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Morning Report

UK 100 Leaders Close Chg % Chg % YTD
Carnival PLC 2505 74 3 17.83
Fresnillo PLC 1930 41 2.2 26.39
Aggreko PLC 2089 43 2.1 3.57
Unilever PLC 2310 45 2 6.8
International Consolidated Airlines Group SA 160 2.8 1.8 8.55
John Wood Group PLC 848.5 14.5 1.7 32.37
Johnson Matthey PLC 2253 37 1.7 17.13
Next PLC 3618 55 1.5 32.19
UK 100 Laggards Close Chg % Chg % YTD
Evraz PLC 235.4 -14.9 -6 -37.18
Eurasian Natural Resources Corporation PLC 333.4 -8.2 -2.4 -47.54
WPP Group PLC 789.5 -18.5 -2.3 16.88
Kazakhmys PLC 736 -14 -1.9 -20.6
ARM Holdings PLC 665 -10.5 -1.6 12.33
AMEC PLC 1034 -15 -1.4 13.94
Resolution Ltd 210.6 -2.4 -1.1 -16.23
Royal Dutch Shell PLC 2165 -24.5 -1.1 -11.78
Major World Indices Mid/Close Chg % Chg % YTD
UK UK 100 5805.05 0.27 0 4.18
UK 11972.2 109.54 0.92 18.5
FR CAC 40 3411.53 -14.96 -0.44 7.97
DE DAX 30 7200.23 7.38 0.1 22.07
US DJ Industrial Average 30 13103.7 26.36 0.2 7.25
US Nasdaq Composite 100 2986.12 4.42 0.15 14.62
US S&P 500 1412.97 4.22 0.3 12.35
JP Nikkei 225 8933.06 -122.14 -1.35 5.65
HK Hang Seng Index 48 21558.15 -252.08 -1.16 16.94
AU S&P/ASX 200 4472.38 -38.12 -0.85 10.25
Commodities & FX Mid/Close Chg % Chg % YTD
Crude Oil, US Light Sweet ($/barrel) 85.305 -0.875 -1.02 -13.83
Crude Oil, Brent ($/barrel) 107.665 -0.325 -0.3 0.26
Gold ($/oz) 1704.45 -9.85 -0.57 8.81
Silver ($/oz) 31.7275 -0.4575 -1.42 14.23
Platinum ($/oz) 1557.7 -14.6 -0.93 11.18
GBP/USD – US$ per £ 1.6106 -0.08 3.71
EUR/USD – US$ per € 1.2922 -0.13 -0.25
GBP/EUR – € per £ 1.2464 0.06 3.88
UK Index called to open -30pts

UK 100 (UKX): 1-week chart (Source: IT-Finance)

Click graph to enlarge

Today's Main Events

  • 08:00     ES           Unemployment
  • 13:30     US           GDP
  • 14:55     US           Uni of Michigan Consumer Confidence

See Live Macro Calendar for all data, incl. consensus expectations

Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 called to open -30pts (off its worst levels of -60pts), with Asian equities and world equity futures pulling back following tech giants Apple and Amazon’ results disappointing, the former missing EPS consensus estimates (only slightly, and it doesn’t matter if revenues were better) after US market close and giving cautious outlook with lower guidance for the first part of 2013. Note that Asian peer Samsung reported record quarterly profits on booming smartphone/tablet sales.

The poor hit rate for earnings and guidance has seen worries regarding slowing global growth intensify and European bourses look set for a weak open. The UK flagship index has seen futures break below their trend of 1, 3, and 5-month rising lows/support at 5790 (alluded to as a possibility earlier in the week) which could open up potential for a larger correction to 5500, after not insignificant gains of 15% from June and 2012 lows of 5150.

Overnight, macro data saw Japanese inflation slightly less negative than expected, helping Yen strengthen and USD/JPY come off recent highs (still around 80). Japanese government officially announced the new stimulus measures that speculation had been rife about most of this week, however, uncertainty as to size and potential effects of package and real JPY weakness remains liked to pressure on and expectations that Bank of Japan (BoJ) will act with powerful monetary stimulus (potentially next week).

Ratings agencies were active again, with S&P lifting its risk rating on France from 2 to 3 and taking negative action on major banks BNP Paribas, Credit Agricole and Société Générale. The saga of Greece and its next tranche of bailout aid continues, with talks with the Troika of lenders ongoing, opposition on Labour reforms from certain politicians (Democratic Left) and Wall Street Journal (WSJ) article suggesting Athens needs another €30bn to fill funding gap to 2016 deficit reduction target. Chinese Business sentiment data crept up.

US markets closed positive (the real damage to sentiment was after the close with the tech giants’ results) having reversed earlier gains following talk (quickly denied) that ratings agency Fitch might be considering a US downgrade. Macro data mixed with Chicago Fed, Durable Goods Orders and Jobless all meeting/beating expectations, but run of recent positive housing data coming to an end with Pending home sales weaker. This followed mixed US Q3 results from Colgate Palmolive, ConocoPhilips, Sprint Nextel and P&G adding to disappointing corporate earnings flow.

Big UK corporate news out this morning includes the CEO of Anglo American stepping down after 6 years, which could affect sentiment among the big London-listed resources/mining groups, while African Barrick Gold has downgraded 2012 output forecast, reinforcing slowing global growth fears

In FX, GBP/USD off yesterday’s highs of 1.614 which coincides with 5-week trendline of resistance over falling highs. This could allow for a correction back to 1.59, supported by risk-off mood today seeing moves into safehaven of greenback, and despite speculation of US downgrade by Fitch and UK GDP reducing chances of more QE from the Bank of England (BoE) in November. EUR/USD still in 7-day downtrend, but now at 2-week lows (trading at 1.29 down from highs of 1.314, 6-week support not until 1.28) as fears over eurozone remain. GBP/EUR back at 2-week highs of 1.246 on eurozone concerns and lower possibility of BoE QE. Pause before another leg higher?

In commodities, Gold has tested that key $1700 level again as a result of the stronger USD. US Crude Oil still in retreat from last week ($93), testing 1-month lows of $85 again, on stronger USD and reduced global growth prospects. Brent Crude trading in similar fashion, bouncing off lows of $107 having fallen back from high of $114.5 early last week, with global growth issues overshadowing supply fears from geo-political uncertainty.

Today’s focus will be on the US GDP figure which is seen accelerating to an annualised 1.9% in Q3 from 1.3% in Q2, the latter having been revised down much more heavily than expected from the initial 1.7%, which cast gloom over the state of the US economy. Personal consumption is also seen improving, with consensus for growth at 2.1% since the last quarter, which supports the recent positive run of US consumer sentiment data, but Core expenditure is still seen slowing. Uni of Michigan sentiment data is expected to close the macro-economic data line-up for the week flat.

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Overnight Macro Data: (Source: Reuters/DJ Newswires)

  • Japan               Consumer Price Inflation                    Better
  • China               MNI October Business Sentiment       Improved
  • Germany          GFK Consumer Confidence                 Better
  • Germany          Import Price Index                               Lower
  • See Live Macro calendar for all details

 

UK Company Headlines: (Source: Reuters/DJ Newswires)

  • Berendsen Q3 trading in line with expectations
  • CPP says trading to slow in 2013
  • African Barrick downgrades 2012 output forecast
  • Elementis says full-year oper profit to be adversely impacted
  • Premier Oil extends timetable of exchange offer
  • Fenner buys Australian Conveyor Engineering
  • Anglo American says CEO Cynthia Carroll to step down

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

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