UK Market Snapshot
UK markets closed lower yesterday, amid strength in the Pound and a slowdown in nation’s manufacturing activity growth for November. Consumer goods shares, British American Tobacco, Unilever and Coca-Cola HBC declined 1.9%, 2.8% and 3.9%, respectively. Burberry Group, Diageo and Reckitt Benckiser Group lost 1.3%, 1.9% and 2.0%, respectively. On the positive side, BP edged up 2.3%, after a leading broker upgraded its rating on the stock to ‘Outperform’. Peers, Royal Dutch Shell and Tullow Oil climbed 2.8% and 5.9%, respectively, extending their rally from the previous session. Daily Mail & General Trust advanced 3.0%, after its revenue for the full year surpassed analysts’ estimates. Glencore added 1.5%, after it announced plans to restart dividend payout of $1.0 billion to its investors in 2017. The FTSE 100 slid 0.5%, to close at 6,752.9, while the FTSE 250 fell 0.3%, to settle at 17,497.3.
US Market Snapshot
US markets ended mostly lower yesterday, as losses in tech shares offset gains in banking shares and energy producers. Yahoo!, Micron Technology and QUALCOMM tumbled 3.4%, 5.4% and 5.8%, respectively. Express sank 20.4%, after the company offered weak outlook for the fourth quarter. FuelCell Energy plummeted 11.1%, after it unveiled that the company will lay off 96 jobs as a part of its restructuring plan. Bucking the trend, General Motors climbed 5.5%, after it reported a rise in its US vehicle sales for November. Energy producers, Chevron and Transocean gained 1.6% and 3.6%, respectively, on higher crude oil prices. Financial shares, Bank of America, Wells Fargo and Goldman Sachs Group advanced 1.8%, 2.7% and 3.4%, respectively. The S&P 500 eased 0.4%, to settle at 2,191.1. The DJIA added 0.4%, to settle at 19,191.9, while the NASDAQ declined 1.4%, to close at 5,251.1.
Europe Market Snapshot
Other European markets finished in negative territory yesterday, as investors exercised caution ahead of Italy’s referendum vote on 04 December 2016. Healthcare shares, Bayer and Merck dropped 2.1% and 2.8%, respectively. Consumer products firms, Danone, Nestle and Henkel slid 1.5%, 1.6% and 1.9%, respectively, on concerns that higher oil prices would drive inflation. On the contrary, Banco Popular Espanol surged 13.7%, on the back of reports that it is considering a potential merger with another bank and plans to replace its Chairman, Angel Ron. Energy producers, Repsol, Eni and Statoil advanced 2.3%, 3.6% and 4.0%, respectively, tracking gains in crude oil prices. The FTSEurofirst 300 index slipped 0.6%, to close at 1,342.9. Among other European markets, the German DAX Xetra 30 lost 1.0%, to close at 10,534.1, while the French CAC-40 shed 0.4%, to settle at 4,560.6.
Asia Market Snapshot
Markets in Asia are trading weaker this morning, with investors remaining cautious ahead of today’s key US jobs report for November. In Japan, DeNA has plunged 6.7%, after it shut its eight additional curated-content websites amid criticism over its authenticity. Export-oriented stocks, Toyota Motor, Mazda Motor and Sony have dropped 0.3%, 0.5% and 2.5%, respectively, amid strength in the Japanese Yen. On the flipside, Mitsubishi UFJ Financial Group, Resona Holdings and Nomura Holdings have climbed 4.7%, 5.1% and 5.2%, respectively. In Hong Kong, gaming stocks, Sands China and Galaxy Entertainment Group have declined 4.5% and 4.9%, respectively. In South Korea, index majors, POSCO and Samsung Electronics have shed 0.2% and 1.9%, respectively. The Nikkei 225 index is trading 0.9% lower at 18,339.3. The Hang Seng index is trading 1.2% down at 22,612.6, while the Kospi index is trading 0.8% lower at 1,967.3.
