Commodities: Oil slips below $96
Crude oil prices snapped a four-day winning streak on Monday, mirroring weak stock markets, and concern that slowing global growth will curb demand for oil.
Crude oil for September delivery declined 4 cents to settle at $95.97 a barrel on the New York Mercantile Exchange. Trading was thinner than usual on Monday ahead of the expiry of the Nymex September contract on Tuesday. Otherwise oil prices have risen over 3% in the last four sessions.
On the ICE futures exchange October Brent crude eased one cent to settle at $113.70 a barrel after spending most of the session dipping in and out of losses.
Stock markets in Europe turned lower after the European Central Bank said reports that it was considering capping bond yields for debt struck economies was "absolutely misleading."
The Eurozone monetary authority added that, "it would be wrong to speculate on the future shape of any interventions." The comments follow a weekend article in German weekly Der Spiegel which said the Eurozone´s monetary authority may set "caps" on the sovereign debt yields of Spain and Italy.
Oil buyers also turned cautious amid speculation over a US Strategic Petroleum Reserve release and following reports of an increase in Saudi Arabian production.
Among precious metals gold futures settled 0.2% higher on Monday to the strongest close since mid June while platinum prices scored a third day of consecutive gains.
Gold prices remained within a tight range in a day short of any major headlines from Europe or the US.
Gold futures for December delivery rose $3.60 to settle at $1,623 an ounce on the Comex division of the New York Mercantile Exchange.
| UK Event Calendar | Tuesday August 21
INTERIMS
Afren, Capital Drilling Ltd. (DI), Coca-Cola HBC S.A., CPP Group, Fisher (James) & Sons, Gem Diamonds Ltd. (DI), Glencore International, H&T Group, Persimmon, Severfield-Rowen, Source BioScience, UK Commercial Property Trust, Wood Group (John)
Q2
ADC African Development Corporation GmbH
GMS
ILX Group
ANNUAL REPORT
Falkland Islands Holdings
AGMS
Falkland Islands Holdings, Goldman Sachs Dynamic Opportunities Ltd, World Trust Fund
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
Public Sector Finances (09:30) |
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | European stock futures suggest a higher opening on Tuesday despite uncertainty over future action by the European Central Bank. The ECB said yesterday that speculation about plans to set up a cap on borrowing costs of crisis-hit countries is misleading, as the decisions concerning bond buying have not yet been discussed by the ECB's governing council.
Asian stocks are rising broadly, with Chinese shares up 0.3 percent after the People's Bank of China injected 220 billion yuan ($34.6 billion) into the banking system via reverse-repurchase operations, with an aim to improve liquidity and bolster a slowing economy. China's key money-market rates edged higher as today's relatively large cash injection, the most in a single day, doused hopes of a cut in banks' reserve ratio in the near term.
Key benchmark indexes in Australia, Japan and South Korea are posting modest gains, while Hong Kong's Hang Seng index is down 0.4 percent.
The euro is holding steady against the dollar and yen ahead of a crucial week of meetings with eurozone leaders which could determine Greece's future and the stability of the 17 countries that use the euro.
German Foreign Minister Guido Westerwelle stressed yesterday that his country wants Greece to continue implementing reforms and tough cost-cutting measures it had earlier agreed while availing two massive international bailout loans for avoiding bankruptcy.
Speaking to reporters after talks with his Greek counterpart, Dimitris Avramopoulos, in Berlin, Westerwelle stressed that "a substantial softening of the agreements and the agreed reforms is not possible from the German government's point of view." The German foreign minister also noted that a final decision regarding policy changes should be taken only after the 'troika' of creditors, comprising the IMF, EU and ECB, release their report on Greece next month.
On the macroeconomic front, investors await public sector finance data from the U.K. and the outcome of a short-term debt auction in Spain for further directional cues. Across the Atlantic, reports on existing home sales and new home sales due this week will provide some clues about whether the Fed would ease its policy in September.
In domestic corporate news, Swiss private-banking group Julius Baer Group said that it would limit its proposed rights offering to 500 million Swiss francs as part of its capital raise to fund its acquisition of Bank of America Corp.'s non-US wealth management unit.
