UK/Euro Financial Market Daily Morning Briefing 11-02-2014

London open: Stocks closing in on three-week high, but Barclays falls

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INTERIMS
DotDigital Group, Dunelm Group, Hargreaves Services, Mcbride

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Wholesales Inventories (US) (15:00)

FINALS
Barclays

IMSS
Babcock International Group, Cable & Wireless Communications, Thomas Cook Group

AGMS
Blackrock Income And Growth Investment Trust, RWS Holdings

TRADING ANNOUNCEMENTS
Bellway

UK ECONOMIC ANNOUNCEMENTS
BRC Sales Monitor (00:01)

FINAL DIVIDEND PAYMENT DATE
Dunedin Smaller Companies Inv Trust

How to Know when the Bull Market Ends - Given that the stock market rally has now lasted nearly five years and in view of new all-time highs, many market participants are faced with the question when will there be a top at the major share indexes. After all, everybody wants to exit the market near a high and lock in their profits before the market turns downwards again.   Read more.

Europe open: Stocks rise before Yellen's first policy testimony

- Yellen testimony in focus
- Investors weigh US jobs data ahead of Fed meeting
- Barclays reports annual results

FTSE 100: 0.82%
DAX: 1.05%
CAC 40: 0.80%
FTSE MIB: 0.70%
IBE35: 0.78%
Stoxx 600: 0.73%

European stocks rose ahead of a testimony on US monetary policy from Federal Reserve Chair Janet Yellen.

Yellen will today deliver her first report on policy since taking over the helm from Ben Bernanke earlier this month.

Her testimony before the House Financial Services Committee comes after the Fed last month announced a second round of tapering to monetary stimulus. The bank decided to reduce monthly bond purchases by $10bn to $65bn.

A weaker-than-expected monthly jobs report from the Labor Department on Friday fuelled speculation that the central bank might hold back on further cuts at its next meeting in March.

Alpari analyst Craig Erlam said today's testimony will be "our first insight into the Yellen's take on this which should help us understand whether it will encourage the Fed to slow the rate of tapering at the next meeting in March".

He continued: "One thing is for sure, the Financial Services Committee will not go easy on Yellen, just as they didn't with her predecessor Ben Bernanke, so we could get some valuable insight about how the Fed plans to approach tapering and interest rates over the next couple of years. We should also get Yellen's view on some other hot topics including the run on emerging markets which many blame on the pace of Fed tapering."

Barclays, L'Oreal

Barclays declined after reporting a 32% fall in adjusted annual pre-tax profit, reflecting restricting costs and a drop in income at the Investment Bank.

L'Oreal advanced following news the maker of Maybelline mascara will pay €3.4bn in cash for 27.3m shares held by Nestlé, according to a statement.

Actelion gained after the Swiss drugmaker said growth in earnings excluding some items will be in the low single digits at constant exchange rates, compared with a previous forecast for earnings at least at the same level as last year.

Michelin & Cie. edged higher after Europe's largest tyremaker reported a fall in 2013 operating profit that missed analysts' estimates.

The euro was up 0.20% to $1.3673.

Brent crude futures rose $0.476 to $109.150 per barrel, according to the ICE.

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US close: Stocks push higher ahead of Yellen speech

- Markets await Yellen's comments on monetary policy
- Stocks finish higher after weak start
- Apple gains as Icahn drops buyback demands

Dow Jones: 0.05%
Nasdaq: 0.54%
S&P 500: 0.16%

After a slow start, US markets finished with small gains on Monday as investors speculated about Janet Yellen's upcoming testimony to Congress the following day.

Markets will be eager to gauge the thoughts of the new Federal Reserve Chair on the staged withdrawal of stimulus after she took over from former central bank head Ben Bernanke this month.

Despite earlier losses, the Dow Jones Industrial Average finished just 0.05% higher, while the S&P 500 gained 0.16%. The Nasdaq, however, recorded bigger gains of 0.54% after a strong performance from tech giant Apple.

