ADVFN Morning Euro Markets Bulletin - Nov. 16th 2011

By ADVFN.com
ADVFN offer FREE streaming stocks and shares data form around the world. SEE

Stocks mark time ahead of Inflation Report

Market Movers
techMARK 1,861.28 -0.29%
FTSE 100 5,490.00 -0.50%
FTSE 250 10,236.00 -0.23%

London has got off to a subdued start, with investors waiting on the Bank of England's inflation report and, to a lesser extent, the unemployment data, at 9:30am.

Many economists are expecting that the Bank's Inflation Report will pave the way for an extension of its quantitative easing programme, and so investors are reluctant to over commit ahead of what would be a major policy announcement.

The Bank is also expected in some quarters to downgrade its growth expectations for the UK economy while, hot on the heels of yesterday's slightly bigger than expected fall in inflation, the central bank may also forecast a quickening in the rate of decline of the inflation rate, such that the rate may fall below the 2% target rate in two to three years' time.

As for October's unemployment figures, the key figure to watch out for is youth unemployment, where the number of 16 to 24-year-olds may top the million mark, after rising to a record high of 991,000 in the June to August period.

On the corporate side, inter-dealer broker ICAP has issued a veiled profit warning, saying that it should hit market expectations for full-year profit provided market conditions return to normal in the final quarter; the fourth quarter is traditionally one of the group's stronger trading periods.

ICAP's revenue of £867m in the six months to the end of September was unchanged from the corresponding period of last year. Despite that, adjusted profit before tax edged up 2% to £186m from £183m at the interim stage in 2010.

Mining giant BHP Billiton said it had approved an $822m investment for the development of a new mine in Western Australia. BHP said the mine would help maintain iron ore production output from its Newman Joint Venture operations.

Reed Elsevier, the business information and data company, said the overall improvement in its trading performance seen in the first half of the year has continued into the second half, and it is on track to deliver earnings per share in line with expectations. Underlying revenue for the nine months to the end of September grew by 1%.

Intertek, the testing and quality assurance company, said year-on-year organic revenue growth for the ten months to the end of October was 8%, in line with the figure published in the half year update in August.

Aerospace and defence engineering firm Meggitt is gaining altitude after it said it has been awarded two separate contracts, one of which is worth £13m.

FTSE 100 - Risers
Meggitt (MGGT) 391.60p +2.27%
Intertek Group (ITRK) 1,906.00p +1.06%
Reckitt Benckiser Group (RB.) 3,260.00p +0.96%
Tate & Lyle (TATE) 690.00p +0.88%
Shire Plc (SHP) 2,048.00p +0.69%
ITV (ITV) 65.95p +0.69%
InterContinental Hotels Group (IHG) 1,079.00p +0.65%
Capital Shopping Centres Group (CSCG) 313.90p +0.61%
SABMiller (SAB) 2,243.50p +0.49%
Hammerson (HMSO) 393.60p +0.49%

FTSE 100 - Fallers
Vodafone Group (VOD) 172.40p -4.54%
ICAP (IAP) 351.80p -4.14%
Vedanta Resources (VED) 1,080.00p -2.53%
British Sky Broadcasting Group (BSY) 738.00p -1.93%
Marks & Spencer Group (MKS) 326.40p -1.92%
Xstrata (XTA) 980.20p -1.81%
Reed Elsevier (REL) 528.00p -1.77%
Antofagasta (ANTO) 1,146.00p -1.72%
Admiral Group (ADM) 816.00p -1.69%
Sainsbury (J) (SBRY) 300.50p -1.60%

FTSE 250 - Risers
Dixons Retail (DXNS) 11.90p +4.94%
SThree (STHR) 235.80p +3.42%
Michael Page International (MPI) 376.00p +3.24%
Domino Printing Sciences (DNO) 536.50p +2.68%
Hochschild Mining (HOC) 449.30p +2.58%
Allied Gold Mining (ALD) 150.00p +2.46%
Unite Group (UTG) 167.50p +2.20%
Ophir Energy (OPHR) 255.00p +2.00%
Jupiter Fund Management (JUP) 215.00p +1.99%
St James's Place (STJ) 340.00p +1.86%

FTSE 250 - Fallers
HICL Infrastructure Company Ltd. (HICL) 114.50p -3.29%
Tullett Prebon (TLPR) 307.40p -3.15%
Exillon Energy (EXI) 311.10p -2.78%
Fidelity China Special Situations (FCSS) 77.05p -2.34%
TalkTalk Telecom Group (TALK) 126.00p -2.33%
Berendsen (BRSN) 424.60p -2.23%
Filtrona PLC (FLTR) 372.70p -2.13%
Greggs (GRG) 499.00p -2.06%
Telecom Plus (TEP) 710.50p -2.00%
Cape (CIU) 344.00p -1.94%