Key Corporate Announcements Today
AGMs
AXA Property Trust Limited, DFS Furniture, Quadrise Fuels International, James Halstead
EGMs
Public Joint Stock Company Severstal GDR (Reg S)
Final Dividend Payment Date
Abcam, Ashmore group, Genus, James Halstead, Kier Group, Manchester & London Investment Trust, Swallowfield
Interim Dividend Payment Date
Drum Income Plus Reit, Games Workshop Group, Hargreave Hale AIM VCT 2, Hilton Food Group, Laird, Marshalls, Mission Marketing Group, Octopus Apollo VCT, Schroder Real Estate Investment Trust Ltd,
Scottish Mortgage Inv Trust, UK Mail Group, William Hill
Special Dividend Payment Date
Best of the Best, Octopus Apollo VCT, Octopus Eclipse VCT 1
Quarterly Payment Date
Boeing Co
Key Corporate Announcements for Monday
EGMs
PJSC Lukoil ADR
Final Dividend Payment Date
BlackRock Greater Europe Inv Trust, NWF Group, TR European Growth Trust
Interim Dividend Payment Date
Balfour Beatty, First Derivatives, GCP Student Living, International Consolidated Airlines Group SA (CDI)
Special Dividend Payment Date
TR European Growth Trust
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.98% or $0.53 lower at $53.41 per barrel, ahead of Baker Hughes weekly oil rig count data, scheduled to release later in the day. Yesterday, the contract climbed 4.05% or $2.10, to settle at $53.94 per barrel, reaching its highest level since August 2015, following OPEC’s decision to cut crude oil output to reduce the global supply glut.
Gold
At 0430GMT today, Gold futures contract is trading 0.93% or $10.90 higher at $1177.80 per ounce, ahead of US non-farm payrolls data for November, scheduled later in the day. Yesterday, the contract declined 0.33% or $3.90, to settle at $1166.90 per ounce, extending its losing streak for a consecutive third session.
Currency
At 0430GMT today, the EUR is trading 0.23% higher against the USD at $1.0684, ahead of the Euro-zone producer price index for October, slated to release in a few hours. Additionally, the US nonfarm payrolls data and unemployment rate, both for November, due to release later today, would be on investor’s radar. Yesterday, the EUR strengthened 0.71% versus the USD, to close at $1.0660, after data showed that the Euro-zone unemployment rate unexpectedly declined in October and the Euro-zone Markit manufacturing PMI rose in November, meeting expectations.
At 0430GMT today, the GBP is trading 0.14% higher against the USD at $1.2608, ahead of UK’s construction PMI for November, set to release in some time. Yesterday, the GBP rose 0.70% versus the USD, to close at $1.2591, after Brexit Secretary, David Davis, stated that the UK Government could make contributions to the EU budget to get access to the EU single market, thus easing concerns about a hard Brexit. Meanwhile, the UK manufacturing sector growth slowed in November.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, as crude oil prices continued to rise after OPEC’s deal to curb crude oil production. Yesterday, yield on 10-year notes jumped 8 basis points to 2.45%, while yield on 2-year notes advanced 3 basis points to 1.14%. Meanwhile, 30-year bond yield climbed 8 basis points to 3.10%.
Key Economic News
UK house prices rose less than expected in November
The non-seasonally adjusted house prices advanced 4.40% on a YoY basis in the UK, in November, compared to an advance of 4.60% in the previous month. Markets were expecting house prices to climb 4.70%.
UK house prices advanced less than expected in November
On a MoM basis, the seasonally adjusted house prices in the UK climbed 0.10% in November, lower than market expectations for an advance of 0.20%. House prices had registered an unchanged reading in the previous month.
UK manufacturing PMI fell surprisingly in November
The manufacturing PMI fell unexpectedly to 53.40 in the UK, in November, lower than market expectations of a rise to 54.40. In the prior month, the manufacturing PMI had recorded a revised reading of 54.20.
Euro-zone unemployment rate slid surprisingly in October
The unemployment rate registered an unexpected drop to 9.80% in the Euro-zone, in October, compared to a revised level of 9.90% in the prior month. Market expectation was for the unemployment rate to climb to a level of 10.00%.
Euro-zone manufacturing PMI advanced in November
In November, the final manufacturing PMI climbed to 53.70 in the Euro-zone, compared to a level of 53.50 in the prior month. The preliminary figures had also indicated a rise to 53.70. Markets were expecting the manufacturing PMI to remain unchanged at 53.70.
