UK/Euro Financial Market Daily Morning Briefing 26-03-2014

London open: Stocks at two-week high, Standard Life jumps

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Wednesday March 26

INTERIMS
Bellway, Leaf Clean Energy Co (DI)

INTERIM DIVIDEND PAYMENT DATE
BHP Billiton

INTERIM EX-DIVIDEND DATE
British Sky Broadcasting Group, Craneware, Photo-Me International, Smiths Group, Tracsis, Tristel

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (14:30)
Durable Goods Orders (US) (12:30)
GFK Consumer Confidence (GER) (07:00)
MBA Mortgage Applications (US) (11:00)
Speech President St.Louis Fed

FINALS
ACTA S.P.A, Alliance Pharma, APR Energy, Bilfinger Berger Global Infrastructure Sicav S.A.(DI), Chime Communications, Dolphin Capital Investors Ltd, EnQuest IQE, Eurasian Natural Resources Corporation, Instem, IQE, Lamprell, Marshalls, Michelmersh Brick Holdings, Moss Bros Group, Paragon Entertainment Ltd (DI), Phoenix Group Holdings (DI), Powerflute Oyj (DI), Scisys, ServicePower Technologies, Vislink

ANNUAL REPORT
Ultra Electronics Holdings

AGMS
Amino Technologies, Beazley, Beazley, Beazley, Beazley, Beazley, Beazley, Beazley, Beazley, Beazley, Beazley, Blackrock Throgmorton Trust, eServGlobal Ltd., Leeds Building Society 13 3/8% Bearing Shares, Pinnacle Technology Group, Redhall Group

TRADING ANNOUNCEMENTS
Dolphin Capital Investors Ltd, Euromoney Institutional Investor, Speedy Hire, TUI Travel

FINAL DIVIDEND PAYMENT DATE
Brunner Inv Trust

FINAL EX-DIVIDEND DATE
BlackRock Latin American Inv Trust, Bovis Homes Group, Chrysalis VCT, Core VCT IV, Core VCT V, Countrywide, Devro, Driver Group, Foreign and Colonial Inv Trust, Henderson Opportunities Trust, Japan Residential Investment Co Ltd., Ladbrokes, LSL Property Services, New Britain Palm Oil Ltd. (DI), PPHE Hotel Group Ltd, Prudential, Schroders, SEGRO, Shore Capital Group Ltd., Synectics, Wynnstay Group

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Europe open: Stocks rise on German consumer confidence data

- German consumer confidence at seven-year high
- US durable goods orders data out later
- Draghi reiterates ECB policy stance

FTSE 100: 0.21%
DAX: 0.73%
CAC 40: 0.47%
FTSE MIB: 0.51%
IBEX 35: 0.51%
Stoxx 600: 0.35%

European stocks gained as a report showed German consumer confidence remained at a seven-year high.

GfK's forward-looking consumer sentiment indicator was 8.5 points in April, in line with March, when it reached its highest point since January 2007.

The results matched forecasts and followed data from the Ifo Institute yesterday which showed German business confidence slumped for the first time in five months in March, due to worries over the turmoil in Crimea.

"It remains to be seen just how the current events in Crimea will affect the mood amongst consumers," GfK said in its monthly survey of roughly 2,000 German consumers, acknowledging that the survey was conducted before the crisis escalated.

"It cannot be ruled out that this event will unsettle consumers in the coming weeks," the research institute added.

The Moscow-led referendum and subsequent annexation of the Crimean peninsula from Ukraine have raised concerns that it could hurt German businesses which have exposure to Russia.

In the US later on, attention will turn to the release of a report on US durable good orders which is expected to show a 0.8% rise in February, compared to a 1% fall a month earlier.

ECB stands ready to act, Draghi says

European Central Bank (ECB) President Mario Draghi yesterday reiterated in a speech in Paris that the monetary authority stands ready to act if necessary to boost the region's economy.

He said the central bank's accommodative monetary policy should be increasingly felt throughout the euro-area as the economy recovers.

However, he warned that risks including subdued prices and a strengthening euro remain.

"If any downside risks to this scenario appear, we stand ready to take additional monetary policy measures that ensure our mandate is fulfilled," Draghi said. "In other words, we will do what is needed to maintain price stability," he said, adding that "right now, we think that the risks of having deflation are limited."

Airbus, Lloyds

Airbus Group gained after Les Echos reported it is extending its partnership with Aviation Industry Corporation of China.

Lloyds Banking Group declined after the UK government sold a stake in the lender.

Mediaset SpA advanced after the broadcaster, controlled by former Italian Prime Minister Silvio Berlusconi, posted a return to profit for 2013.

The euro dropped 0.07% to $1.3816.

Brent crude futures rose $0.187 to $107.190 per barrel, according to the ICE.

