UK/Euro Financial Market Daily Morning Briefing – UK/Euro Financial Market Daily Morning Briefing
|
A daily snapshot of the UK, French, German and Dutch markets just after the market open. Including a diary of key financial events across the UK and a summary of U.S after market close. Click here to receive or daily bulletins. News provided by AFX/Associated Press.
|
|
UK/Euro Financial Market Daily Morning Briefing 04-01-2019
01/04/2019
Morning Euro Markets Bulletin
Calculus VCT – 0% Initial Fee – Limited Time Offer
Calculus Capital is waiving initial fees on its VCT, The move makes the Calculus VCT one of the most attractive in the current marketplace – most providers are charging between 3% and 5%.
Find out More
|
|
London open: Stocks rise amid trade hopes as investors eye payrolls
|
|
|
London stocks rose in early trade on Friday amid renewed optimism about Sino-US trade relations and following encouraging Chinese services data, as investors eyed the release of the latest US non-farm payrolls report.
At 0830 GMT, the FTSE 100 was 0.8% higher at 6,746.04, while the pound was up 0.3% against the dollar at 1.2662 and 0.1% firmer versus the euro at 1.1096.
Sentiment got a lift from news that the US and China will hold vice-ministerial level negotiations over trade in Beijing on 7-8 January. These will be the first face-to-face talks since Donald Trump and Xi Jinping met at the G-20 meeting in December and agreed a temporary truce on tariffs.
Also helping to underpin sentiment was data showing that China's service sector expanded at a slightly faster pace in December. The Caixin China services purchasing managers' index ticked up 53.9 in December from 53.8 in November, beating expectations for a reading of 52.9.
Neil Wilson, chief market analyst at Markets.com, highlighted the recent run of bad news spooking markets, including China’s Caixin manufacturing PMI, Apple’s profit warning and weak US ISM manufacturing data.
"All these suggest that the Sino-US trade war is having a greater effect on confidence and activity on both sides of the Pacific than we had maybe thought likely.
"However, we see some light, albeit dim. First, there are signs of progress in terms of the trade spat. Trade talks take place next week and we may start to see that the effects on both the stock markets and on the real economies of the respective countries will focus their attention. That may just be an optimist’s view of the world - the US is still in the stronger position and will not easily give it up.
"Two, markets are starting to price in a rate cut this year rather than another hike. The market has underestimated the Fed in the past on hikes, notably in 2017, but for most of the last decade it has been the market that has got things more accurate than the Fed. The sharp decline in US yields is not itself a ‘good thing’, not least as we see points of inversion along the curve, but if the Fed is seen being easier this year it could offer succour to equity markets."
The release of the US non-farm payrolls report, unemployment rate and average hourly earnings at 1330 GMT will be the highlight of the day on the macro calendar.
The jobs report is expected to show that 177,000 jobs were added in the US in December, while the unemployment rate is expected to have held steady at 3.7%. Average earnings on a yearly basis are forecast to have eased to 3% from 3.1%, but on a monthly basis they are expected to be 0.3%, up from 0.2%.
On the UK data front, the Bank of England's net lending, consumer credit, mortgage approvals and IHS Markit’s services PMI survey are due at 0930 GMT.
Figures out earlier from Nationwide showed that house prices fell last month in their steepest monthly drop for over seven years and with annual growth the slowest in almost five years.
Home prices in December dropped 0.7% compared to the month before - the biggest month-on-month tumble since August 2011.
Compared to the year before, prices in December were up 0.5%, which was a significant slowing from the 1.9% growth in November and in fact the slowest annual growth since February 2013. The average forecast had been for growth of 1.5%.
For the whole of 2018, house price growth slowed to 0.5% from 2.6% in 2017.
The Nationwide survey is in line with other housing surveys, which have shown a sharp fall in buyer demand towards the end of last year, with other wider consumer surveys showing deteriorating confidence.
"Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchases, have remained broadly stable in recent months, but forward-looking indicators had suggested some softening was likely," said Robert Gardner, Nationwide's chief economist.
