UK Market Snapshot
UK markets closed in the red yesterday, after Chancellor of the Exchequer, Philip Hammond, stated in his Autumn Statement that the nation’s economy will grow at a slower pace next year than previously projected. Real estate agents, Countrywide and Foxtons Group plunged 5.2% and 14.3%, respectively, after the UK government banned real estate brokers from charging fees to renters. Retailers, Next, Dixons Carphone and Tesco shed 1.4%, 1.5% and 2.4%, after Philip Hammond disclosed that government plans to raise the national minimum wage to £7.50 per hour from £7.20 an hour, effective from April 2017. Housebuilders, Taylor Wimpey, Persimmon and Barratt Developments slid 1.5%, 1.8% and 2.0%, respectively. On the positive side, Firstgroup and National Express Group added 0.7% and 1.1%, respectively, after Chancellor announced that an additional £1.1 billion would be invested in English local transport networks. The FTSE 100 slipped marginally, to close at 6,817.7, while the FTSE 250 eased 0.3%, to settle at 17,622.5.
US Market Snapshot
US markets ended mostly higher yesterday, with the benchmark S&P 500 and Dow Jones indices registering their third straight record high close, boosted by an advance in industrial stocks. Deere surged 11.0%, after its results for the fourth quarter surpassed market estimates. Peer, Caterpillar advanced 2.7%. On the losing side, Juno Therapeutics sank 24.5%, after it reported that two patients had died during its phase 2 cancer trial. Urban Outfitters tanked 12.1%, as its results for the third quarter fell short of analysts’ expectations. Eli Lilly plummeted 10.5%, after it disclosed that its third stage trial of a treatment for dementia among patients with Alzheimer's disease failed to achieve its target. HP plunged 6.8%, as it posted disappointing results for the fourth quarter and offered a downbeat earnings forecast for the first quarter. The S&P 500 added 0.1%, to settle at 2,204.7. The DJIA gained 0.3%, to settle at 19,083.2, while the NASDAQ fell 0.1%, to close at 5,380.7.
Europe Market Snapshot
Other European markets finished mostly lower yesterday, weighed down by a drop in banking shares. Lenders, Credit Agricole, Mediobanca, Commerzbank and Bankia lost 0.7%, 1.5%, 1.6% and 2.0%, respectively. Assicurazioni Generali declined 3.0%, The company affirmed that it would accelerate its strategic turnaround plan by disposing unprofitable businesses and cut operating costs and expects to raise at least €1.0 billion. On the flip side, Airbus Group advanced 2.4%, as it is poised to cut around 1,000 office jobs to remove duplication between its main plane-making arm and the remaining group. The FTSEurofirst 300 index rose marginally, to close at 1,344.2. Among other European markets, the German DAX Xetra 30 dipped 0.5%, to close at 10,662.4, while the French CAC-40 slid 0.4%, to settle at 4,529.2.
Asia Market Snapshot
Markets in Asia are trading mostly lower this morning, as robust US economic data strengthened the case for rate hike in December. In Japan, auto exporters, Honda Motor, Toyota Motor and Mazda Motor have advanced 3.0%, 3.9% and 4.9%, respectively, amid a weaker Japanese Yen. On the contrary, drug manufacturers, Astellas Pharma, Takeda Pharmaceutical and Eisai have declined 0.5%, 1.1% and 6.0%, respectively. In Hong Kong, oil stocks, Sinopec Oilfield Service, CNOOC and PetroChina have shed 0.6%, 0.8% and 0.9%, respectively. In South Korea, index majors, POSCO and LG Electronics have lost 0.4% and 1.0%, respectively. The Nikkei 225 index is trading 1.0% higher at 18,348.1. The Hang Seng index is trading 0.3% down at 22,597.9, while the Kospi index is trading 0.7% lower at 1,973.2.
