Stocks pull back after FOMC minutes
Market Movers
techMARK 2,156.54 -0.03%
FTSE 100 6,045.65 -0.03%
FTSE 250 12,632.03 -0.15%
Following
a 150-point surge over the last two days, the FTSE 100 pulled back in
early trading on Friday following the release of the minutes of the
latest Federal Reserve meeting last night.
While there was a clear majority in favour of further asset purchases (the third round of quantitative easing, or QE3), Federal Open Market Committee (FOMC) members were divided on the timing of these purchases.
The support for how long the programme should run "isn't as solid as
previously thought with some Fed members feeling rather uncomfortable
for the Fed buying bonds beyond mid 2013," explained Markus Huber, the
head of German HNW trading at ETX Capital.
He said that, while it isn't a surprise, there is also talk that US Treasury Secretary Timothy Geithner
may step down at the end of the month despite an upcoming deadline to
deal with the debt ceiling, "potentially causing an increase in
uncertainty which could weigh on markets at a later stage once these
talks [over the ceiling] are actually confirmed," Huber said.
Markets will be keeping a close eye on the US today ahead of the release of unemployment figures.
Consensus expectations are for a 145,000 gain in non-farm payrolls in
December, similar to the 146,000 rise seen the month before. The jobless
rate is forecast to remain unchanged at 7.7%.
Deepwater Horizon rig owner Transocean has reached a $1.4bn settlement with the Department of Justice, causing shares in operator BP
to rise early on this morning. Transocean, the world's largest offshore
drilling contractor, agreed yesterday to plead guilty to one
misdemeanour violation of the Clean Water Act for "negligent discharge
of oil into the Gulf of Mexico".
Nevertheless, the wider resource sector was under the weather in the opening hour, with Fresnillo, Randgold, Petrofac and Polymetal all registering losses. Fresnillo was the heaviest faller after UBS cut its recommendation for the shares to 'neutral'.
Sector peer Anglo American
was also in the red after agreeing to sell its 70% interest in the
Amapá iron ore mine in Brazil. The terms of the deal with Zamin Ferrous
are confidential and subject to state regulatory approval, but the
company said it was expected to complete in 2013.
Real estate investment trust Hammerson was dampened by Credit Suisse after the broker downgraded its rating for the stock to 'neutral'.
Power systems giant Rolls-Royce
fell despite revealing that it is to provide repair and support
services for aircraft engines operated by the US Marine Corps and Air
Force as part of a contract worth $52.2m.
Balfour Beatty,
the FTSE 250 global infrastructure group, was also lower despite saying
that it has been awarded a five-year highway maintenance contract by
Wiltshire Council.
| AIM/Small Cap Report |
FTSE 100 - Risers
BP (BP.) 446.70p +1.13%
British American Tobacco (BATS) 3,158.00p +1.09%
Reckitt Benckiser Group (RB.) 3,962.00p +0.58%
Standard Life (SL.) 348.20p +0.52%
Experian (EXPN) 1,020.00p +0.49%
Centrica (CNA) 338.40p +0.48%
Royal Dutch Shell 'B' (RDSB) 2,205.00p +0.39%
Vodafone Group (VOD) 158.00p +0.38%
ARM Holdings (ARM) 799.00p +0.38%
Royal Dutch Shell 'A' (RDSA) 2,147.00p +0.37%
FTSE 100 - Fallers
Fresnillo (FRES) 1,788.00p -5.15%
Randgold Resources Ltd. (RRS) 6,030.00p -3.21%
Polymetal International (POLY) 1,190.00p -2.38%
Petrofac Ltd. (PFC) 1,642.00p -1.85%
Marks & Spencer Group (MKS) 381.30p -1.83%
Anglo American (AAL) 1,987.00p -1.37%
Antofagasta (ANTO) 1,352.00p -1.31%
Hammerson (HMSO) 490.90p -1.25%
Evraz (EVR) 277.40p -1.14%
Johnson Matthey (JMAT) 2,336.00p -1.14%
FTSE 250 - Risers
Raven Russia Ltd (RUS) 63.90p +2.08%
Cranswick (CWK) 868.00p +1.52%
Dechra Pharmaceuticals (DPH) 617.00p +1.40%
Galliford Try (GFRD) 765.00p +1.39%
Bovis Homes Group (BVS) 589.00p +1.20%
Hiscox Ltd. (HSX) 459.00p +1.19%
Howden Joinery Group (HWDN) 173.40p +1.11%
Big Yellow Group (BYG) 366.50p +0.99%
Betfair Group (BET) 690.00p +0.95%
Hansteen Holdings (HSTN) 80.65p +0.94%
FTSE 250 - Fallers
Petropavlovsk (POG) 365.20p -2.64%
Enterprise Inns (ETI) 101.50p -2.40%
African Barrick Gold (ABG) 446.90p -2.36%
Heritage Oil (HOIL) 193.20p -2.08%
Invensys (ISYS) 327.50p -1.95%
Bumi (BUMI) 270.60p -1.60%
Lonmin (LMI) 291.80p -1.55%
Perform Group (PER) 388.50p -1.42%
Supergroup (SGP) 550.50p -1.26%
Elementis (ELM) 228.60p -1.25%
|
| FX and Commodities round-up |
 |
| FTSE 100 | Euronext | Dax perf | CAC 40 |
 |  |  |  |
|
Dollar continues to rise following meeting of Federal Reserve
The US dollar extended its recovery on Thursday, boosted by the release of minutes detailing the Federal Reserve’s December meeting.