FTSE TechMARK - Risers
BATM Advanced Communications Ltd. (BVC) 17.25p +6.98%
Vectura Group (VEC) 65.00p +4.84%
Corin Group (CRG) 39.00p 0.00%
Asterand (ATD) 2.12p 0.00%
Kofax (KFX) 232.00p 0.00%
Innovation Group (TIG) 19.25p 0.00%
Triad Group (TRD) 11.50p 0.00%
Alterian (ALN) 96.00p 0.00%
Parity Group (PTY) 21.00p 0.00%
Antisoma (ASM) 1.94p 0.00%

FTSE TechMARK - Fallers
Psion (PON) 50.25p -4.29%
Ricardo (RCDO) 372.00p -2.07%
Dialight (DIA) 745.50p -1.06%
Corin Group (CRG) 39.00p 0.00%
Asterand (ATD) 2.12p 0.00%
Kofax (KFX) 232.00p 0.00%
Innovation Group (TIG) 19.25p 0.00%
Triad Group (TRD) 11.50p 0.00%
Alterian (ALN) 96.00p 0.00%
Parity Group (PTY) 21.00p 0.00%


--------------------------------------------------------------------------------

Sippdeal
An award winning provider of SIPPs, ISAs and share dealing accounts. With online dealing from just £4.95, an annual cash bonus of up to 0.5% on fund investments and no charges for; set up, annual administration and payments in – Sippdeal could be ideal for you. To find out more click here


--------------------------------------------------------------------------------

UK Event Calendar
INTERIMS
Alterian, Hampson Industries, Harvard International, ICAP, London Stock Exchange Group, Speedy Hire, UK Mail Group

INTERIM DIVIDEND PAYMENT DATE
Centrica

INTERIM EX-DIVIDEND DATE
Andrews Sykes Group, Carphone Warehouse Group, DCC, Great Portland Estates, Hansa Trust, HICL Infrastructure Company Ltd., Marks & Spencer Group, Prime People, Printing.com, Sainsbury (J), Synergy Health, Vedanta Resources, Vodafone Group, Wynnstay Properties

QUARTERLY EX-DIVIDEND DATE
M Winkworth

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Capacity Utilisation (US) (16:15)
Consumer Price Index (EU) (10:00)
Consumer Price Index (US) (13:30)
Crude Oil Inventories (US) (15:30)
Industrial Production (US) (16:15)
MBA Mortgage Applications (US) (12:00)
New Car Registrations (EU) (10:00)

Q3
New World Resources A Shares, New World Resources NV A Shares

GMS
Anglogold Ashanti Ltd., Downing Planned Exit VCT 2, Downing Planned Exit VCT 3

FINALS
United Drug

IMSS
Avis Europe, Beazley, Centaur Media, Melrose, Paddy Power, Unite Group

SPECIAL EX-DIVIDEND PAYMENT DATE
Gleeson (M J) Group, Rotork, Vodafone Group

EGMS
GVC Holdings

AGMS
Allergy Therapeutics, Barratt Developments, Camco International LTd., Cash Converters International Ltd, Kier Group, Mobile Streams, Northamber

UK ECONOMIC ANNOUNCEMENTS
BoE Inflation Report (09:30)
Claimant Count Rate (09:30)
Unemployment Rate (09:30)

FINAL DIVIDEND PAYMENT DATE
Hargreaves Services

FINAL EX-DIVIDEND DATE
Air Partner, British Sky Broadcasting Group, Euromoney Institutional Investor, Fidelity Special Values, JPMorgan Global Emerging Income Trust, JPMorgan Smaller Companies Inv Trust, Lok'n Store Group, Octopus Eclipse VCT 1, Octopus Eclipse VCT 3, Octopus Eclipse VCT 4, Sherborne Investors (Guernsey) 'A' Shares, Tristel


--------------------------------------------------------------------------------

Selftrade
Exit fees reimbursed - up to £100 per account type when you transfer to Selftrade. Flat £12.50 charge per online trade and an annual Management Fee of £35 + VAT with 3 free trades. Deal in equities, funds, gilts, corporate bonds, covered warrants and listed CFDs. No dealing fee on fund purchases.
Click here


--------------------------------------------------------------------------------

European Market Report

FTSE 100 Euronext Dax perf CAC 40


The Euro is at a one-month low

European stocks opened the trading session down with average losses of 0.60% as markets remain under attack due to the stress in Eurozone periphery debt and increased tensions in “core” countries, such as France and Austria. During the last week, analysts at Digital Look have been commenting on how the only relatively risk-free assets in Europe right now are German and alternatively Dutch debt. Yield spreads versus the German Bund remain high with Italy’s risk premium at 500 basis points and Spain’s at 450bp.

