UK/Euro Financial Market Daily Morning Briefing 05-12-2013

FTSE 100 flat at seven-week low ahead of busy day

- FTSE 100 at lowest level since October 14th
- Central bank meetings, Autumn Statement in focus
- Investors cautious ahead of jobs report tomorrow

techMARK 2,644.71 +0.02%
FTSE 100 6,509.08 -0.01%
FTSE 250 15,152.45 +0.16%

UK stocks opened broadly flat on Thursday morning with the FTSE 100 trading at a seven-week low as investors adopt a cautious approach ahead of a busy day for financial markets.

London's benchmark index closed Wednesday's session at 6,509.97, its worst finish since October 14th, as uncertainty surrounding the impending tapering of stimulus in the States continued to erode risk appetite.

Upbeat readings of US private payrolls and new home sales sparked the fourth straight fall for the Dow Jones Industrial Average and S&P 500 last night, given that an improved economy only backs the argument for the Federal Reserve to scale back the rate of its asset purchases sooner than initially expected.

The official jobs report - likely to be a key factor in the Fed's policy decision at its meeting on December 17-18th - is due out on Friday afternoon and is expected to reveal a 183,000 increase in non-farm payrolls for November, below the 204,000 gain in October.

According to analysts at Capital Economics, the creation of more than 200,000 jobs in November "might just be enough to persuade the Fed to begin its QE taper later this month".

As for today, investors will be keeping a close watch on the Bank of England and European Central Bank today as they unveil their latest decisions on monetary policy. Nevertheless, analysts expect both announcements to be non-events given that no change in policy is expected from either.

Chancellor George Osborne's Autumn Statement is also due out during the session and is rumoured to include a sooner-than-expected increase in the state pension age, amongst other things.

"In terms of market reaction to the Autumn Statement, there probably won't be much of one, unless Osborne announces something significant that the markets are not expecting. We may see some volatility in sterling, for example, during the statement but I don't envisage any significant moves," said Market Analyst Craig Erlam from Alpari.

Miners gain early on

Mining stocks were mostly up this morning, rebounding after some sharp falls earlier in the week. Precious metal peers Fresnillo, Randgold, Centamin and Hochschild Mining were all making gains despite a dip in gold and silver prices early on.

Even Polymetal was in demand despite revealing that it would not pay a special dividend for 2013 due to its recent performance and negative commodity market conditions.

Oil groups Tullow and BP edged higher with West Texas crude trading near its highest level in five weeks as inventories fell in the US. Meanwhile, OPEC also said that oil demand next year wouldn't weaken enough to warrant cuts in production.

Soft drinks firm AG Barr rose after toasting a robust set of interim figures with revenues up 8%. The company said it is confident of meeting full-year expectations as it enters the key Christmas trading period .

Budget airline easyJet fell despite saying that it carried more passengers in November, up 3.4% on the same month a year ago. The Luton-based carrier said 4,255,978 people flew with it in November, up from the 4,116,576 people it carried in the same month a year ago.

Financial stocks were mixed this morning with Aberdeen Asset Management and Resolution in the red and Barclays and HSBC heading higher.

Earn a tax free income trading, from just 20 minutes a day – no experience needed.  Our powerful trading software will help you decide when to enter trades and how to maximise profits.

Register for a FREE brochure and trading guide, Click Here. 

FTSE 100 - Risers
Fresnillo (FRES) 757.00p +2.37%
Vedanta Resources (VED) 862.00p +1.89%
Shire Plc (SHP) 2,691.00p +1.39%
Barclays (BARC) 266.05p +1.24%
Randgold Resources Ltd. (RRS) 4,086.00p +1.14%
Tullow Oil (TLW) 885.00p +1.03%
Amec (AMEC) 1,107.00p +1.00%
RSA Insurance Group (RSA) 102.60p +0.79%
United Utilities Group (UU.) 653.50p +0.77%
BAE Systems (BA.) 423.90p +0.76%