He also noted that the number of properties coming onto the market also slowed though this "doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers".
"It is likely that the recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs," he added.
Nationwide expects UK house prices to rise at a low single-digit pace in 2019 as long as the economy continues to grow at a modest pace, with unemployment and interest rates remaining close to current levels.
Samuel Tombs at Pantheon Macroeconomics agreed that a sustained period of falling house prices is unlikely, with unemployment at a 43-year low and business surveys pointing to steady growth in employment over the coming months.
If the government agrees a Brexit deal, however, that would give the Bank of England the green light to begin a "proper tightening cycle", which would suggest growth in house prices is likely to remain slower than incomes, around 2% this year he predicts.
There wasn’t a whole lot happening on the corporate front, but Premier Inn owner Whitbread rallied after an upgrade to ‘overweight’ by Barclays, while Sainsbury’s was hit by a downgrade to ‘reduce’ at HSBC.
Oil producers and service providers were providing a boost to the FTSE indices as crude prices picked up further. A barrel of Brent was up 1.6% to $56.85, while WTI was costing 1.7% more at $47.90.
|
|
|
MERRY CHRISTMAS
For a limited time only we are offering a 2 week FREE Trial of our Trading Alerts.
Register now
|
|
|
Top 10 FTSE 100 RisersSponsored by Interactive Investor | | |
Top 10 FTSE 100 FallersSponsored by Interactive Investor | | |
|
|
|
Are you looking for a profitable trading strategy?
Do you have 20 minutes a day to follow this strategy?
Yes! Then you need to watch this session.
In fact for the past 6 months this strategy has been averaging +1275 pips per month!
Book A Free Place To Find Out More
|
|
US close: Stocks continue declines as Apple drags down tech sector
|
|
|
US stocks finished with some heavy losses on Thursday, as Apple’s move to slash its first-quarter sales guidance and a softer-than-expected manufacturing report spooked investors.
The Dow Jones Industrial Average ended the session down 2.83% at 22,686.22, the S&P 500 was off 2.48% at 2,447.89, and the Nasdaq 100 fell 3.36% to end at 6,147.13.
At the opening bell, the Dow had tumbled more than 550 points as a result of Apple warning investors after the close on Wednesday that its first-quarter revenues would be lower than expected due to weaker sales in China.
The tech giant said it now expects revenues of around $84bn over the three months to 29 December, down from previous guidance of between $89bn and $93bn.
It would mark Apple’s first quarterly year-on-year drop since 2016.
In a letter to shareholders, chief executive Tim Cook highlighted slowing growth in China and trade tensions with the US.
"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China," Cook said.
The news from Apple only served to exacerbate worries about a slowdown in China, following disappointing Chinese manufacturing figures earlier in the week.
“Tech giant Apple sent alarm bells ringing last night after it cautioned the market that sales figures would disappoint,” said James Hughes, chief market analyst at Axitrader.
“It’s activity both at home and across the Pacific in China that is biting, and the implications of this saw US index futures plummet shortly after the market closed.”
The Japanese yen surged to an eight-month high against the dollar following the Apple warning, breaking through key technical support levels as investors looked for a safe haven trade.
In what was being described as a "flash crash" in currency markets, the yen also rose nearly 8% against the Australian dollar to its best level since 2009, and 10% versus the Turkish lira.
Apple shares were down 9.96% at the close, with the likes of chip manufacturers Advanced Micro Devices and Nvidia also closing 9.45% and 6.04% lower, respectively.
Elsewhere, the shift in power as Democrats assumed their majority in Congress offered little relief to investors either.
"However, a proposal to reopen a number of divisions of the government - which has been closed for almost two weeks following budget deadlock - may be sufficient to provide at least a modest degree of support for stocks, assuming it can succeed," added James Hughes.
In macro news, the number of Americans filing for unemployment benefits rose more than expected last week, according to data released by the Labor Department.