Key Corporate Announcements Today
AGMs
Andalas Energy and Power, CVS Group, Gemfields, JPMorgan Global Markets Emerging Income Trust, K3 Business Technology Group, Netcall, Seeing Machines Ltd., South32 Limited (DI), SQN Asset Finance Income Fund Limited, Doriemus, Thor Mining, Optima Worldwide
EGMs
Falcon Acquisitions, Public Power GDR SA (Reg S), Bioquell, Cluff Natural Resources, JD Sports Fashion
Final Ex-Dividend Date
AB Dynamics, CVS Group, JPMorgan Japanese Inv Trust, Northern Venture Trust, River and Mercantile Group, Smart (J) & Co., St Ives, Utilitywise plc, World Careers Network
Final Dividend Payment Date
AIREA, Mulberry Group, Thorpe (F.W.), Wetherspoon (J.D.)
Interim Ex-Dividend Date
3i Infrastructure, Aew UK Reit, Amec Foster Wheeler, Atkins (WS), B&M European Value Retail S.A. (DI), Castings, DCC, Drum Income Plus Reit, Ecofin Global Utilities and Infrastructure Trust, Great Portland Estates, Ground Rents Income Fund, Hill & Smith Holdings, Johnson Matthey, JPMorgan Elect Managed Growth Shares, JPMorgan Elect Managed Income Shares, Liontrust Asset Management, Majestic Wine, Mckay Securities, Mediclinic International, National Grid, Personal Group Holdings, Princess Private Equity Holding Ltd., Schroder Real Estate Investment Trust Ltd, Scottish American Inv Company, Securities Trust of Scotland, Seneca Global Income & Growth Trust, Shanks Group, Standard Life Equity Income Trust, Talktalk Telecom Group, Tate & Lyle, UK Mail Group, Vodafone Group, VPC Specialty Lending Investments, Worldwide Healthcare Trust, Wynnstay Properties, Young & Co's Brewery 'A' Shares, Yu Group
Interim Dividend Payment Date
Centrica, Fair Oaks Income Fund Limited
Quarterly Ex-Dividend Date
Blackrock North American Income Trust, Carnival, HICL Infrastructure Company Ltd, Regional REIT Limited
Trading Announcements
Euromoney Institutional Investor, Countrywide, Exova Group
Key Corporate Announcements for Tomorrow
AGMs
Coal of Africa Ltd., Origin Enterprises, Pan African Resources, Range Resources Ltd. (DI), Thor Mining, Augean
EGMs
Globalworth Real Estate Investments Limited, PJSC Megafon GDR (Reg S), Tengri Resources (DI), Sirius Minerals
Final Dividend Payment Date
Aeorema Communications, Animalcare Group, Clinigen Group, CVC Credit Partners European Opportunities Ltd EURO, CVC Credit Partners European Opportunities Ltd GBP, Dunelm Group, Go-Ahead Group, JPMorgan Global Growth & Income, JPMorgan Income & Growth Inv Trust Income Shares
Interim Dividend Payment Date
Action Hotels, Amati Vct 2, Axiom European Financial Debt Fund Limited, Booker Group, Card Factory, CareTech Holding, City Natural Resources High Yield Trust, Dunedin Income Growth Inv Trust, GCP Infrastructure Investments Ltd, Greencoat UK Wind, Hansa Trust, Hansa Trust 'A' Non Voting Shares, IFG Group, JZ Capital Partners Ltd, Lookers, M&G High Income Inv Trust Income & Growth Units, Maven Income & Growth VCT, Morgan Advanced Materials, Moss Bros Group, Next Fifteen Communications, P2P Global Investments, Prime People, Provident Financial, Secure Income Reit, Sequoia Economic Infrastructure Income Fund Limited, Sequoia Economic Infrastructure Income Fund Limited C shares, Smart Metering Systems, Target Healthcare REIT Ltd, Trinity Mirror, U And I Group
Special Dividend Payment Date
Calculus VCT, Card Factory
Quarterly Payment Date
Primary Health Properties, Tetragon Financial Group Limited
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0430GMT today, Brent Crude Oil one month futures contract is trading marginally or $0.01 higher at $48.96 per barrel. Yesterday, the contract declined 0.35% or $0.17, to settle at $48.95 per barrel, amid doubts that OPEC would agree to a production cut large enough to provide a major relief from current global oil glut. Also, Baker Hughes reported that active oil rigs drilling in the US rose by 3 to 474 this week. Meanwhile, the Energy Information Administration announced that US crude oil stockpiles declined by 1.3 million barrels for the week ended 18 November 2016.
