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| London open: Footsie flat for second day, but CSR rockets Market Movers
- Eyes on Bernanke and hints on further stimulus - CSR jumps nearly 40 per cent after disposal - Wolseley sees 'challenging' Europe The FTSE 100 was flat on Tuesday morning following a subdued session the day before, as investors look ahead to a semi-annual monetary policy report from the US Federal Reserve later today with all eyes on Chairman Ben Bernanke. "The Fed Chairman has repeatedly stated that while they are reluctant to inject further liquidity into the economy at this time, they are ready to step in if the situation worsens," said analyst Craig Erlam from Alpari. "Each time we've heard this over recent month's however, data has shown the economy has worsened and no further QE has been adopted. This shows the Fed's reluctance to carry out further monetary easing despite what they have said repeatedly. However once again, we have seen sentiment improving as we near the testimony and I don't believe people are going to get the response they're hoping for." Markets will also be keeping a close eye on the German ZEW index of economic sentiment and a Spanish debt auction due out later today. FTSE 100: Wolseley drops on 'challenging' Europe Plumbing and heating products distributor Wolseley was a heavy faller after saying that the difficult market conditions in Continental Europe in the third quarter have continued and it is now exploring strategic options for the future of its businesses in France. | ||||||||||||||||||
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| Europe open: German companies cutting headcounts? -Spanish bill auction on tap -Moodys cuts ratings on 10 Italian banks -PIMCOs Gross says US approaching recession -Strategists move US QE3 forecast out to Q4 from Q3 FTSE-100:-0.05% Dax-30: 0.48% Cac-40: 0.32% FTSE-Mibtel: 0.40% Ibex 35: 1.29% Stoxx600: 0.09% The main European equity benchmarks have begun the day slightly higher. That in anticipation that the President of the US Federal Reserve may drop some hints this afternoon regarding the prospects for further quantitative easing on the other side of the Atlantic. Also worth watching out for, Spain´s Treasury will this morning auction up to €3.5bn in 12 and 18 month bills. Acting as a backdrop, economists at both Goldman Sachs and Deutsche Bank have today lowered their forecasts for second quarter economic growth in the United States down to 1%, from 1.3% and 1.4% previously. Similarly, Bill Gross, co-chief executive of the world´s largest bond fund, PIMCO, yesterday wrote that the US is approaching a recession. Be that as it may, in recent times strategists have been moving out their forecasts for a further round of quantitative easing to the last quarter of 2012, versus the third quarter previously forecast. Ironically, the above means that markets may not be assuaged by tonight´s testimony from Bernanke. Is anybody hiring?RWE is planning to cut at least another 2,000 jobs in Europe, according to the Rheinische Post. German department store Karstadt, which competes with Metro's Kaufhof, said it will cut 2,000 jobs as it spoke of challenging market conditions. The Financial Times Deutschland reports that Commerzbank is considering further job cuts in its retail banking business. The best performance can now be seen in the following industrial groups on the DJ Stoxx 600: automobiles (1.14%), oil (0.72%) and chemicals (0.57%). ZEW index on tapThe German ZEW Institute´s economic confidence index for the month of July will be released at 10:00. Euro bounces higher, probably on Fed speculationThe euro/dollar is now 0.34% higher at 1.2310. Front month Brent crude futures are lower by 0.204 dollars to the 103.10 dollar per barrel level in ICE trading. |
| US Market Report |
US close: Stocks slide again as retail sales disappoint
S&P 500: -3 at 1,354 NASDAQ Composite: -12 at 2,897 Macro economic dataRetail sales in the US fell 0.5% between May and June. It's the third straight month of weakening data on consumer spending.The IMF said worldwide growth in 2013 would be 3.9%, lower than the 4.1% estimate released in April. The ongoing European debt crisis and weakening emerging markets contributed to the revision. The Federal Reserve Bank of New York's general economic index rose to 7.4 from 2.3 in June, above economists' consensus forecast of a reading of 4.0. Readings in positive territory indicate expansion. Human Genome Sciences succumbs to GlaxoThe protracted courtship of pharmaceutical company Human Genome Sciences (HGS) by Anglo-American drugs giant GlaxoSmithKline ended with Glaxo lifting its offer to $14.25 a share from its previous offer of $13 a share to secure the backing of the HGS board.Glaxo is paying almost double the price at which HGS shares were trading before the US company revealed on April 18th that it had been