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US close: Stocks higher after choppy session on confidence data

- Consumer confidence at best level in six years
- Housing data paints a mixed picture
- Plosser backs Yellen comments
- Carnival disappoints, breaks even in Q1

Dow Jones: 0.56%
Nasdaq: 0.19%
S&P 500: 0.44%

A larger-than-expected rise in consumer confidence helped US stocks end with decent gains on Tuesday after two straight days of losses.

Figures showed that "consumer confidence recovered in March to its best levels since January 2008, raising hopes that the recent downturn in the US economy is starting to turn around", according to Chief Market Analyst Michael Hewson from CMC Markets.

However, trading was choppy as investors also reacted to mixed economic data on the housing market.

The Dow Jones Industrial Average finished 0.6% higher at 16,368, the S&P 500 ended up 0.4% at 1,866, while the Nasdaq rose 0.2% to 4,234, with the latter closing in positive territory after briefly dropping into the red.

Markets were also reacting to comments from Charles Plosser, head of the Philadelphia Federal Reserve Bank, who threw his weight behind remarks from Fed Chair Janet Yellen who last week sparked an equity sell-off with her guidance for interest rates.

Plosser said that Yellen's guidance for the first rate hike coming around six months after quantitative easing ends "wasn't a wildly unexpected timeframe". He said that the risk of stock market volatility could be one of the "unintended consequences" of Fed policy as it ends its stimulus programme.

The Fed member also said he expects short-term interest rates to rise to 3% by the end of 2015 and reach 4% by the end of 2016, but noted that his forecasts were higher than most of his colleagues.

Housing data mixed, consumer confidence

New home sales in the States fell by 3.3% to an annual rate of 440,000 in February, a five-month low, retreating from a one-year high of 455,000 in January. The consensus estimate was for a smaller decline to 445,000.

The S&P/Case-Shiller composite house price index of 20 major US cities rose by 0.85% in January, up from a 0.74% gain in December and ahead of the consensus forecast for an increase of 0.6%. The 13.2% annual growth, however, came in slightly below expectations.

The FHFA's own home price index for January increased at a month-on-month rate of 0.5%, down from 0.7% previously and below estimates.

Meanwhile, the US consumer confidence index jumped from a revised 78.3 to 82.3 in March, well ahead of the consensus estimate of 78.5.

Carnival drops after flat Q1

Cruise operator Carnival dropped after saying it broke even in the first quarter, posting earnings per share of 0 cents, compared with 8.0 cents the year before. Net revenue yields declined by 2.1%, though this was better than the company guidance for a 3-4% decline.

Walt Disney advanced after the media and entertainment company agreed to buy Maker Studios for at least $500m. This consideration could rise by a further $450m if certain operating goals are met.

Semiconductor maker Himax Technologies sunk after Bank of America Merrill Lynch cut its rating on the stock to 'underperform'.

Pharmacies operator Walgreen Co rose strongly after saying that synergies from the acquisition of Alliance Boots will be larger than initially thought. The company also announced plans to close 76 stores in the second half of its financial year.

A number of financial stocks finished with losses including banking heavyweights Goldman Sahcs and JPMorgan Chase & Co and card companies Visa and American Express.


S&P 500 - Risers
McCormick & Co. (MKC) $71.20 +5.47%
Seagate Technology Plc (STX) $55.13 +4.02%
Cisco Systems Inc. (CSCO) $22.35 +3.62%
International Business Machines Corp. (IBM) $195.04 +3.61%
Nabors Industries Ltd. (NBR) $24.86 +3.41%
Delta Airlines Inc. (DAL) $34.43 +3.33%
Walgreen Co. (WAG) $66.42 +3.28%
Boston Scientific Corp. (BSX) $13.26 +3.27%
Hewlett-Packard Co. (HPQ) $32.56 +2.94%
Newfield Exploration Co (NFX) $30.89 +2.93%

S&P 500 - Fallers
Carnival Corp. (CCL) $38.02 -4.95%
EQT Corp. (EQT) $99.08 -3.32%
Chipotle Mexican Grill Inc. (CMG) $570.68 -3.03%
Akamai Technologies Inc. (AKAM) $57.85 -2.90%
Whole Foods Market Inc. (WFM) $52.26 -2.77%
Mastercard Inc. (MA) $75.28 -2.73%
Morgan Stanley (MS) $31.59 -2.62%
First Solar Inc. (FSLR) $72.06 -2.45%
Ralph Lauren Corp (RL) $156.29 -2.32%
Ross Stores Inc. (ROST) $71.67 -2.21%

Dow Jones I.A - Risers
Cisco Systems Inc. (CSCO) $22.35 +3.62%
International Business Machines Corp. (IBM) $195.04 +3.61%
Merck & Co. Inc. (MRK) $55.19 +2.62%
Johnson & Johnson (JNJ) $97.38 +2.29%
Caterpillar Inc. (CAT) $98.59 +1.80%
Intel Corp. (INTC) $25.46 +1.35%
United Technologies Corp. (UTX) $115.20 +1.27%
3M Co. (MMM) $134.06 +1.24%
General Electric Co. (GE) $25.70 +1.14%
E.I. du Pont de Nemours and Co. (DD) $67.23 +1.11%

