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 |  Subject: ADVFN Morning Euro Markets Bulletin - June 8th 2010  Tue Jun 08, 2010 10:35 am | |
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Flat start for Footsie
Market Movers
FTSE 100 5,059.06 -0.20%
techMARK 1,583.04 -0.20%
FTSE 250 9,507.13 +0.31%
Footsie is moving sideways this morning with investors unsettled by the late fall on Wall Street last night.
Tesco is the big story. Chief executive Sir Terry Leahy is to retire next March with Philip Clarke moving up to take his place as CEO at the UK's top supermarket chain.
Leahy steps down after 14 years in the top job, a period that has seen Tesco become the dominant force in UK grocery retailing and start to make significant inroads into overseas markets in Asia and more recently the US. Clarke is a lifelong Tesco man.
Demand at the World Cup and a pick-up in business elsewhere means temporary power and temperature control services firm Aggreko expects performance this year will be significantly better than previously anticipated. At the interim stage group revenue in constant currency and excluding pass-through fuel will grow by around 10%, and trading profit by about 20%, the company said.
Miners have also picked up after a few iffy days recently. Fresnillo, ENRC and Xstrata are the best performers.
Catering firm Compass Group has snapped up a North American provider of soft support services operating in the education and business and industry sectors. The company is paying $65m (£45m) in cash for Southeast Service Corporation (SSC), a company which last year had revenue of $153m (£106m).
Chloride leads the second line after agreeing an £860m 325p per share takeover bid from ABB. Emerson Electric is the other suitor interested in the power supplies group.
Newsagent chain WH Smith announced the retirement of chairman Robert Walker as it revealed a 4% fall in like-for-like sales in the 14 weeks to June 5. Like-for-like sales were down by 4% in both the High Street and Travel divisions, with like-for-like sales at travel outlets down by 2% excluding the impact of the volcanic ash cloud that grounded flights across Britain.
Falkland Basin oil explorer Rockhopper has wasted little time in tapping shareholders after its recent discoveries in the South Atlantic. The firm is to raise £48.5m through a placing of 17.3m new shares at 280p apiece, a small discount to last night's close of 290p. |
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| | UK Event Calendar for today | INTERIMS
Alternative Networks, Gooch and Housego
QUARTERLY EX-DIVIDEND DATE
Canadian General Investments
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ABC Consumer Confidence (US) (22:00)
Balance of Trade (GER) (07:00)
Current Account (GER) (07:00)
Industrial Production (GER) (11:00)
GMS
Brightside, Capital & Regional
FINALS
Advanced Computer Software, Carclo, Hyder Consulting, Penna Consulting, Renold, Sepura, Sirius Real Estate Ltd., Ten Alps, Umeco, VP
ANNUAL REPORT
E2V Technologies, Maypole Group
AGMS
Andrews Sykes, Asterand, Augean, Axis Bank GDR (Reg S), Bisichi Mining, Gresham Computing, Hon Hai Precsn GDR (Reg S), Maven Income and Growth VCT 2 , REA Holdings, Witan Pacific Inv Trust
TRADING ANNOUNCEMENTS
Aggreko
UK ECONOMIC ANNOUNCEMENTS
BRC Sales Monitor (11:00)
FINAL DIVIDEND PAYMENT DATE
Interserve |
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| | European Markets Report |
The US dollar has slipped back on comments by Federal Reserve President Bernanke that he doesn’t expect to see a double-dip recession.
These comments have come as some relief to shell shocked investors after the events of the past few days; however they are only expected to bring moderate relief as they do not change the overall environment that the markets are currently operating in.
Yesterday’s strong German factory data has also given the Euro a brief boost but these boosts should provide further selling opportunities while below 1.2135.
There is still major concern about sovereign risk with respect to Hungary and though as far as the European economy is concerned it is not that relevant it represents a symbol of the contagion risks that are currently present within the Euro zone as well as the current scepticism about the Euro itself.
This slight change in tone regarding the level of the Euro has further undermined the single currency as political leaders indicate that they see no reasons to stop further slides, as indicated by the French Prime Ministers comments on Friday and Trichet’s comments about the value of the Euro relative to the value of the old Deutschemark.
However this weeks European Central Bank meeting is likely to see further easing measures in the form of extended bond buying will continue to weigh the Euro down.
European leaders are expected to have also put the finishing touches to the European Financial Stability facility which according to EU Economic and Monetary Affairs Commissioner Olli Rehn “will help to stabilize markets” and make aid unnecessary.
This looks a rather forlorn hope with sentiment the way it is.