European stocks fell modestly on Monday after Germany's Bundesbank reiterated its opposition to the European Central Bank's plan to purchase more government bonds, warning that the decision to share solvency risks should be taken by governments, and not by central banks.
The Euro Stoxx 50 index of eurozone bluechip stocks slid 0.2 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.4 percent, while the major averages around Europe fell between 0.1 percent and 0.5 percent.
U.S. stocks ended almost unchanged overnight, with a lack of fresh directional cues amid little major corporate and economic news contributing to the lackluster performance. The Dow dipped 3.56 points, the tech-heavy Nasdaq edged down 0.38 points and the S&P 500 inched down 0.03 points. | US Market Report | US close: Stocks flat with the focus on Europe
Market Movers:
Dow Jones: 13,272 (-0.03%)
Nasdaq: 3,076 (-0.01%)
S&P 500: 1,418 (0.00%) US stocks started the week on a dull note, finishing flat on the back of fading optimism surrounding the Eurozone.
Both the Dow Jones Industrial Average and the S&P 500 registered their sixth straight weekly gain last week, while the Nasdaq rose for the fifth consecutive week.
Germany's Bundesbank reiterated its opposition to the European Central Bank's (ECB's) intervention in the bond markets today, saying that such an act coms with "considerable risks for stability". It said: "Decisions about a possibly even broader mutualisation of solvency risks should be anchored in financial policy, meaning with the governments and parliaments, and should not occur via central bank balances."
Markets were also reacting to reports that the ECB is considering setting caps on bond spreads in southern Europe in order to help keep a lid on periphery country borrowing costs.
Meanwhile investors were looking ahead to minutes of the latest Federal Open Market Committee (FOMC) due out on Wednesday. Economic data since the meeting on August 1st has dampened hopes of further quantitative easing by the Fed.
Coventry surges after Aetna deal
Coventry Health Care surged 20% after Aetna agreed to buy the medical-care provider for $5.7bn in a cash and stock deal. Aetna gained over 5% after the announcement with its Chief Executive Officer Mark Bertolini saying: "Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing government sector and expand our relationships with providers in local geographies."
Electronics retailer Best Buy dropped over 10% after announcing that negotiations with its ex-Chief Executive Officer, Richard Schulze, have fallen through. This after the company's board signalled that it might not accept his buy-out offer.
US home improvement chain Lowe's slipped after reporting that profits fell by 10% in its fiscal second quarter, disappointing analysts who had pencilled in a slight rise. The firm also lowered its full-year earnings guidance.
Sirius gained after Liberty Media said that it plans to take control of the satellite-radio broadcaster and that this is now easier as it controls over 50% of its stock.
Kinder Morgan is to sell $3.3bn in energy pipeline and infrastructure assets in the Rocky Mountains to Tallgrass Energy Partners, including debt.
S&P 500 - Risers
Coventry Health Care Inc. (CVH) $42.04 +20.32%
First Solar Inc. (FSLR) $22.46 +5.64%
Aetna Inc. (AET) $40.18 +5.63%
GameStop Corp. (GME) $19.49 +4.95%
Southwest Airlines Co. (LUV) $9.44 +3.40%
CONSOL Energy Inc. (CNX) $33.06 +3.38%
NRG Energy Inc. (NRG) $22.26 +3.34%
Valero Energy Corp. (VLO) $29.75 +3.30%
Citigroup Inc. (C) $29.98 +3.27%
Hewlett-Packard Co. (HPQ) $20.09 +2.92%
