Spreadex Market Update
Friday, November 01, 2013 - Afternoon Market Update
Steady rise in US futures today
Yesterday appeared to find the bottom of negative investor sentiment in US markets with a steady rise in US futures today. Bulls appeared to be resurgent ahead of data this afternoon; Manufacturing PMI came in better than expected at 51.1 and the Dow opened up, better than forecast ISM manufacturing PMI continues to further bolster the US markets. The dollar has been strengthening this afternoon with the cable moving back below the 1.6 mark with the end to QE seen on the horizon. After the immediate volatility following the FOMC policy meeting and panic that tapering could occur towards the end of the year, sentiment seems to be that the surge of US markets has weathered a government shutdown and previous volatility over tapering and that it’s safe to jump back into equities.
The UK’s manufacturing PMI came in slightly worse than expected today but still showed solid growth, investors are interpreting this as a sign that the recovery might be gaining a broader base and has led to a positive day currently 22 points up. There is concern however that growth has been falsely inflated by soaring house prices and consumer demand with manufacturing PMI still 9% lower than it was pre-crisis. Never the less this is still seen as an encouraging sign.
On what is a rather slow day for the markets, Vodafone is one of few stocks enjoying high volume and is in fact the only equity trading over 2% higher this morning within the FTSE 100. This comes following reports last night that AT & T is considering a takeover of the phone company next year. American AT&T is keen to invest in Europe, and is believed to be working on plans for Vodafone's European operations should a deal be made.
Royal Dutch Shell Class B
Royal Dutch Shell stock had its “outperform” rating reaffirmed by equities researchers at RBC Capital in a research report issued today. They currently have a 2,520p price objective on the stock. RBC Capital’s target price points to a potential upside of 16.69% from the company’s current price.
Topping the list of FTSE 350 risers, the developer of intellectual property based businesses has reported on significant progress since its half year results. The group says it has completed a strategic investment in Cambridge Innovation Capital as well as signing a memorandum of understanding to share information on investment and co-investment opportunities in the Cambridge Cluster.
Rank Group’s shares have recovered somewhat during this morning’s session as the game operator applies for leave to launch an appeal in the UK’s Supreme Court after the Court of Appeal ruled yesterday in favour of her majesty’s Revenue & Customs in a dispute regarding the overpayment of VAT on gaming machines.
African Copper Shares have surged more than any other AIM listed share after the copper production & exploration company reported that own sourced production was 276,700 tonnes, up 37%, with strong sequential quarter on quarter growth; Mutanda up 28% and Katanga up 9%.
Falling further than any other FTSE 100 company, shares in Meggitt have taken a battering after lowering its full-year revenue guidance after several setbacks including production problems in the United States that hit third quarter trading. The supplier of avionics and wheels to planemakers Airbus and Boeing said it had experienced "production difficulties" at its Sensing Systems business and discovered a "raw material supply issue" dating back to 2012, which it has put 20 million pounds aside to cover.
Stock analysts at Deutsche Bank lowered their price target on shares of EasyJet from 1,610p to 1,560p in a report issued today. The firm currently has a “buy” rating on the stock. Deutsche Bank’s target price suggests a potential upside of 19.17% from the stock’s previous close.
F&C Asset Management
F&C Asset Management said its assets under management declined over the third quarter, as a result of net outflows and foreign exchange movements offsetting a good investment performance. F&C's assets under management declined 2.4% to £90.09 billion on September, as compared to the total recorded on July 1st.
2 founding shareholders of the company are offloading their 14% stake in the online gambling group worth more than £140M. The couple have agreed to move their 7.2pc stakes into trusts to be sold down within three years. They are also selling the stakes for “reasons of privacy”. Analysts said the move indicated that bwin was moving closer to starting internet gambling operations in New Jersey.
Invu shares have plummeted after the document management software provider announced its intention to get shareholder permission to cease trading on AIM because it doesn't see any further need to raise money through equity markets. The company has restructured and shrunk in recent years, part of a move to improve its profits and cash flow.
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If you are unsure what different Economic Figures mean take a look at our Economic Indicators Explained guide
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