UK/Euro Financial Market Daily Morning Briefing 28-01-2014

London open: Stocks inch higher after recent sell-off

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Tuesday January 28

INTERIMS
Filtronic, Mattioli Woods

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence (US) (15:00)
Durable Goods Orders (US) (13:30)

GMS
TXO, Vodafone Group

FINALS
Aberforth Smaller Companies Trust, Crest Nicholson Holdings

ANNUAL REPORT
Arden Partners

IMSS
British Land Co, Carpetright, Greencore Group

EGMS
Komercni Banka A.S.GDR (Level 1), Lyxor Euro Stoxx 50 DR GBP, Lyxor Index Fund Lyxor Emerging Markets Local Cy Bond Dr$, Lyxor MSCI Europe DR GBP, Samsung C&T Corp. GDR

AGMS
Alternative Networks, Greencore Group, Polar Capital Global Healthcare Growth & Income Trust, Standard Life European Private Equity Trust

TRADING ANNOUNCEMENTS
Afren, Gem Diamonds Ltd. (DI), GLOBO, Aquarius Platinum

UK ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (09:30)
Index of Services (09:30)

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Europe open: Stocks edge higher as traders await UK, US data

- Turkish central bank to hold emergency meeting
- UK GDP figures released
- US consumer confidence and durable goods orders data out

FTSE 100: 0.31%
DAX: 0.64%
CAC 40: 0.67%
FTSE MIB: 0.59%
IBEX 35: 1.14%
Stoxx 600: 0.67%

European stocks rose as investors awaited a batch of data and as Turkey's central bank prepared to hold an emergency meeting following a sharp fall in the nation's currency.

The Turkish central bank will meet today to discuss recent developments and take the necessary policy measures for price stability after the lira weakened against the euro and the dollar. It will lay out its plans in a statement at 22:00 GMT amid market pressure for the bank to raise interest rates.

The news of the meeting sent the lira higher today. The Indian rupee also gained after the Reserve Bank of India unexpectedly raised its benchmark repurchase rate to 8% from 7.75%.

Also on the top of today's agenda is the release of UK economic growth data. Gross domestic product is expected to show a rise of 2.8% year-on-year in the fourth quarter, up from 1.9% in the prior quarter.

US data released as Fed meeting looms

The US consumer confidence index is anticipated to dip slightly to 78 in January from 78.1 in December.

Analysts predict another report on US durable goods will reveal an increase of 1.8% in December, compared to a rise of 3.4% a month earlier.

The figures come a day before the Federal Reserve announces its latest policy decision. Policymakers have been turning to data to gauge the health of the world's biggest economy as they weigh whether to introduce another round of monetary stimulus tapering.

The Fed began unwinding monthly bond purchases by $10bn to $75bn last month and is expected to cut a further $10bn tomorrow.

"Markets may be subdued today following the recent sell-off and as investors take bets ahead of the all-important Federal Open Market Committee meeting tomorrow," according to Lee Mumford, Trader at Spreadex.

Siemens, F&C Asset Management

Siemens gained after reporting quarterly net profit that beat estimates.

F&C Asset Management advanced after Bank of Montreal bought the owner of the UK's oldest investment fund for £708m.

STMicroelectronics declined after the maker of semiconductors posted an unexpected loss for the last three months of 2013.

The euro dropped 0.10% to $1.3659.

Brent crude futures rose $0.429 to $107.150 per barrel, according to the ICE.

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US close: Stocks fall as investors weigh emerging markets, Fed

- Investors look ahead to Fed meeting
- New home sales drop seven per cent
- Caterpillar beats forecasts, reports strong guidance
- Markets stabilise slightly after announcement from Turkish central bank

Dow Jones: -0.26%
Nasdaq: -1.07%
S&P 500: -0.46%

US stocks finished slightly lower on Monday after a choppy session as bearish pressure continued following last week's sell-off, which saw the S&P 500 register its worst weekly performance since June 2012.

Investors were also showing caution ahead to the Federal Reserve's next policy meeting which concludes on Wednesday with the central bank widely expected to continue with its plan to taper its quantitative easing programme.

The Fed, which began scaling back its monthly asset purchases in December from $85bn to $75bn, will make another $10bn cut this month, according to the consensus forecast.

