FTSE 100	4294.03, +53.02	Dow	8529.38, +90.99
FTSE 250	7477.21, +90.95	Nasdaq	1844.06, +5.84
FTSE All Share	2194.11, +26.82	S&P 500	927.23, +8.33
Nikkei	9958.44, +174.97	Hang Seng	18578.85, +50.34
Oil (Crude)	$71.49	Gold	$940.70
Base Rate	0.5%	10 Yr Gilt	3.62%
£/$	1.669	£/€	1.1848
1 month LIBOR	0.655	3 month LIBOR	1.2

 

Markets

London - The FTSE 100 is currently 5.99 points lower at 4,288.04. United Utilities leads the faller, down 2.8%, after JPMorgan downgraded the stock to Neutral fro Overweight and cut its price target from 850p to 580p. Wolseley tops the risers board, adding 5.8%, after saying that Ian Meakins was replacing its chief executive Chip Hornsby. Meakins was recently Chief Executive of foreign exchange and payments business Travelex Holdings and ran Alliance UniChem. Mining stocks are also prominent following rising metal prices. BHP Billiton adds 1.8%, Vedanta Resources gains 1.5% and Kazakhmys advances 1.1%.

New York - US markets finished higher yesterday as a rise in the price of oil bolstered energy shares. The approaching quarter end also helped stocks as fund managers picked up the quarters big winners in a process known as "window dressing". Investors also had one eye on the trial of Bernie Madoff, who was sentenced to the maximum 150 years in prison for orchestrating the biggest Ponzi scheme in modern history. It is thought that Wall Street will be pleased with the verdict; however, it may lead to increased government regulation of money management.

The Dow Jones rose 90.99 points to close at 8,529.38 while the S&P 500 added 8.33 points to end at 927.23. The Nasdaq gained 5.84 points to finish at 1,844.06.

US light crude oil for August delivery jumped $2.33 to $71.49 a barrel. Exxon Mobil gave the Dow its biggest lift, rising 2.2% followed by Chevron Corp, which rose 7%. Elsewhere, Microsoft managed a 2.2% gain after Deutsche Bank raised its price target on the stock, saying the software manufacturer’s Windows operating system is "poised for rapid production". The only loser on the Dow was Alcoa, falling 3%, after FBR Capital downgraded the stock to Under perform from Market Perform.

COMEX gold for August delivery slipped $0.30 to $940.70 an ounce. Treasury prices went higher, lowering the yield on the 10 year note to 3.48% from 3.54%.

Tokyo - The Nikkei jumped 174.97 points to close at 9,958.44 this morning after commodity prices climbed and the outlook for steel improved. Japan Petroleum Exploration, the nation’s second biggest oil explorer, climbed 7.2%. Nippon Steel, Japan’s largest maker of the alloy, added 3.6% after a government report said declines in steel output are expected to slow.

Hong Kong - The Hang Seng is currently 50.34 points higher at 18,578.85. Energy shares go higher after crude oil prices rose and China increased rates for gasoline and diesel fuel. While banking stocks improve on speculation that lending continued to grow in June.

 

Economics

UK GDP (Q1, third release) 09:30 BST

While the most likely outcome is that GDP growth is unrevised at -1.9% on the quarter, there is a chance it may be revised up. In this final estimate of GDP we are given the full national accounts, which include the income breakdown of GDP. The focus will be on the household sector savings rate. This leapt up to 4.8% in the final quarter of last year (from just 1.7% in Q3 2008) with little discernible impact on consumer spending, as falling interest rates and oil prices increased disposable income. Interest rates fell further in the first quarter, but this will, to some extent, be offset by a rise in unemployment over the quarter, so analysts expect the saving rate to dip slightly to 4.4%. The Bank of England noted in last week’s Treasury Select Committee hearings that consumer spending has proved more resilient than anticipated. The GDP forecast contained in the May Inflation Report had incorporated a steeper rise in the saving rate.

US S&P/Case-Shiller home prices (Apr) 14:00 BST/09:00 EDT

The Case-Shiller home price index for 20 metropolitan areas has fallen for 32 months in a row, including declines of 2% or more for the past six months. However, other measures such as the FHFA house price index and Radar Logic home price data are suggesting the declines may be starting to slow. Analysts look for the Case-Shiller index to fall 1.0% in April, with the year-on-year rate of change rising slightly to -18.5%.

