UK Market Snapshot
UK markets closed mixed yesterday. Babcock International Group jumped 5.8%, after the company reiterated its 2018 outlook and stated that its first half trading was in line with expectations. Kingfisher climbed 5.6%, following forecast beating first half profits and after the retailer confirmed that it was on track to meet its goals in the second year of its five-year restructuring plan. Other retailers, Next and Marks & Spencer Group advanced 1.9% and 2.4%, respectively, on the back of robust retail sales data for August. Bucking the trend, Diageo declined 2.8%, after the company warned that its organic sales growth would be hurt by delay in the Chinese New Year and a ban on selling alcohol along highways in India. The FTSE 100 marginally declined to close at 7,272.0, while the FTSE 250 marginally rose to settle at 19,540.8.
US Market Snapshot
US markets finished mostly higher yesterday, with the DJIA and S&P 500 indices closing at their record high levels after the Federal Reserve (Fed) announced that it would start unwinding its $4.5 trillion balance sheet in October, revealing no surprises. Alnylam Pharmaceuticals skyrocketed 51.7%, following success of its late-stage trial of a treatment for Hereditary ATTR Amyliodosis patients with polyneuropathy. FedEx advanced 2.1%, despite reporting lower than expected earnings for the first quarter due to significant operational challenges posed by a cyber attack and Hurricane. On the contrary, Bed Bath & Beyond sank 15.9%, after the company’s earnings and sales for the second quarter missed market estimates. The S&P 500 gained 0.1%, to settle at 2,508.2. The DJIA rose 0.2%, to settle at 22,412.6, while the NASDAQ slid 0.1%, to close at 6,456.0.
Europe Market Snapshot
Other European markets ended mostly higher yesterday, amid a pickup in merger & acquisitions activity. Fortum OYJ rallied 4.2%, after the utility firm stated that it would offer €8.05 billion to E.ON in order to acquire the latter’s remaining 46.65% stake in Uniper. Shares of ThyssenKrupp AG perked up 3.1%, after agreeing to merge its European steel activities with Tata Steel in a 50-50 joint venture. Ipsen jumped 5.6%, after the company received the European Commission’s approval for its ‘Xermelo’ drug which is used to treat carcinoid syndrome diarrhoea. On the losing side, Cie Financiere Richemont declined 1.3%, after the company’s stock went ex-dividend. The FTSEurofirst 300 index declined 0.1%, to close at 1,499.7. Among other European markets, the German DAX Xetra 30 rose 0.1%, to close at 12,569.2, while the French CAC-40 advanced 0.1%, to settle at 5,241.7.
Asia Market Snapshot
Markets in Asia are trading mostly higher this morning, tracking overnight gains on Wall Street. Additionally, the Bank of Japan (BoJ) kept its interest rate unchanged and maintained its positive view of the economy. In Japan, Kakaku.com has advanced 2.3%, after the company announced that it would buyback its 2.3% of outstanding shares. On the contrary, Apple suppliers, Murata Manufacturing, Nitto Denko and Alps Electric have declined 1.2%, 2.0% and 3.3%, respectively, after iPhone 8 pre-orders came in well below those of its predecessors. In Hong Kong, China International Capital has rallied 16.0%, after Tencent Holding revealed that it would acquire a stake in the former. In South Korea, Hyundai Motor and POSCO have dropped 1.8% and 2.3%, respectively. The Nikkei 225 index is trading 0.8% higher at 20,479.9. The Hang Seng index is trading 0.2% up at 28,177.2, while the Kospi index is trading 0.1% lower at 2,410.6.