Ongoing turmoil in emerging markets has hit sentiment in recent days as investors scaled back risk appetite on concerns of a slowdown in China after some weak data.

However, downside for global stock markets was limited on Monday after Turkey's central bank said it would hold an emergency monetary policy meeting in order to discuss recent developments and take necessary measures to ensure stability.

Losses, however, were more pronounced on the Nasdaq with analysts highlighting that the tech-heavy index briefly fell through its 50-day moving average.

In economic news, US new home sales fell at a month-on-month rate of 7% to a seasonally adjusted annual rate of 414,000 in December. Analysts were expecting a figure closer to 455,000.

Property Economist Paul Diggle from Capital Economics said that the decline was probably driven by last month's severe winter weather.

"Sales activity in January is likely to be weak for similar reasons. But we continue to think that new home sales will stage an encouraging rise over 2014 as a whole," he said.

Caterpillar rallies after earnings, guidance

Mining and construction equipment maker Caterpillar after announcing a $10bn share buyback and a stronger-than-expected 44% jump in fourth-quarter profits. The company also forecast earnings and revenue for 2014 ahead of analysts' estimates.

Apple rose as investors awaited the tech giant's fiscal first-quarter results. However, shares fell sharply in after-hours trade despite the company beating forecasts as its guidance for second-quarter revenue disappointed analysts.

JPMorgan Chase & Co. finished flat after the news that its Chief Executive Jamie Dimon is set to receive a significant increase in his pay.

Royal Caribbean Cruises was making decent gains despite reports that its ship Explorer of the Seas is coming back to New Jersey sooner than planned after more than 600 passengers caught a stomach bug.

Telecoms giant AT&T edged higher ahead of its results tomorrow after releasing a statement quashing speculation that it intends to make a bid for British counterpart Vodafone.

US cable operator Liberty Global was in demand after agreeing to buy Dutch company Ziggo in a €6.9bn deal.


S&P 500 - Risers
Caterpillar Inc. (CAT) $91.29 +5.94%
H&R Block Inc. (HRB) $29.27 +4.24%
Cablevision Systems Corp. (CVC) $16.51 +4.03%
Robert Half International Inc. (RHI) $41.24 +3.07%
Electronic Arts Inc. (EA) $24.47 +2.64%
Transocean Ltd. (RIG) $45.25 +2.26%
GameStop Corp. (GME) $37.32 +2.19%
Honeywell International Inc. (HON) $90.29 +2.06%
United Technologies Corp. (UTX) $113.79 +1.78%
Alcoa Inc. (AA) $11.64 +1.75%

S&P 500 - Fallers
Progressive Corp. (PGR) $23.18 -6.53%
Xerox Corp. (XRX) $10.61 -5.60%
E*TRADE Financial Corp. (ETFC) $20.07 -4.29%
Edwards Lifesciences Corp. (EW) $66.38 -3.53%
Yahoo! Inc. (YHOO) $36.65 -3.32%
Chesapeake Energy Corp. (CHK) $26.01 -3.24%
Regeneron Pharmaceuticals Inc. (REGN) $270.74 -3.17%
Janus Capital Group Inc. (JNS) $11.09 -3.14%
Mastercard Inc. (MA) $76.05 -3.13%
Priceline.Com Inc. (PCLN) $1,143.24 -3.11%

Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $91.29 +5.94%
United Technologies Corp. (UTX) $113.79 +1.78%
Merck & Co. Inc. (MRK) $52.53 +1.06%
Travelers Company Inc. (TRV) $82.29 +0.83%
Boeing Co. (BA) $137.36 +0.52%
General Electric Co. (GE) $25.07 +0.48%
E.I. du Pont de Nemours and Co. (DD) $60.24 +0.45%
Nike Inc. (NKE) $71.90 +0.35%
AT&T Inc. (T) $33.51 +0.27%
Verizon Communications Inc. (VZ) $47.69 +0.13%