S&P 500 - Fallers
Best Buy Co. Inc. (BBY) $18.16 -10.41%
Lowe's Companies Inc. (LOW) $26.26 -5.78%
Sears Holdings Corp. (SHLD) $57.32 -3.65%
D. R. Horton Inc. (DHI) $18.41 -3.00%
Beam Inc. Common Stock (BEAM) $58.41 -2.97%
Waste Management Inc. (WM) $34.60 -2.97%
Autodesk Inc. (ADSK) $33.96 -2.89%
PulteGroup Inc. (PHM) $13.01 -2.77%
Lennar Corp. Class A (LEN) $31.88 -2.63%
JDS Uniphase Corp. (JDSU) $11.71 -2.50%
Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $20.09 +2.92%
Bank of America Corp. (BAC) $8.15 +1.88%
JP Morgan Chase & Co. (JPM) $37.37 +1.05%
Merck & Co. Inc. (MRK) $43.75 +0.95%
McDonald's Corp. (MCD) $88.17 +0.93%
Travelers Company Inc. (TRV) $65.64 +0.78%
Kraft Foods Inc. (KFT) $40.77 +0.67%
Alcoa Inc. (AA) $8.80 +0.57%
Pfizer Inc. (PFE) $23.91 +0.50%
Caterpillar Inc. (CAT) $90.44 +0.48%
Dow Jones I.A - Fallers
American Express Co. (AXP) $56.90 -1.20%
Verizon Communications Inc. (VZ) $43.70 -0.82%
AT&T Inc. (T) $36.89 -0.75%
Cisco Systems Inc. (CSCO) $18.94 -0.63%
Microsoft Corp. (MSFT) $30.74 -0.52%
Exxon Mobil Corp. (XOM) $87.95 -0.51%
Intel Corp. (INTC) $26.23 -0.38%
Procter & Gamble Co. (PG) $66.75 -0.37%
3M Co. (MMM) $93.89 -0.37%
United Technologies Corp. (UTX) $80.08 -0.36%
Nasdaq 100 - Risers
Dell Inc. (DELL) $12.56 +2.78%
Apple Inc. (AAPL) $665.15 +2.63%
Celgene Corp. (CELG) $70.81 +2.46%
Garmin Ltd. (GRMN) $41.84 +1.60%
Perrigo Company (PRGO) $108.64 +1.60%
Expedia Inc. (EXPE) $52.44 +1.59%
Warner Chilcott Plc (WCRX) $17.20 +1.24%
Mylan Inc. (MYL) $23.88 +1.06%
Netflix Inc. (NFLX) $64.24 +0.86%
Wynn Resorts Ltd. (WYNN) $105.60 +0.76%
Nasdaq 100 - Fallers
Sears Holdings Corp. (SHLD) $57.32 -3.65%
Autodesk Inc. (ADSK) $33.96 -2.89%
Green Mountain Coffee Roasters Inc. (GMCR) $24.34 -2.44%
Avago Technologies Ltd. (AVGO) $35.96 -2.39%
Baidu Inc. (BIDU) $130.91 -2.29%
Cerner Corp. (CERN) $71.11 -2.00%
Microchip Technology Inc. (MCHP) $35.07 -1.85%
F5 Networks Inc. (FFIV) $101.68 -1.82%
O'Reilly Automotive Inc. (ORLY) $86.49 -1.70%
Maxim Integrated Products Inc. (MXIM) $28.31 -1.70% |
| Newspaper Round Up | Tuesday newspaper round-up: ECB, Rank, Everything Everywhere
The Daily Telegraph reports today that it can confirm reports in Der Spiegel that European Central Bank (ECB) technicians are examining plans to cap Spanish and Italian bond yields, among other options. This may prove to be the "game changer" that critics around the world have been demanding for two years, the newspaper adds. The ECB's director-general of market operations, Ulrich Bindseil, is spearheading the plans in talks with experts from the ECB's family of national central banks. Market, monetary policy and risk management committees are working to put together a draft. "They don't take sides. They just lay out the pros and cons and leave it to the governing council to decide," said one EU diplomat who was cited.
Billionaire George Soros has taken a 7.85% stake in Manchester United, betting on the UK football team to score in the financial markets as well as on the pitch. News of the investment, made via Soros Fund Management, was released in an SEC filing after the closing bell rang on Wall Street today. The 82-year-old now owns 3,114,588 shares in the team but carries almost no voting power and will receive no dividend, thanks to the structure of the club's flotation. Manchester United floated 16.7m shares in New York at $14 each on August 10, giving it a total valuation of $2.3bn and making it the most valuable team in the world. Its main contender for the title, Real Madrid, is worth just $1.88bn, The Telegraph says.
