We're sorry, today's earlier bulletin was sent out in error. Our apologies.
Sainsbury warns celebrations will not carry into 2013
The
UK's main equity benchmark, the FTSE 100, has started the Wednesday
session slightly higher, up by 18 points to 6,071, to just below
technical resistance at the 6,100 point mark, despite the release of
mixed results overnight from US aluminium giant Alcoa and what appears to be a rather mixed news-flow here in the UK.
That as investors ponder whether to push equities higher before debt
negotiations in the United States are successfully completed and while
the Eurozone crisis continues to simmer, although for now periphery debt
continues to come slowly off the boil. Time will tell if quickly
enough.
Not to be missed either, some investors may also prefer to wait and see what the European Central Bank and Bank of England tell markets tomorrow.
To a certain extent Alcoa's results reflect what can be seen in other
industries, slow demand growth - but growth all the same - and excess
capacity. The company's shares traded 1.1% higher after the close
despite that.
The British Retail Consortium's (BRC)
latest shop price inflation data released before the 'opening bell' also
attests to some of the trends – possibly longer term in this case –
which are to be seen in the market: namely, food price inflation.
Shop prices, nevertheless, rose at the same clip in December as last month, by 1.5% year-on-year.
International trade data will be released at 09:30 by ONS.
On another front, the Financial Times
has picked up this morning on business leaders' warning to the Prime
Minister against damaging the economy by taking Britain out of the
European Union (EU).
Sainsbury tells investors celebrations are over
Sainsbury
enjoyed record-breaking Christmas trading as it increased its market
share in the last three months of 2012. But the firm warned the
celebrations would probably not last into the new year. Third quarter
total sales gain of 3.9%, +0.9% excluding fuel, which was largely
in-line with estimates.
"We expect the challenging economic
backdrop to persist, with customers looking to re-balance their
household budget after the festivities and so spending cautiously in the
first few months of 2013," said Chief Executive Justin King.
Housebuilder Galliford Try has announced that it remains on track to meet its full year expectations and that half year profit is ahead of its targets.
Designer brand Ted Baker
announced a solid rise in sales over the festive period as Chairman
Robert Breare confirmed he will step down after more than 11 years in
the role. David Bernstein, currently Senior Independent Non-Executive
Director, will succeed Breare with immediate effect.
Greggs sees its full year results broadly in line, although 'tough' trading conditions have continued into 2013.
Egypt focused gold producer Centamin
(one of yesterday's big gainers) has announced full year production of
262,900 ounces, ahead of the forecasts of 250,000 seen, and up 30%.
Yesterday evening, after the close, Shire's
(another one of yesterday's big gainers) Chief Executive Officer stated
that he is increasingly confident of reaching double digit full year
earnings growth and on meeting current consensus earnings expectations
for 2013.
AMEC up on Goldman upgrade
Lastly, and as regards today's main broker recommendations, Goldman Sachs has upgraded AMEC to buy from neutral, while analysts at Bank of America have raised their view on shares of GKN and Meggitt to buy.
| FX and Commodities round-up |
Dollar and euro down against yen
The dollar and
euro fell against the yen on Tuesday as traders booked profit on recent
gains ahead of widely anticipated stimulus action by the Bank of
Japan. The greenback fell to ¥87.08 from ¥87.82 the previous session after settling above ¥88 earlier in the week.
The dollar has
risen sharply against the yen in the last month on expectations that
Japan new government will put pressure on the Bank of Japan to take more
aggressive monetary stimulus measures.
Japanese Finance Minister Taro Aso recently stressed the need for further monetary and fiscal stimulus to revive the economy.
New Prime Minister Shinzo Abe
has called on the BOJ to share a 2% inflation target with the
government, double the bank's current price target. The BOJ will review
setting a higher inflation target at its next rate review on January
21-22nd.
The euro changed hands at ¥113.97 compared to
¥115.12 the session before while the single currency fell to $1.3084
from $1.3111 in the prior session. The euro was kept in a tight range ahead of the European Central Bank meeting on Thursday.
The dollar index,
which measures the greenback against a basket of six major currencies,
advanced to 80.323 from 80.256 in late trading on Monday.
Sterling bought $1.6053 compared to $1.6109 on Monday.