FTSE 100 - Fallers
Morrison (Wm) Supermarkets (MRW) 256.70p -1.53%
Tesco (TSCO) 335.10p -1.44%
Old Mutual (OML) 186.80p -1.37%
Babcock International Group (BAB) 1,271.00p -1.32%
Sainsbury (J) (SBRY) 388.60p -1.12%
William Hill (WMH) 382.50p -1.11%
Capita (CPI) 972.00p -0.92%
easyJet (EZJ) 1,394.00p -0.92%
Next (NXT) 5,500.00p -0.81%
Legal & General Group (LGEN) 207.10p -0.67%

FTSE 250 - Risers
AZ Electronic Materials SA (DI) (AZEM) 398.80p +51.69%
Centamin (DI) (CEY) 41.24p +6.89%
Smith (DS) (SMDS) 312.30p +4.45%
Drax Group (DRX) 775.00p +4.31%
Ultra Electronics Holdings (ULE) 1,833.00p +3.74%
Alent (ALNT) 346.30p +3.37%
Hochschild Mining (HOC) 126.00p +2.19%
Synthomer (SYNT) 227.00p +2.11%
Dunelm Group (DNLM) 885.50p +2.02%
African Barrick Gold (ABG) 156.10p +1.56%

FTSE 250 - Fallers
Phoenix Group Holdings (DI) (PHNX) 678.00p -3.69%
Rightmove (RMV) 2,445.00p -2.67%
Henderson Group (HGG) 200.70p -2.48%
IP Group (IPO) 173.30p -2.09%
Computacenter (CCC) 650.00p -1.44%
Redrow (RDW) 269.80p -1.28%
NMC Health (NMC) 400.00p -1.23%
Carpetright (CPR) 530.50p -1.21%
BH Macro Ltd. USD Shares (BHMU) 19.81 -1.20%
Diploma (DPLM) 684.00p -1.16%

INTERIMS
Ensor Holdings, Smith (DS)

INTERIM DIVIDEND PAYMENT DATE
First Derivatives, GCP Student Living

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
Factory Orders (US) (15:00)
GDP (Preliminary) (US) (13:30)
Goods Orders (US) (15:00)
Initial Jobless Claims (US) (13:30)
PMI Construction (EU) (09:00)
PMI Construction (GER) (08:55)

FINALS
CareTech Holding, Sage Group

IMSS
Barr (A.G.)

EGMS
GLI Finance Limited, New City High Yield Fund Ltd.

AGMS
Altus Resource Capital Ltd., AXA Property Trust Ltd, Baobab Resources, CVS Group, Egdon Resources, Goldplat, Inland Homes, New City High Yield Fund Ltd., Octagonal, Plexus Holdings, Rambler Metals & Mining, Uranium Resources

TRADING ANNOUNCEMENTS
Dolphin Capital Investors Ltd

UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (12:00)
New Car Registrations (09:30)

FINAL DIVIDEND PAYMENT DATE
Allocate Software

Have you heard of the stock market phenomenon called the Santa Rally? The FTSE 100 has risen in 18 of the last 20 Decembers*. Download your free report showing a breaking down of what the average rise has been for the stocks within the FTSE over the month of December.  Losses can exceed deposits. * Past performance is no guarantee of the future

Stocks fall ahead of ECB and BoE policy meetings

-ECB and BoE expected to keep policy on hold
- Osborne delivers Autumn Statement
- US data released ahead of FOMC meeting

FTSE 100: -0.05%
DAX: -0.01%
CAC 40: -0.07%
FTSE MIB: 0.11%
IBEX 35: 0.06%
Stoxx 600: -0.10%

European stocks declined as investors waited on the latest policy announcements from the European Central Bank and the Bank of England.

The BoE is expected to keep its policy on hold, maintaining its benchmark interest rate at 0.50% and asset purchases at £375bn.

The Bank has vowed that it will not consider raising the rate until employment reaches at least 7%.