Key Corporate Announcements Today
AGMs
Accsys Technologies, Auto Trader Group, Begbies Traynor Group, Cambium Global Timberland Ltd., Circle Property, F&C Managed Portfolio Trust Income Shares, First Property Group, Gloo Networks, IG Group Holdings, NCC Group, Park Group, Ryanair Holdings, Twentyfour Income Fund Limited Ord Red, VietNam Holding Ltd, WYG, Invesco Perpetual Select Trust
Final Ex-Dividend Date
1pm, AdEPT Telecom, Consort Medical, Coral Products, Dart Group, Hargreaves Services, Joules Group, K3 Capital Group, Kainos Group, Mattioli Woods, Oxford Instruments, Pembroke VCT, Pembroke Vct B, Rank Group, Redrow, Renishaw, Stewart & Wight, Van Elle Holdings
Interim Ex-Dividend Date
Acorn Income Fund Ld, Applegreen, BlackRock Commodities Income Inv Trust, Bovis Homes Group, Chelverton Small Companies Dividend Trust, Crest Nicholson Holdings, Dignity, Drax Group, EMIS Group, Epwin Group, Forterra, Franchise Brands, Games Workshop Group, Gamma Communications, Good Energy Group, GVC Holdings, Henderson High Income Trust, Henry Boot, HGCapital Trust, Hunters Property, Irish Continental Group Units, John Laing Infrastructure Fund Ltd, JPMorgan Income & Capital Inv Trust, Ladbrokes Coral Group, Luceco, Macfarlane Group, Maintel Holdings, Martin Currie Global Portfolio Trust, Midwich Group, Non-Standard Finance, Old Mutual, Pendragon, Petrofac Ltd., Playtech, Property Franchise Group, Servelec Group, Stadium Group, Taylor Wimpey, TwentyFour Select Monthly Income Fund Limited, Vitec Group, Weir Group, XLMedia
Interim Dividend Payment Date
Cineworld Group, Fidessa Group, Hochschild Mining, Legal & General Group, Rio Tinto, Schroders, Schroders (Non-Voting), Ultra Electronics Holdings, Utilico Emerging Markets Ltd (DI), VPC Specialty Lending Investments
Quarterly Payment Date
Fair Oaks Income Limited 2014 Shs NPV, Fair Oaks Income Limited 2017 Shs NPV
Quarterly Ex-Dividend Date
Funding Circle SME Income Fund
Trading Announcements
Mitchells & Butlers, NCC Group
Key Corporate Announcements for Tomorrow
AGMs
Accrol Group Holdings, Sirius Real Estate Ltd.
Final Dividend Payment Date
Best of the Best, Dixons Carphone, FIH Group, JPMorgan Brazil Inv Trust, Miton UK Microcap Trust, Solid State, SSE, Supergroup
Interim Dividend Payment Date
Anglo American, Clarkson, FDM Group (Holdings), Henderson Opportunities Trust, Hikma Pharmaceuticals, Hostelworld Group, Ibstock, John Laing Environmental Assets Group Limited, Low & Bonar, LPA Group, Marshall Motor Holdings, National Express Group, Paddy Power Betfair, Polypipe Group, Ranger Direct Lending Fund, Rotork, Scottish American Inv Company, Stock Spirits Group, Vesuvius, Virgin Money Holdings (UK)
Quarterly Payment Date
Alpha Real Trust Ltd., BP, Real Estate Credit Investments Ltd, UIL Limited (DI)
Commodity, Currency & Bitcoin
Commodity
At 0330GMT today, Brent Crude Oil one-month futures contract is trading 0.23% or $0.13 lower at $56.16 per barrel. Yesterday, the contract climbed 2.09% or $1.15, to settle at a four month high of $56.29 per barrel and remaining on track for the largest 3Q gain since 2004, amid mounting tensions between US and Iran and as traders speculated that OPEC may extend its output cut deal. Meanwhile, the Energy Information Administration reported that the US crude inventories advanced more than anticipated by 4.6 million barrels for the week ended 15 September 2017.
At 0330GMT today, Gold futures contract is trading 0.75% or $9.90 lower at $1302.60 per ounce, after the US Fed hinted towards the likelihood of another interest rate hike this year. Yesterday, the contract advanced 0.44% or $5.80, to settle at $1312.50 per ounce.
