Stocks flat after impressive rise
Market Movers
techMARK 2,152.63 +0.08%
FTSE 100 6,026.43 -0.02%
FTSE 250 12,630.99 +0.15%
UK stocks
were registering only slight losses on Thursday morning as markets
managed to hold on to yesterday's impressive gains following the
New-Year's-Day agreement to avert the fiscal cliff in the US.
Providing some support early on was the China non-manufacturing purchasing managers' index
which rose from 55.6 to 56.1 in December, "providing yet more evidence
that the turnaround of the Chinese economy is gaining pace with stronger
economic growth likely in the months ahead," said Markus Huber, the
head of German HNW trading at ETX Capital.
The FTSE 100 surged by 2.2% on Wednesday, the first trading day of the 2013, as investors reacted to the deal by US politicians to allow some tax increases on America's wealthiest workers and delay specifics on spending cuts by two months.
"The inability of congress
to approach both the spending cuts element of the fiscal cliff, along
with the impending debt ceiling has set up a second deadline around the
end of February and beginning of March," said research analyst Joshua
Mahony from Alpari.
"This time it appears clear that the
Republicans will have the upper hand in negotiations whereby their
threat to veto any deal to further delay spending cuts or fail to agree
on a debt ceiling extension, would likely see a greater level of
strength in negotiations. Subsequently there is likely to be even more
heated debate in the coming months with the threat of default being
primary on the agenda, rather than simply higher taxes in the
short-term."
FTSE 100: Next on shopping lists early on
Retailer Next
jumped in the opening hour after saying that its full-year results
would come in towards the top of expectations. The company said although
2012 sales had been in line with forecasts, cost control measures,
markdowns and gross margins had all been slightly better than expected.
Contract caterer Compass Group was heading the other way after Espirito Santo downgraded its rating for the stock to 'neutral'. Meanwhile, outsourcing firm Serco edged higher after the same broker lifted its rating to 'buy'.
Building materials group CRH
fell after announcing that full-year development activity in 2012
totalled over €0.6bn, helped by 18 acquisition and investment
initiatives undertaken in the second half.
Experian was on the up after the Financial Times
reported that Bank of America is ramping up mortgage and corporate
lending. Seymour Pierce upgraded its rating for Experian this morning
from 'reduce' to 'add', saying that the article suggests a "return to
health" in the US mortgage market which is beneficial to the business.
FTSE 250: Chemring up after FD appointment
Defence contractor Chemring Group
has appointed Steve Bowers as Group Finance Director, causing shares to
rise strongly. Bowers worked as Finance Director for Umeco, a provider
of composite materials to aerospace and defence industries until its
acquisition by Cytec UK Holdings in July 2012. He was with the company
for 13 years in a number of finance roles.
Infrastructure company Balfour Beatty
rose after purchasing Subsurface Group to expand the Energy Storage
Services business of it subsidiary, Parson Brinckerhoff, in the US.
John Menzies,
the aviation and distribution group, was higher after saying that
full-year results will be in line with expectations in 2012 after
"continued progress" in the fourth quarter.