Despite a faster-than-expected pick up in the labour market and wider economy, BoE Governor Mark Carney has stressed that the central bank will not necessarily raise interest rates once the jobless rate falls to its target.

The ECB is also expected to maintain its policy by holding interest rates at 0.25%.

The central bank last month surprised the market by lowering its rate from 0.50% due to deflation fears. Inflation is running at 0.9%, far below the ECB’s target of just under 2%.

ECB President Mario Draghi said the Eurozone "may experience a prolonged period of low inflation" and that the central bank was ready to consider using all available policy tools.

Autumn Statement

Chancellor George Osborne's Autumn Statement will be released today and is anticipated to include a sooner-than-expected increase in the state pension age.

Osborne is also expected to announce a number of changes to spending and taxes and may address unpopular topics like rises in energy bills.

“Chancellor George Osborne is likely to first use today as an opportunity to laud the performance of the UK economy at the moment, while warning that more needs to be done to protect the recovery going forward,” according to Alpari analyst Craig Erlam.

“In terms of market reaction to the autumn statement, there probably won't be much of one, unless Osborne announces something significant that the markets are not expecting. We may see some volatility in sterling, for example, during the statement but I don't envisage any significant moves.”

Meanwhile in the US later today will be the release a batch of US data including consumer confidence, initial jobless claims, continuing claims and GDP figures.

Federal Reserve policymakers are turning to economic indicators to gauge whether the economy has picked up enough to start scaling back monetary stimulus. The Fed next meets mid-December when it may announce a tapering of quantitative easing.

Vienna Insurance, FLSmidth

Vienna Insurance Group AG dropped as an undisclosed seller offered 2.29m shares in the company.

FLSmidth & Co. A/S slumped as the Danish mining-equipment maker lowered its forecast earnings margin.

Old Mutual retreated as it announced it was one step closer to completing the acquisition of a majority stake in micro-lender company Faulu Kenya after receiving regulatory approvals.

Other asset classes advance

The euro rose 0.13% to $1.3610.

Brent crude futures increased $0.089 to $111.980 per barrel, according to ICE data.

Download your FREE Investment Guide here.

Stocks fall as upbeat data sparks taper fears

- ADP report, home sales increase taper speculation
- Friday's jobs report in focus ahead of Fed meeting
- Beige Book points to "modest to moderate" growth

Dow Jones: -0.15%
Nasdaq: 0.02%
S&P 500: -0.12%

Wall Street benchmarks closed mostly lower on Wednesday after a choppy session with the Dow Jones Industrial Average and S&P 500 finishing in negative territory for a fourth straight day as speculation about a tapering of stimulus continues to erode risk appetite.

Upbeat readings of US private payrolls and new home sales were met with a mixed reaction on markets given that an improved economy only backs the argument for the Federal Reserve to scale back the rate of its asset purchases sooner than initially expected.

Investors are now waiting for the all-important jobs report on Friday to gauge the central bank's outlook for the economy. Consensus forecasts are pointing to a 183,000 increase in non-farm payrolls for November, below the 204,000 gain in October. The unemployment rate is expected to slip to 7.2% from 7.3%.

According to analysts at Capital Economics, the creation of over 200,000 jobs in November "might just be enough to persuade the Fed to begin its QE taper later this month".

The Fed's closely-watched Beige Book was released on Wednesday and suggested that economic growth remained "modest to moderate" during October and November.

Meanwhile, markets were also keeping one eye on Washington as politicians continue to try and thrash out an agreement on the budget ahead of a December 13th deadline. According to Senate Budget Committee Chairman Patty Murray, "there are still issues to be resolved" but negotiations are continuing.

ADP report and home sales beat expectations

Private sector employers in the US last month added 215,000 workers, according to figures from the ADP Research Institute. That was comfortably ahead of the 178,000 increase expected by analysts and up from a revised 184,000 the month before.

New home sales in the States jumped to an annual rate of 444,000 in October, up 25.4% from 354,000 in September. The forecast was for a reading of just 419,000.