Ahead of her semi-annual monetary policy report to the House Financial Services Committee on Tuesday, analysts widely expect Yellen to say that recent weak economic data and emerging-market volatility will not prompt the Fed to slow the pace of tapering asset purchases.

"However, with the unemployment rate falling to 6.6% in January, it will be interesting to see if Yellen hints that the Fed may update its statement that rates will be unchanged 'well past the time that the unemployment rate declines below 6.5%'," said Capital Economics analyst Paul Dales.

"This may not happen soon, but at some point the Fed may drop the quantitative reference to the unemployment rate," he said.

Apple, McDonald's

Apple finished higher after activist investor Carl Icahn dropped his proposal for the company to increase its share buyback. This comes after shareholder advisory firm ISS recommended shareholders to vote against his demands.

Fast-food giant McDonald's was lower after saying that global same-store sales rose by 1.2% in January with growth limited by weakness in the domestic US market.

Online reviews operator Yelp rose on reports that internet group Yahoo! is to incorporate its listings and reviews into its search engine.

Qualcomm, the wireless technology firm, was flat on competition concerns after Taiwanese mobile gadget maker HTC suggested that it could use other chipset providers.

Sohu.com was also unchanged as the owner of China's third-largest search engine posted quarterly revenue that missed market forecasts.

Green Mountain Coffee Roasters was higher after the company agreed to sell coffee from Krispy Kreme Doughnuts for its Keurig single-cup brewing system by the end of 2014.


S&P 500 - Risers
Hasbro Inc (HAS) $52.36 +4.53%
Hospira Inc. (HSP) $44.62 +4.03%
Alexion Pharmaceuticals Inc. (ALXN) $170.11 +3.96%
Invesco Ltd. (IVZ) $34.10 +3.71%
Bristol-Myers Squibb (BMY) $52.12 +3.56%
Allergan Inc. (AGN) $122.96 +3.47%
Monster Beverage Corp (MNST) $70.69 +3.24%
Newmont Mining Corp. (NEM) $22.20 +3.16%
Intuitive Surgical Inc. (ISRG) $429.66 +2.87%
Gilead Sciences Inc. (GILD) $80.98 +2.83%

S&P 500 - Fallers
Loews Corp. (L) $43.26 -4.25%
Valero Energy Corp. (VLO) $47.36 -2.99%
Phillips 66 Common Stock (PSX) $72.27 -2.71%
Parker-Hannifin Corp. (PH) $115.58 -2.60%
Janus Capital Group Inc. (JNS) $10.64 -2.39%
Marathon Petroleum Corporation (MPC) $82.52 -2.31%
PulteGroup Inc. (PHM) $19.35 -2.27%
Garmin Ltd. (GRMN) $44.52 -2.22%
Lennar Corp. Class A (LEN) $40.89 -2.11%
Norfolk Southern Corp. (NSC) $92.92 -1.92%

Dow Jones I.A - Risers
Walt Disney Co. (DIS) $77.06 +1.84%
Travelers Company Inc. (TRV) $82.35 +1.82%
Coca-Cola Co. (KO) $38.57 +1.63%
American Express Co. (AXP) $88.34 +1.54%
Johnson & Johnson (JNJ) $91.07 +1.14%
Procter & Gamble Co. (PG) $78.03 +0.93%
Pfizer Inc. (PFE) $31.47 +0.80%
United Technologies Corp. (UTX) $111.60 +0.79%
Cisco Systems Inc. (CSCO) $22.83 +0.71%
Microsoft Corp. (MSFT) $36.80 +0.66%

Dow Jones I.A - Fallers
Unitedhealth Group Inc. (UNH) $69.74 -2.27%
Exxon Mobil Corp. (XOM) $89.52 -1.17%
McDonald's Corp. (MCD) $94.86 -1.11%
Goldman Sachs Group Inc. (GS) $161.00 -0.57%
General Electric Co. (GE) $25.05 -0.56%
Visa Inc. (V) $220.55 -0.55%
3M Co. (MMM) $129.70 -0.48%
Caterpillar Inc. (CAT) $94.50 -0.39%
Chevron Corp. (CVX) $111.69 -0.32%
International Business Machines Corp. (IBM) $177.14 -0.06%