Gold soars, crude settles nearly flat
Gold
futures snapped a three-day losing streak on Tuesday on reports of
increased demand in Asia. Gold for February delivery advanced $15.90 an
ounce to settle at $1,662.20 on the Comex division of the New York
Mercantile Exchange. Physical demand for gold traditionally picks ahead
in the weeks running up to the Chinese New Year celebrations.
Silver for March added 38 cents to $30.47 an ounce while March palladium fell $2.15 to $667.85 an ounce. Crude oil futures settled almost flat on Tuesday as traders took a breather ahead of weekly supplies data. Oil for
February delivery declined 4 cents to settle at $93.15 a barrel on the
New York Mercantile Exchange. It traded between $92.67 and $93.80.
The Energy Information Administration will
publish its weekly oil inventories report on Wednesday and analysts
expect crude supplies to have risen by 2.2m barrels. Last week crude
stockpiles fell over 11m barrels. Gasoline supplies are expected to increase by 2.6m barrels while distillates are forecast to increase 1.5m barrels.
The EIA published its monthly short-term energy outlook on Tuesday. The
report said US oil demand fell 1.6% to a 15-year low last year and is
predicted to rise by just 0.3% in 2013 and 2014.
Meanwhile investors mulled
reports of the completion of the expansion of the Seaway Pipeline
project by the end of this week. The expansion should reduce the glut of
oil inventories at the Nymex crude-contract delivery point in Cushing,
Oklahoma. On the ICE futures exchange Brent crude rose 63 cents at
$112.03 a barrel.
| UK Event Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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TRADING ANNOUNCEMENTS
Restaurant Group, Sainsbury (J), Ted Baker
INTERIM DIVIDEND PAYMENT DATE
3i Group, 3i Infrastructure, De La Rue, Games Workshop Group, Phoenix IT Group
INTERIM EX-DIVIDEND DATE
FirstGroup, Pinewood Shepperton, Volex, Workspace Group
QUARTERLY EX-DIVIDEND DATE
Assura Group Ltd., British Land Co
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Industrial production (Germany) (11:00)
GMS
Beacon Hill Resources, EG Solutions
SPECIAL EX-DIVIDEND PAYMENT DATE
European Investment Trust, Octopus Titan VCT 1, Octopus Titan VCT 2, Octopus Titan VCT 3
AGMS
Baring Emerging Europe
FINAL DIVIDEND PAYMENT DATE
Renewable Energy Generation Ltd., Ultimate Finance Group
FINAL EX-DIVIDEND DATE
Edinburgh
Worldwide Inv Trust, European Investment Trust, Majedie Investments,
Next Fifteen Communications, Paragon Group Of Companies, Smiths News,
Spirit Pub Company, Unicorn AIM VCT
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
Trade in Good and Services (09:30)
| US Market Report |
Slight drop masks multiple cross currents under the surface
Dow Jones: -0.41%
Nasdaq Comp.: -0.23%
S&P 500: -0.32%
US equities finished the day slightly but off their intra-day lows ahead of the release of aluminium giant Alcoa´s quarterly results, which typically mark the start of the corporate earnings season on the other side of the pond.
Of interest, state and local governments are in their best financial
shape since the recession, giving them leeway to cushion the US economy
from federal budget cuts with spending and hiring of their own,
according to analysis by Moody's Analytics, Bloomberg reports. Consumer credit data from the Federal Reserve released Tuesday evening was similarly positive.
More worryingly, the same news agency cited meteorologists who are
warning that drought conditions in the US could mimick those seen in the
30´s in the United States, which lasted for a period of several years.
Not coincidentally, food security is expected to be high on the agenda
at the next World Economic Forum, at Davos.
Hedge funds optimistic
Respondents to a December survey of hedge fund managers carried out by Trimtabs
overwhelming expect the S&P 500 to go up this year, but few
expected as strong a performance as 2012. Nevertheless, in a reseearch
not released earlier in the day Credit Suisse cited hedge fund positioning in equities as one reason to expect a consolidation in the very short-term.
Don´t bite the hand that feeds you
Market
reports that former insurance giant AIG -who was near the epicentre of
the 2008 meltdown on Wall Street - could file a lawsuit against The
United States, was apparently the 'talk of the town,' although
apparently in a slightly derisive manner.
