system were compounded last night as the
technology company reported a drop in profits. The computer industry had
hoped that Windows 8, which was launched in October, would be the
saviour of a PC market that has suffered as consumers switched to using
smartphones and tablet computers. Microsoft reported that more than 60
million copies of Windows 8 had been sold. Analysts said that this was a
solid but unimpressive launch given that the company’s software is
installed on more than 90 per cent of computers worldwide. [The Times]
The return of confidence and healthy growth in the US risks setting off a “bond crash” comparable to 1994 and triggering a string of upsets across the world, Bank of America
has warned. The US lender said investors face a treacherous moment as
central banks start fretting about inflation and shift gears,
threatening a surge in bond yields. This happened in 1994 under Federal
Reserve chief Alan Greenspan when yields on US 30-year Treasuries jumped
240 basis points over a nine-month span, setting off a “savage reversal
of fortune in leveraged areas of fixed income markets”. [The Telegraph]
David Cameron has taken a swipe at Starbucks
as he promised that making business pay its fair share would be one of
three key aims of Britain's G8 presidency. "Companies need to wake up
and smell the coffee, because the customers who buy from them have had
enough," the prime minister told business leaders (video) at the World
Economic Forum in Davos. Protesters targeted Starbucks branches late
last year after it admitted it had paid just £8.6m in corporation tax in
the UK over the past 14 years. The firm subsequently promised to pay
£20m over two years, amid fears of a consumer boycott. [The Guardian]
Mario Monti,
Italy’s prime minister, was forced to offer to recall parliament on
Thursday amid questions about his government’s handling of the financial
crisis at Monte dei Paschi di Siena and the role of the central
bank. Shares in Italy’s third-largest bank by assets, which has
requested a second state bailout in four years, have fallen more than 22
per cent in the past few days since revelations five days ago of
derivatives transactions that may force the 500-year-old bank to restate
hundreds of millions of euros of losses. Supervision of the struggling
institution by the Bank of Italy while Mario Draghi, European Central
Bank president, was governor has come under attack as an increasingly
fierce political outcry erupts in the run-up to national elections next
month. [Financial Times]
The owners of the Channel Tunnel
rail link, known as High Speed One (HS1), will launch a refinancing of
its £1.5bn debt mountain, The Independent can reveal. The Canadian
consortium of Ontario Teachers' Pension Plan and Borealis Infrastructure
is looking to take advantage of low repayment rates in the
corporate-bond market, which has been on fire since the start of the
year.[The Independent]
Samsung Electronics has
warned that its smartphone business would be hit this year by growing
price competition and slowing demand in developed markets, even as it
confirmed record earnings for 2012. The world's biggest technology group
by revenue on Friday confirmed that last year's operating profit rose
88 per cent to Won8.8tn ($8.27bn), with sales growing 18 per cent to
Won56tn. That was in line with guidance given earlier this month. [Financial Times]
Department store chain John Lewis has recruited former eBay
UK boss Mark Lewis to head its online offering in a new role
reflecting the growing importance of its website. He will join the
group’s board on 4 March, reporting directly to managing director Andy
Street. Employee-owned John Lewis invested heavily in its website at the
start of last year, driving a 40 per cent jump in online sales by
linking it to its store network with a “click and collect” service.
Lewis, who spent six years at eBay in roles including UK managing
director and European marketplaces director, is familiar with the
“clicks and bricks” approach. [The Scotsman]
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