Nasdaq 100 - Risers
Tesla Motors Inc (TSLA) $196.56 +5.38%
Alexion Pharmaceuticals Inc. (ALXN) $170.11 +3.96%
Monster Beverage Corp (MNST) $70.69 +3.24%
Illumina Inc. (ILMN) $161.74 +3.08%
Green Mountain Coffee Roasters Inc. (GMCR) $110.92 +2.94%
Intuitive Surgical Inc. (ISRG) $429.66 +2.87%
Gilead Sciences Inc. (GILD) $80.98 +2.83%
Akamai Technologies Inc. (AKAM) $58.01 +2.42%
Maxim Integrated Products Inc. (MXIM) $30.27 +2.13%
F5 Networks Inc. (FFIV) $109.50 +2.07%

Nasdaq 100 - Fallers
Garmin Ltd. (GRMN) $44.52 -2.22%
eBay Inc. (EBAY) $53.78 -1.47%
Activision Blizzard Inc. (ATVI) $19.36 -1.43%
Facebook Inc. (FB) $63.55 -1.20%
PACCAR Inc. (PCAR) $58.49 -1.12%
Cognizant Technology Solutions Corp. (CTSH) $96.05 -0.98%
Vodafone Group Plc ADS (VOD) $36.25 -0.90%
Fiserv Inc. (FISV) $54.78 -0.81%
Tractor Supply Company (TSCO) $66.02 -0.75%
O'Reilly Automotive Inc. (ORLY) $148.19 -0.68%

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Tuesday newspaper round-up: Retail sales, Household finances, Vodafone...

A strong rebound in furniture sales on the back of the recovery in the housing market fuelled the strongest monthly retail sales growth since March 2010. High Street retailers will take some relief from better-than-expected sales figures for January that rose 3.9 per cent according to the British Retail Consortium/KPMG sales monitor. Furniture was the top-performing category, achieving its best growth since April 2006, as shoppers responded enthusiastically to sales and promotions for new ranges. But the contrast was in non-food, which saw low levels of growth in the last quarter. – Daily Mail

The squeeze on household finances since the financial crisis has been so severe that the number of mortgage borrowers with less than 5% of their pay left at the end of the month has nearly doubled in the past seven years, despite cuts in interest rates to an historical low. The finding, disclosed by the Resolution Foundation in its annual State of Living Standards report, underlined the scale of the problem in Britain as wages failed to keep pace with inflation. – The Times

Vittorio Colao, Chief Executive of Vodafone, has sounded a warning to American mobile operators eyeing the European market, telling them that they are unlikely to do a better job than the current players. The Italian-born executive said on Monday that there was not much that European operators could be taught, and that the only reason Europe lagged behind America in rolling out 4G-services was because of complicated regulations. – Daily Telegraph

Political uncertainty surrounding next year's general election could derail a fragile recovery in business investment, the Confederation of Business Industry has warned. While business optimism was finally translating into investment in IT, advertising and research, Katja Hall, the CBI's chief policy director, said political tensions during the build-up to the 2015 election were a potential "mood killer" for investment. – Daily Telegraph

CBI director-general John Cridland said UK gross domestic product (GDP) is poised to expand by 2.6% this year, up from the group's previous forecast of 2.4%. That compares with the 2.5% predicted by UBS Wealth Management and the National Institute of Economic & Social Research. The upbeat assessment comes a day after Bank of Scotland said growth in the private sector economy north of the Border rose to a three-month high in January, as strong output in the manufacturing and service sectors boosted employment. - Scotsman

The bill faced by taxpayers for the clean-up of Sellafield will spiral above the £70 pound official estimate because of continuing project delays and budget overruns, MPs have warned. They have also demanded that the consortium managing the operation be stripped of its contract altogether unless it improves its performance quickly. – The Times

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