FTSE 100	4189.59, +93.19	Dow	8185.73, +168.78
FTSE 250	7357.98, +202.8	Nasdaq	1711.94, +38.13
FTSE All Share	2142.42, +49.29	S&P 500	873.64, +18.48
Nikkei	8828.26, +334.49	Hang Seng	15541.40, +584.45
Oil (Crude)	$50.97	Gold	$900.50
Base Rate	0.5%	10 Yr Gilt	3.55%
£/$	1.493	£/€	1.1173
1 month LIBOR	0.853	3 month LIBOR	1.455

 

Markets

London - The FTSE 100 is currently 55.22 points higher at 4,244.81. Barclays leads financials and the FTSE higher after positive comments from UBS. The brokerage raised its price target on the stock to 260p from 110p as well as its EPS estimates for 2009/10. Barclays are 9.1% higher while RBS jumps 9% and Lloyds gains 6.1%. Kazakhmys gains 6.85% after issuing its first quarter production report. Cadbury tops the fallers board, down 2.9%, after reporting relatively subdued sales growth. Hammerson slips 1.6% after its trading update met expectations.

New York - US stocks rallied yesterday following some positive economic data and the Federal Reserve’s decision to hold interest rates. A government report showed that GDP shrank at a 6.1% annual rate in the first quarter, much faster than the 4.7% predicted by economists. However, investors were encouraged by elements of the report that showed consumer spending rose and inventories had declined. The statement that accompanied the Fed’s decision was cautious although more upbeat than previously, saying the economic outlook had improved modestly since March.

The Dow Jones jumped 168.78 points to close at 8,185.73 while the S&P 500 added 18.48 points to close at 873.64. The Nasdaq rose 38.13 points to finish at 1,711.94.

Big manufacturers were boosted by the GDP report. Boeing Co was among the top performers on the Dow, rising 4.4% while United Technologies gained 2%. Wal-Mart was also one of the strongest Dow components, up 4.1% after saying that 17% of measurable traffic in February came from new households.

After the bell, Bank of America announced that Ken Lewis had been removed as chairman, although he will continue his roles as CEO and President.

US light crude oil for June delivery gained $1.05 to $50.97 a barrel. COMEX gold for June delivery climbed $6.90 to $900.50 an ounce. Treasury prices slumped, raising the yield on the 10 year note to 3.09% from 3.01%.

Tokyo - The Nikkei surged 334.49 points higher to 8,828.26 this morning, boosted by a report showing the nation’s factory output rose for the first time in six months. Canon Inc, which gets almost a third of its sales from the US, climbed 6.1%. Honda Motor jumped 9.4% after forecasting an operating profit for this year. In contrast, Pioneer plunged 8.2% after projecting a sixth year of losses.

Hong Kong - The Hang Seng surged 584.45 points higher to 15,541.40 this morning. China Unicom climbed 3.4% after reporting first quarter profit that beat analysts’ estimates. Tsingtao Brewery, the Chinese beer company founded by German settlers more than a century ago, jumped 6.9% after saying first quarter profit increased 54%.

Economics      

US Employment cost index (Q1) 13.30 GMT

The employment cost index rose by only 0.5 percent in Q4. This was the second smallest increase on record (going back to 1982), after a 0.4 percent rise in Q1 1999. The ECI is expected to rise 0.5 percent again in Q1, with the year on year rate falling to 2.3 percent from 2.6 percent. The latest Beige Book noted minimal wage pressures, with pay freezes in a broad range of industries and even some reports of salary reductions. Average hourly earnings rose by 0.7 percent in Q1, the lowest since Q2 2005. Many districts also reported cuts in non wage employment benefits, such as bonuses, employer contributions to retirement programs, and co-payments to healthcare plans.

US Personal income and spending (Mar) 13.30 gmt

Personal income could fall 0.2 percent in March, which would be the fifth monthly decline in the past six months. Private sector wages and salaries have fallen by 0.5 percent or more for the past three months. Another sizeable decline is likely in March as aggregate hours fell 1 percent, more than enough to offset a 0.2 percent rise in hourly earnings. Meanwhile, personal spending could rose 0.2 percent. Even though total retail sales fell 1.1 percent, unit auto sales rose 8.8 percent to 9.9m and should provide a direct boost to spending. Real PCE is expected to have risen 0.1 percent in March, along with a 0.1 percent rise in the headline PCE deflator. A 0.24 percent rise in the core PCE deflator is assumed, with the year on year rate rising to 1.9 percent, up from 1.8 percent.

US Initial jobless claims (week 25 April) 13.30 gmt

Last weeks initial claims rose to 640,000 from 613,000, but the 4 week average drifted lower to 646,750 from 651,000. State by state comments for the prior week noted fewer auto industry layoffs in Michigan. Initial claims are expected to be 635,000 this week. Continuing claims for the previous week could rise to a new high of 6.23m up from 6.14m.