The US trade deficit narrowed to $40.6bn in October, down from a deficit of $43bn in September and broadly in line with analysts' forecasts.

Another report from the Institute for Supply Management revealed a moderation in the pace of activity within the non-manufacturing sector. The index fell to 53.9 in November, down from 55.4 a month earlier and below the consensus estimate of 55.

AT&T, eBay hit by broker downgrades

AT&T slumped after JP Morgan reduced its rating on the US telecoms giant from 'overweight' to 'neutral', saying that headwinds faced in wireless seen in 2013 "will continue and likely expand in 2014".

Meanwhile, Evercore Partners reduced its rating on eBay from 'overweight' to 'hold', causing shares in the online merchant to fall.

Express Inc. dropped after the retailer lowered its earnings estimate for its financial year ending on February 1st to no more than $1.51 a share compared to a previous forecast of $1.60.

OmniVision tumbled as the maker of semiconductor-imaging devices forecast earnings for the final three months of this year that fell short of analysts’ estimates.

Retailer Sears Holdings fell sharply after fund manager ESL Partners cut its stake to 48 % from 55 %.


S&P 500 - Risers
CF Industries Holdings Inc. (CF) $237.07 +10.68%
Yahoo! Inc. (YHOO) $38.13 +4.29%
Electronic Arts Inc. (EA) $22.34 +3.71%
Apartment Investment & Management Co. (AIV) $25.83 +3.32%
Mosaic Company (MOS) $47.93 +3.30%
Deere & Co. (DE) $85.38 +3.23%
Campbell Soup Co. (CPB) $40.04 +3.17%
Citrix Systems Inc. (CTXS) $60.00 +3.16%
International Game Technology (IGT) $17.78 +2.89%
AES Corp. (AES) $15.31 +2.89%

S&P 500 - Fallers
Sears Holdings Corp. (SHLD) $50.92 -8.33%
Teradata Corp. (TDC) $42.53 -6.22%
J.C. Penney Co. Inc. (JCP) $9.66 -4.45%
Boston Scientific Corp. (BSX) $11.31 -4.31%
Marathon Petroleum Corporation (MPC) $83.26 -4.29%
Valero Energy Corp. (VLO) $45.02 -3.74%
L Brands Inc (LB) $63.25 -3.58%
Baker Hughes Inc. (BHI) $54.70 -3.44%
Gannett Co. Inc. (GCI) $25.35 -3.21%
Raytheon Co. (RTN) $86.05 -3.08%

Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $38.94 +1.64%
Intel Corp. (INTC) $23.74 +0.81%
JP Morgan Chase & Co. (JPM) $57.19 +0.58%
Visa Inc. (V) $202.74 +0.49%
Goldman Sachs Group Inc. (GS) $168.70 +0.39%
General Electric Co. (GE) $26.64 +0.30%
Exxon Mobil Corp. (XOM) $94.67 +0.30%
Pfizer Inc. (PFE) $31.27 +0.16%
Caterpillar Inc. (CAT) $83.97 +0.12%
Walt Disney Co. (DIS) $69.97 +0.10%

Dow Jones I.A - Fallers
Wal-Mart Stores Inc. (WMT) $80.22 -1.22%
Merck & Co. Inc. (MRK) $49.31 -0.90%
McDonald's Corp. (MCD) $95.71 -0.70%
United Technologies Corp. (UTX) $108.94 -0.68%
Chevron Corp. (CVX) $121.77 -0.61%
Procter & Gamble Co. (PG) $83.35 -0.57%
Travelers Company Inc. (TRV) $88.61 -0.47%
Verizon Communications Inc. (VZ) $49.37 -0.46%
AT&T Inc. (T) $34.60 -0.40%
E.I. du Pont de Nemours and Co. (DD) $60.26 -0.40%

