Stormy times for Cape Market Movers - techMARK 2,071.21 +0.10%
- FTSE 100 5,653.76 +0.33%
- FTSE 250 11,142.72 +0.05%
London has got off to a quiet start, with investors adopting a wait-and-see attitude ahead of today's completion of the meeting of the US Federal Reserve's policy making committee.
"It seems hope and sentiment for further stimulus from the US Fed Chairman and the ECB [European Central Bank] President have been key ideals supporting losses as well as enhancing gains over the last few days within the markets," suggests Shavaz Dhalla, a trader at spread betting firm Spreadex. "However, over the next few days investors are hoping that such sentiment will lead to a stimulus announcement from policy makers. A failure to do so, could result in a marathon of volatility within the global markets," Dhalla speculated. Cape plunges on profits warning The response to trading updates from FTSE 100 heavyweights Standard Chartered and Next has been positive, but it is in the FTSE 250 space where the drama is, as energy support services firm Cape issued a profit warning.
The group is unlikely to meet previous expectations for 2012, with problems likely to continue into 2013, despite a restructure of this part of its business.
Looking at the hammering Cape is getting in the market, the assertion from Peter Sands, the Chief Executive Officer of banking giant Standard Chartered, that there is "some virtue in being boring" is carrying extra weight.
The emerging markets focused bank saw profit before tax for the six months to the end of June was up 9% to $3,636m from $3,139m the year before, in line with operating income, which improved to $9,511m from $8.764m in the first half of 2011.
Fashion firm Next continues to march to a different drum in the retail sector, with its online and catalogue sales coming to the rescue in a period when umbrellas were the must-have accessory to any outfit.
Total sales for the first half of 2012 were up 4.5% against last year, the firm said, topping its prediction of growth between 1% and 4%.
Like-for-like sales came in at 2%, beating some analysts' expectations of a rise of just 1%.
Sales at its online and catalogue Next Directory arm were up 13.3% on last year making up for high street retail sales which crept up just 0.2%.
Can maker Rexam is getting a bit of a kicking and must be looking forward to getting shot of its loss-making Personal Care unit, which ensured that the packaging giant's bottom line was written in red at the halfway point of the year. Gilts steady, oil little changed The benchmark 10-year gilt is little changed in early trading. The yield has edged up from 1.47% to 1.48%.
The most widely traded contract for Brent Crude is down 12 cents at $104.80 a barrel.
FTSE 100 - Risers
Next (NXT) 3,344.00p +3.88%
Standard Chartered (STAN) 1,495.50p +2.12%
Antofagasta (ANTO) 1,088.00p +1.49%
Rolls-Royce Holdings (RR.) 863.00p +1.47%
Admiral Group (ADM) 1,108.00p +1.47%
Aviva (AV.) 295.50p +1.34%
HSBC Holdings (HSBA) 540.10p +1.16%
ARM Holdings (ARM) 557.50p +1.09%
Reed Elsevier (REL) 543.50p +1.02%
Intertek Group (ITRK) 2,762.00p +1.02%
FTSE 100 - Fallers
Rexam (REX) 420.30p -3.27%
Whitbread (WTB) 2,103.00p -1.54%
Weir Group (WEIR) 1,632.00p -1.39%
Johnson Matthey (JMAT) 2,151.00p -1.33%
Eurasian Natural Resources Corp. (ENRC) 389.10p -0.99%
Fresnillo (FRES) 1,442.00p -0.96%
Randgold Resources Ltd. (RRS) 5,750.00p -0.86%
Petrofac Ltd. (PFC) 1,480.00p -0.74%
BT Group (BT.A) 215.80p -0.69%
GKN (GKN) 209.20p -0.57%
FTSE 250 - Risers
Rightmove (RMV) 1,545.00p +3.55%
Avocet Mining (AVM) 77.20p +2.93%
Laird (LRD) 222.10p +2.35%
Filtrona PLC (FLTR) 475.80p +2.32%
Jupiter Fund Management (JUP) 221.30p +1.98%
RIT Capital Partners (RCP) 1,215.00p +1.67%
New World Resources A Shares (NWR) 300.00p +1.63%
UBM (UBM) 650.50p +1.56%
Lancashire Holdings (LRE) 795.00p +1.53%
Centamin (DI) (CEY) 67.50p +1.35%
FTSE 250 - Fallers
Cape (CIU) 174.90p -39.67%
Ruspetro (RPO) 140.78p -2.91%
African Barrick Gold (ABG) 368.00p -2.13%
Restaurant Group (RTN) 319.60p -1.99%
Kentz Corporation Ltd. (KENZ) 379.74p -1.82%
Home Retail Group (HOME) 76.15p -1.74%
JD Sports Fashion (JD.) 677.00p -1.60%
Beazley (BEZ) 156.30p -1.51%
Aberforth Smaller Companies Trust (ASL) 586.00p -1.51%
F&C Asset Management (FCAM) 86.70p -1.48%
| FX round-up |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Dollar slips ahead of policy meetings Hopes have been high that both the US and the European Central Bank will hint of further stimulus measures the bolster growth and help contain the Eurozone crisis. However by Tuesday traders had a change of heart and concern that action would not be taken by the Federal Reserve and the European Central Bank kept buyers at bay.