Other published reports regarding a purported return to proprietary trading by the likes of Goldman Sachs and JP Morgan
also lifted some eyebrows. Current strategies however are now more
long-term in nature and thus supposedly fall out of the remit of the
proposed 'Volcker Rule'.
Seed company Monsanto has surpassed first fiscal-quarter earnings and boosted its full-year forecast.
Yum! Brands,
owner of the KFC fast-food chain, reported same-store sales which fell
more than expected after a Chinese government probe into one of its
former suppliers.
Merck&Co. may be interested in acquiring Bausch&Lomb.
Biotech outfit Celgene got a boost from an upgrade out of RBC to outperform.
Analysts at BB&T Capital Markets have downgraded their view on Boeing to hold from buy.
From a sector stand-point the worst performance was seen in the
following industrial groups: Renewable Energies (-6.61%) and Fixed Line
Telecommunications (-2.63%). Coal also fared poorly.
Consumer
electronics led on the upside, benefitting from the talk at the Las
Vegas Consumer Electronics Show (CES) about gadgets that can talk to
plants... anyone feel left out of the conversation?
Large drop in retail sales
Same store retail sales dropped 4.2% last week, according to the latest survey data from ICSC.
The NFIB's small company confidence index improved slightly, to 88
points in November (Consensus: 87.2) after a reading of 87.8 in the
month before.
Slight rise in cure futures
West Texas crude futures fell by 0.10% to the 93.06 dollar mark on the NYMEX.
10 year US Treasury yields are flat, at 1.87%.
S&P 500 - Risers
Celgene Corp. (CELG) $91.41 +6.63%
Coach Inc. (COH) $57.33 +3.06%
Tesoro Corp. (TSO) $41.40 +2.93%
Discovery Communications Inc. Class A (DISCA) $67.85 +2.93%
Monsanto Co. (MON) $98.50 +2.67%
Fossil Inc. (FOSL) $98.38 +2.64%
Gap Inc. (GPS) $32.01 +2.60%
Tiffany & Co. (TIF) $62.60 +2.45%
Boston Scientific Corp. (BSX) $6.12 +2.34%
Scripps Network Interactive Inc. (SNI) $59.12 +2.32%
S&P 500 - Fallers
Sears Holdings Corp. (SHLD) $40.16 -6.43%
GameStop Corp. (GME) $23.19 -6.30%
J.C. Penney Co. Inc. (JCP) $18.99 -4.86%
Electronic Arts Inc. (EA) $13.77 -4.71%
Chesapeake Energy Corp. (CHK) $16.88 -4.20%
Yum! Brands Inc. (YUM) $65.04 -4.20%
Aetna Inc. (AET) $44.38 -3.86%
R.R. Donnelley & Sons Co. (RRD) $9.01 -3.64%
Verizon Communications Inc. (VZ) $43.10 -3.56%
Genworth Financial Inc. (GNW) $8.04 -3.48%
Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $15.39 +1.45%
Exxon Mobil Corp. (XOM) $88.48 +0.63%
Home Depot Inc. (HD) $63.22 +0.60%
American Express Co. (AXP) $60.20 +0.57%
E.I. du Pont de Nemours and Co. (DD) $46.05 +0.55%
Wal-Mart Stores Inc. (WMT) $68.59 +0.28%
JP Morgan Chase & Co. (JPM) $45.50 +0.20%
Travelers Company Inc. (TRV) $73.19 +0.18%
Pfizer Inc. (PFE) $26.02 +0.15%
Merck & Co. Inc. (MRK) $42.18 +0.14%
Dow Jones I.A - Fallers
Verizon Communications Inc. (VZ) $43.10 -3.56%
AT&T Inc. (T) $34.35 -2.94%
Boeing Co. (BA) $74.13 -2.63%
Unitedhealth Group Inc. (UNH) $51.40 -1.32%
Caterpillar Inc. (CAT) $94.00 -1.27%
United Technologies Corp. (UTX) $83.55 -1.21%
General Electric Co. (GE) $20.90 -1.09%
Bank of America Corp. (BAC) $11.98 -0.91%
Intel Corp. (INTC) $21.09 -0.75%
Coca-Cola Co. (KO) $37.04 -0.70%
| Wednesday newspaper round-up |
HSBC, Pub companies, Rail fares...