Gold
At 0430GMT today, Gold futures contract is trading 0.08% or $0.90 lower at $1188.40 per ounce. Yesterday, the contract fell 1.81% or $21.90, to settle at $1189.30 per ounce, amid strength in the greenback following upbeat US economic data.
Currency
At 0430GMT today, the EUR is trading 0.16% lower against the USD at $1.0539, ahead of German GDP growth data for the third quarter, due to release in a few hours. Also, Germany’s GfK consumer confidence survey for December and Ifo survey data for November, due to release today, will be closely monitored by investors. Yesterday, the EUR weakened 0.64% versus the USD, to close at $1.0556
At 0430GMT today, the GBP is trading 0.07% lower against the USD at $1.2429, ahead of the UK BBA mortgage approvals for October, set to release later today. Yesterday, the GBP strengthened 0.13% versus the USD, to close at $1.2438. The US Dollar gained strength against its major peers, after FOMC minutes and robust US durable goods orders data in October raised prospects of a December rate hike.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, after the Federal Open Market Committee (FOMC) meeting minutes indicated an interest rate hike in December. Additionally, upbeat reports on US durable goods orders and Markit manufacturing PMI weighed on safe-haven treasuries. Yesterday, yield on 10-year notes climbed 5 basis points to 2.36%, while yield on 2-year notes advanced 5 basis points to 1.12%. Meanwhile, 30-year bond yield rose 2 basis points to 3.02%.
Key Economic News
Autumn Statement: UK growth to slow to 1.4% next year
UK Chancellor Philip Hammond in his first Autumn Statement indicated that the Office for Budget Responsibility has upgraded Britain’s growth forecast to 2.1% from 2.0% for this year, but then revised its 2017 growth forecast to 1.4%, a drastic downgrade from its prior estimate of 2.2%. Additionally, the government is no longer seeking a budget surplus in 2019-20 and is committed to returning public finances to balance “as soon as practicable”.
Euro-zone services PMI advanced in November
In November, the flash services PMI in the Euro-zone recorded a rise to 54.10, higher than market expectations of an advance to 52.90. Services PMI had registered a reading of 52.80 in the previous month.
Euro-zone composite PMI surprisingly advanced in November
The preliminary composite PMI recorded an unexpected rise to 54.10 in November, in the Euro-zone, compared to a level of 53.30 in the prior month. Market expectation was for composite PMI to record a steady reading.
Euro-zone manufacturing PMI recorded an unexpected rise in November
In the Euro-zone, the flash manufacturing PMI advanced unexpectedly to 53.70 in November, compared to market expectations of a drop to 53.30. In the prior month, the manufacturing PMI had recorded a reading of 53.50.
German manufacturing PMI slid in November
In November, the flash manufacturing PMI in Germany fell to a level of 54.40, compared to market expectations of a drop to a level of 54.80. In the previous month, manufacturing PMI had registered a reading of 55.00.
German services PMI registered an unexpected rise in November
The flash services PMI recorded an unexpected rise to 55.00 in November, in Germany, compared to market expectations of a fall to 54.00. Services PMI had recorded a reading of 54.20 in the prior month.
French services PMI rose in November
The preliminary services PMI in France recorded a rise to 52.60 in November, compared to market expectations of a rise to 51.90. In the prior month, services PMI had recorded a reading of 51.40.