Dow Jones I.A - Fallers
Nike Inc. (NKE) $73.65 -1.62%
Goldman Sachs Group Inc. (GS) $163.25 -1.49%
Visa Inc. (V) $218.40 -1.06%
Microsoft Corp. (MSFT) $40.34 -0.40%
McDonald's Corp. (MCD) $95.91 -0.28%
Home Depot Inc. (HD) $79.47 -0.24%
JP Morgan Chase & Co. (JPM) $60.93 -0.23%
Unitedhealth Group Inc. (UNH) $81.10 -0.22%
American Express Co. (AXP) $90.84 -0.19%

Nasdaq 100 - Risers
Seagate Technology Plc (STX) $55.13 +4.02%
Cisco Systems Inc. (CSCO) $22.35 +3.62%
Alexion Pharmaceuticals Inc. (ALXN) $153.08 +2.22%
Celgene Corp. (CELG) $144.50 +2.13%
Western Digital Corp. (WDC) $89.85 +2.13%
Altera Corp. (ALTR) $36.43 +1.87%
PACCAR Inc. (PCAR) $67.65 +1.53%
Mylan Inc. (MYL) $50.71 +1.48%
NetApp Inc. (NTAP) $37.09 +1.39%
Intel Corp. (INTC) $25.46 +1.35%

Nasdaq 100 - Fallers
Akamai Technologies Inc. (AKAM) $57.85 -2.90%
Whole Foods Market Inc. (WFM) $52.26 -2.77%
Sirius XM Holdings Inc (SIRI) $3.17 -2.76%
Ross Stores Inc. (ROST) $71.67 -2.21%
Wynn Resorts Ltd. (WYNN) $219.50 -2.14%
Netflix Inc. (NFLX) $370.84 -2.13%
Liberty Media Corporation - Class A (LMCA) $130.58 -2.07%
Yahoo! Inc. (YHOO) $35.93 -2.04%
Illumina Inc. (ILMN) $147.89 -2.02%
Tractor Supply Company (TSCO) $71.84 -1.86%

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Wednesday newspaper round-up: Sainsbury, SSE, Ukraine crisis

For Clive Black, the Head of Research at Shore Capital, there is now a much more convincing case for the Qatar Investment Authority (QIA) to make a more strategic investment in troubled supermarket operator Sainsbury. After all, the grocer has an attractive annual cash return backed by assets. That would come after that country´s investment authority walked away from 10.6bn pounds – 600p a share bid – for the company, blaming the exit on the downturn in credit markets, which made funding such an approach more expensive, according to The Daily Mail.

Utility outfit SSE has announced a freeze on electricity and gas prices for households until 2016. The measure will be partly funded via a cost reduction programme, including 500 redundancies, which will generate £100m in savings. In parallel, and in what will come as a major blow for the government, the company has decided to scale back plans to build offshore wind farms as it does not have "sufficient confidence in the viability of the wider offshore wind sector," The Daily Telegraph says.

The Ukraine crisis has led the Department of Energy and Climate Change to reconsider its plans to allow Russia to construct nuclear power plants in the UK. Just last September, Westminster signed a nuclear co-operation deal with Russia´s state-owned Rosatom which would pave the way for it to enter the UK civil nuclear market, according to The Daily Telegraph.

The Financial Conduct Authority (FCA) is about to slap Santander UK with a multimillion pound fine for offering poor investment advice to some clients. That follows a year-long investigation into the industry which found that in multiple instances high street banks and building societies were failing to correctly identify clients´ needs in terms of the level of risk which they were willing to assume and the appropriateness of the financial securities offered to them, The Daily Telegraph says.

The Scottish government´s roadmap for splitting up the UK makes no sense even if its prized oil and gas revenues are taken into account, the CBI believes. Consequently, says the business lobby group, there is no credible plan for cutting Scotland´s net deficit following a break-up. That is made worse by the fact that it will be more volatile, but just as large, as that of the rest of the country. It would also saddle people and businesses with extra red tape, The Times reports.

Business confidence has recovered to its best levels since before the start of the recession, courtesy of factors including a bounceback in exports, the latest economic survey from the Bank of Scotland showed. Better trading at companies since the start of the year will be buttressed by a recovery in investment levels, The Scotsman writes.

Centrica has undertaken its first foray into Ireland by purchasing the supply division of Bord Gais for 1.1bn euros. Most importantly, the firm is looking to replicate its integrated model of owning power stations and a supply business in the Republic of Ireland. The acquisition target has 56% of the gas supply market in Ireland. Also, the two private equity groups involved in the transaction will make take on Bord Gáis's business in Northern Ireland and its wind farms in the Republic, The Times says.

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