During
the meeting policy-makers indicated that they believed the
bond-purchase programmes would operate until December at the latest.
The euro fell to $1.3072 compared to £1.3177 earlier.
This
extended the currency's earlier gains as it erased losses seen on the
announcement of the new bill to delay the tax hikes and spending cuts of
the 'fiscal cliff' on Tuesday.
The ICE dollar index,
which measures the greenback against a basket of six other major
currencies, climbed from 80.199 before the minutes to 80.343 after.
Meanwhile, the pound declined from $1.6121 compared to $1.6249 the previous evening.
Commodities:
Oil and gold both fall as dollar rises
Crude oil
levels dropped below the 93 dollar mark on Thursday, largely as a
result of strong gains made by the US currency, which was boosted by the
release of minutes detailing the Federal Reserve’s December meeting.
During
the meeting policy-makers indicated that they believed the
bond-purchase programmes would operate until December at the latest.
Crude oil fell 0.21% to $92.92 per barrel.
Heating oil
also dropped, ending the day down 0.7% at $3.03 per gallon, while
natural gas dropped 1.08% to $3.20 per million British thermal units.
Bucking the trend was unleaded gas, which edged 0.09% higher to settle at $2.80 per gallon.
In metals, gold ended the session lower, having made decent gains during the previous two days, hit by the strongly rising dollar.
The February contract for the commodity fell 0.84% to $1,674.60 per troy ounce.
Silver and copper was also both lower, down 0.93% and 0.51% respectively, while platinum gained 0.76% to $1,579.90 per troy ounce.
|
| US Market Report |
Modest losses seen after latest Federal Reserve meeting
Dow 13,391 -22
Nasdaq 3,101 -11
S&P 500 1,459 -3
US stocks
finished the day with modest losses on Thursday following the release
of minutes from the Federal Reserve's December policy meeting.
During the meeting policy-makers indicated that they believed the
bond-purchase programmes would operate until December at the latest.
As regards the risks for the outlook for growth and inflation, this is
what the Federal Open Market Committee had to say: “The staff viewed the
uncertainty around the projection for economic activity as somewhat
elevated and the risks as skewed to the downside, largely reflecting the possibility of a more severe tightening in US fiscal policy than expected, along with continued concerns about the economic and financial situation in Europe.
"Although the staff saw the outlook for inflation as uncertain, the risks were viewed as balanced and not unusually high.”
That followed on the back of the release of a much better-than-expected payrolls number from private consultancy ADP.
Those figures – which are often quite volatile from month to month -
buttressed sentiment ahead of Friday´s monthly employment report.
In any case, the current budget negotiations on Capitol Hill continued
to be foremost on investors´ minds, particularly given the very cool
response from the main ratings agencies, overnight, to the mini-pact
reached last Tuesday in Washington.
Mixed retail sales data
Comparable sales data from the nation´s main retailers were coming in mixed on Thursday morning, although those from Gap, Macy´s and Ross Stores came in ahead of analysts´ estimates.
Retailer TJX Cos. revised its quarterly and full-year earnings per share estimates higher. Altera Corp., Cypress Semiconductor Corp., Lam Research Corp., LSI Corp. and Volterra Semiconductor Corp. all ended the day lower after Barclays analyst C.J. Muse reduced his rating on all five stocks.
On a more positive note, JMP Securities upgraded its view on shares of Goldman Sachs and Morgan Stanley. For their part Citigroup and JP Morgan were upgraded to buy from neutral by analysts at Sterne Agee.
Ford, Chrysler and GM unveiled stronger-than-forecast vehicles sales figures for the month of December. Hormel Foods was to purchase Skippy Peanut Butter from Unilever for $700m. Piper Jaffray downgraded Biogen to underweight from neutral.