The euro gained against the greenback and the yen on Tuesday however any advance is expected to be short-lived on concern that policy makers will not take aggressive enough action to tackle the global economic slowdown.
The euro traded at $1.2311 from $1.2256 on Monday and rose 0.3% against the Japanese yen to ¥96.08.
The dollar index, which measures the US currency against a basket of six other currencies, fell to 82.619 from 82.829 on Monday.
Against the yen, the dollar traded at ¥78.18 from ¥78.19 before.
The British pound bought $1.5682 compared to $1.5704 on Monday as traders prepare for Bank of England's policy meeting on Thursday. UK Event Calendar
INTERIMS
Avocet Mining, F&C Asset Management, Fiberweb, Filtrona PLC, First Quantum Minerals Ltd., International Power, Jupiter Fund Management , Rexam, Rightmove, Shire Plc, Smurfit Kappa Group, Standard Chartered, StatPro Group, Taylor Wimpey, Vernalis, Xchanging
INTERIM DIVIDEND PAYMENT DATE
Electronic Data Processing
INTERIM EX-DIVIDEND DATE
BG Group, Brunner Inv Trust, Domino's Pizza Group, Impellam Group, Mecom Group, Microgen, Nichols, Porvair
QUARTERLY PAYMENT DATE
Mercantile Investment Trust (The), Torchmark Corp., Verizon Communications
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
Construction Spending (US) (15:00)
Crude Oil Inventories (US) (15:30)
FOMC Interest Rate (US) (17:15)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
MBA Mortgage Applications (US) (12:00)
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
Q2
Avocet Mining, First Quantum Minerals Ltd., Shire Plc, Smurfit Kappa Group
EGMS
Transense Technologies
AGMS
Atkins (WS), CML Microsystems, Cranswick, Cropper (James)
TRADING ANNOUNCEMENTS
Next
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
PMI Manufacturing (09:30)
FINAL DIVIDEND PAYMENT DATE
Homeserve, Next, Phoenix IT Group, Record, Shanks Group, TR Property Inv Trust, TR Property Inv Trust Sigma Shares, Vodafone Group
FINAL EX-DIVIDEND DATE
Aberdeen New Dawn Inv Trust, Creston, Heath (Samuel) & Sons, Johnson Matthey, JPMorgan Euro Small Co. Trust, Latham (James), ProVen Growth & Income VCT
PRODUCTION UPDATE
Antofagasta, ENRC |
| US Market Report | Eurozone doubts rattle equities
Dow Jones Industrial: -64 at 13,009
S&P 500: -6 at 1,379
NASDAQ Composite: -6 at 2,940 US equities followed Europe lower as doubts grew that Europe might not be able to deliver the whole-hearted commitment to saving the Eurozone that the region's leaders have recently been promising.
Closer to home, pundits were in two minds over whether the Federal Reserve would announce another round of quantitative easing when its policy-making committee finishes its monthly meeting tomorrow. Consumers keep their purses closed Disappointing US consumer spending data also depressed sentiment. Personal spending fell for the second month in succession in June. On a similar theme, retailer Coach moved sharply into reverse as like-for-like sales growth declined to 1.7%, down from 10% year-on-year growth a year earlier. Sector peers Lowe's and Abercrombie & Fitch fell in sympathy.
Humana was another stock heading south as the provider of Medicare benefits cut its 2012 profit forecast.
Archer Daniels's quarterly results failed to hit the target, as the corn processor's fiscal fourth quarter numbers were hit by falling ethanol prices and higher production costs as a result of the recent drought across large parts of the country.
Amongst those companies on the rise were heavyweights such as Pfizer and Apple. Pfizer is set to spin off up to one-fifth of its animal health unit through a stock market flotation. Apple, meanwhile, is expected to launch a new version of its ubiquitous iPhone as early as this September, according to various media reports.
Also gaining traction was Goodyear Tire & Rubber, the US's largest maker of tyres, after second quarter earnings came in ahead of expectations, though the group did lower its full year sales guidance for the second time this year.