In the FX market, we see that this risk aversion is favoring the Dollar and the Yen. The Euro crosses remain pressured by problems in Euroland. The Euro/Dollar broke through the recent low of 1.3484 and reached 1.3429 with the next support level at 1.3400. Other European currencies are also losing strength with the Norwegian Krone and Swiss franc suffering the most versus the green-back. Logically, carry trade currencies have been sent reeling as funds flee to quality.

On the macroeconomic calendar today, there will be some relevant data coming out from Europe and the United States. In Spain, final third quarter GDP readings of 0.0% quarterly and 0.8% annual have been confirmed. There will be CPI data in the Euro Zone and the United States, where there will also be TIC flow data coming out, industrial production numbers and an NAHB housing data release.

Looking at central banks, the Bank of Japan decided to keep its key rate unchanged at 0.1% at this morning's monetary policy meeting. The Bank of England will publish its quarterly Inflation Report at 10:30am London time. Governor Mervyn King will explain the BOE’s monetary policy outlook and will defend the recent extension of its asset purchase programme to 275b pounds.

Commodities

Crude steps up a gear, nears $100

Crude cruised towards $100 a barrel on Tuesday after better than expected US retail sales and manufacturing data.

However the dollar's strength and simmering worries about Europe's debt crisis kept gains in check. Crude for December delivery gained $1.23 to settle at $99.37 a barrel on the New York Mercantile Exchange.

Brent crude for December delivery settled 50 cents higher at $112.39 on the ICE Futures Europe exchange.

US data boosted sentiment after retail sales grew by a better than expected 0.5% in October. Core retail sales rose by 0.6% on month, confounding forecasts of a 0.2% gain, the biggest rise since March.

The New York Fed’s regional manufacturing index rose to 0.61 in November compared to -8.48 the previous month.

Investors will also be keeping an eye out for weekly inventory data by the Department of Energy on Wednesday. Some analysts are predicting oil inventories will fall by 800,000 barrels.

Among precious metals gold closed higher after a volatile session as traders mulled the day's pleasing US economic data and ongoing jitters about Europe's debt problems.

Gold for December delivery rose $3.80 to settle at $1,782.20 an ounce on the Comex division of the New York Mercantile Exchange.

Gold changed hands at a high of $1,787.80 and traded at a low of $1,707.20 on Tuesday.


--------------------------------------------------------------------------------

Profit from the modern day US gold rush!
Click here for you FREE Report.


--------------------------------------------------------------------------------

US Market Report
Economic data offsets euro concerns

Some pleasing domestic economic data helped to offset fears about the Eurozone on Tuesday as US benchmarks finished in the blue, with the Dow rising 0.1% and the S&P gaining 0.5%. The tech-heavy Nasdaq however finished over 1% lifted by strong gains for Hewlett Packard and Intel.

US DATA BOOSTS SENTIMENT, DESPITE RISING YIELDS IN EUROZONE

Total retail sales grew by 0.5% on month in October (Consensus: 0.3%), while core retail sales rose by 0.6% on month (Consensus: 0.2%), the largest increase since March, which makes for a strong start to the last quarter of the year, according to economists at Barclays Capital.

The New York Fed’s regional manufacturing index for the month of November has come in at 0.61, versus last month’s reading of -8.48 and consensus forecasts of -2.

European markets were weighed down by news of rising sovereign debt yields. Former EU Competition Commissioner Mario Monti may have run into political resistance on forming a Cabinet in Italy, according to Bloomberg. The news may be a reason why the closely-watched yield on a 10-year Italian government bond has surged back towards the 7%, a level seen by most as dangerous and unsustainable.

Meanwhile, the Spanish Treasury issued a total of €3.158bn in short-term debt, with yields coming in significantly higher than the last auction. The Treasury issued both 12-month and 18-month debt at yields of 5.2% and 5.32%, respectively, up from 3.61% and 3.8% previously.

COMPANIES

Wal-Mart finished lower after a drop in quarterly profit due to high costs. However, both earnings and revenue were better than expected, leading the group to raise its outlook for the full year.

Home Depot fell into the red despite raises its quarterly dividend by 16% as both earnings and revenue beat expectations in the third quarter.