US Chicago PMI (Jun) 14:45 BST/09:45 EDT

In contrast to the other main manufacturing surveys, the Chicago PMI took a step backwards in May, falling to 34.9 from 40.1. Chicago-area comments in the June Beige Book noted weak demand from abroad (apart from Asia) and negative comments from metals and autos-related industries. Still, analysts expect the Chicago index to make up some of the gap to the other surveys over the next few months, and look for the June reading to rise to 40.

US Consumer confidence (Jun) 15:00 BST/10:00 EDT

Analysts look for June consumer confidence to fall slightly to 54.5, from 54.9 in May. The present situation index appears to have bottomed out in March and should begin to trend higher, assuming labour market declines continue to moderate. Analysts look for this series to rise to 31.5 from 28.9. However, the outlook for the expectations index could be choppy after climbing 45pts over the past three months, and analysts expect a 2pt drop to around 70. Gasoline prices have been rising since the beginning of the year. The weekly ABC News consumer index has fallen 11pts since the middle of May, and the latest Michigan consumer expectations reading for June fell by 4pts.

 

Corporate

HMV posted an 11.5 percent rise in annual profit as it benefited from the demise of smaller rivals, and said it was upbeat about its new financial year despite a weak economy. The firm said it made profit before tax and one off items of £63m in the year ended April 25. Analyst’s forecasts were £62m. Sales from continuing operations rose 4.4 percent to £1.96bn and the dividend was kept at 7.4 pence a share. CE Simon Fox said "Whilst we are cautious about the economic environment, at this very early stage in the year we are confident of our plans for the current financial year". HMV has responded to the competitive threat by widening its focus. It has entered the live music and ticketing markets, is trialling digital cinemas in partnership with Curzon and selling mobile phones in a deal with Orange.

Petrofac said today it expects to start production from the Don Southwest field in the UK North Sea in the next few days. The company said its total backlog is expected to be about $8bn at end of June and that it anticipates its gross cash balances to be around $850m. Petrofac reiterated that it has had a good start to the year and is increasingly confident that 2009 will be another year of strong growth.

Arriva said slower revenue growth at its key UK rail franchise Cross-Country would weigh on first half results, although the rest of the group had performed as expected. The company said in a statement CrossCountry revenues grew 2.4 percent in the six months to end June, but would need full year growth of 10 percent to maintain 2008 profit levels. The company said "The group results for the six months will reflect the lower revenue growth rates in CrossCountry, and are otherwise expected to be broadly in line with management’s overall expectations".

Carpetright posted a 72 percent slump in full year profit and slashed its dividend, reflecting the impact of recession on sales of discretionary items. The company said "We remain cautious about short term prospects, but are confident that the investment we have made in our stores, ranges, services, cutting and distribution centre and IT systems will support future growth". Carpetright made an underlying pre-tax profit of £17.2m in the year to May 2. This compares with analysts consensus forecast of £18m, and £62.1m in the previous year. Total revenue fell 7.4 percent to £482.8m. The group cut its final dividend to 4 pence from 30 pence last time, making 8 pence for the year, down from 52 pence.

Scott Wilson posted an 8 percent fall in full year adjusted pre-tax profit, and said full year dividend increased 11 percent to 4 pence, a share. Adjusted operating profit remained unchanged at £22.6m. Chairman Geoff French said "We do not expect growth in our UK business over the next year but we do see significant opportunities for further growth in our international markets". He added the group is already established in both China and India, two major markets that continue to grow despite the recent economic difficulties. The company said adjusted pre-tax profit for the year ended May 3 was £22m compared with £23.9m a year ago. Revenue, including share of joint ventures, rose 11 percent to £260m. The year also included an exceptional charge of £7m due to redundancy costs and losses incurred as a project in the Middle East was indefinitely postponed.

Yell said it had started a refinancing process, involving extending the maturity and terms of its debt facility. The company said it would also talk with its main shareholders, with the process expected to complete in the autumn. Yell said advertising spend had fallen markedly since January 1, but it believed it had outperformed the market and trading for the first quarter was in line with its expectations. The company said second quarter revenue was expected to be about 17 percent down year on year and earnings before interest, tax, depreciation and amortisation would be about 30 percent lower.

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Posted: June 30th, 2009 under Asset Management.
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