Cummins, which makes engines for lorries, was another company which beat analyst forecasts with its earnings, as was steel-maker US Steel.
Financial information provider Dun & Bradstreet was the top performing blue-chip on reports that the group is contemplating putting itself up for sale.
Oil refiner Valero Energy was wanted after reporting a rise in second quarter profits on the back of improved margins. The group unveiled plans to spin off its retail operations. Manufacturing orders rise, according to the Chicago NAPM Personal incomes grew by 0.5% month-on-month in June, slightly ahead of the 0.4% expected by the consensus. Worth noting however, personal income and savings data for all three of the past three years have been revised downwards.
In monthly terms consumption figures, on the other hand, came in weaker than forecast.
The Chicago NAPM´s purchasing managers index (PMI) for the month of July has come in ahead of expectations, at 53.7, after 52.9 in the month before. Gains in new orders and order backlogs contributed to the rise.
Economists at Barclays had this to say of the PMI data: "the broader picture mirrors the modest increases that we saw in the Empire State and Philly Fed indices for July, and is consistent with our forecast of a modest rebound in the ISM tomorrow to 50.5. While below the levels seen during Q1, such a print would reaffirm that the pace of growth in manufacturing activity has slowed rather than contracted in recent months."
The Conference Board´s consumer confidence index for the month of July showed an improvement, rising to 65.9 after 63.7 in June (Consensus: 61.8).
The expectations sub-index improved to 79.1 from 73.4 in June. Oil inventories in the week ended July 27th fell by 11.6m barrels. Oil slides to two-week low West Texas crude for September delivery fell $1.72 to $88.06 a barrel on the NYMEX. 10-year US Treasuries rose by 10/32 dollars, with yields easing to 1.47%.
S&P 500 - Risers
Dun & Bradstreet Corp. (DNB) $80.19 +13.42%
Goodyear Tire & Rubber Co. (GT) $11.45 +10.41%
Supervalu Inc. (SVU) $2.47 +10.27%
First Solar Inc. (FSLR) $15.54 +9.36%
United States Steel Corp. (X) $20.65 +9.14%
Cummins Inc. (CMI) $95.90 +5.99%
AK Steel Holding Corp. (AKS) $5.32 +5.56%
MEMC Electronic Materials (WFR) $1.92 +5.49%
Valero Energy Corp. (VLO) $27.50 +5.44%
S&P 500 - Fallers
Coach Inc. (COH) $49.33 -18.57%
Humana Inc. (HUM) $61.60 -12.69%
Masco Corp. (MAS) $12.03 -8.31%
Lowe's Companies Inc. (LOW) $25.37 -5.55%
Archer-Daniels-Midland Co. (ADM) $26.09 -5.09%
Nabors Industries Ltd. (NBR) $13.84 -5.08%
Abercrombie & Fitch Co. (ANF) $33.80 -4.49%
Unitedhealth Group Inc. (UNH) $51.09 -4.07%
Dow Jones I.A - Risers
Pfizer Inc. (PFE) $24.04 +1.39%
AT&T Inc. (T) $37.92 +1.31%
Bank of America Corp. (BAC) $7.34 +0.82%
Cisco Systems Inc. (CSCO) $15.95 +0.50%
Dow Jones I.A - Fallers
Home Depot Inc. (HD) $52.18 -2.01%
Caterpillar Inc. (CAT) $84.21 -1.73%
Walt Disney Co. (DIS) $49.14 -1.33%
Boeing Co. (BA) $73.91 -1.27%
American Express Co. (AXP) $57.71 -1.00%
Nasdaq 100 - Risers
First Solar Inc. (FSLR) $15.54 +9.36%
Apple Inc. (AAPL) $610.76 +2.64%
Symantec Corp. (SYMC) $15.75 +1.81%
Nvidia Corp. (NVDA) $13.54 +1.58%
Expedia Inc. (EXPE) $56.99 +1.55%
Nasdaq 100 - Fallers
Starbucks Corp. (SBUX) $45.28 -3.41%
Priceline.Com Inc. (PCLN) $661.74 -3.05%
Fiserv Inc. (FISV) $70.13 -2.93%
Vertex Pharmaceuticals Inc. (VRTX) $48.51 -2.90%
eBay Inc. (EBAY) $44.30 -2.85%
Patterson Companies Inc. (PDCO) $34.10 -2.79%
Bed Bath & Beyond Inc. (BBBY) $60.95 -2.67%
Henry Schein Inc. (HSIC) $74.81 -2.59%
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| Newspaper Round Up | BoE, Euro break-up, Tesco
Four leading economists have called on the Bank of England's Monetary Policy Committee to cut interest rates from their already historic low in an attempt to kickstart growth. The members of The Times' Shadow MPC — Michael Saunders, UK economist at Citigroup; Sushil Wadhwani, of Wadhwani Asset Management; Sir Steve Robson, the former second permanent secretary to the Treasury; and Charles Goodhart, of the London School of Economics — urged the Bank to cut rates by a quarter point to 0.25 per cent. "The economic outlook has worsened since the July meeting and inflation prospects have improved further. More stimulus is needed to prevent inflation falling below target over time," Mr Saunders said before the MPC's two-day meeting, which begins today. Wadhwani and Mr Saunders also voted for more money to be pumped into the flagging economy through quantitative easing.