Staples has reported an earnings per share of 47 cents in the third quarter, in line with expectations. Revenue, however, missed company estimates, causing shares to fall.

DOUBTS ABOUT THE DEFICIT

In afternoon trading, co-chairman of the deficit commission said lawmakers on the Joint Special Committee on Deficit Reduction will not make the necessary cuts to reduce the deficit and escape a crisis.

"We hope to solve our problem but the probability that they get is very low," said Erskine Bowles at a conference in Washington.

OTHER MARKETS

Oil prices were on the way up with West Texas rising close to the $100 mark at $99.50, its highest level since last July.


--------------------------------------------------------------------------------

Read our FREE Report for brighter investment ideas!
Click here to download our unbiased overview of the carbon trading market.


--------------------------------------------------------------------------------

Wednesday Newspapers:
David Cameron faced a deepening rift with Germany over the future of Europe last night, while at home Nick Clegg scorned the Prime Minister for his hopes of looser links with Brussels. (…) Mr Cameron plans to visit Brussels as well as Berlin on Friday to argue the case for new protections for the City from EU directives. He will seek clarity from Herman Van Rompuy, the European Council President, on whether a new EU treaty will be required for the 17 Eurozone countries to forge closer fiscal links. A new treaty would require UK approval, although most Eurozone countries want to agree new rules among themselves, which would avoid the need for an Irish referendum, writes The Times.

The Bank is expected to cut its 2011 and 2012 growth forecast to about 1% from its August forecast of about 2% when it publishes its latest quarterly Inflation Report on Wednesday. Sir Mervyn King, the Bank’s Governor, is likely to emphasise there are serious downside risks to the UK growth outlook because of the threat posed by the eurozone’s continued problems. (…) It will emphasise that inflation could potentially fall even more sharply, undershooting the target, given the current risks to the UK and global economies. "It is likely that the Bank of England’s quarterly Inflation Report for November will imply that more quantitative easing will be enacted over the coming months and that interest rates will stay down at 0.5% until well into 2013, and very possibly beyond," said Howard Archer, chief UK economist at IHS Global Insight.

It was once a day for dozing off excess and conjuring new and ever more ingenious uses for leftover turkey. But now only one supermarket group wants to keep it that way — and it is looking increasingly lonely. Wm Morrison is resisting the stampede among stores to open on Boxing Day, leaving only it and the John Lewis partnership in the traditionalists’ corner. Christmas is potentially a vulnerable period for Morrisons, which, unlike Asda, Tesco and Sainsbury’s, stocks only a modest range of non-food goods. In a move to prevent customers defecting to rival supermarkets, where they can also do their Christmas shopping, it is running a £25-off scheme for loyal shoppers, says The Times.

Yell chairman Bob Wigley has taken the unusual step of buying the bonds of the indebted directories company as it attempts to convince lenders to accept changes to its debt's terms. Mr Wigley bought Yell senior debt on Tuesday with a face value of $1m (£625,260) for about £200,000, as well as increasing his stake in the struggling company with the purchase of shares worth £100,485. The former investment banker said he was convinced Yell had "huge potential" and could "manage its debt structure".

The European Commission will crack down on credit rating agencies, forcing them to report how they assign ratings and making them liable for compensation when mistakes are found, but plans to introduce temporary bans on sovereign debt ratings under bailout circumstances had to be put on hold. Many of the ideas have run into stiff resistance, with leading rating firms claiming they are impractical, politically motivated, and that they damage the quality and independence of ratings. A Moody's spokesman said the proposals were "inconsistent with the objectives of stabilising credit markets" adding that the rules would "disrupt access to credit and increase market volatility," The Telegraph reports.

George Osborne may have to unleash a fresh round of austerity measures in order to bring the UK’s budget deficit under control, a respected think tank will warn today. Fresh forecasts show the UK’s debt mountain will only fall to £100 billion in 2015-16 from £122bn this year, according to the Centre for Economic & Business Research (CEBR). That £100bn debt pile would be more than double the £46bn prediction for 2015-16 from the independent Office of Budget Responsibility set up by the coalition government, The Scotsman report.

The prospect of a Eurozone breakup intensified on Tuesday night as borrowing costs around the region soared and the Dutch prime minister said it should be possible to expel some members from the currency union. Investors are rapidly losing hope that a solution to the sovereign debt crisis will be found, and their fear was demonstrated by rising bond yields – the rate of interest governments have to pay to borrow – across almost all single-currency countries. The Dutch premier, Mark Rutte, stoked fears that a collapse could become a reality as he aired the prospect of countries being ejected, albeit as a last resort, explains The Guardian.