FTSE 100	4171.25, +18.29	Dow	8479.47, +36.08
FTSE 250	5832.99, +43.44	Nasdaq	1464.73, -7.29
FTSE All Share	2073.85, +9.17	S&P 500	857.39, +5.58
Nikkei	8213.22, -110.71	Hang Seng	13369.45, +490.85
Oil (Crude)	$50.77	Gold	$820.50
Base Rate	3%	10 Yr Gilt	3.82%
£/$	1.541	£/€	1.1848
1 month LIBOR	3.335	3 month LIBOR	3.964

 

Markets

London - The FTSE 100 is currently 26.40 points lower at 4,144.85. Standard Chartered continues to fall, down 4.6%, after announcing yesterday it plans to raise £1.8 from a rights issue. United Utilities loses 2.6% after its half yearly report. Tesco slips 2.1% after Bernstein analysts cut its price target. On the upside, Johnson Matthey gains 10% after posting a 20% rise in first half profits. Miners fill many of the top spots, rebounding from yesterdays slump. Vedanta jumps 8.4% and Antofagasta climbs 8%.

New York - US stocks were mixed yesterday, with the Dow and S&P 500 making small gains while the Nasdaq closed lower. Stocks were higher in the morning after the government announced two new programs that will provide around $800 billion to increase the availability of consumer mortgage lending. However, stocks declined following weak economic data and profit taking in the technology sector. The Commerce Department reported GDP falling at an annual rate of 0.5% in the third quarter - its worst quarterly decline for seven years.

The Dow Jones gained 36.08 points to close at 8,479.47, the S&P 500 added 5.58 points to end at 857.39. The Nasdaq slipped 7.29 points to finish at 1,464.73.

The technology sector faltered after Cisco Systems said that it will close most of its operations in the United States and Canada for five days in an effort to cut costs. Shares in the company lost 6%. Hewlett-Packard caused the heaviest weight on the Dow following two days of strong gains after reporting solid quarterly figures as investors decided to lock in profits.

Financial stocks were higher following the governments latest recue package. Citigroup climbed 3.6%, JPMorgan rose 7.9% and Morgan Stanley gained 6.65%.

US light crude oil for January delivery fell $3.73 to $50.77 a barrel. COMEX gold for January delivery edged $0.60 higher at $820.50. Treasury prices surged higher, lowering the yield on the 10 year note to 3.1% from 3.34%.

Tokyo - The Nikkei slid 110.71 points to close at 8,213.22. Toyota Motor Corp fell after slowing sales in the US market prompted Fitch Ratings to cut its credit rating on the carmaker for the first time in 10 years. Sumitomo Trust & Banking Co lost 4.8% after the bank said it will sell shares to boost capital.

Hong Kong - The Hang Seng jumped 490.85 points to close at 13,369.45 after further action from the US Federal Reserve heightened expectations that the world’s largest economy will weather the global recession.

Economics

UK GDP (Q3, prelim) 09.30gmt

The second release of G3 GDP is expected to be unrevised at -0.5 percent. The expenditure breakdown is expected to show that investment, consumption and de-stocking served as the main drag on activity in the third quarter.

US Durable goods orders (Oct) 13.30 gmt

All of the key manufacturing surveys in October indicated continued deterioration in new orders. The level of ex-transportation shipments already needs to fall in order to catch up to weaker new orders over the past two months. However, the bar is expected to be lowered again this month, with ex-transportation orders falling 1 percent including a likely decline in machinery. Pervasive weakness in both aircraft (Boeing orders fell to 14 from 41) and auto may take total durable orders down 2.5 percent.

US Personal Income and Spending (Oct) 13.30 gmt

October personal income growth is likely to be sluggish at 0.1 percent, as increase in payroll hourly earnings (+0.2 percent) are not enough to offset falling aggregate hours worked (-0.3 percent). Personal spending is expected to fall 1.2 percent, as prices declined sharply. Assuming a 0.6 percent drop in headline PCE prices, real PCE is also expected to fall 0.6 percent, reflecting weaker auto sales and department store sales. This would put Q4 consumption on track to fall by over 3 percent. Meanwhile, the core PCE deflator is expected to be flat, with the year on year rate slowing to 2.2 percent from 2.4 percent. This would be a bit higher than the core CPI reading of -0.1 percent, due to weighting differences and incorporating increases in some of the PPI medical care components.