| AIM/Small Cap Report |
FTSE 100 - Risers
Next (NXT) 3,855.00p +2.20%
Hargreaves Lansdown (HL.) 707.50p +1.22%
Serco Group (SRP) 547.50p +1.11%
Aberdeen Asset Management (ADN) 379.60p +1.09%
Legal & General Group (LGEN) 150.20p +1.08%
Bunzl (BNZL) 1,036.00p +0.88%
Rexam (REX) 450.40p +0.81%
Aviva (AV.) 384.70p +0.73%
Barclays (BARC) 277.60p +0.73%
TUI Travel (TT.) 289.70p +0.70%
FTSE 100 - Fallers
Compass Group (CPG) 724.50p -1.76%
Vedanta Resources (VED) 1,208.00p -1.15%
Rio Tinto (RIO) 3,649.50p -1.12%
Whitbread (WTB) 2,520.00p -1.02%
CRH (CRH) 1,270.00p -1.01%
BHP Billiton (BLT) 2,188.00p -0.93%
Melrose Industries (MRO) 231.40p -0.90%
Intertek Group (ITRK) 3,191.00p -0.87%
Kazakhmys (KAZ) 818.50p -0.85%
Randgold Resources Ltd. (RRS) 6,195.00p -0.80%
FTSE 250 - Risers
Kenmare Resources (KMR) 34.44p +4.36%
Chemring Group (CHG) 246.60p +3.48%
Carpetright (CPR) 700.00p +2.19%
Imagination Technologies Group (IMG) 416.00p +1.96%
Computacenter (CCC) 417.00p +1.93%
KCOM Group (KCOM) 71.75p +1.85%
Debenhams (DEB) 117.10p +1.74%
Man Group (EMG) 85.65p +1.60%
BH Global Ltd. GBP Shares (BHGG) 1,160.00p +1.49%
Ted Baker (TED) 1,177.00p +1.47%
FTSE 250 - Fallers
WH Smith (SMWH) 631.50p -3.37%
Bank of Georgia Holdings (BGEO) 1,084.00p -2.17%
African Barrick Gold (ABG) 448.60p -2.16%
Daejan Holdings (DJAN) 3,060.56p -2.06%
Rank Group (RNK) 145.60p -1.49%
Howden Joinery Group (HWDN) 173.90p -1.42%
Betfair Group (BET) 682.50p -1.23%
Elementis (ELM) 233.40p -1.19%
Paragon Group Of Companies (PAG) 257.60p -0.92%
Synergy Health (SYR) 1,086.00p -0.82% |
| Europe Market Report |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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Dollar continues to rise after US averts cliff
The dollar continued
to rise on Wednesday and into Thursday, erasing losses seen on the
announcement of the new bill to delay the tax hikes and spending cuts of
the 'fiscal cliff' on Tuesday.
Overnight, the euro dropped from $1.3177 to $1.3138, while the pound declined from $1.6249 to $1.6221.
The ICE dollar index rose back above 80 points overnight, from 79.847 to 80.026.
While
the budget saga Stateside is far from over - talks over spending cuts
go on while concerns over the government’s debt ceiling have resurfaced -
the House of Representatives passed a Senate-backed bill in the early
hours of Tuesday morning to stop massive tax rises and spending cuts, by
257 votes to 167. A day before the same legislation had cleared the
Senate by a majority of 89 votes to 8.
Analysts at Link Securities said that the agreement eliminates the "worst case scenario" and the danger of a new US recession.
Meanwhile, the dollar also rose against the Japanese yen, up ¥87.26 from ¥87.24, to reach a level unseen since 2010.
Commodities:
Crude surges after fiscal cliff deal
Commodities
prices gained across the board on Wednesday as risk appetite increased
following the New-Year's-Day agreement by US politicians to avert the
fiscal cliff.
While the budget saga Stateside is far from over -
talks over spending cuts go on while concerns over the government’s debt
ceiling have resurfaced - the House of Representatives passed a
Senate-backed bill in the early hours of Tuesday morning to stop massive
tax rises and spending cuts, by 257 votes to 167. A day before the same
legislation had cleared the Senate by a majority of 89 votes to eight.
Crude oil for February delivery was up $1.30 at $93.12 in New York, a rise of 1.42%
There
were concerns that US fuel consumption, linked intrinsically to the
strength of the world's largest economy, would see a huge indirect
impact from the automatic spending cuts and tax increases that were
scheduled to come into effect on January 1st.
The fiscal cliff -
scheduled tax rises of around $536bn and spending cuts of $109bn - was
widely expected to throw the US economy back into recession if
politicians couldn't break months of impasse.
According to the Financial Times, oil demand in the States had fallen to 18.7m barrels a day in October, the lowest October level since 1995.
Gold prices were up $13 at $1,688.80 a troy ounce, up 0.78% on the day.
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| US Market Report |
Dow gains over 300 points after fiscal cliff deal
Market movers
Dow Jones: 13,413 (+2.36%)
Nadsaq: 3,112 (+3.06%)
S&P 500: 1,462 (+2.51%)
US equity markets staged an impressive performance on Wednesday in the aftermath of the deal by politicians to avert the fiscal cliff.
