FTSE 100	4399.15, -27.04	Dow	8448.56, -25.41
FTSE 250	6547.29, -138.70	Nasdaq	1546.46, +7.67
FTSE All Share	2201.86, -17.07	S&P 500	871.79, +1.53
Nikkei	8438.45, +24.54	Hang Seng	13704.64, +36.56
Oil (Crude)	$37.78	Gold	$820.70
Base Rate	1.5%	10 Yr Gilt	3.245%
£/$	1.464	£/€	1.1086
1 month LIBOR	1.701	3 month LIBOR	2.295

 

Markets

London - The FTSE 100 is currently 6.23 points lower at 4,392.92. FirstGroup leads the fallers, plunging 9.3%, following disappointing figures. HSBC is down 7.5% after analysts questioned whether the company would need to raise capital via a rights issue this year. Amec tops the risers’ board after predicting 2008 profit at the top end of forecasts, shares are currently 4.2% higher.

New York - The Dow Jones fell for the fifth consecutive session yesterday as investors continued to worry about weak corporate profit. Although banks limited losses following a speech in London from Federal Reserve Chairman Ben Bernanke. The S&P 500 and Nasdaq both managed small gains, helped by biotechnology companies, which investors see best equipped to continue earnings growth in the current climate.

The Dow Jones slipped 25.41 points to close at 8,448.56, the S&P 500 added 1.53 points to end at 871.79. The Nasdaq gained 7.67 points to finish at 1,546.46.

Bernanke said that the near $800 billion plan being discussed by the incoming Obama administration and the newly elected Congress "could provide a significant boost to economic activity". He said more steps were needed to stabilise banks, reviving the idea among investors that the authorities may pick up toxic assets from banks books. 

On the downside, both General Electric and Boeing fell after analysts downgraded the stocks. Barclays Capital said GE’s profit could rely more heavily on tax benefits than the market expects, sending shares 5.6% lower. Boeing declined 2.9% after Credit Suisse downgraded the company citing concerns over problems with Boeing’s 787 Dreamliner program.

After the close, Citigroup confirmed it is selling 51% of its Smith Barney unit to Morgan Stanley.

US light crude oil for February delivery slipped $0.19 to close at $37.78 a barrel. COMEX gold for February delivery edged $0.30 lower to $820.70 an ounce. Treasury prices gained marginally, lowering the yield on the 10 year note to 2.29% from 2.3%.

Tokyo - The Nikkei rose 24.54 points to close at 8,438.45 this morning. Higher oil prices lifted energy producers, while shippers advanced on increases in fees for transporting commodities.

Hong Kong - The Hang Seng is closed 36.56 points higher at 13,704.61 this morning. Developers went higher following plans by China to boost the property market, while a rebound in oil prices lifted energy producers.

Economics
US Retail sales (Dec) 13.30gmt

December retail sales fell by 1.3 percent with ex-auto sales down 1.5 percent. Unit auto sales rose to 10.3m from 10.2, which should bring an end to the string of three large monthly declines in retail auto sales. Gasoline prices fell by 21 percent and gas stations sales will probably fall by at least 10 percent. Ex-auto and gasoline sales are expected to fall 0.4 percent after rising 0.3 percent in November. Chain store results were decent relative to expectations, but both prices and sales volumes are expected to have continuing to drop.

US Import price index (Dec) 13.30 gmt

Import price will show another steep decline in December, as oil prices fell by 29 percent. The Import price index is expected to fall 6 percent, taking the year on year rate from -4.4 to -10 percent.

US Business inventories (Nov) 15.00 gmt

Business inventories declined in both September and October, partly due to lower prices but also reflecting real cutbacks in machinery, autos and various nondurable goods. A 0.4 percent decline in November is expected as oil prices fell further.

Corporate

British oil services and engineering group Amec said business was holding up well despite the economic downturn as it forecast 2008 profit would top £200 million and a better 2009. Analysts have forecast a 2008 profit between £193 million and £205 million, according to the company on Wednesday. Amec said ongoing market volatility had resulted in reduced certainty about customers’ discretionary spending plans and it recognised the "ongoing risk" that customers may curtail capital spending during the year. The company said it had experienced only minor delays and cancellations of prospective projects, compared with those it would expect to see normally. Amec said a £3 billion pounds order backlog in its natural resources and power & process divisions gave it good visibility for 2009 and beyond.

British bus and rail operator FirstGroup said its North American bus firm Greyhound had seen a fall in revenues during its third quarter but, overall, the company was coping with the economic downturn. FirstGroup, which bought Greyhound for $3.5 billion in 2007, said on Wednesday like-for-like revenues at Greyhound had fallen 4.5% in the three months to December, with a particular drop-off towards the end of the period. In Britain, FirstGroup said its bus and train divisions both posted like-for-like revenue growth of over 7%, although rail was seeing an impact from the weaker economy. It said it was cutting down on costs, although the spokeswoman said no major job cuts were being planned. 

HSBC Holdings is likely to halve its dividend and may need to raise up to $30 billion in a rights issue, according to leading analysts. Morgan Stanley said the bank’s earnings will fall this year and its relative capital position is not as strong as in the past. HSBC has not had to raise capital during the financial crisis, unlike most big rivals, due to its historically strong capital and liquidity. But it is facing increasing scrutiny over any potential need to raise funds as the economy worsens.

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: January 14th, 2009 under Asset Management.
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