Chicago PMI (Nov) 14.45 gmt

The October reading fell 18.9ppt to 37.8 from 56.7. This index is expected to remain in the dumps as overall activity continues to scale back for a wide range of industries, with the auto sector in particular experiencing a sharp deterioration in conditions. So far this month, the Empire Index dropped to -25.4 from -24.6, hitting a new cycle low, while the Philadelphia also weakened to -39.3 from -37.5. Chicago PMI is expected to be roughly changed at 38, consistent with ISM manufacturing in the low 40s.

US University of Michigan confidence (Nov) 15.00 gmt

All else remaining the same, continued declines in the price of gasoline should provide a boost for consumer sentiment. In the current environment, this is being outweighed by economic worries (97 percent of respondents indicated recession in the preliminary survey), ongoing job losses, tight credit conditions, and falling equity and house prices. The final Michigan reading for November is expected to slip slightly to 57.5, down from the initial estimate of 57.9 and roughly unchanged from October. The preliminary survey showed that 5 year median inflation expectations stayed unchanged at 2.9 percent. The 1 year median dropped to 2.9 percent from 3.9 percent and could fall further in the near term.

Corporate

Johnson Matthey said its underlying second half pre-tax profit would be between 5 and 15 percent lower given the sharp slowdown in global car production. CE Neil Carson said "With global car sales expected to fall in the second half we have taken action to reduce costs and protect out margins in Emission Control Technologies". The company posted a pre-tax profit before amortisation of £144.9m in the six months to end September, on sales up 24 percent to £4.355bn.

Mitchells and Butlers scrapped its year end dividend today as it focuses on reducing its debt. Analysts had expected the company to increase its final dividend. M&B reported a 13.5 percent decline in pre-tax profit for the year to Sept 27 to £179m as trade was hit by the impact of the smoking ban and impending recession. However, that was at the top end of market forecasts, which ranged between £165m and £180m. The company said current trading had shown a resilient trend in the first eight weeks of the financial year, with like for like sales up 1 percent to Nov 22.

Compass Group posted a 30 percent increase in annual profit, meeting expectations, and said trading in the new financial year had started well. The company reported pretax profit for the year ending Sept 30 of £566m on revenue 6.3 percent higher at £11.4bn. The consensus forecast expected the company to post a pretax profit of £565m for the year. Compass raised the total dividend by 11.1 percent to 12 pence and said margins had increased by 5.8 percent during the year. CE Richard Cousins said "The new financial year has started well and we have considerable flexibility in the cost base and further significant scope for cost reduction. Together with the scale of the market opportunity and ongoing demand for outsourced services, this gives us confidence that we can continue to deliver".

United Utilities reported a 6 percent rise in first half underlying profit and sounded an upbeat note about its prospects for the rest of the year. United Utilities said underlying operating profit in the six months to Sept 30 increased to £368.6m from £347.8m a year earlier. The consensus market forecast was about £370m. The group said it was reducing its interim dividend by 30 percent to 10.64 pence per share, as outlined in its first half results last year and following the sale of its electricity operation and a £1.5bn return to shareholders. It said it was proposing an average annual real terms price increase of 2.7 percent between 2010-15m, which it said was needed to fund a £4bn investment plan. CE Philip Green said "We remain confident of delivering a good underlying financial performance over the remainder of 2008/09".

Telecom Plus Plc reported its first-half pre-tax profit rose 55 percent, reflecting a larger customer base and higher retail energy prices. The company said it was on target to report record-high revenue and pre-tax profit for the full year. The company declared an interim dividend of 5 pence a share, up from 4 pence previously. It posted a pre-tax profit of 9.8 million pounds ($15 million) for the six months to Sept. 30, compared with 6.4 million pounds a year earlier, while revenue rose 25 percent to 88.9 million pounds. Telecom Plus also said it appointed commercial director Andrew Lindsay as chief operating officer, effective immediately.

Xaar Plc said on Wednesday it expects its results for 2008 to be below market expectations as fourth-quarter trading levels have not improved over the third quarter, and its shares fell 33 percent. Although trading levels have not deteriorated since the third quarter, the company said margins and profits continued to be below plan. In a trading statement, the company said it had cash of 9.4 million pounds as of Nov. 21 and total debt of 700,000 pounds. Xaar said last month it expected an improved fourth-quarter performance, but it had expressed caution in the light of the outlook for the global economy. Xaar reiterated that it had implemented a series of cost-saving measures, the benefits of which will be seen in 2009. It said it was reviewing its cost base to ensure that spending levels are in line with current economic realities.

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

 

Posted: November 26th, 2008 under Asset Management.
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