approached by Glaxo. The terms value HGS at $3.6bn but because of HGS's cash position, the final bill for Glaxo will be around $3bn. One stock that's caught the eye was Gannett, the publisher of nearly 100 daily newspapers around the US, including USA Today. It climbed after announcing profits for the second quarter that beat the market consensus. This is quite an eye-opener because some of the revenue increase has come from the Internet which, up to now, has been cannibalising advertising income. On the subject of the Internet, waning web portal Yahoo! has poached Marissa Mayer from rival Google and made her its new Chief Executive Officer. She will replace interim boss Ross Levinsohn tomorrow, when the once king of the Internet is scheduled to issue results after the market closes. Banking behemoth Citigroup had a bright day after issuing better profits than forecast for the second quarter. Mastercard gained after announcing after the bell on Friday it is to settle with a group of retailers who had complained over price-fixing. A World Trade Organisation panel reported on Monday that China is discriminating against non-Chinese credit card companies such as American Express, Visa and Mastercard by barring them from handling transactions involving Chinese currency. Broker downgradesEngineering giant GE fell after getting downgraded by analysts at Morgan Stanley to "equal weight" from "overweight". Alpha Natural Resources took a tumble after the Bank of Montreal cited possible financing issues as its reason for downgrading the coal producer to "under-perform" from "out-perform". Sector peer Arch Coal also got the treatment from the Canadian bank, with Bank of Montreal cutting its rating to "under-perform" from "market perform".Other marketsWest Texas intermediate crude for August delivery rose $1.33 to $88.43 a barrel in trading on the New York Mercantile Exchange.The rise was in part due to a decline in the value of the greenback; the dollar index, which measures the US currency's value against a trade-weighted basket of currencies, eased to 83.192 from 83.324 late on Friday. S&P 500 - Risers Supervalu Inc. (SVU) $2.48 +6.90% First Solar Inc. (FSLR) $14.98 +5.72% Avon Products Inc. (AVP) $15.84 +4.28% Sprint Nxtel Corp. (S) $3.46 +3.90% Denbury Resources Inc. (DNR) $14.77 +3.79% Marathon Oil Corp. (MRO) $25.58 +2.85% Anadarko Petroleum Corp. (APC) $70.68 +2.72% Interpublic Group of Companies Inc. (IPG) $10.99 +2.71% Gannett Co. Inc. (GCI) $14.69 +2.66% Visa Inc. (V) $127.15 +2.47% S&P 500 - Fallers Alpha Natural Res (ANR) $6.85 -10.22% Dean Foods Co. (DF) $13.42 -7.58% MEMC Electronic Materials (WFR) $2.05 -6.82% Mead Johnson Nutrition Co. (MJN) $73.00 -5.22% Monster Worldwide Inc. (MWW) $7.33 -3.93% CONSOL Energy Inc. (CNX) $30.46 -3.79% Lowe's Companies Inc. (LOW) $25.80 -3.44% eBay Inc. (EBAY) $38.60 -3.38% Cerner Corp. (CERN) $77.59 -3.36% Ingersoll Rand Ltd. (IR) $39.63 -3.25% Dow Jones I.A - Risers Pfizer Inc. (PFE) $23.13 +1.40% American Express Co. (AXP) $58.64 +1.23% Chevron Corp. (CVX) $106.78 +0.73% 3M Co. (MMM) $88.10 +0.58% Dow Jones I.A - Fallers JP Morgan Chase & Co. (JPM) $35.09 -2.72% Home Depot Inc. (HD) $51.45 -1.23% Caterpillar Inc. (CAT) $81.15 -1.12% Alcoa Inc. (AA) $8.33 -1.07% Coca-Cola Co. (KO) $76.48 -1.04% Travelers Company Inc. (TRV) $62.55 -0.92% General Electric Co. (GE) $19.59 -0.91% Nasdaq 100 - Risers First Solar Inc. (FSLR) $14.98 +5.72% Sears Holdings Corp. (SHLD) $54.67 +2.03% Cognizant Technology Solutions Corp. (CTSH) $58.26 +1.75% Gilead Sciences Inc. (GILD) $51.94 +1.50% Nasdaq 100 - Fallers Research in Motion Ltd. (RIMM) $6.99 -3.45% eBay Inc. (EBAY) $38.60 -3.38% Cerner Corp. (CERN) $77.59 -3.36% FLIR Systems Inc. (FLIR) $18.33 -2.34% CH Robinson Worldwide Inc (CHRW) $58.92 -2.29% Infosys Technologies Ltd. (INFY) $39.33 -2.19% Baidu Inc. (BIDU) $107.35 -2.15% Vertex Pharmaceuticals Inc. (VRTX) $52.40 -2.15% |
| Newspaper Round Up |
| Tuesday newspaper round-up: BoE, Pound, Drilling Bob Diamond was rounded on by his former right-hand-man and three top City regulators today as he was accused of giving the direct instruction to lower the Libor rates at the heart of the rigging scandal. Jerry del Missier, former chief operating officer at Barclays, told the Treasury Select Committee that Mr Diamond had clearly told him in October 2008 to "get our Libor rates down". The disclosure came as the former Barclays boss was branded as being "less than candid" with MPs over the Libor scandal. Mr Diamond's testimony from last week - that Mr del Missier asked traders to lower Libor in October 2008 after "misinterpreting" an email - was crushed by Mr del Missier's claims that the order was relayed to him in a telephone conversation. Mr del Missier, the third of the three senior directors ejected from Barclays to be grilled by MPs over the scandal that cost the bank £290m in fines, confirmed that he had