FTSE 100	4890.58, -26.22	Dow	9543.52, +4.23
FTSE 250	8873.21, -77.6	Nasdaq	2024.43, +0.2
FTSE All Share	2511.29, -13.72	S&P 500	1028.12, +0.12
Nikkei	10473.97, -165.74	Hang Seng	20246.64, -209.68
Oil (Crude)	$71.43	Gold	$945.80
Base Rate	0.5%	10 Yr Gilt	3.54%
£/$	1.62	£/€	1.1389
1 month LIBOR	0.538	3 month LIBOR	0.693

 

Markets

London - The FTSE 100 is currently 0.72 points higher at 4,889.86. Kazakhmys tops the risers’ board, up 4%, while Amec leads the fallers, down 6.2%, after both companies released their first half figures. Elsewhere, stocks in focus include Lloyds Banking Group after it was reported that the lender is hoping to reduce its use of the government’s insurance scheme for toxic assets by offering investors a new form of interest-paying capital instrument which could be converted into ordinary shares for those who choose to subscribe.

New York - US stocks were little changed yesterday as investors remained on the sidelines following the recent rally. The Dow Jones added 4.23 points to close at 9,543.52 while the S&P 500 edged 0.12 points higher to 1,028.12. The Nasdaq finished just 0.2 points better at 2,024.43.

Positive economic data kept stocks in positive territory, but the gains were minimal. Following Tuesday’s better than expected housing data, the Commerce Department said that the rate of new home sales rose at their fastest pace in 10 months. As a result the Dow Jones US Home Construction index was up 3%. Among the winners were DR Horton, up 5.7% and Beazer Homes which gained 5%. In a separate report, durable goods orders posted the largest jump since July 2007, rising 4.9% from June.

US light crude oil for October delivery lost $0.62 to $71.43 a barrel. COMEX gold for December delivery slid $0.20 to $945.80 an ounce. Treasury prices were almost unchanged, leaving the yield on the 10 year note at 3.43%.

Tokyo - The Nikkei dropped 165.74 points to close at 10,473.97 this morning. Stocks fell after China said it may reduce overcapacity among steel and cement producers and on concern equities are too expensive relative to the outlook for earnings. The Hang Seng is also lower, currently down 223.48 points at 20,232.84. Anhui Conch Cement, China’s largest producer of the building material, sank 4.2% while Angang Steel dropped 4.4%.

Economics

UK CBI distributive trades report (Aug) 11:00 BST

Lower interest rates and a firmer outlook for the housing market are factors that should support consumer spending, although this will be partly offset by rising unemployment and energy prices. Overall, analysts expect retail spending growth, but at a relatively lacklustre rate, which would be consistent with a small rise in this survey to -10.

US GDP (Q2, prelim.) 13:30 BST/ 08:30 EDT

The second estimate of Q2 GDP could be revised down to -1.5% from the advance estimate of -1.0%, mostly reflecting a bigger drag from inventories (-0.8ppt contribution in the advance report). Meanwhile, analysts will get our first look at Q2 corporate profits on a GDP basis. Profits before tax (with inventory valuation and capital consumptions adjustments) rose 23% annualized in Q1, and we expect to see another double-digit increase in Q2.

US: Initial jobless claims (week 22 Aug) 13:30 BST/ 08:30 EDT

Initial jobless claims have risen for the past two weeks, climbing to 576,000 in last week’s reading. The 4-week average increased to 570,000, up from 556,500 two weeks ago. Analysts look for initial claims to fall to 560,000 this week. Continuing claims, released with an extra week’s lag, could decline to 6.22mn, down from 6.24mn. 

Corporate

Kazakhmys reported a better-than-expected 15.1% fall in first-half net profit and said its full-year copper output would exceed earlier targets. Net profit dropped to $516 million for the six months to June 30, from $608 million during the same period a year earlier. Revenue slid 41.9% to $1.65 billion from $2.84 billion a year earlier. The miner said it would not pay an interim dividend. The company added that it expected to exceed the 300,000 metric ton copper production target it had set earlier in the year.

Engineering and support services company Amec posted a 4% drop in first-half pre-tax profit due to difficult trading conditions but said it expects a stronger performance in the second half of the year. Chief Executive Samir Brikho in a statement said, "We expect to achieve a margin approaching 8% this year, and are firmly on track to deliver our group margin target for 2010 of 8.5%." Amec had GBP700 million of cash on its balance sheet, and Brikho added, "We will seek to supplement organic growth in the business with further value-adding acquisitions." Pretax profit in the six-month period ended June 30 dipped to GBP88.4 million from GBP92.3 million. Pre-tax profit is a closely watched measure of performance for U.K. companies. Revenue was unchanged at GBP1.26 billion. The company’s order book jumped to GBP3.2 billion from GBP2.5 billion a year earlier, but was down from GBP3.3 billion at the end of 2008. Earnings before interest, tax and amortization climbed 25% to GBP94.5 million from GBP75.9 million. Amec proposed a 15% hike in its interim dividend to 6.1 pence a share.

Diageo posted a 4% rise in full-year organic profit and said the coming year would be challenging, with profit expected to grow no more than the low single digits. The maker of Johnnie Walker scotch, Guinness stout and Smirnoff vodka said that net profit in the year to June 30 grew to GBP1.62 billion from GBP1.52 billion, as sales rose 15% to GBP9.31 billion. Stripping out the effect of acquisitions and the weak U.K. currency, sales growth was flat in the year, slightly below market expectations. Operating profit was GBP2.61 billion, up 4% on the year, in line with market expectations. Diageo - the world’s biggest alcoholic-drinks producer by volume - said that while the global economy appears to be stabilizing, there is uncertainty as to the sustainability of the recovery and the coming year will be challenging. "That being recognized, we expect to deliver low single digit organic operating profit growth in fiscal 2010." The 4% operating profit growth in the year to end-June compares with a target of between 4% and 6% for the current year and a 9% growth rate in the year to end-June 2008. Diageo had planned for growth of between 7% and 9% until the global recession and the destocking of inventories by customers forced it to cut targets in February. In common with rivals such as Pernod Ricard SA, Diageo’s sales were hit in the second half of the year by destocking of its products by its U.S. spirits and wine distributors. The company’s flat core sales for the year, compares with a 7% drop in the third quarter and a 3% rise in the first half. With most of its sales generated outside the U.K., however, Diageo has benefited from sterling’s weakness against major currencies during the year. Last month the company extended its GBP100 million cost-savings program announced in February to GBP120 million and said 900 jobs would be cut in Scotland as it rationalizes its Scotch Whisky production. The cost-savings program was launched in reaction to reduced worldwide volumes as the global recession hit demand for its products.

---

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: August 27th, 2009 under Asset Management.
Comments: none

 Print this post