Britain's heavily indebted economy would suffer a deeper slump than Germany's in the immediate aftermath of a break-up of the euro, a leading consultancy has predicted. Fathom Financial Consulting estimates that the UK's economic output would drop by 5.2% in 2013 in the case of an implosion of the single currency and a full-blown banking collapse. That compares with a 5% decline in gross domestic product in Germany and a 4.3% drop in the United States. The UK would suffer disproportionately in part because of its large financial sector and overvalued housing market. A flood of cash into sterling would also drive up the pound and crush exports, Danny Gabay, a director at Fathom, said. Speaking at the consultancy's Monetary Policy Forum, he said that the Bank of England would have to print £1tn in its quantitative easing programme to stop the pound from skyrocketing, The Times reports.
The Serious Fraud Office vowed to press on with its controversial fraud investigation into property entrepreneur Robert Tchenguiz despite suffering a damning High Court judgment on the case. The SFO said the inquiry would continue with "renewed focus and vigour", just hours after a High Court judge found it had illegally obtained search warrants used in dawn raids against Mr Tchenguiz and his brother Vincent. The decision means the multi-million pound investigation into Mr Tchenguiz's links with failed Icelandic bank Kaupthing could run into a fourth year. Work carried out by the SFO in relation to the Tchenguiz investigation had already been labelled incompetent by the judge presiding over the judicial review into their arrests and the searches of their properties, The Telegraph says.
Apple was "literally betting the company" when it introduced the iPhone, a US court heard on the first full day of a patent trial in which the US company is squaring up against Korean rival Samsung. The keenly-anticipated clash has been called the 'patent battle of the century' in which the competitors are suing each other for billions of dollars in damages for alleged infringements of patents used in their phones. Apple "were about to enter a field dominated by giants," Harold McElhinny, a lawyer for Apple, told jurors at the court in San Jose, California. But its designers created a "phone the world had never seen before." In Apple's opening statement, jurors were shown an internal review that Samsung did of the iPhone in late 2007 in which it is described as "beautiful" and "easy to copy." Apple is seeking more than $2.5bn (£1.6bn) in damages from Samsung, which has in turned sued Apple, according to The Telegraph.
Switzerland is facing the consequences of a vow to keep the franc weak. Figures released by the Swiss National Bank on Tuesday show that its euro holdings have ballooned in the second quarter of the year, as the bank battles haven demand from investors and struggles to maintain a ceiling of SFr1.20 against the single currency. But that strategy carries risks. One of these is that they'll be holding an asset that's viewed as being very poor quality says Steven Englander, foreign exchange strategist at Citigroup. Furthermore, The SNB is also creating a headache for other central banks, faced with rising demand for their currencies as Switzerland embarks on its rebalancing act. "Sweden will need to set monetary policy now with the SNB in mind," says Mr Yu. As well, Geoffrey Kendrick, foreign currency analyst at Nomura, estimates that, even if the central bank bought no more euros, it still needs to sell SFr20bn of euros to return to the same proportion of holdings it had in the first quarter. Offloading that could push the single currency sharply lower against other big currencies such as the dollar, The Financial Times writes.
Tesco was dealt a blow yesterday after ratings agency Standard & Poor's said it was considering cutting its credit rating and suggested that the retailer sell off businesses to cut its debt. S&P did not alter its "A-/A-2" rating – a grade that denotes an "excellent" business risk profile – but changed its outlook from "stable" to "negative" due to concerns about "weakening" profits at the supermarket giant. In January Tesco issued its first profit warning in 20 years, a shock that was blamed on UK shoppers turning their backs on its stores. "We believe that in light of currently difficult industry conditions, a trend of weakening profitability and low top-line growth will continue," said S&P. Its analysts said Tesco boss Philip Clarke's plans to revitalise the business by hiring more staff and revamping stores would "negatively affect its trading margins", and added: "In our opinion, market conditions will continue to be extremely competitive, particularly in the UK, with high pricing pressure throughout the industry," The Guardian reports. |
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