While the budget saga Stateside is far from over - talks over spending
cuts go on while concerns over the government’s debt ceiling have
resurfaced - the House of Representatives passed a Senate-backed bill in
the early hours of Tuesday morning to stop massive tax rises and spending cuts, by 257 votes to 167. A day before the same legislation had cleared the Senate by a majority of 89 votes to 8.
Analysts at Link Securities said that the agreement eliminates the "worst case scenario" and the danger of a new US recession.
The Dow Jones jumped more than 300 points, its best one-day advance since December 2011. This was the first-day-of-the-year point jump in history for the index, according to Marketwatch.
M&A again in the news
Rare earths group Molycorp rose on the back of a positive mention in Bloomberg.
The news agency cited analysts who said that Molycorp could become a
takeover target now that its market capitalisation had fallen below its
net asset value.
Zipcar soared by 48% on news that Avis Budget Group had agreed to buy the company. GE finished higher on news that it will acquire 32 wind farms from Spanish outfit Iberdrola for €350m. Computer giant Hewlett-Packard was higher on reports that it is considering selling non-core assets.
Retailer Walgreen was performing well after Raymond James upgraded its rating for the stock to 'overweight' from 'neutral'. Meanwhile, United States Steel Corp was boosted by Credit Suisse which lifted its view of the stock from 'neutral' to 'outperform'.
ISM survey beats forecasts
The
ISM manufacturing index for the month of December rose to 50.7 points
after a reading of 49.5 the month before, led by a rise in the ‘prices
paid’ component. The consensus estimate was 50.5. The new orders
sub-index remained steady at 50.3.
Construction spending fell 0.3% month-on-month in November, missing the 0.6% rise expected.
Meanwhile, same-store retail chain sales increased by 0.6% last week,
the latest ICSC survey data revealed. Estimates were for a greater 0.7%
gain.
S&P 500 - Risers
United States Steel Corp. (X) $25.89 +8.55%
Lam Research Corp. (LRCX) $38.73 +7.20%
Alexion Pharmaceuticals Inc. (ALXN) $100.05 +6.73%
MetLife Inc. (MET) $35.15 +6.71%
Windstream Corp. (WIN) $8.80 +6.28%
Viacom Inc. Class B (VIAB) $56.01 +6.20%
Constellation Brands Inc. Class A (STZ) $37.56 +6.13%
Lincoln National Corp. (LNC) $27.41 +5.83%
J.C. Penney Co. Inc. (JCP) $20.84 +5.73%
Capital One Financial Corp. (COF) $61.23 +5.70%
S&P 500 - Fallers
Abbott Laboratories (ABT) $32.05 -51.07%
CONSOL Energy Inc. (CNX) $31.01 -3.40%
Peabody Energy Corp. (BTU) $25.84 -2.89%
Metropcs Communications Inc. (PCS) $9.70 -2.41%
Watson Pharmaceuticals Inc. (WPI) $84.21 -2.08%
Macy's Inc. (M) $38.31 -1.82%
EMC Corp. (EMC) $24.84 -1.82%
Kohls Corp. (KSS) $42.21 -1.79%
Dollar Tree Stores Inc. (DLTR) $39.90 -1.63%
Alpha Natural Res (ANR) $9.60 -1.44%
Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $15.02 +5.40%
Caterpillar Inc. (CAT) $93.50 +4.34%
AT&T Inc. (T) $35.00 +3.83%
Coca-Cola Co. (KO) $37.60 +3.72%
Intel Corp. (INTC) $21.38 +3.69%
Bank of America Corp. (BAC) $12.03 +3.62%
Alcoa Inc. (AA) $8.99 +3.57%
Cisco Systems Inc. (CSCO) $20.34 +3.51%
Microsoft Corp. (MSFT) $27.62 +3.41%
Pfizer Inc. (PFE) $25.91 +3.31%
Dow Jones I.A - Fallers
Nasdaq 100 - Risers
Alexion Pharmaceuticals Inc. (ALXN) $100.05 +6.73%
Viacom Inc. Class B (VIAB) $56.01 +6.20%
Regeneron Pharmaceuticals Inc. (REGN) $181.20 +5.92%
Dell Inc. (DELL) $10.68 +5.28%
Facebook Inc. (FB) $28.00 +5.19%
eBay Inc. (EBAY) $53.59 +5.08%
Seagate Technology Plc (STX) $31.95 +5.03%
Wynn Resorts Ltd. (WYNN) $118.07 +4.96%
Linear Technology Corp. (LLTC) $35.99 +4.93%
Mondelez International Inc. (MDLZ) $26.67 +4.78%
Nasdaq 100 - Fallers
Dollar Tree Stores Inc. (DLTR) $39.90 -1.63%
CH Robinson Worldwide Inc (CHRW) $63.16 -0.09%
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| Thursday newspaper round-up |
Defence companies, Bank levies, Martin Sorrell...