The sale of HSBC'S
9.4bn-dollar (5.9bn-pound) stake in the insurer Ping An is in doubt
after Chinese authorities appeared to withdraw funding for part of the
deal. The China Development Bank is believed to have reneged on a
promise to back Thailand's Charoen Pokphand Group, the chosen bidder for
the stake. According to reports in Asia, the CDB is concerned that the
deal has become too complex. [The Independent]
Britain's biggest pub companies
have been accused of “greedy” and “exploitative” behaviour towards
their tenant landlords - and face fines for “unfair” treatment of the
publicans. Business Secretary Vince Cable has declared war on pub
companies who are “squeezing” their tenants through contracts that are
“focused on short-term profit”. Large companies such as Enterprise Inns and Punch Taverns,
which lease their properties to tenant landlords, have been accused by
campaigners of hastening the demise of Britain’s pubs by “overcharging”
for drinks and rent. [The Telegraph]
Passengers face potential rail fare rises
of up to 21 per cent over the next five years to help fund a £37.5
billion upgrade of the railway. Campaigners are warning of widespread
disruption as improvements are made to lines in the South, Midlands,
North, Scotland and Wales. Unions meanwhile are threatening possible
industrial unrest as rail bosses prepare to shed thousands of jobs to
meet efficiency targets. Network Rail said that its investment programme
outlined this morning would increase the number of seats during the
morning rush hour into London by 20 per cent and by 32 per cent in nine
other cities. It would also electrify 850 miles of track on the Great
Western Main Line and Midland Main Line and connect Oxford to Bedford
and Milton Keynes via a new electric railway linking the Great Western,
Midland and West Coast lines. [The Times]
US oil imports
will fall to their lowest level for more than 25 years next year, as
production booms while demand grows only slowly, according to a
government forecast. The US Energy Information Administration predicted
that net imports of liquid fuels, including crude oil and petroleum
products, would fall to about 6m barrels per day in 2014, their lowest
level since 1987 and only about half their peak levels of more than 12m
during 2004-07. The figures reflect the spectacular growth of US
production thanks to the unlocking of “tight oil” reserves using
hydraulic fracturing and horizontal drilling in states led by North
Dakota and Texas. [Financial Times]
Ireland
swept past a key milestone on its journey towards rehabilitation with
international lenders yesterday when its first mainstream debt offering
since the 2010 bailout was lapped up enthusiastically. The €2.5 billion
syndicated fundraising was three times subscribed as more than 200
pension funds, asset managers and other institutional investors
scrambled to lend to the debt-laden nation. The favourable response
comes a little over two years after Dublin was forced to accept a €67.5
billion rescue from the European Union and International Monetary Fund
to enable it to keep paying its bills. [The Times]
Shoppers looking for goose, venison and fine wines might usually be
found in the aisles of Waitrose, but this year the discount chain Aldi
offered all of the above at its trademark rock-bottom prices. The
strategy was a success and Aldi watched sales shoot up by more than 30%
in the 12 weeks up to Christmas, driving its share of the groceries
market to an all-time high of 3.2%. Figures from the market researchers
Kantar Worldpanel revealed the extent of Britain's polarised groceries
market this Christmas, with the high-end supermarket Waitrose and
discount chains, such as Aldi, Lidl and Iceland, all enjoying strong
growth. [The Guardian]
Goldman Sachs and HSBC
are expected to become the latest banks to settle with the US
authorities over allegations they improperly foreclosed on homeowners.
The deal is also expected to see Morgan Stanley and Ally Financial pay
at least $1.5bn (£934m) in compensation to borrowers hurt by having
their loans foreclosed in the aftermath of the banking crisis in 2008.
According to sources cited by Bloomberg, the four banks could reach a
settlement as early as this week, days after ten lenders agreed their
own $8.5bn deal with the authorities. [The Telegraph]
Europe’s top telecoms executives are discussing the creation of a
pan-European infrastructure network to unite the continent’s fragmented
national markets, following prompting from Brussels to consider more
radical options. The idea of pooling telecoms infrastructure emerged at a
private meeting between Joaquín Almunia, the EU’s competition chief,
and bosses of Europe’s biggest groups, including Deutsche Telekom,
France Telecom, Telecom Italia and Telefonica. [Financial Times]
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