UK/Euro Financial Market Daily Morning Briefing 22-01-2014

London open: Stocks gain ahead of UK data

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TRADING ANNOUNCEMENTS
Findel

IMSs

Findel, Land Securities Group, Sage group

AGMs
Hargreave Hale AIM VCT 1, Lowland Investment Co., Polo Resources Ltd., WH Smith

GMs

Avesco Group

FINAL EX-DIVIDEND DATE

Cardiff Property, Catco Reinsurance Opportunities fund Ltd (DI), Compass Group, Impax Asset Management Group, RWS Holdings, Shaftesbury, Titon Holdings

FINAL DIVIDEND PAYMENT DATE

Diploma, Majedie Investments

INTERIM EX-DIVIDEND DATE

DP Aircraft I Limited Pref, Fletcher King, GCP Infrastructure Investments Ltd., IG Group Holdings, NCC Group, red24, SSE

INTERIM DIVIDEND DATE

Home Retail Group, MDM Engineering Group Ltd. (DI), National Grid

QUARTERLY EX-DIVIDEND DATE

City of London Investment Trust

QUARTERLY PAYMENT DATE

Assura Group

UK ECONOMIC ANNOUNCEMENTS

MPC Minutes (09:30)
Claimant count rate (09:30)
Public sector finances (09:30)
Unemployment rate (09:30)
Speech Ian Mccafferty (18:30)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Geneva peace talks on Syria begin
MBA Weekly mortgage applications (US) (12:00)
Monetary policy announcement (CAN) (15:00)
Monetary policy announcement (Thailand) (15:30)
Monetary policy announcement (JP) (n/a)
All-industry activity index (JP) (13:30)
1st day of Davos World Economic Forum

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Europe open: Stocks rise ahead of BoE meeting minutes

- BoE releases meeting minutes
- UK jobless rate out
- Syria peace talks begin

FTSE 100: 0.33%
DAX: 0.14%
CAC 40: 0.24%
FTSE MIB: 0.66%
IBEX 35: 0.57%
Stoxx 600: 0.26%

European stocks gained ahead of the UK unemployment rate for the three months to November and the Bank of England's (BOE) meeting minutes.

Britain's jobless rate is expected to fall to 7.3% from 7.4% the previous period, edging closer the central bank's 7% threshold at which it will consider raising interest rates.

The BoE has vowed to keep interest rates at record lows for an extended period until unemployment declines to at least 7% but it is not a trigger.

"With the unemployment rate fast approaching 7%, the threshold that Governor Mark Carney previously claimed was the point at which an interest rate hike would first be considered, the central bank is going to have to do something to reassure households, businesses and the markets that an increase in rates will not happen in the coming months," according to Alpari Market Analyst, Craig Erlam.

The Bank's Monetary Policy Committee (MPC) earlier this month decided to keep interest rates at 0.5% and its quantitative easing programme at £375bn.

The minutes from the January 9th meeting, released today, should shed further light behind the decision.

In other closely watched macro-news today, Syria peace talks will begin in Geneva.

The United Nations (UN) on Monday withdrew an invitation to Iran to attend just 24 hours after it was issued as the Syrian Opposition threatened to pull out unless Iranian officials first publicly committed to a transitional government for Syria.

The UN talks with the Syrian government and the opposition in Switzerland come amid violence in the country and accusations that the country's regime killed civilians.

SSAB AB to buy Rautaruukki Oyj

Rautaruukki Oyj surged after SSAB AB announced plans to buy the Finnish steelmaker.

ABB Ltd. slumped after the power and automation technology company said charges from project delays and operational issues will hurt profit.

Societe Television Francaise 1 gained after Discovery Communications Inc. said it will increase its stake in the company's Eurosport unit.

ASML Holding edged higher after the European semiconductor-equipment supplier announced plans to raise its 2013 dividend by 15%.

The euro fell 0.16% to $1.3539.

Brent crude futures rose $0.466 to $107.230 per barrel, according to the ICE.

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US close: S&P 500 gains, but Dow dragged lower after earnings

- Verizon, J&J, GE provide a drag on the Dow
- US stocks overvalued, according to BofA survey
- IMF raises global, US growth forecasts for 2014

Dow Jones: -0.27%
Nasdaq: 0.68%
S&P 500: 0.29%

US markets finished mixed on Tuesday with the gains on the Nasdaq and S&P 500 countered by a fall on the Dow Jones Industrial Average after big falls from heavyweight constituents Verizon, Johnson & Johnson and General Electric.