Sterling on the other hand continues to enjoy better fortunes despite Prime Minister David Cameron’s assertion yesterday that things were worse than the government thought with respect to the fiscal problems of the UK, trading at its highest levels since January against a basket of currencies.
EURUSD – last week’s break and close below 1.2135 is now the resistance which has to be overcome to prevent a move towards the 2005 lows around 1.1650. The low so far has been 1.1880 which is now a new 4 year low. In the longer term the overall objective now becomes 1.1210 which is the 61.8% Fibonacci retracement of the up move from the 2000 lows at 0.8230 and the 2008 peaks at 1.6040.
GBPUSD – the pound continues to remain somewhat insulated from the ailing Euro despite failing to break above the 1.4780 level of last week. We slightly overshot the 1.4430/40 area touching 1.4395, however the pound should remain fairly well supported on dips while above the key support around the 1.4230/50 level and remains the key barrier to any further sterling declines in the short-term. While above 1.4380 we should see a re-test of last week’s highs around 1.4780.
The 1.4000 level remains a key support on a monthly close.
EURGBP - the Euro continues to exhibit weakness across the board and is on target to hit the all important 0.8170 area which is the 50% retracement of the up move from the 2007 lows at 0.6537 to the 2008 highs at 0.9801
We could still see rallies back towards 0.8340. The 0.8400 break-out level remains key resistance behind that.
USDJPY – the recent range support at 90.70/80 remains the key area preventing further dollar declines.
Yen strength should be contained by this support level as we expect a short-term re-test of the 93.00 level. There is resistance around the 92.20/30 area and behind that at 93.30. A break back below 90.70/80 re-targets 89.30. |
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| | US Markets Report |
Dow hammered by euro and jobs fears
US stocks slumped over 300 points on renewed fears over the euro and weaker than expected jobs figures. The Dow closed down 323 points at 9,931. The S&P shed 37 at 1,064 while Nasdaq tumbled 83 at 2,219.
The jobs figures started the rout. Worries about European debt and the financial problems of Hungary added to the gloomy mood.
The number of Americans on company payrolls grew by 431,000 in May, but most of the increase was down to hiring of temporary workers to carry out the US census.
With 411,000 out of last month’s increase a result of census hirings, payrolls were up just 20,000, according to the Labor Department. Economists had been hoping for a big figure above 500,000. There were also downward revisions to payrolls in March and April, both 22,000 lower at 208,000 and 290,000 respectively.
The unemployment rate fell to a seasonally adjusted 9.7%, down from 9.9% in April and less than expectations for 9.8%, helped by a drop in employment of 35,000. Unemployment was down 287,000 to 15m.
The slump in the euro followed some gloomy comments from Hungary’s Peter Szijjarto, the spokesman for Prime Minister Viktor Orban.
“It’s clear that the economy is in a very grave situation,” Szijjarto said today in Budapest. “It’s not an exaggeration at all” to talk about a default, he added.
“In Hungary, the previous government falsified data. In Greece, they also falsified data. In Greece the moment of truth has arrived. Hungary is still before that,” he is reported to have said.
Recruitment companies, such as Monster Worldwide and Manpower, were lower due to the jobs data. BP said a capping device placed over the well in the Gulf of Mexico has begun to funnel oil to the surface.
President Obama is fuming at BP’s lack of success in tackling what is now the biggest oil slick in US history. He feels the company has not made "the kind of rapid response" to the disaster that he would have liked. BP has already "felt his anger", he told CNN.
S&P 500 - Risers
People's United Financial Inc. (PBCT) $14.09 +1.21%
Ebay Inc. (EBAY) $22.40 +0.98%
Frontier Communications Company (FTR) $8.34 +0.85%
Novellus Systems Inc. (NVLS) $26.72 +0.11%
S&P 500 - Fallers
Monster Worldwide Inc. (MWW) $13.35 -10.88%
Tellabs Inc. (TLAB) $7.21 -8.32%
Textron Inc. (TXT) $18.96 -8.18%
Jacobs Engineerng Group (JEC) $40.14 -8.15%
Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $57.76 -5.48%
American Express Inc. (AXP) $38.41 -5.25%
Boeing Co. (BA) $61.23 -4.79%
Alcoa Inc. (AA) $10.84 -4.66% |
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| | Tuesday newspaper round-up: UK cuts, Prudential, British Airways |
The Government would have to double the scale of the cuts it has already planned if it intends to come anywhere near to Canada's example of a public sector bonfire, experts have said.
