FTSE 100	5080.42, -120.55	Dow	9762.69, -119.48
FTSE 250	8849.50, -291.78	Nasdaq	2059.61, -56.48
FTSE All Share	2599.38, -64.41	S&P 500	1042.63, -20.78
Nikkei	9891.10, -183.95	Hang Seng	21264.99, -496.59
Oil (Crude)	$77.46	Gold	$1039.80
Base Rate	0.5%	10 Yr Gilt	3.61%
£/$	1.642	£/€	1.1148
1 month LIBOR	0.513	3 month LIBOR	0.590

 

Markets

London - The FTSE 100 is currently 2.66 points lower at 5,077.76. Royal Dutch Shell leads the index lower after reporting a 67.6% fall in adjusted third-quarter profit. Shares in the oil giant are currently more than 3% lower. Standard Life is also among the heaviest percentage losers, down 2%, after posting a 10% fall in new business sales for the third quarter.

New York - US indices tumbled yesterday following weaker than expected data on new home sales. The Dow Jones fell 119.48 points to 9,762.69, the S&P lost 20.78 to 1,042.63 while the Nasdaq slumped 56.48 points to 2,059.61. The Commerce Department reported the number of new home sales fell to an annualised rate of 402,000 in September against expectations of a rise to 440,000. Furthermore, the Mortgage Bankers Association showed demand for mortgages has fallen for the past three months. This data added to questions raised about the strength of the economic recovery from the past week or so, which has seen the S&P 500 wipe out its gains for October. The broad measure of companies has dropped more than 5% in the past week.

Tokyo - The Nikkei slid 183.95 points lower to close at 9,891.10 this morning, its biggest daily percentage drop in four weeks. Falling commodity prices and corporate losses were the main drivers, raising concern the global recovery is faltering.

Hong Kong - The Hang Seng is currently 496.59 points lower at 21,264.99. China related shares lead the drop after the nation said it will tighten rules on personal loans. The nation’s banking regulator said it will make move sot prevent loans from being used for speculation.

 Economics

UK Mortgage approvals (Sep) 09:30 GMT

The Bank of England’s credit conditions survey suggested that commercial banks planned to make more mortgage credit available through Q3. The RICS survey suggests demand is still rising, so analysts expect a further rise in mortgage approvals to be reported for September. Consumer credit is likely to continue to be paid down, but this does follow a boom in consumer lending in 2007.

US GDP (Q3, advance) 12:30 GMT/08:30 EDT

Analysts look for an upside surprise to Q3 GDP, which we expect to rise by 4.0%. Consumption looks like it will rise by a solid 2.9%, and analysts expect residential investment to climb 5%, the first increase in fourteen quarters. But equipment & software spending (+1%) could be weaker than earlier thought, given the disappointing drop in August shipments data. Analysts also now expect the net trade contribution to be close to zero, as both imports (+13%) and exports (+15%) appear to have boomed. Non-residential construction probably fell at a double-digit pace, while we anticipate another strong boost from government spending (+5%). The big wildcard will again be inventories, where our estimated change of –USD120bn adds 1.3ppt to GDP, after Q2’s –USD160bn. Meanwhile, analysts expect the GDP deflator to rise by 1.0%, with PCE prices (+2.9%) doing most of the lifting.

US Initial jobless claims (week 24 Oct) 12:30 GMT/08:30 EDT

Initial jobless claims rose to 531,000 last week, with the 4-week average nearly unchanged at 532,250. We look for claims at 525,000 this week. Continuing claims should continue to fall, and analysts expect a decline to 5.88m, from 5.29m.

Corporate

Kazakhmys, Kazakhstan’s biggest copper producer, today said third quarter copper cathode production fell 13.5% but that it remained on track to hit its full-year output target of 315,000 metric tons. Production of copper cathode from its own concentrate was 82,200 tons during the three months to Sept. 30, compared with 95,000 tons during the same period a year earlier. The metal accounted for 63% of the company’s first-half earnings before interest, taxes, depreciation and amortization, or Ebitda. Kazakhmys also produces gold, zinc and silver, as well as electricity at the country’s biggest power station. Kazakhmys earlier this year closed high-cost mines, and cut output and capital expenditure as copper demand and prices tumbled. But markets have since rebounded, and the company in August raised its full-year copper production target by 5% to 315,000 tons - a figure still well below the previous year’s 340,100 tons. The cutbacks were meant in part to allow the company to focus on reducing its debt - net debt fell to $1.4 billion as of Sept. 30, compared with $1.57 billion as of June 30. Kazakhmys saw mixed results with other metals. Third-quarter gold production rose 23.1% to 36,200 troy ounces and silver output increased 6.8% to 4.05 million ounces, while zinc output was down 15.2% to 32,400 tons. Power output meanwhile dipped slightly compared to a year earlier, though the company said the third quarter represented a marked recovery compared with earlier in the year. 
 
Royal Dutch Shell today posted a 67.6% fall in adjusted third-quarter profit due to much lower average oil prices and weak natural gas and refined product markets. Despite signs of improvement in Shell’s core markets, the company indicated it doesn’t expect a rapid return to the profitability it enjoyed before the economic downturn. The Anglo-Dutch energy company said the clean current cost of supplies, a keenly-watched profit figure because it strips out gains or losses from inventories and other non-operating items, was $2.62 billion in the three months ended Sept. 30, compared with $8.09 billion in the third quarter of 2008. This was above analysts’ expectations for $2.56 billion. Net profit for the quarter totalled $3.25 billion, down 61.6% from $8.45 billion in the same period a year ago. Group revenue was $75.01 billion, compared with $131.57 billion in the third quarter of 2008. Diluted earnings per share were 53 cents compared with 137 cents in the same period of the previous year.

Insurer Standard Life today posted a 10% fall in new business sales for the third quarter, as lower sales in the U.K. and Europe outweighed gains in Canada and Asia. The company said the outlook for the U.K. savings and investment market remains challenging in the short term but sees "opportunities for our Asian business and in Canada." The company said that total new business sales for the three months ended Sept. 30 were GBP3.045 billion, down from GBP3.365 billion a year earlier on a present value of new business premiums basis, or PVNBP. PVNBP is a measure of life and pension sales, and is calculated as 100% of single premiums plus the expected present value of new regular premiums. For the first nine months of the year, sales were down 15% at GBP10.5 billion. That result was lower than the GBP10.63 billion average expected by 10 analysts. The company said its surplus capital was GBP3.4 billion at the end-September, up from GBP3.1 billion in June. The company on Monday said it will sell its banking operations to Barclays for GBP226 million in cash.

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Posted: October 29th, 2009 under Asset Management.
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