FTSE 100	4278.46, -50.11	Dow	8497.18, -7.49
FTSE 250	7309.05, -174.55	Nasdaq	1808.06, +11.88
FTSE All Share	2181.73, -28.91	S&P 500	910.71, -1.26
Nikkei	9703.72, -137.13	Hang Seng	17928.21, -156.39
Oil (Crude)	$71.03	Gold	$936
Base Rate	0.5%	10 Yr Gilt	3.8%
£/$	1.641	£/€	1.1779
1 month LIBOR	0.668	3 month LIBOR	1.251

 

Markets

London - The FTSE 100 is currently 4.39 points lower at 4,274.07. Reed Elsevier tops the fallers’ board, down 2%, after Morgan Stanley cut its rating on the stock to Equalweight from Overweight. Miners rebound from two days of losses with Xstrata up 2.6%, ENRC up 2.2% and BHP Billiton adding 1.2%. Financials are mixed as investors mull the potential impact of upcoming changes to regulation of the financial sector across the globe. Lloyds Banking Group adds 2.4% while Royal Bank of Scotland gains 0.6%. In contrast, Barclays slips 1.1% and HSBC is off 1.4%.

New York - US indices were mixed yesterday as tech stocks drove the Nasdaq higher while the Dow and S&P 500 both finished lower. Financials were among the biggest drags after a broad debt ratings downgrade from Standard & Poor’s and news of the government’s banking industry reform. President Obama unveiled plans to give increased power to the Federal Reserve to monitor the financial system, together with increased responsibility to the Treasury. Obama also proposed the creation of a consumer watchdog to track mortgage and credit card practices. Although there were no surprises in the statement, investors appeared to be concerned about the extra costs the changes would create for the financial industry, driving the sector lower.

The Dow Jones slipped 7.49 points to close at 8,497.18 while the S&P 500 edged 1.26 points lower. The Nasdaq climbed 11.88 to finish at 1,808.06.

Standard & Poor’s downgraded the credit ratings of 22 banks fuelling the decline in the sector. S&P said that operating conditions for the industry will get worse as supervision gets tighter. JPMorgan Chase caused the second biggest drag on the Dow, falling 2.3% while Bank of America dropped 3.4%.

In contrast, Qualcomm was one of the top performers on the Nasdaq after Goldman Sachs added the company to its conviction buy list. Shares jumped 3.8% as result. Biotech companies were also buoyant after Celgene Corp said its experimental anti-inflammatory drug was effective in a mid stage study.

US light crude oil for July delivery gained $0.56 to $71.03 a barrel. COMEX gold for August delivery added $3.80 to $936 an ounce. Treasury prices surged higher, lowering the yield on the 10 year note to 3.6% from 3.66%.

Tokyo - The Nikkei dropped 137.13 points to close at 9,703.72 this morning. Exporters lead the market lower after the yen strengthened to a two week high. Honda Motor, which gets more than half its sales from North America, fell 2.6% while Sony Corp declined 3.1%

Hong Kong - The Hang Seng is currently 156.39 points lower at 17,928.21. Banks decline following the downgrades from Standard & Poor’s in the US. Bank of China causes the biggest drag on the index, down 6.1%.

Economics

UK Retail sales (May) 09:30 BST

Retail spending is expected to keep growing, albeit at a relatively lacklustre rate. Interest rates are low, which is supporting household disposable income, and, according to the latest consumer confidence releases, people are feeling a little more optimistic about their personal finances.

UK Public finances (May) 09.30 bst

In recent weeks, S&P altered the UK’s outlook to negative from stable due to concerns about the rise in public sector debt. The public finance releases will continue to be important for markets. Net borrowing is expected to be £21bn in May and total borrowing is expected to be £190bn in the 2009/10 tax year as a whole.

UK CBI industrial trends (Jun) 11:00 BST

The PMI survey was considerably more upbeat than the CBI survey in May. A strong increase in this survey is expected this month.

US Initial jobless claims (week 13 Jun) 13:30

Last week’s initial claims fell to 601,000, the lowest reading since late January. The four-week average fell to 621,750 from 632,250. Claims are expected to be 610,000 this week. Continuing claims for the previous week could creep slightly higher to 6.83m, from 6.82m.

US Leading indicators (May) 15:00

May leading indicators are expected to rise 1.0% for the second month in a row. Positive contributions should come from higher stocks, ISM supplier deliveries, an increase in real money supply, and the positively sloped yield curve, offsetting a decline in the manufacturing workweek.

US Philadelphia Fed (Jun) 15:00

The Philadelphia Fed has risen by 18.7pts over the past three months (from -41.3 in February to -22.6 in May), but it is still lagging behind the Empire, Richmond Fed, and ISM manufacturing surveys. The last Beige Book indicated that demand remains especially weak for primary metals, industrial machinery, and electrical equipment. Another increase to -18 is expected in June.

Corporate

Ashtead posted a 22 percent decline in full year profit as expected today after a downturn in the construction sector hit sales. The group reported an underlying pre-tax profit of £87.4m, down from £112.3m a year earlier but in line with a consensus forecasts provided by the company. Profits were down 29 percent year on year after stripping out positive currency translation effects. Ashtead said it would maintain its dividend at 1.675 pence per share and that expectations for 2009/10 remain unchanged from its previous guidance.

Cadbury reported a rise in April and May trading today, and suffering a slow start to the year, and confirmed its sales growth and profit margin targets for 2009. The company said growth in chocolate was robust, while gum and candy both grew, helped by improved performances in a number of developed markets. It gave no specific figures. Although conditions in mainland Europe remain challenging, the group held its sales growth forecast for 2009, with the slower start to the year set to be balanced by a stronger second half, underpinned by planned new product launches. CE Todd Stitzer said "Our early progress has continues into the second quarter with out business focused on delivering market share gains and efficiency improvements". As a result, it held its 2009 targets of sales growth at around the lower end of its medium term 4 percent to 6 percent range and to make good progress towards its goal of mid teen percentage margins by 2011, after posting 11.9 percent for 2008. Forecasts looked for an average first half sales rise of 3.2 percent in a survey, and came after the company saw first quarter sales up only 2 percent, hurt by destoking in North America and weak mainland European markets.

Go-Ahead Group said today its operations were performing as expected and it would meet internal hopes for full year profit. The company said "Overall, we remain confident that we will deliver a full year operating performance in line with our expectations". Go-Ahead said it had continued to grow like for like revenue in bus and rail. It said it held operating results for its ground handling and cargo operations in line with the first half despite difficult trading conditions.

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.
If you would like to discuss any aspect of financial planning or investment, one of the specialist advisors in Lupton Fawcett’s Financial Services and Tax Department would be delighted to help.
Initial meetings are without obligation or charge. Please contact Paul Smith on 0113 280 2095 or email paul.smith@luptonfawcett.com

 

Posted: June 18th, 2009 under Asset Management.
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