Today's Closing Update
U.S. shares advanced on, after the release of prepared congressional testimony by Federal Reserve Chairwoman Janet Yellen, who said that interest rate increases will be gradual and would not need to rise all that much further.
European and U.K. shares finished on a buoyant note as investors digested the latest comments from Federal Reserve Chair Janet Yellen in the U.S., while wading through corporate earnings results.
UK unemployment fell by 64,000 to 1.49 million in the three months to May, official figures show. It meant the unemployment rate fell by 0.2% to its lowest since 1975, at 4.5%, the Office for National Statistics (ONS) added. But wage increases continued to fall further behind inflation. Excluding bonuses, earnings rose by 2.0% year-on-year. However, inflation had hit an almost four-year high of 2.9% in May. When the impact of inflation is factored in, real weekly wages fell by 0.5% compared with a year earlier.
The proposed purchase by supermarket giant Tesco of wholesaler Booker is to be subjected to an in-depth probe, UK competition authorities have said. The Competition and Markets Authority (CMA) says there are concerns over the proposed £3.7bn tie-up. The CMA said there are 350 areas where there is an overlap between Tesco shops and Booker-supplied independent stores. It said the deal could be bad for shoppers in those areas because of reduced competition. The CMA said that if the deal were to go through, potentially, Booker could offer inferior wholesale terms to the stores it currently supplies, “in order to drive customers to their local Tesco”.
Royal Bank of Scotland has agreed a settlement with US regulators of $5.5bn (£4.2bn) to resolve claims over its issue of residential mortgage-backed securities in the run-up to the financial crisis, though Of the $5.5bn that RBS will pay to FHFA, $754m will be reimbursed to RBS under indemnification agreements with third parties. RBS will need to make an extra $196m (£151m) charge in its second-quarter results for 2017 in order to cover its total cost $4.75bn cost, having as of 31 March held provisions of $8.3bn against RMBS, of which $4.55bn related to FHFA.
Spire Healthcare is now in the crosshairs of its major shareholder, Mediclinic International, according to a report. According to Wallstreetwires’s Zak Mir, rumours indicate that Mediclinic, which already owns 29.9% of the private healthcare provider, was now minded to take over the entire company. Last year, analysts at JP Morgan Cazenove reportedly suggested Mediclinic might offer a 35% premium for the whole of Spire. Previously, the rumour mill had bandied about the possibility that Mediclinic might be willing to pay a 30% premium, in conjunction with Morgan Stanley, Mir said.
The Federal Reserve will continue to tighten its monetary policy as falling unemployment on expectations for further moderate growth in the economy, the head of the central bank said. Policymakers also still thought it likely that they would start to unwind the Fed’s balance sheet in 2017, as long as their projections for growth panned out. In remarks prepared for her semi-annual report to Congress, US central bank chair Janet Yellen pointed out that the unemployment rate had fallen “modestly” below the Fed’s estimate of its sustainable long-term level.
Sales accelerated at SSP Group, which operates food and drink outlets in airports, train and motorway service stations for the likes of Burger King, Starbucks and Upper Crust, in the third quarter, which was slightly ahead of management expectations.
Revenues swelled 21.7% in the three months to 30 June or by 14.6% if the effect of the weaker pound is ignored, which was an improvement from the respective growth rates of 19.6% and 8.1% in the first half of the year.
Oil prices continued to move higher, riding on optimism that U.S. crude inventories likely shrank again last week.
Gold prices moved toward a third-straight advance, maintaining their short-term boost from a weaker dollar and U.S. political uncertainty
Market Close
Market |
Index |
Change |
% Change |
UK 100 |
7416.9 |
+87.2 |
+1.2% |
UK 250 |
19,267.9 |
+52.5 |
+0.3% |
GER 30 |
12,641.0 |
+203.9 |
+1.6% |
FRA 40 |
5,229.3 |
+88.7 |
+1.7% |
U.S. 30 |
21,526.80 |
+117.73 |
+0.6% |
U.S. 500 |
2,441.7 |
+16.2 |
+0.7% |
OIL (BRENT) |
47.74 |
+0.22 |
+0.5% |
GOLD |
1,220.92 |
+3.20 |
+0.3% |
UK Risers & Fallers
Company |
Price |
Change |
% Change |
Evraz |
233.55 |
+11.4 |
+5.1% |
Mediclinic |
742.5 |
+33.5 |
+4.7% |
Burberry Group |
1630 |
+50 |
+3.2% |
Carillion |
58.05 |
-20.7 |
-26.6% |
Micro Focus |
2020 |
-178 |
-8.1% |
Pearson |
624 |
-31 |
-4.7% |
Reported Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
9:30am: U.K. Average Earnings Index 3m/y |
2.1% |
1.8% |
1.8% |
9:30am: U.K. Unemployment Rate |
4.6% |
4.6% |
4.5% |
3:00pm: U.S. Fed Chair Yellen Testifies |
– |
– |
– |
3:30pm: U.S. Crude Oil Inventories |
-6.3m |
-3.2m |
-7.6m |
Sources
http://www.marketwatch.com/story/us-stock-futures-in-holding-pattern-as-traders-wait-for-yellen-2017-07-12
http://www.cnbc.com/2017/07/12/european-markets-set-to-open-higher-investors-await-data-and-earnings.html
http://www.bbc.co.uk/news/business-40579058
http://www.bbc.co.uk/news/business-40579523
https://www.digitallook.com/news/news-and-announcements/rbs-settles-with-us-regulator-over-mortgage-backed-securities–2766579.html
https://www.digitallook.com/news/m-a/rumours-resurface-of-takeover-bid-for-spire-healthcare–2766680.html
https://www.digitallook.com/news/international-economic/fed-still-set-to-tighten-yellen-says–2766626.html
https://www.digitallook.com/news/news-and-announcements/ssp-sales-speed-higher-in-third-quarter–2765539.html
http://www.marketwatch.com/story/oil-extends-gains-after-upbeat-us-production-data-2017-07-12
http://www.marketwatch.com/story/gold-tries-for-third-straight-win-as-investors-settle-in-for-yellens-policy-update-2017-07-12