Stronger-than-forecast ADP number
Private
sector payrolls in the US gained by 215,000 last month according to
data from private consultant ADP (Consensus: 140,000), after an upwardly
revised gain of 148,000 for November (from 118,000).
Weekly
US initial unemployment claims rose to 372,000 last week, up from
362,000 (upwardly revised from an initial reading of 350,000 for the
week before) and versus a consensus forecast of 362,000. Although the
seasonal adjustment factors should have corrected for it the data showed
a "strong holiday effect" the Department of Labour said. The four week
moving average remained steady at 462,000.
Lay-off
announcements at large US corporations came in at 32,556 for that same
month, after a rise of 57,100 in the previous month, according to the
so-called Challenger survey.
All of the above figures came ahead of the release of tomorrow´s monthly employment report in the US.
Large drop in crude futures
Crude oil fell 0.21% to $92.92 per barrel on the NYMEX. 10-year US Treasury yields are now rising by 7 basis points to 1.91%.
S&P 500 - Risers
Ross Stores Inc. (ROST) $58.78 +7.97%
First Solar Inc. (FSLR) $34.41 +7.57%
Lexmark International Inc. (LXK) $25.97 +7.49%
Alpha Natural Res (ANR) $10.15 +5.73%
Netflix Inc. (NFLX) $96.59 +4.98%
Micron Technology Inc. (MU) $6.90 +4.07%
Rowan Companies plc (RDC) $33.44 +3.82%
Abbott Laboratories (ABT) $33.27 +3.81%
Avon Products Inc. (AVP) $15.59 +3.73%
Hormel Foods Corp. (HRL) $33.20 +3.72%
S&P 500 - Fallers
Family Dollar Stores Inc. (FDO) $55.74 -12.96%
Limited Brands Inc. (LTD) $44.71 -5.68%
GameStop Corp. (GME) $24.36 -5.07%
Unitedhealth Group Inc. (UNH) $51.99 -4.68%
F5 Networks Inc. (FFIV) $97.25 -3.82%
Phillips 66 Common Stock (PSX) $53.19 -3.75%
Monster Beverage Corp (MNST) $52.21 -3.72%
Tesoro Corp. (TSO) $43.73 -3.68%
J.C. Penney Co. Inc. (JCP) $20.11 -3.50%
Citrix Systems Inc. (CTXS) $65.87 -3.38%
Dow Jones I.A - Risers
Merck & Co. Inc. (MRK) $42.33 +2.39%
Caterpillar Inc. (CAT) $94.40 +0.96%
Alcoa Inc. (AA) $9.07 +0.89%
Hewlett-Packard Co. (HPQ) $15.14 +0.80%
Travelers Company Inc. (TRV) $73.42 +0.77%
McDonald's Corp. (MCD) $90.63 +0.57%
Cisco Systems Inc. (CSCO) $20.45 +0.54%
Boeing Co. (BA) $77.47 +0.52%
American Express Co. (AXP) $59.00 +0.43%
United Technologies Corp. (UTX) $84.31 +0.37%
Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $51.99 -4.68%
Microsoft Corp. (MSFT) $27.25 -1.34%
E.I. du Pont de Nemours and Co. (DD) $45.29 -1.26%
General Electric Co. (GE) $21.10 -1.12%
Wal-Mart Stores Inc. (WMT) $68.80 -0.64%
Procter & Gamble Co. (PG) $68.95 -0.63%
Bank of America Corp. (BAC) $11.96 -0.58%
International Business Machines Corp. (IBM) $195.27 -0.55%
Verizon Communications Inc. (VZ) $44.06 -0.47%
Chevron Corp. (CVX) $109.92 -0.43%
Nasdaq 100 - Risers
Ross Stores Inc. (ROST) $58.78 +7.97%
Micron Technology Inc. (MU) $6.90 +4.07%
Vertex Pharmaceuticals Inc. (VRTX) $45.15 +3.44%
Dell Inc. (DELL) $10.94 +2.48%
Staples Inc. (SPLS) $11.75 +2.35%
Sirius XM Radio Inc (SIRI) $3.08 +1.99%
Priceline.Com Inc. (PCLN) $648.73 +1.62%
Catamaran Corp (CTRX) $49.26 +1.57%
Sears Holdings Corp. (SHLD) $42.26 +1.34%
Intuitive Surgical Inc. (ISRG) $503.67 +1.24%
Nasdaq 100 - Fallers
Check Point Software Technologies Ltd. (CHKP) $47.18 -4.18%
F5 Networks Inc. (FFIV) $97.25 -3.82%
Monster Beverage Corp (MNST) $52.21 -3.72%
Citrix Systems Inc. (CTXS) $65.87 -3.38%
Randgold Resources Ltd. Ads (GOLD) $97.80 -2.91%
Akamai Technologies Inc. (AKAM) $40.95 -2.87%
eBay Inc. (EBAY) $52.45 -2.13%
Altera Corp. (ALTR) $35.19 -1.98%
Seagate Technology Plc (STX) $31.38 -1.78%
Nuance Communications Inc. (NUAN) $22.90 -1.72%
| Friday preview |
Transocean, Fed, Twitter...