German manufacturing PMI fell in November
The final manufacturing PMI in Germany dropped to 54.30 in November, compared to a reading of 55.00 in the prior month. Market anticipation was for manufacturing PMI to ease to 54.40. The preliminary figures had recorded a drop to 54.40.
French manufacturing PMI registered a drop in November
The final manufacturing PMI in France recorded a drop to 51.70 in November, compared to market expectations of a drop to 51.50. Manufacturing PMI had recorded a level of 51.80 in the prior month. The preliminary figures had recorded a drop to 51.50.
Italian GDP climbed in 3Q 2016
The final gross domestic product (GDP) rose 0.30% in Italy on a QoQ basis, in 3Q 2016. In the previous quarter, the GDP had recorded a flat reading. The preliminary figures had also indicated an advance of 0.30%.
Italian unemployment rate registered a drop in October
Unemployment rate in Italy dropped to 11.60% in October. Unemployment rate had registered a reading of 11.70% in the previous month.
Italian manufacturing PMI advanced in November
In November, the manufacturing PMI recorded a rise to 52.20 in Italy, compared to a level of 50.90 in the previous month. Market anticipation was for the manufacturing PMI to rise to 51.30.
Spanish manufacturing PMI advanced in November
In Spain, the manufacturing PMI advanced to 54.50 in November, compared to a level of 53.30 in the prior month. Market anticipation was for the manufacturing PMI to rise to 53.70.
Swiss real retail sales eased in October
Real retail sales dropped 0.50% on an annual basis in Switzerland, in October. In the prior month, real retail sales had registered a revised drop of 2.10%.
Swiss SVME manufacturing PMI climbed in November
The SVME manufacturing PMI in Switzerland recorded a rise to 56.60 in November, compared to a level of 54.70 in the previous month.
US construction spending rose less than expected in October
Construction spending in the US climbed 0.50% in October on a monthly basis, less than market expectations for a rise of 0.60%. In the prior month, construction spending had recorded a revised unchanged reading.
US ISM backlog orders recorded a rise in November
ISM backlog orders rose to a level of 49.00 in November, in the US, compared to a level of 45.50 in the prior month.
US ISM production advanced in November
ISM production in the US climbed to 56.00 in November, compared to a level of 54.60 in the previous month.
US number of planned layoffs by US companies eased in November
On a YoY basis, the number of planned layoffs by US companies fell 13.00% in the US, in November. The number of planned layoffs by US companies had registered a drop of 39.10% in the previous month.
US Markit manufacturing PMI rose in November
The final Markit manufacturing PMI advanced to 54.10 in the US, in November, higher than market expectations of a rise to 53.90. The preliminary figures had recorded an advance to 53.90. In the prior month, the Markit manufacturing PMI had recorded a level of 53.40.
US initial jobless claims rose in the last week
In the week ended 26 November 2016, the seasonally adjusted initial jobless claims in the US rose to a level of 268.00 K, higher than market expectations of an advance to a level of 253.00 K. In the prior week, initial jobless claims had registered a level of 251.00 K.
US continuing jobless claims recorded an unexpected rise in the last week
The seasonally adjusted continuing jobless claims in the US rose unexpectedly to 2081.00 K in the week ended 19 November 2016, higher than market expectations of a fall to 2033.00 K. Continuing jobless claims had recorded a reading of 2043.00 K in the previous week.
US ISM manufacturing activity index advanced in November
The ISM manufacturing activity index advanced to 53.20 in the US, in November, compared to a level of 51.90 in the prior month. Markets were expecting the ISM manufacturing activity index to advance to 52.50.
US ISM prices paid index remained unchanged in November
The ISM prices paid index in the US remained unchanged at 54.50 in November, in line with market expectations.
US ISM new orders registered a rise in November
ISM new orders in the US advanced to 53.00 in November, compared to a level of 52.10 in the prior month.
Japanese vehicle sales rose in November
On an annual basis, vehicle sales climbed 13.90% in Japan, in November. In the previous month, vehicle sales had recorded a rise of 0.80%.
Japanese monetary base rose in November
On a YoY basis, the monetary base advanced 21.50% in November, in Japan. In the previous month, the monetary base had registered a rise of 22.10%.