The 20% cut in public spending which Canada implemented in the 1990s would be equivalent today to some £140bn worth of public spending cuts, according to the Institute of Economic Affairs, reports the Telegraph.
Harvey McGrath, chairman of Prudential, on Monday did not rule out resurrecting its failed $35.5bn bid for AIA, as he defended the insurer’s strategy before shareholders at its annual meeting. Mr McGrath was asked several times whether the Pru would consider trying again to buy some or all of AIA. “We will of course watch what happens to AIA,” he said. “We are very interested to see what happens after our transaction was one that was not consummated.” He added later: “We will keep a very close eye on AIA,” the FT reports.
The political storm engulfing BP intensified yesterday as the group came under renewed pressure on its Russian front. Gazprom, the Kremlin-controlled gas monopoly, has raised new questions over the future of a giant gasfield in Siberia controlled by the British group’s Russian joint venture TNK-BP. Gazprom piled on the pressure by ending hopes that it might buy Kovytka from TNK-BP for up to $1bn, the Times reports.
Meanwhile, BP is increasing the amount of oil it is capturing from its leaking Macondo well in the Gulf of Mexico but is still far from staunching the flow, the admiral in charge of the federal response disclosed on Monday. The British oil firm retrieved about 11,000 barrels on Sunday, up from 10,500 a day earlier, through a containment cap fitted over the ruptured wellhead late last week, the FT reports.
Goldman Sachs has been accused of “deliberately and disruptively” refusing to work with the Financial Crisis Inquiry Commission (FCIC) after employing delaying tactics and attempting to inundate the panel with millions of pages of documents. The investment bank, which has now been subpoenaed to appear before the FCIC as a result of its alleged actions, has also been accused of “mischief-making” with regards to its conduct towards the commission after sending it 20m separate documents, the Telegraph reports.
British Airways chief executive Willie Walsh threw down the gauntlet to striking cabin crew staff on Monday, saying he would hold out against industrial action “for as long as it takes”. In a sign of BA’s determination to break the Unite union’s stranglehold on the loss-making airline, Mr Walsh told a group of airline industry leaders: “I don’t think we’ve been brave enough in the past to stand up and say ‘No’.” His comments came as flight attendants staged a third round of five-day strikes, the FT reports.
Apple has placed video calling at the centre of its new iPhone, which it considers to be its biggest upgrade since the handset was launched in 2007. The iPhone model features a new design and offers users a better battery life and improved graphics. However, it was video calling that got the 5,000 crowd at the Worldwide Developers Conference most excited, the Times reports.
Two more City firms have been fined by the Financial Services Authority for failing to properly ring-fence clients' money, after the regulator last week handed a record £33m penalty to JP Morgan for the same offence. Stockbroker Rowan Dartington and fund manager Close Investors were respectively fined £511,000 and £98,000 yesterday for failing to ensure that clients' money was segregated from their own assets, the Independent reports.
Peter Hambro’s mining company is planning a $1 billion listing of its iron ore division in Hong Kong. An announcement is expected within weeks as the company, renamed Petropavlovsk last year, concentrates on its core gold operations in Russia. It brought in new investors yesterday when it raised $60 million in a private share placing in Hong Kong. The business, which has its main listing in London and is chaired by Mr Hambro, is understood to have favoured Hong Kong because its iron ore mines are close to the Chinese border and will feed Chinese steel smelters, the Times reports.
Bernard Madoff has mocked the investors he swindled out of $65bn (£45bn), reportedly saying that he "carried them" for 20 years and that he took money from "greedy" rich people who wanted more. The convicted fraudster, sentenced to 150 years in jail for running his 'Ponzi" scheme, allegedly said "---- my victims" when a fellow inmate condemned him for his crimes, the Telegraph reports.
Asia and the Americas will haul the airline sector back into profit this year, confounding forecasts of a third straight year of multibillion-pound losses, industry leaders said yesterday. However, European airlines will continue to suffer heavy losses amid industrial unrest, the currency crisis and continued fallout from the Icelandic ash cloud, the International Air Transport Association warned. Carriers will make a combined profit of $2.5 billion (£1.7 billion) in 2010, the IATA predicted, the Times reports.
Eurozone countries were urged by the International Monetary Fund to “complete the project of monetary union” yesterday as the single currency continued to slide. Germany outlined its own plans to save €80 billion (£66 billion) by 2014 and Hungary — outside the eurozone — fought to re-establish its financial reputation after a senior politician suggested on Friday that it was near-bankrupt, which dragged down the euro, the Times reports. |
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