FTSE 100	5315.34, +53.77	Dow	10501.05, +29.55
FTSE 250	9037.77, +37.12	Nasdaq	2212.10, +21.79
FTSE All Share	2707.24, +24.72	S&P 500	1114.11, +7.7
Nikkei	10083.48, -22.2	Hang Seng	21813.92, -271.83
Oil (Crude)	$69.51, +$0.36	Gold	$1123.80, +$3.90
Base Rate	0.5%	10 Yr Gilt	3.85%
£/$	1.627	£/€	1.1173
1 month LIBOR	0.514	3 month LIBOR	0.606

 

Markets

London - The FTSE 100 jumped 53.77 points to 5,315.34 yesterday as investors cheered the bailout news from Dubai. Financial stocks were among the strongest, including Standard Chartered, up 4.3%. But London Stock Exchange, whose largest shareholder is Borse Dubai was the best performer, climbing 9.9%. This morning the index is 9.09 points lower at 5306.25. British Airways is the biggest faller following news that cabin crew had voted for a 12 day strike over the Christmas period.

New York - All three major US indices hit 14 month highs yesterday. A weaker dollar, news that Citigroup will repay bailout money and Abu Dhabi’s $10 billion in aid for Dubai all helped carry over the buoyant mood from the end of last week. The Dow Jones gained 29.55 points to 10,501.05, the S&P 500 added 7.7 points to 1,114.11 and the Nasdaq jumped 21.79 points to 2,212.10. Citigroup announced that it will repay $20 billion to the government, with $17 billion being funded through a common stock offering. In M&A news, Exxon Mobil announced that it will buy natural gas supplier XTO Energy in an all stock transaction valued at about $30 billion, excluding debt. Elsewhere, Sun Microsystems helped push the Nasdaq almost 1% higher after EU regulators signalled that Oracle Corp’s $7 billion takeover of Sun could be cleared.

Tokyo - The Nikkei fell 22.2 points to close at 10,083.48 this morning. Real estate companies advanced after Secured Capital Japan plans to buy the 32 story Pacific Century Place Marunouchi office building. However, these gains were offset by losses among shipping lines as bulk cargo rates fell.

Hong Kong - The Hang Seng is currently 271.83 points lower at 21,813.92. Developers are among the biggest fallers after the Xinhua news agency said China will target "excessive" growth in property prices. 

 Economics

UK RICS house prices (Nov) 00:01 GMT

The RICS house price balance rose to 34% in October, the highest balance of surveyors noting house price gains since 2006. Looking at the regional breakdown, London is driving the gains, with a net balance of 94% of surveyors reporting price increases.

UK CPI (Nov) 09:30 GMT

Both CPI and RPI surprised to the upside in October at 1.5% (consensus 1.4%) and -0.8% (consensus -1.0%), respectively. Relative to HSBC Economics’ forecasts the main contributors to this upside surprise were food and house prices. In November, higher petrol prices will have placed further upward pressure on inflation, and HSBC Economics forecasts the annual rate of RPI inflation will turn positive (0.1%) for the first time since February 2009. At the Pre-Budget Report, the Chancellor announced that, as planned, VAT will be reinstated at 17.5% on 1 January 2010. This, alongside base effects from energy prices and interest rates, will cause headline inflation to pick up sharply in the coming months.

UK DCLG house prices (Oct) 09:30 GMT

The DCLG (formerly ODPM) house price index is the last of the house price indices to be released for the month of October and so tends not to be as significant for the markets as the Nationwide or Halifax releases. The annual rate of house price deflation is expected to moderate further.

US PPI (Nov) 13:30 BST/ 08:30 EST

We expect the headline PPI to rise 1.0% on the month, with gasoline up 7% (boosted by seasonal adjustment) and increases in heating oil and other energy goods also emerging. The year-on-year rate should rise from -1.9% to 1.8%, moving into positive territory for the first time in a year. October’s 0.6% decline in the core PPI was entirely driven by autos, as the core PPI excluding autos has been remarkably stable for the past six months. Light truck prices are down 1.7% from a year ago, according to the PPI report, which seems to be inconsistent with rising auto prices in the CPI. There is a greater-than-usual chance that the PPI for light trucks will rebound, after falling 5.2% in October. This could push November’s core PPI up to 0.3%, or possibly even higher.

US Empire manufacturing (Dec) 13:30 GMT/ 08:30 EST

Empire manufacturing has been robust in recent months, even after November’s 11pt fall to 23.5. We look for a further decline to 20 in December, still comfortably in expansionary territory and consistent with a reading of around 54 for ISM manufacturing index.

US Industrial production (Nov) 14:15 GMT/ 09:15 EST

We expect industrial production to rise 0.5% in November, with a 0.7% rise in manufacturing more than offsetting a decline in utilities. Capacity utilization should rise for the fourth month in a row, to 71.1%. The ISM production index fell 3.4pts to 59.9 in November but remains robust, while aggregate manufacturing hours rose 0.4%. Meanwhile, data on auto assemblies suggest that motor vehicle output rebounded after falling by 1.6% in October.

Corporate

British Airways PLC’s cabin crew voted Monday to strike during the busy Christmas period, threatening massive disruption for hundreds of thousands of passengers. A strike would mark the biggest blemish on the tenure of BA Chief Executive Willie Walsh, who since 2005 has been trying to streamline the carrier, but has alienated many staff in the process. A 12-day strike is due to begin Dec. 22, officials of the Unite trade union said. They said 92.5% of their members who voted in a ballot supported industrial action. The union said it remained open to negotiations with BA, but only if the airline backtracks on controversial changes to working practices that it already has imposed. Unite said it didn’t rule out further action. British Airways said in a statement that it was extremely disappointed by Unite’s "cynical decision," which it said shows a lack of concern for its customers, its business and other employees.

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The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: December 15th, 2009 under Asset Management.
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