The mixed performance came after a fund manager survey from Bank of America Merrill Lynch found that the percentage of investors who believe that US stocks are overvalued hit its highest leave since September 2000 this month, with allocations to US equities declining month-on-month.

It was a quiet day for financial markets on Monday given that Wall Street was closed for the Martin Luther King Jr. Day holiday. As such, American investors were having to play catch-up in regards to data showing that Chinese growth had slowed in the fourth quarter of 2013.

In contrast, credit conditions in China eased after the People's Bank of China injected more than 255bn yuan into the country's large commercial banks. The central bank said the move is aimed at ensuring the stability of the monetary market ahead of the Lunar New Year holiday later this month.

In other news, the International Monetary Fund (IMF) raised its forecasts for US growth in 2014 as it revised its estimates for global economic expansion slightly higher. US gross domestic product (GDP) is now expected to rise by 2.8% in 2014, up from a previous estimate of 2.6% in October.

However, in 2015 GDP is only expected to expand by 3%, versus a previous forecast for growth of 3.4%.

Verizon falls despite Q4 beat

Telecoms giant Verizon Communications erased early gains to fall into the red despite posting fourth-quarter profits that beat analysts' estimates. Earnings per share were $1.76 in the fourth quarter, compared with a loss of $1.48 a year ago on revenues that rose 3.4% to $31.1bn.

Investors were also reacting to the company's announcement that it has purchased Intel's cloud TV business, Intel Media.

Healthcare and consumer products titan Johnson & Johnson also underwhelmed with profits that beat expectations, with earnings rising 37% year-on-year. Profit forecasts for 2014, however, came in below estimates.

Plane maker Boeing gained after receiving an order from General Electric for 40 planes worth $4bn. GE, meanwhile, fell on reports that it is among three potential bidders for oil field services firm Expro.

Delta Air rose to a 52-week high after surpassing analysts' forecasts with fourth-quarter earnings and giving an upbeat outlook for the current quarter.

Smartphone maker BlackBerry surged after the US Department of Defense revealed that it will use 80,000 of its devices in a new programme.

Alcoa rose after JPMorgan raised its rating on the US aluminium producer to 'overweight' from 'neutral'. Meanwhile, SolarCity declined after the same bank downgraded the stock to 'neutral' from 'overweight'.


S&P 500 - Risers
Alcoa Inc. (AA) $12.13 +6.78%
Dow Chemical Co. (DOW) $45.93 +6.64%
Baker Hughes Inc. (BHI) $56.73 +4.78%
Biogen Idec Inc. (BIIB) $310.50 +4.38%
Zions Bancorporation (ZION) $31.47 +4.34%
Cabot Oil & Gas Corp. (COG) $39.09 +4.30%
Vertex Pharmaceuticals Inc. (VRTX) $85.48 +4.13%
Gilead Sciences Inc. (GILD) $81.58 +4.06%
Chesapeake Energy Corp. (CHK) $26.45 +3.93%
Facebook Inc. (FB) $58.50 +3.91%

S&P 500 - Fallers
Allegheny Technologies Inc. (ATI) $34.18 -5.84%
Cliffs Natural Resources Inc. (CLF) $21.30 -5.04%
Expedia Inc. (EXPE) $67.67 -4.27%
Tenet Healthcare Corp. (THC) $45.54 -3.60%
TripAdvisor Inc. (TRIP) $81.50 -2.86%
United States Steel Corp. (X) $26.68 -2.70%
TJX Companies Inc. (TJX) $60.21 -2.67%
Freeport-McMoRan Copper & Gold Inc. (FCX) $35.26 -2.57%
Sandisk Corp. (SNDK) $71.89 -2.44%
Dollar General Corp (DG) $58.67 -2.38%

Dow Jones I.A - Risers
Coca-Cola Co. (KO) $39.92 +1.63%
Chevron Corp. (CVX) $120.36 +0.90%
Unitedhealth Group Inc. (UNH) $73.16 +0.88%
Boeing Co. (BA) $141.67 +0.86%
United Technologies Corp. (UTX) $114.99 +0.68%
Nike Inc. (NKE) $73.75 +0.49%
Pfizer Inc. (PFE) $31.23 +0.45%
Cisco Systems Inc. (CSCO) $22.83 +0.40%
Procter & Gamble Co. (PG) $80.18 +0.38%
Walt Disney Co. (DIS) $74.20 +0.30%