given the low-balling orders, The Telegraph reports. Bank of England Governor Sir Mervyn King will face a grilling from MPs today on his efforts to nurse the British economy out of a double-dip recession. Sir Mervyn's appearance before the House of Commons Treasury comes a day after the International Monetary Fund slashed its UK growth forecast to just 0.2% for 2012 and 1.4% for 2013 and less than a week after the announcement of an emergency £80bn "funding for lending" scheme designed to ward off a credit squeeze. He is also likely to face further questions about his handling of the Libor rate-fixing scandal, after it emerged that the then president of the US Federal Reserve Tim Geithner raised concerns with him about the index as long ago as 2008. A former member of the Bank's Monetary Policy Committee has called for Sir Mervyn to be removed before his term comes to an end in June 2013, The Telegraph says. One of Britain's biggest energy companies has been held to account for doorstep mis-selling after a four-year legal battle. David Osborn, a 59-year-old environmental consultant from Bristol, won his case against npower at Bristol County Court in what is believed to be the first time that an energy supplier has been successfully taken to court by a customer over doorstep mis-selling. The company also paid him £1,200 to settle harrassment claims after instructing ten debt collection agencies to chase money that it wrongly claimed he owed. Over almost two years, Mr Osborn and his family were subjected to threats that bailiffs would forcibly enter their home and disconnect electricity and gas, the court was told. A computer program was used to telephone the family up to four times a day, The Times reports. Changes to the tax system are making Britain a more attractive drilling location for oil and gas companies than arch-rival Norway, according to a report published today. Drilling activity in British waters leapt by 64% year-on-year in the three months to 30 June, compared with a 33% fall in Norway, Deloitte's quarterly report found. Existing tax breaks – for heavy oil, high-temperature, high-pressure and small fields – are tipping the balance in favour of investment in British waters, the accountancy firm reported, with measures outlined in the Budget expected to give a further boost to drilling. Graham Sadler, managing director of Deloitte's petroleum services group, told The Scotsman: "The post-winter spurt in activity does seem a little bit bigger than normal, so these figures are encouraging." Scotland's small manufacturers have "ambitious growth plans" but are being held back by rising fuel and transport costs as well as late-paying customers, research suggests. Supply chain problems are also constraining firms from expanding, according to a study by the Federation of Small Businesses (FSB) in Scotland. The organisation, which quizzed almost 100 companies across a diverse range of sectors, said more attention should be paid to businesses that account for almost 90% of the country's manufacturing sector. The findings indicate that, while about two-fifths of small manufacturers plan to develop products, 23% want to expand into other sectors and more than a fifth – or 22% – are looking to tap into further territories, many of them are being held back by the economic climate. The cost of fuel was cited by 95% of respondents as a reason for the lack of growth, while 88% said transport was a key barrier to expansion, The Scotsman writes. The pound hit new 44-month highs today versus the euro and will be worth €1.33 in a month's time, according to one analyst. As the euro continued to be undermined by worries over the financial stability of Italy and Spain, it fell to a level of 78.4p - it's lowest since late October 2008. That means the pound is now worth €1.275 on the foreign exchange markets. Continued uncertainty about the Spanish banks' bailout package and expectations of further interest rate cuts by the European Central Bank are putting pressure on the euro and one analyst predicted sterling would soon hit €1.33, The Daily Mail says. Greenpeace activists shut down 74 Shell petrol stations in Edinburgh and London in a protest against the company's plans to drill for oil in the Arcticthat saw 24 campaigners arrested on Monday. The campaigners are attempting to shut off petrol to London's 105 Shell stations and Edinburgh's 14. Seventy-one have been closed in London and three in Edinburgh. There have been 24 confirmed arrests, 18 in London and six in Edinburgh. The police in Edinburgh have reportedly parked cars outside all Shell stations across the capital. Protesters have scaled the roof of the Shell station on Queenstown Road near Battersea Park in London and on Dalry Road in Edinburgh, with police and fire crews attending the scene in Edinburgh, The Guardian reports. |
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