Defence companies
competing for a 1.5bn-pound contract to replace Britain’s military air
traffic infrastructure will submit proposals over the next few days.
Three teams including BAE Systems and Lockheed Martin are vying for the
work, which will be undertaken over a period of 22 years. The contract,
known as Project Marshall, is expected to be awarded by the Ministry of
Defence in 2015. [ The Telegraph]
The Government's levy on the banks will raise only £1.8bn in the current financial
year, much less than the £2.5bn figure repeatedly trumpeted by David
Cameron and George Osborne. It is the second year running that the
Chancellor has fallen short of his goal for raising money from the
banks. The lower-than-expected revenue from the levy on the banks' balance
sheets was confirmed by the Office for Budget Responsibility (OBR), the
independent fiscal watchdog, in its twice-yearly report on the economy.
[ The Independent]
The advertising tycoon Sir Martin Sorrell
reignited the row over corporate tax after he described the amount big
companies pay as "a question of judgement". The comments, in an
interview with the BBC, sparked a furious response from tax campaigners
amid a public outcry over the way multinationals such as Starbucks, and
Amazon have avoided paying UK corporation tax. Sir Martin, the chief
executive of WPP, said: "The right model is you make a
contribution. All contributions you make to your stakeholders are a
question of judgement. There are the rules. If companies choose to make a
contribution to all the stakeholders, all credit to them." [ The Independent]
A stark split of retail and investment banking
rather than mere “ring-fencing” would help cut customer fees and
charges, a top think-tank claimed yesterday. The Institute for Public
Policy Research (IPPR) is the latest body to throw its weight behind
moves for a more formal separation of high street and so-called casino
banking than that proposed by the Vickers report. Bank customers were
paying substantial fees and charges – which the IPPR compared to
unjustifiably high “rents” – because competition in the sector was
“severely distorted and regulation has been historically ineffective”.
The body, in a report out yesterday called “Don’t bank on it:
financialisation in the UK economy”, said such charges failed to reflect
the levels of banking service and performance, and were helping “harm
the rest of the economy”. [ The Scotsman]
Sales of downloaded music, films and video games
exceeded £1 billion in 2012, breaking all previous records, but
retailers continue to see steep falls in people buying CDs and DVDs. New
figures released today show that the sales of digital downloads in
Britain now make up a quarter of all entertainment sales, increasing
more than 11 per cent compared to 2011. Sales of CDs, DVDs, Blu-ray and
video games still account for just over three quarters of the
entertainment market. But there is grim news for high street stores,
which saw purchases of physical discs falling by 17.6 per cent compared
with 2011. [ The Times]
Billionaire US investor Warren Buffett
is taking a $2.5bn (£1.5bn) bet on solar energy, acquiring what is set
to become the largest photovoltaic development in the world. MidAmerican
Energy Holdings, a subsidiary of Mr Buffett’s Berkshire Hathaway
investment company, has struck a deal with SunPower to acquire and
build two projects in California’s Antelope Valley. The deal, which will
see MidAmerican pay between $2bn to $2.5bn, marks the third time in
little over a year that Mr Buffett has ploughed cash into solar energy. [ The Telegraph]
Bank of America
is ramping up mortgage and corporate lending after two years of
focusing on capital levels and cost-cutting under chief executive Brian
Moynihan. Mr Moynihan said the company should overtake JPMorgan Chase in
direct-to- consumer mortgage lending in the next six months and he had directed bankers to be “more aggressive” in lending to companies. [ Financial Times]
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