Dow Jones I.A - Fallers
Goldman Sachs Group Inc. (GS) $173.20 -1.75%
Travelers Company Inc. (TRV) $85.00 -1.70%
Verizon Communications Inc. (VZ) $47.70 -1.34%
General Electric Co. (GE) $26.29 -1.09%
Johnson & Johnson (JNJ) $94.03 -1.08%
Intel Corp. (INTC) $25.59 -1.01%
Caterpillar Inc. (CAT) $90.60 -0.92%
International Business Machines Corp. (IBM) $188.43 -0.87%
Home Depot Inc. (HD) $80.46 -0.67%
Exxon Mobil Corp. (XOM) $98.50 -0.67%

Nasdaq 100 - Risers
Biogen Idec Inc. (BIIB) $310.50 +4.38%
Vertex Pharmaceuticals Inc. (VRTX) $85.48 +4.13%
Gilead Sciences Inc. (GILD) $81.58 +4.06%
Tesla Motors Inc (TSLA) $176.68 +3.92%
Facebook Inc. (FB) $58.50 +3.91%
Illumina Inc. (ILMN) $141.20 +3.56%
Micron Technology Inc. (MU) $23.12 +3.31%
Priceline.Com Inc. (PCLN) $1,205.95 +2.37%
Intuitive Surgical Inc. (ISRG) $439.51 +2.18%
Altera Corp. (ALTR) $33.07 +2.07%

Nasdaq 100 - Fallers
Expedia Inc. (EXPE) $67.67 -4.27%
TripAdvisor Inc. (TRIP) $81.50 -2.86%
Sandisk Corp. (SNDK) $71.89 -2.44%
Mondelez International Inc. (MDLZ) $34.45 -2.27%
Tractor Supply Company (TSCO) $72.91 -1.70%
Starbucks Corp. (SBUX) $73.65 -1.67%
Wynn Resorts Ltd. (WYNN) $212.27 -1.59%
Dollar Tree Inc (DLTR) $53.55 -1.42%
Mattel Inc. (MAT) $43.40 -1.36%
Ross Stores Inc. (ROST) $70.42 -1.36%

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Wednesday newspaper round-up: Banks, London listings, Unilever

Britain's banks have launched a strong intervention in the debate over the nation's membership of the European Union, calling for closer ties with Brussels and urging the government to raise its game in order to make the single market work. The British Bankers' Association has sent a submission to a Treasury review that counters fears over the split of powers between London and Brussels, saying the current balance was "broadly appropriate". – Financial Times

SSP, the food group headed by former WH Smith boss Kate Swann, has taken its first step towards a London listing by hiring investment firm Lazard to advise on its market debut. A listing could value the Café Ritazza and Upper Crust company at around £2bn. Swedish private equity firm EQT is understood to have run a beauty parade of investment bankers at the end of last year with Lazard understood to be named as the successful bank. – The Daily Telegraph

BC Partners is considering plans to float Phones4U this year on the London Stock Exchange, where it would join a parade of companies that are seeking to take advantage of buoyant equity markets. The move could value the UK phone and electrical goods retailer at up to £1bn and give the private equity group an opportunity to exit the retailer earlier than expected, having bought the business just three years ago for about £700m. - Financial Times

The fast-food chain Subway is planning to nearly double the number of its outlets in the UK and Ireland to 3,000 over the next six years, creating about 13,000 new jobs. The firm said the expansion was in response to growing consumer demand for its sandwiches, which now includes extended opening hours to cater for the growing breakfast market.- The Guardian

The UK would be better off staying inside the European Union "than kicking against the table" and voting to leave, the boss of one of the world's largest consumer goods companies has said. Paul Polman, the Dutch chief executive of the consumer multinational Unilever, said the company could review its UK investment if Britain left the EU. "We will always look at things," he said, when asked whether Unilever could reduce its presence in the UK. Unilever employs 6,000 people in the UK, which is a net exporter to the EU for its business. - The Guardian

Fees for investors in newly launched hedge funds have fallen to their lowest level for more than a decade as new entrants to the market rush to attract capital into their funds. The days of the "two and twenty" fee structure, whereby a hedge fund would charge investors an annual fee of 2% of assets and 20% of profits, have waned, according to figures from Hedge Fund Research. - The Times

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