The Market Close - Bank of England split but favour the lower base rates - Collins Sarri Statham Investments

Today's Closing Update

U.S. shares were broadly lower in early trading as investors sized up the latest batch of earnings reports from retailers and other companies. Consumer-focused companies fell the most. Oil prices headed higher.

UK and European Shares were mixed as growing worries about U.S. President Donald Trump’s ability to move forward on policy issues such as tax reform and deregulation offset investor optimism over higher oil prices and UniCredit’s upbeat first-quarter results. Whilst british investors waited patientely for an MPC vote on QE and Interest Rates.

Bank of England policymakers decided to hold the record low UK interest rate, again in a split vote with one policymaker calling for a rate hike. The Monetary Policy Committee of the BoE, governed by Mark Carney, voted 7-1 to maintain the bank rate at 0.25%. Kristin Forbes sought a 25bp rate increase. All other seven members said the current monetary policy setting remained appropriate to balance the demands of the Committee’s remit. The committee also voted unanimously to maintain the asset purchase programme at £435bn.

Boeing has temporarily halted test flights of its new 737 MAX plane after finding issues related to the aircraft’s engine. Boeing had said that it would make its first deliveries of the 737 later this month, with clients including American Airlines and Southwest. Tests of the aircraft have been ongoing for several months, using engines that have been provided by a joint venture between General Electric and French firm Safran.

RBS’s CEO Howard Davies reiterated the bank’s target of returning to profitability next year, as he announced further one-off costs and said the Brexit process was unlikely to hit it as hard as peers. At the bank’s annual general meeting, Davies said the group expects to take further significant one-offs in 2017, particularly related to conduct and litigation charges and restructuring, leading to a bottom line loss at the end of the year before targeting a return to profitability in 2018.

TUI Group has announced plans for a major expansion into the Asian market, with a particular view to stepping up its operations in China. The Anglo-German firm said it was conducting a joint venture with Chinese partner CTS Group, in order to tap into the rising tourism levels from those in the East. “We are seeing new travel trends, in particular among young Chinese travellers. For a long time, the focus was on city breaks, culture and shopping. Young Chinese consumers are now discovering ‘Western-style’ sun and beach holidays, sports, wellness and relaxation”, TUI CEO Fritz Joussen said during a visit to China.

Snap, the recently-listed parent company of messaging app Snapchat, plummeted almost 25% in New York after its first ever quarterly earnings report. The tech firm reported a loss of $2.2bn during the period directly after its initial public offering in March, and is currently struggling to convince investors that its business model is profitable.

Aldermore Group reports a strong start to the year with continued strong progress on its strategic priorities and financial performance ahead of its expectations. The group saw strong customer-driven growth in the first quarter with organic new lending of around £1bn. It said net loans were up 6% at £7.9bn with growth driven by strong levels of new lending up 17% at £949m.

Rathbone Brothers has improved its total funds under management to £35.8bn at the end of its Q1, up 4.7% from £34.2bn at 31st December. In a trading statement for the period 1st January to 31st March, Rathbone said strong investment markets and continuing growth helped our funds under management grow. “Our investment businesses continue to perform well and activity is high across the group as we continue to progress towards our strategic goals,” the company said.

After receiving an unfavourable verdict from US drug regulators, Hikma Pharamceuticals and partner Vectura felt there was a “low likelihood” that their generic version of asthma treatment Advair would be approved this year. Hikma, the proposed manufacturer of the drug, and Vectura, the maker of the inhaler, received a Complete Response Letter from the US Food and Drug Administration categorised as ‘major’, which means the drug application will require significant amendments.

Jupiter Emerging & Frontier Income Trust said it has raised £90m in a share placing prior to its flotation on the London Stock Exchange, significantly below its original target of £200m. The trust, Jupiter Fund Management, said applications were received for 90m shares at 100p each. Of those, 55.1m were issued in an institutional placing, 20.2m in an offer for subscription and 14.7m in an offer to intermediaries.

Oil Prices traded comfortably above $50 a barrel after a fall in U.S. inventories and a bigger-than-expected cut in Saudi supplies to Asia helped tightened the market.

Gold rose as European and U.S. stock markets retreated, though it pared gains after data showing a tightening jobs market and accelerating inflation lifted the dollar and pulled U.S. bond yields from earlier lows.

Market Close

Market	Index	Change	% Change
UK 100	7,386.6	+1.4	+0.0%
UK 250	19,795.7	-81.1	-0.4%
GER 30	12,702.4	-55.0	-0.4%
FRA 40	5,380.8	-19.6	-0.4%
U.S. 30	20,854.27	-88.84	-0.4%
U.S. 500	2,386.9	-12.7	-0.5%
OIL (BRENT)	51.11	+0.89	+1.8%
GOLD	1,224.33	+5.23	+0.4%

UK Risers & Fallers

Company	Price	Change	% Change
Fresnillo	1503	+72	+5.0%
Polymetal International	1034.5	+39.5	+4.0%
Randgold Resources	7150	+250	+3.6%
Vectura	131.9	-13	-9.0%
Hikma	1795	-161	-8.2%
Centrica	192.2	-11	-5.4%

Reported Economic Data

Time/Date	Previous	Forecast	Outcome
11:00am: BOE Inflation Report	–	–	–
11:00am: U.K. Official Bank Rate	0.25%	0.25%	0.25%
12:30pm: U.S. PPI m/m	-0.1%	0.2%	0.5%
12:30pm: U.S. Unemployment Claims	238k	245k	236K