The
owner of the Deepwater Horizon rig has finally owned up to playing a
part in the Gulf of Mexico disaster after reaching a 1.4 billion-dollar
settlement with the US Department of Justice. Transocean owned the rig hired by BP,
which exploded in April 2010, killing 11 workers and causing the
biggest oil spill in US history. The Switzerland-based company had,
until now, refused to bear any responsibility for the disaster, trying
instead to pin all the blame on BP and its other contractors. Transocean
yesterday pleaded guilty to violating the Clean Water Act by failing to
properly monitor the doomed Macondo well, which BP tried to plug after
drilling on April 20, 2010. A massive build-up of pressure inside the
well resulted in a blow-out after a surge of methane gas caused an
explosion on the rig. [The Times]
Officials at the US Federal Reserve
are split on whether to keep buying assets until the end of 2013,
according to the minutes of their December meeting. The minutes show the
new front line for debate on the rate-setting Federal Open Market
Committee and give the first indication of how big the Fed’s third round
of quantitative easing – so-called QE3 – may be in total. If the Fed
keeps buying at the current pace of $85bn a month for the rest of 2013,
it would accumulate another $1tn in long-term assets. [Financial Times]
Twitter
is preparing to take the company public in 2014, and could already be
worth as much as $11bn, according to a report by specialist financial
researchers Greencrest. The rough valuation of $11bn is based on trading
in secondary markets, where shares unofficially trade hands privately.
But a funding round in 2011 valued Twitter at $8bn, after which the
value rose to $10bn on secondary markets before Facebook's shambolic IPO
pushed the value back down to $9bn. [The Guardian]
International Airlines Group,
the owner of British Airways and Iberia, could escape strikes and other
industrial action after the Spanish pilots' union agreed to talks on
restructuring Iberia by axing staff and cutting salaries. Willie Walsh,
the chief executive of IAG, plans to cut more than 4,000 jobs, a fifth
of Iberia's workforce, sell off planes and reduce routes. [The Independent]
A small oil and gas technology company conceived in an Oxford
University laboratory has attracted the interest and the cash of Roman
Abramovich. The Russian billionaire and Chelsea Football Club owner is
understood to have injected more than £4.3 million into Oxford Catalysts,
an AIM-quoted company that raised £30.6 million in a share issue
yesterday. His participation in the business, with a stake of more than 3
per cent, is expected to be announced this morning. He joins the
University of Oxford as an investor in a company that was originally
spun out of a chemical discovery in a college laboratory. The university
already had a 2.5 per cent stake, but it is not yet known if it bought
more in the share placing. [The Times]
The share of
euros in the world’s rising powers’ reserve holdings has fallen to its
lowest level since 2002, dashing hopes that the single currency will
soon challenge the US dollar for global primacy. International Monetary
Fund data show that emerging nations have cut the weighting of EMU bonds
in their reserves to 24.7pc from a peak of 30pc at the onset of
Europe’s crisis three years ago, with a record drop in the third quarter
of 2012. [The Telegraph]
The financier Nat Rothschild has escalated his row with the board of Bumi,
after claiming that the latest results from a key subsidiary of the
Indonesian coal miner he co-founded lacked credibility. Bumi Resources,
in which the parent company Bumi owns a 29 per cent stake, announced a
$632m (£388m) loss for the first nine months of 2012, compared with a
$175m profit a year earlier. [The Independent]
Qatar-based broadcaster Al-Jazeera
has upped its presence in America by buying the struggling cable
channel founded by former US vice-president Al Gore. Al-Jazeera said it
would use the acquisition of Current TV to launch a new US-based news
channel. The deal means Al-Jazeera will be available in more than 40
million US households, up from 4.7 million previously. The group said
its latest New York-based news channel would be separate from al-Jazeera
English, and would provide both domestic and international news for
American audiences. It will launch later this year. The terms of the
sale were not disclosed, but analysts estimated Current could be worth
as much as $500 million (£310m). [The Scotsman]
|
|
|
No comments:
Post a Comment