Nasdaq 100 - Risers
Nuance Communications Inc. (NUAN) $14.15 +4.74%
Yahoo! Inc. (YHOO) $38.13 +4.29%
Facebook Inc. (FB) $48.62 +4.04%
Citrix Systems Inc. (CTXS) $60.00 +3.16%
Wynn Resorts Ltd. (WYNN) $167.78 +2.74%
Randgold Resources Ltd. Ads (GOLD) $67.37 +2.71%
Western Digital Corp. (WDC) $77.57 +2.70%
Green Mountain Coffee Roasters Inc. (GMCR) $70.05 +2.40%
Monster Beverage Corp (MNST) $62.49 +1.99%
Microsoft Corp. (MSFT) $38.94 +1.64%

Nasdaq 100 - Fallers
Sears Holdings Corp. (SHLD) $50.92 -8.33%
Tesla Motors Inc (TSLA) $138.95 -3.97%
Applied Materials Inc. (AMAT) $16.61 -2.98%
KLA-Tencor Corp. (KLAC) $61.93 -2.72%
O'Reilly Automotive Inc. (ORLY) $121.08 -2.64%
Vimpelcom Ltd Ads (VIP) $12.06 -2.43%
Netflix Inc. (NFLX) $356.27 -1.84%
Cerner Corp. (CERN) $56.40 -1.83%
Liberty Media Corporation - Class A (LMCA) $149.29 -1.69%
eBay Inc. (EBAY) $51.09 -1.62%

We have a 72% success rate on the Dow and you can sign up for just £47. Trading suggestions are spelt out with 100% clarity – easy and simple to use. We even guarantee to refund the £47 on request in the first month.  To join us click here.

Goldman Sachs, Autumn Statement, Shipping

Goldman Sachs would “drastically reduce” its activities in London and move large numbers of jobs to Frankfurt and Paris if Britain left the European Union, the bank’s co-chief executive in Europe has said. Michael Sherwood, who has warned in the past that London’s role as a leading financial centre would be damaged if Britain quit the EU, went much further than before in revealing how his bank would probably downgrade its British presence. - The Times

George Osborne will proclaim on Thursday that a budget surplus is in sight for the first time since the millennium, raising Tory hopes of significant tax cuts in the next parliament after nearly a decade of austerity. The chancellor will deliver his Autumn Statement against a backdrop of sharply rising growth forecasts, which could pave the way for Britain to be back in the black by 2018-19 – almost two years earlier than seemed likely in March. - Financial Times

Two of the world’s highest-profile container shipping lines, Germany’s Hapag-Lloyd and Chile’s CSAV, are in talks about a potential merger that would create the world’s fourth-largest container ship fleet. CSAV announced the discussions to the Santiago stock exchange after its shares rose nearly 15% on reports in Germany’s Die Welt about the talks. - Financial Times

Energy giant E ON will reignite the fierce political row over gas and electricity bills by unveiling a £50 increase for more than 4m households on Friday. Sources claimed the German-owned company will become the last of the "Big Six" suppliers to push through a winter rise, with a jump of nearly 4% taking effect in mid-January. The Telegraph revealed last month that E ON was preparing a 6.6% rise. But the size of the increase has been revised following the Government's restructuring of green levies earlier this week. - The Daily Telegraph

The successful launch of BMW’s first electric car, the i3, will see the German motor giant commit itself to cleaner, greener and smaller vehicles. A new generation of smaller BMWs are now being planned, powered by more efficient three cylinder petrol engines made at the group’s factory at Hams Hall in the West Midlands. - The Times

Computer maker Hewlett-Packard is poised to axe more than 1,100 jobs in the UK as part of plans to lay off 27,000 employees around the world. The US group, which last week reported better-than-expected revenues for the fourth quarter, said the impact would be felt around the country and it could not rule out job losses in Erskine, where it is in the process of filling 700-plus posts. - The Scotsman

New ADVFN Service - FREE Reports

Get your free report on Isa's, Investment Trusts, Funds,
Sipps Travel and Cars - FREE and Easy service CLICK HERE

To advertise in the Euro Markets Bulletin please contact patrick@advfn.co.uk