Dow Jones I.A - Fallers
Visa Inc. (V) $216.22 -2.27%
Microsoft Corp. (MSFT) $36.03 -2.11%
Goldman Sachs Group Inc. (GS) $164.69 -1.76%
Pfizer Inc. (PFE) $29.66 -1.43%
American Express Co. (AXP) $85.72 -1.41%
International Business Machines Corp. (IBM) $177.90 -0.97%
3M Co. (MMM) $128.96 -0.97%
Cisco Systems Inc. (CSCO) $22.00 -0.90%
Procter & Gamble Co. (PG) $78.47 -0.90%
Johnson & Johnson (JNJ) $89.94 -0.74%

Nasdaq 100 - Risers
Charter Communications Inc. (CHTR) $136.92 +4.19%
F5 Networks Inc. (FFIV) $106.50 +1.52%
Illumina Inc. (ILMN) $140.25 +1.18%
Nxp Semiconductors Nv (NXPI) $46.00 +0.92%
Costco Wholesale Corp. (COST) $113.08 +0.85%
Apple Inc. (AAPL) $550.50 +0.81%
Ross Stores Inc. (ROST) $68.28 +0.66%
PACCAR Inc. (PCAR) $56.55 +0.55%
Sirius XM Holdings Inc (SIRI) $3.66 +0.55%
Liberty Media Corporation - Class A (LMCA) $134.47 +0.50%

Nasdaq 100 - Fallers
Yahoo! Inc. (YHOO) $36.65 -3.32%
Vodafone Group Plc ADS (VOD) $36.80 -3.26%
Regeneron Pharmaceuticals Inc. (REGN) $270.74 -3.17%
Priceline.Com Inc. (PCLN) $1,143.24 -3.11%
Celgene Corp. (CELG) $156.27 -3.07%
TripAdvisor Inc. (TRIP) $77.91 -3.05%
Alexion Pharmaceuticals Inc. (ALXN) $129.82 -2.86%
Tesla Motors Inc (TSLA) $169.62 -2.85%
eBay Inc. (EBAY) $52.88 -2.74%
Applied Materials Inc. (AMAT) $16.72 -2.62%

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Tuesday newspaper round-up: Britain, Smartphones, Oil

Britain is growing as fast as it was before the financial crisis and the outlook is "buoyant", according to a new economic indicator produced by the CBI. The employers' group released its upbeat projection before today's official growth figures, which are expected to show that the economy expanded by 1.9 per cent last year — the best performance in six years. – The Times

Global smartphone shipments surpassed 1bn last year for the first time, driven by demand for cheaper devices amid signs of slowing growth in the increasingly crowded higher end of the market. IDC, a technology research group, estimated that smartphone shipments in 2013 rose to just over 1bn – a 38% increase from the previous year and double the 494m recorded in 2011. – Financial Times

Thousands of Ford workers are being balloted for strike action in a row over job security and pensions. Members of the Unite and GMB unions will vote on whether to launch a campaign of industrial action aimed at safeguarding jobs after recent cuts led to Ford ending 100 years of vehicle production at its plant in Southampton. Unite has accused the American carmaker of leaving UK workers to bear the brunt of cuts, in the wake of the decision to move production of the Transit van from Britain to Turkey. – The Guardian

Fidelity, the world's biggest institutional investor, has warned that the "tide is going out of emerging markets", as authorities in Turkey and Argentina moved to shore up their currencies and stock markets fell around the world. Dominic Rossi, global chief investment officer at Fidelity, said the end of quantitative easing in the West and changes in Chinese fiscal policies were "forcing up the cost of capital across the emerging markets asset class". – Daily Telegraph

Governments need to deter oil speculators, set aside reserves of crude oil and take steps urgently to reduce their dependence on fossil fuels in order to escape price volatility that undermines stable economic growth, according to a report co-authored by one of Britain's top scientists. The exploitation of shale oil and gas may mitigate damaging price fluctuations in future but it will be terrible news for the environment and is not a longer term solution to the world's energy needs, said the report co-written by Sir David King, published on Tuesday. - The Guardian

Emerging market countries faced fresh pressure on Monday to put up interest rates as Brazil warned that others would need to follow its lead in tightening monetary policy and Turkey's central bank convened an emergency rate-setting meeting. Alexandre Tombini, Brazil's central bank governor, said the "vacuum cleaner" of rising interest rates in the developed world would suck money out of emerging markets and force other central banks to tighten policy to beat inflation. – The Times

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