FTSE 100	5137.72, +57.30	Dow	9962.58, +199.89
FTSE 250	8962.41, +112.91	Nasdaq	2097.55, +37.94
FTSE All Share	2628.13, +28.75	S&P 500	1066.11, +23.48
Nikkei	10034.74, +143.64	Hang Seng	21785.50, +520.51
Oil (Crude)	$79.87	Gold	$1047.10
Base Rate	0.5%	10 Yr Gilt	3.66%
£/$	1.653	£/€	1.1161
1 month LIBOR	0.512	3 month LIBOR	0.591

 

Markets

London - The FTSE 100 is currently 1.25 points higher at 5,138.97. WPP tops the risers’ board after pleasing investors with its third quarter trading update ad figures. Shares in the marketing company are 5% higher. Lloyds continues to rise, up 4.8%, after saying yesterday that any European Commission decisions on business divestments won’t be material to the bank.

New York - US stocks rallied yesterday after a report showed the economy returned to growth in the third quarter. GDP grew at a 3.5% annualised rate in the third quarter, the government reported, the first quarter of growth in a year. As a result, the Dow Jones surged 2.05% higher, the S&P 500 jumped 2.25% while the Nasdaq gained 1.85%. Equity gains were broad, helped further by stronger than expected quarterly results from Procter & Gamble and Colgate-Palmolive. P&G reported weaker quarterly earnings and revenue that topped estimates. The consumer products maker also boosted the low end of its fiscal 2010 earnings forecast. Shares gained 4%. Colgate posted an 18% higher third quarter profit to send its shares 1.6% higher.

Tokyo - The Nikkei climbed 143.64 points to close at 10,034.74 this morning. Strong corporate results and an unexpected drop in the rate of unemployment were the catalysts. Japan’s unemployment rate declined to 5.3% in September.

Hong Kong - The Hang Seng is currently 520.51 points higher at 21,785.50. Banking stocks lead the index higher after Bank of China and Industrial & Commercial Bank of China reported better than expected earnings.

Economics

UK GfK consumer confidence (Oct) 00:01 GMT

Housing and equity prices continued to rise through September, and with fears concerning unemployment abating, consumer confidence is likely to improve further in October.

US Employment cost index (Q3) 12:30 GMT/08:30 EDT

Year-on-year growth in employment costs slowed to just 1.8% in Q2, the all-time low for the series (going back to 1982). Private industry wages & salaries rose by only 0.2% in each of the first two quarters of this year. Wage gains picked up only slightly in Q3, and we expect total wages & salaries to rise 0.5%, with public sector wages (including teachers) running a bit higher at around 0.8%. Benefit costs could show a similar picture, with a total rise of 0.5% in Q3, and a bigger relative increase for state & local government employees. The total ECI would rise 0.5%, with the year-on-year rate falling to a new record low 1.7%.

US Personal income & spending (Sep) 12:30 GMT/08:30 EDT

Employee compensation likely softened in September, after rising modestly in July and August, as aggregate payroll hours fell 0.5% and hourly earnings only rose 0.1%. Analysts expect overall personal income to be flat, assuming proprietors’ and rental income continued to rise. On the consumption side, nominal spending could fall 0.5%, as unit auto sales fell 35% after the cash-for-clunkers program ended. This suggests a 0.7% drop in real PCE, assuming a 0.2% rise in the headline PCE deflator. However, underlying retail sales ex-autos and gasoline have climbed solidly for the past two months.  Analysts expect the core PCE deflator to rise 0.23%, a bit higher than the 0.16% increase in September core CPI. This should take the year-on-year rate up to 1.4%, from 1.3% in August. The PCE deflator has smaller weights for OER and tenant rent, both of which fell 0.1%, while the higher inflation items included autos (+0.5%) and tobacco (+1%).

US Chicago PMI (Oct) 13:45 GMT/09:45 EDT

Analysts look for Chicago PMI to rise back to 50 in October, after falling 4pts to 46.1 in September. The latest Beige Book described Chicago-area manufacturing as “slightly improved in September and early October”. Steel demand was being boosted by plans to increase auto production on the back of lean inventories. Heavy equipment order flow improved, with demand from Asia described as particularly strong in recent months. Other regional manufacturing surveys have been solid so far in October, as Empire manufacturing nearly doubled to 35, while the Philadelphia Fed slipped to 12 but remains in expansionary territory.

US University of Michigan confidence (Oct, final) 13:55 GMT/09:55 EDT

The preliminary Michigan reading for October fell to 69.4, from 73.5, driven primarily by a 5pts decline in consumer expectations. The weekly ABC News consumer comfort index recently fell to -50, the lowest since July. With gasoline prices edging higher so far this month, analysts look for the final Michigan reading to be about unchanged at 69.5. Meanwhile, 5-year median inflation expectations remain stable, rising slightly to 2.9% in the preliminary survey. 

Corporate

WPP, the world’s largest marketing company by revenue, today reported an 8.7% on-year fall in third-quarter like-for-like revenue, but said the rate of decline is slowing. "There is little doubt that consumer and corporate confidence has recovered somewhat from the panic levels of the fourth quarter of 2008 and first quarter of 2009," the company said in a statement, adding consumer confidence remains "fragile." The Dublin-based company said like-for-like revenue, a closely watched metric in the advertising industry which strips out the impact of acquisitions and exchange-rate movements, fell 8.7% in the three months ended Sept. 30. Third-quarter revenue rose 17% to GBP2 billion, boosted by the integration of recently acquired market research firm Taylor Nelson Sofres and the benefit of a weaker sterling. The figure was roughly in line with the BP2.03 billion forecast by analysts. The advertising industry has been hit hard by the global recession, with companies cutting ad spending, forcing advertising agencies to cut jobs as revenue shrinks.

---

 

Posted: October 30th, 2009 under Asset Management.
Comments: none

 Print this post