French manufacturing PMI recorded a decline in November
Compared to a level of 51.80 in the prior month the preliminary manufacturing PMI fell to a level of 51.50 in France, in November. Market expectation was for manufacturing PMI to ease to a level of 51.50.
November FOMC minutes signalled an interest rate rise “relatively soon”
According to the minutes of the Federal Open Market Committee’s (FOMC) November meeting, most policymakers believed that it would be appropriate to raise interest rates relatively soon. They also noted that the expectation for a near-term rate hike is contingent on incoming data providing some further evidence of continued progress toward the Fed's objectives.
US mortgage applications rose in the last week
Mortgage applications recorded a rise of 5.50% on a weekly basis, in the week ended 18 November 2016, in the US. In the prior week, mortgage applications had registered a drop of 9.20%.
US continuing jobless claims rose in the last week
In the US, the seasonally adjusted continuing jobless claims advanced to 2043.00 K in the week ended 12 November 2016, compared to a revised reading of 1983.00 K in the prior week. Markets were expecting continuing jobless claims to climb to a level of 2008.00 K.
US initial jobless claims advanced in the last week
In the US, the seasonally adjusted initial jobless claims climbed to 251.00 K in the week ended 19 November 2016, higher than market expectations of a rise to 250.00 K. Initial jobless claims had registered a revised reading of 233.00 K in the previous week.
US non-defence capital goods shipments (ex aircraft) rose more than expected in October
In the US, the preliminary non-defence capital goods shipments (ex aircraft) rose 0.20% in October on a monthly basis, higher than market expectations for an advance of 0.10%. The non-defence capital goods shipments (ex aircraft) had advanced 0.40% in the previous month.
US durable goods orders rose more than expected in October
In October, the preliminary durable goods orders recorded a rise of 4.80% on a MoM basis in the US, compared to a drop of 0.30% in the prior month. Market anticipation was for durable goods orders to climb 1.70%.
US non-defence capital goods orders (ex aircraft) rose more than expected in October
In October, the preliminary non-defence capital goods orders (ex aircraft) advanced 0.40% in the US on a MoM basis, higher than market expectations for an advance of 0.30%. In the previous month, the non-defense capital goods orders (ex aircraft) had dropped 1.30%.
US durable goods orders (ex transportation) advanced more than expected in October
The flash durable goods orders (ex transportation) rose 1.00% in the US on a MoM basis in October, compared to a rise of 0.10% in the prior month. Markets were expecting durable goods orders (ex transportation) to rise 0.20%.
US Reuters/Michigan consumer sentiment index advanced in November
Compared to a reading of 87.20 in the prior month, the final Reuters/Michigan consumer sentiment index registered a rise to 98.30 in November, in the US. The preliminary figures had indicated an advance to 91.60. Markets were expecting the Reuters/Michigan consumer sentiment index to advance to.
US new home sales surprisingly eased in October
New home sales registered an unexpected drop of 1.90%, on MoM basis, to a level of 563.00 K in October, in the US, compared to market expectations of 590.00 K. In the previous month, new home sales had registered a revised reading of 574.00 K.
US Markit manufacturing PMI advanced in November
The preliminary Markit manufacturing PMI advanced to 53.90 in the US, in November, higher than market expectations of a rise to a level of 53.50. In the prior month, the Markit manufacturing PMI had recorded a level of 53.40.
US housing price index advanced as expected in September
The housing price index advanced 0.60% in the US, on a monthly basis in September, at par with market expectations. In the prior month, the housing price index had risen 0.70%.
US house price purchase index registered a rise in 3Q 2016
The house price purchase index recorded a rise of 1.50% on a quarterly basis, in 3Q 2016, in the US. The house price purchase index had risen by a revised 1.30% in the prior quarter.
Japanese manufacturing PMI dropped in November
In Japan, the preliminary manufacturing PMI registered a drop to 51.10 in November. Manufacturing PMI had registered a reading of 51.40 in the prior month.