Currency
At 0330GMT today, the EUR is trading marginally lower against the USD at $1.1886, ahead of the European Central Bank’s economic bulletin, due to release in sometime, along with the Eurozone’s preliminary consumer confidence index data for September, scheduled to be released later today. Yesterday, the EUR weakened 0.85% versus the USD, to close at $1.1892. Separately, Germany’s producer price index (PPI) rose more than expected in August.
At 0330GMT today, the GBP is trading a tad lower against the USD at $1.3493, ahead of UK’s public sector net borrowing data for August, set to release in a few hours. Investors will also monitor the US weekly jobless claims data, slated to release later today. Yesterday, the GBP declined 0.06% versus the USD, to close at $1.3495. Meanwhile, UK’s retail sales surprisingly advanced in August on the back of strong sales of clothing and non-essential items. The US Dollar strengthened against a basket of currencies after the Fed stated that it would commence reducing its $4.5 trillion balance sheet in October and may go for a rate hike in December.
Bitcoin
At 0330GMT today, BTC is trading 0.25% lower against the USD at $3859.01. Yesterday, BTC declined 0.88% against the USD to close at $3868.71. Meanwhile, news emerged that Chinese bitcoin exchange executives have been banned from leaving the country in order to ensure that they “cooperate with the investigation” into cryptocurrency trading. In a major development, a report indicated that the central bank of Malaysia is developing clear guidelines for cryptocurrencies like Bitcoin.
Key Economic News
UK retail sales ex-fuel advanced more than expected in August
In August, on a MoM basis, retail sales ex-fuel climbed 1.00% in the UK, more than market expectations for an advance of 0.10%. Retail sales ex-fuel had recorded a revised rise of 0.70% in the prior month.
UK retail sales advanced more than expected in August
Retail sales rose 1.00% in the UK on a MoM basis in August, compared to a revised advance of 0.60% in the previous month. Markets were anticipating retail sales to advance 0.20%.
UK retail sales rose more than expected in August
Retail sales in the UK recorded a rise of 2.40% on an annual basis in August, higher than market expectations for an advance of 1.10%. Retail sales had advanced by a revised 1.40% in the previous month.
German PPI rose more than expected in August
On a monthly basis, the producer price index (PPI) climbed 0.20% in August, in Germany, more than market expectations for an advance of 0.10%. The PPI had registered a similar rise in the prior month.
German PPI rose more than expected in August
On an annual basis in August, the PPI climbed 2.60% in Germany, compared to a rise of 2.30% in the previous month. Market anticipation was for the PPI to climb 2.50%.
US mortgage applications slid in the last week
In the US, mortgage applications fell 9.70% in the week ended 15 September 2017 on a weekly basis. Mortgage applications had advanced 9.90% in the prior week.
US existing home sales unexpectedly dropped in August
Existing home sales registered an unexpected drop of 1.70%, on monthly basis, to a level of 5.35 million in August, in the US, compared to a level of 5.44 million in the prior month. Markets were anticipating existing home sales to advance to a level of 5.45 million.
Fed called historic end to crisis-era stimulus programme, left rates unchanged
The Federal Reserve (Fed) has taken the landmark decision to start unwinding its $4.50 trillion balance sheet in October, initially by just $10.00 billion per month. Meanwhile, policymakers left the benchmark interest rate unchanged in a range of 1.00% to 1.25%. The Fed Chairwoman, Janet Yellen stated that the US economy would suffer short-term damage due to the recent hurricanes but stuck with forecasts for another rate rise this year, followed by three raises in 2018.
BoJ kept monetary policy steady
The Bank of Japan (BoJ) policymakers voted 8-1 to leave its asset-buying programme and negative interest rate policy in place. Further, the central bank maintained its upbeat view of the economy, signalling its conviction that a solid recovery will gradually accelerate inflation towards its 2.00% goal without additional stimulus.
Japanese convenience store sales slid in August
In August, on an annual basis, convenience store sales recorded a drop of 0.90% in Japan. Convenience store sales had registered a flat reading in the prior month.