A multimillion-pound deal to create Britain's biggest chain of casinos was hanging by a thread last night after the Office of Fair Trading unexpectedly referred the merger to the Competition Commission. The regulator said that it was concerned that the proposed acquisition by Rank Group of Gala Casinos would "substantially reduce competition in the casino sector" and could "result in a worse deal for consumers". Rank, which had announced the deal in May, said that it was "considering the implications of this decision", adding: "A further announcement will be made in due course." Carl Leaver, the chief executive of Gala Coral Group, which also owns betting shops and bingo clubs, said that he was "surprised" by the decision. "Once we get the full report, we will sit down with our legal advisors and decide on the next step," he said, according to The Times.
Apple yesterday became the most valuable public company in history. The share price of the technology firm rocketed to £423.33 in frenzied trading, taking the total value of its shares to £395bn. Apple was already the No.1 on companies' current value, a position it has held since dethroning oil giant Exxon Mobil last August. But a doubling of its market capitalisation value in just 17 months means it has now knocked its rival technology firm Microsoft from the all-time top spot. The surge in share price has been driven by the impending arrival of Apple's latest gadget, the fifth-generation iPhone, which is expected to go on sale in the UK in October. Previous generations of the smartphone have been a major success for the firm. Speculation that Apple is gearing up to launch a cut-price iPad tablet computer has also boosted the share price. Until yesterday Bill Gates's Microsoft had held the title of the all-time most valuable publicly traded company since December 1999, the peak of the 'dotcom bubble', when its market capitalisation flirted with the £394bn mark, the Daily Mail writes.
Online spending grew at its fastest rate this year in July, even as the high street endured a tough month. Strong sales of fashion accessories and electronic goods helped to lift internet sales by 17% to £6.5bn, according to the IMRG Capgemini e-Retail Sales Index. Sales made over mobile devices rose more than four-fold against last year. The weakest categories were lingerie, with sales down 2% year-on-year, and beer, wines and spirits, which were flat compared with last year and 11 per cent down on June. Chris Webster, of Capgemini, said: "The excitement and build up to the Olympic Games certainly contributed to July's strong performance." Online-only players outperformed the online operations of traditional retailers for the seventh month in a row, with growth of 19.5% and 15% respectively. Travel sales rose by 12%, with the average purchase value rising 24% to £1,050, The Times reports.
Barnes & Noble, the world's largest books chain, will take on Amazon and Apple with the launch of its digital book device in Britain. The American retail giant said yesterday that it will release the Nook e-reader in Britain in mid-October, with 2.5m titles available to buy. The library is larger than Amazon's Kindle store, which has "more than a million" titles for download. The move is likely to create a fierce battle in the market for e-books in this country, which is dominated by Amazon. Devices such as the Sony Reader and WH Smith's Kobo have failed to take off. The Nook, which is the second-bestselling digital books device in the US, is likely to provide tougher competition than previous challengers. Microsoft recently bought a $605m stake in the Nook business, giving Barnes & Noble the financial firepower to expand, according to The Times.
Everything Everywhere is in advanced discussions to sell part of its crucial spectrum holdings capable of carrying next generation 4G mobile services to Three, the rival network owned by Hutchison Whampoa. The mobile phone operator formed by the merger of Orange and T-Mobile two years ago has been forced to sell the spectrum by European competition authorities. The deal would give Three guaranteed ownership of rare spectrum that can carry superfast 4G mobile broadband, and potentially at a lower price than bidding against its three rivals in the much delayed auction of lower frequency 4G spectrum pencilled for the end of the year by Ofcom, the telecoms regulator. Morgan Stanley is advising on the sale, which has also interested Vodafone and O2. All parties declined to comment, The Financial Times says.
The grocery giant Tesco is facing a hefty fine after a dawn raid by the UK Border Agency found it had been employing foreign students illegally. Immigration officials have arrested 20 people at the supermarket's dotcom warehouse in south London for working substantially longer than they were allowed. In full co-operation with Tesco, UKBA officers conducted the raid at 3am on 21 July at the grocer's facility in Croydon, which delivers online orders from Tesco.com. The investigation follows a renewed effort by the Government to clamp down on "visa abuse", which has seen more than 2,000 offenders removed since the beginning of May, The Independent reports. |
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