US Chicago PMI (Apr) 14.45 gmt

Both the Empire manufacturing and Philadelphia Fed surveys improved in April. Empire new orders (-45 from -4) and shipments (-2 from -27) rose sharply, and the headline index rose 15 points to the highest since last September. Meanwhile the latest Beige Book noted that automakers were optimistic about a late March surge in sales, although there were further plans to cut back on production. A sizeable increase is expected in Chicago PMI up to 38, from 31.4 in March.

Corporate

Smith & Nephew reported weaker first-quarter revenue growth that met forecasts today as cash strapped patients and hospitals cut back. The company said first-quarter adjusted earnings per share was $0.131 against $0.128 in the same period last year, in the middle of a range of ten analysts’ forecasts of $0.12 to $0.14 provided by the company. Revenues for the period were $865m, compared with the $850-$896m expected by analysts. At an underlying rate of 4 percent, the pace of revenue growth was significantly slower than the 22 percent rise reported a year ago. "Our businesses are proving resilient, but not immune to the weak global economy," said chief executive David Illingworth in a statement.  The company said endoscopy revenues were flat on the prior year at $179m, affected by the macro economic impact on hospitals and patients. The company saw growth in its hip area of 2 percent, mostly due to the United States where it experienced a weaker performance of its leading Birmingham Hip Resurfacing System. Smith & Nephew trades at 11.35 times estimated 2009 earnings, compared with a FTSE Medical Equipment and Supplies 12.85.

DSG International unveiled a £310.6m cash call to help fund its store revamp programme and strengthen its finances. The firm said it would raise £100m in a placing of 333.3 million new shares at 30 pence, a 20 percent discount to Wednesday’s closing price. It also announced a 5 for 7 fully underwritten rights issue to raise 210.6 million pounds by issuing 1,504.1 million new shares at 14 pence apiece.

RPS Group said today its first-quarter performance would meet market expectations, driven by strong energy markets, and that it had extended its banking facilities. RPS said its energy clients continued to invest in oil and gas exploration and production programmes, while environmental management performed well on buoyant demand in the utilities and nuclear safety sectors. The energy and environmental consultancy reduced its debt by 5 percent to £27m from the year-end and said it had extended its facilities with Lloyds Banking Group from £100m to £125m, available until 2013.

BSkyB beat forecasts with 80,000 net new customers in the third quarter due to demand for its high-definition offer but said it still expected 2009 to remain challenging. The company said it had seen a very strong customer response for HD TV, from both new and existing customers, with 243,000 net additions in the quarter. It also managed to hold on to more customers than most analysts had expected and the price the average customer paid over the year hit a new high at £452, compared to £424 last year. The demand for high definition meant BSkyB’s 80,000 net customer growth was 43 percent higher than the previous year, to give it a total customer base of 9.32 million households.

Petroceltic International Plc posted a wider pre-tax loss on higher administrative expenses ahead of planned drilling, and said it raised up to $40m through a placing of its shares. Cash and cash equivalents were $43.4m at year end and the company had no debt, it said in a statement. Pre-tax loss for the year ended Dec. 31 was $3.7m, compared with a loss of $2.5m in the year-ago period. Revenue rose 75 percent to $962,000, mainly due to higher gas prices. One analyst expected the company to post a pre-tax loss of $3m on revenue of $1m. The company said a drilling programme for up to seven wells in Algeria is on schedule and would begin in May 2009. In a separate statement, Petroceltic said it raised up to $40m, or £27.5m, by placing up to 392.5 million shares at 7 pence a share. It said the proceeds would be used to support its drilling programme in Algeria and to accelerate its ongoing appraisal and drilling activities in Italy in 2010/2011.

Galiform Plc said sales have continued to fall although trading conditions were stable. The group said revenue for the 16 weeks to April 18 fell 10.3 percent after stripping out the impact of new depot openings. Total sales over the period fell 8.8 percent. Galiform said trading conditions continue to be stable, with the sales performance in 2009 so far remaining on a par with that seen in the final quarter of 2008.
The sales decline reflects sharply reduced demand for fitted kitchens as consumers cut back on spending on big ticket discretionary items amid soaring unemployment, falling house prices and fears of a long and deep recession.

Logica expects first-half revenue to decline slightly and sees little change in the second half, reflecting a difficult market in consulting and professional services. Logica posted first quarter sales of £954m, 11 percent up on the same period a year ago, but flat when adjusted for acquisitions and disposals. The company said its order performance remained strong, up 16 percent on a pro forma basis, boosted by wins from TeliaSonera and the UK’s National Policing Improvement Agency. Logica said despite market conditions, it expected to deliver full-year adjusted operating margin at least in line with last year.

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: April 30th, 2009 under Asset Management.
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