Jobless claims came in at 231,000, up 10,000 from the previous week’s level, which was revised up by 5,000 to 221,000.
Economists had been expecting a level of 220,000.
Meanwhile, the four-week moving average came in at 218,750, down 500 from the previous week's average, which was revised up by 1,250 from 218,000.
Also on the jobs front, private sector employment in the US grew much more than expected in December, according to the latest figures from ADP.
Employers added 271,000 jobs last month compared to a 179,000 gain in November, beating expectations for a 178,000 increase and marking the biggest increase in nearly two years.
Small businesses with fewer than 50 employees added 89,000 jobs, while medium-sized businesses with between 50 and 499 members of staff added 129,000 and large businesses of 500 employees or more created 54,000 jobs.
In other news, the Institute of Supply Management's manufacturing sector Purchasing Managers' Index dropped from last month's level of 59.3 to 54.1, missing forecasts for a fall to 54.1 by a wide margin.
Significantly, the sub-index for companies' new orders plummeted from a reading of 62.1 to 51.1.
On the energy side of things, US oil prices reversed losses from earlier in the session as West Texas Intermediate was trading 0.77% higher at $46.90 per barrel, while Brent crude continued its gains to rise 1.19% to $55.57.
|
|
Friday newspaper round-up: Fat Cats, Google, housebuilders, Alphabet
|
|
|
The bosses of the UK’s biggest companies are facing renewed scrutiny over excessive pay deals, after new figures showed top executives earned the average worker’s annual salary within the first three working days of 2019. Dubbed “Fat Cat Friday”, 4 January is the date by which the average CEO of a FTSE 100 company pockets the equivalent take-home pay of a typical full-time worker in the UK. – Guardian
Google moved €19.9bn ($22.7bn) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch chamber of commerce. The amount channelled through Google Netherlands Holdings BV was about €4bn more than in 2016, the documents, filed on 21 December, showed. - Guardian
Housebuilders have been told to stop blaming the planning system for holding back the supply of new homes as new figures show councils are speeding through applications at their fastest rate in over a decade. Around 87pc of major applications for residential planning permission were processed within 13 weeks or an agreed time limit in the year to last summer, compared with a low-point of just 47pc five years earlier. - Telegraph
Apple's shock profit warning has dragged it further down the list of the most valuable companies, as Alphabet became the third company to leapfrog the iPhone maker in less than two months. Shares in Apple plunged by almost 10pc after markets opened in New York, putting its valuation at around $675bn (£536bn). It is now worth less than Microsoft, which has a market capitalisation at around $755bn, Amazon, worth $738bn, and Alphabet, $717bn. - Telegraph
Three former Credit Suisse bankers were arrested in London yesterday on charges that they took part in a $2 billion fraud scheme involving state-owned companies in Mozambique. Andrew Pearse, Surjan Singh and Detelina Subeva were charged in an indictment filed in a New York court with conspiring to violate American anti-bribery laws and to commit money laundering and securities fraud, according to John Marzulli, a spokesman for federal prosecutors in Brooklyn. They have been released on bail. - The Times
The boss of the ferry company given a £14 million no-deal Brexit contract ran a shipping business that collapsed with a large tax bill, The Times can reveal. Ben Sharp, Seaborne Freight’s chief executive, has a chequered business past, raising questions about the government’s vetting of the company, which has no ferries at present. - The Times
|
|
|
ADVFN Disclaimer
Although we have sent you this email, ADVFN does not endorse any product or company nor is it responsible for the content of this news bulletin. We have not independently reviewed the information; claims or testimonials provided within the news bulletin and make no guarantee or warranty regarding its content. The opinions and recommendations expressed in this email are not those of ADVFN.
|
|
|
|
|
Registered Office/Accounts Dept: Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
|
|
Support Tel: 0207 0700 961 Company registered in England and Wales: Number 2374988 VAT No: GB 549 2130 49
|
|
|
|
|
|
|
|
|
|
|
|
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
|
| |