The Market Close – Could Trump give us all a lesson in diplomacy as he starts his roadshow today?

Today's Closing Update

U.S. shares suffered $8.9bn outflow as the trail of debris in Donald Trump’s wake built. Investors ditched almost $9bn of U.S. equities as political turmoil in Washington built up in the past week, Bank of America Merrill Lynch figures.

 

European and U.K. shares rose, timidly recovering from heavy losses suffered this week after political turmoil fuelled worries over U.S. President Donald Trump’s stimulus plans, denting appetite for riskier assets.

 

The US plans to start talks with Mexico and Canada over Nafta “as soon as practicable”, the Trump administration said. The letter to congressional leaders provided formal notice of the administration’s intent to move forward with a campaign pledge to reform the 1990s trade deal. Mr Trump earlier threatened to end the agreement, calling it a job “killer”. Thursday’s letter said the deal needs “modernisation”. In 2016, Canada and Mexico were America’s second and third-largest trade partners after China. US trade with the two countries has more than tripled since Nafta went into effect in 1994, with more than $1tn goods and services exchanged each year.
Smiths Group’s Chief Financial Officer Chris O’Shea has resigned in order to “pursue his career outside the group”. Non-Executive Director Bill Seeger has been appointed interim CFO with immediate effect. Seeger was previously finance director of engineering group GKN. Smiths Group said O’Shea will be available for up to six months to ensure a smooth handover, and has now commenced the search for a permanent replacement. The company added that current trading and its outlook remain in line with previous guidance.

 

Rio Tinto said it will seek shareholder approval next month for the proposed sale of Coal & Allied Industries to Yancoal Australia under the deal struck in January.  Rio Tinto will hold a general meeting on 27th June in London, and shareholders of Rio Tinto will also need to approve the deal at a meeting in Sydney on 29th June. Yancoal, owned by China’s Yanzhou Coal Mining Co, agreed to buy Coal & Allied Industries which houses Rio Tinto’s thermal coal business in the Hunter Valley region of New South Wales for up to $2.45bn and possible future royalties.

 

Safestore Holdings, up 3.5%. The self-storage provider said it will refinance its US private placement notes as well as amending its existing bank facilities, with the intention to extend the average maturity and lower the cost of the company’s debt financing. Considering the US private placement notes, the existing notes of $65.6m at a coupon of 5.83% due in 2019 and $47.3m a coupon of 6.74% due in 2024 will be repaid in full. The new notes comprise 7-year notes worth €50.9m at a coupon of 1.59%, 10-year notes worth €74.1m at a coupon of 2%, and 12-year notes worth £50.5m at a coupon of 2.92%. The existing UK and Euro revolving credit facilities have been extended by two years from June 2020 to 2022, with an option to extend for another year, while the existing £126m loan has been cancelled.

 

Revenue at Alibaba jumped 60% in the first three months of the year, powered by a growing customer base in China. More than 450m Chinese shoppers used its sites during the quarter, with the average annual spending up by about a third, Alibaba said. The growth pushed revenues for the period to $5.6bn. But investors weren’t satisfied, sending shares down 3%. Alibaba, started by billionaire Jack Ma, is the dominant online retailer in China.

 

Oil Prices were heading for a second week of gains on growing expectations that big crude exporters will extend output cuts to curb a persistent glut in inventories.

 

Gold rose and was on track for its best week in five as the dollar softened on political turbulence in the United States, boosting bullion’s safe-haven appeal.

Market Close

Market	Index	Change	% Change
UK 100	7,470.7	+34.3	+0.5%
UK 250	19,812.8	+121.2	+0.6%
GER 30	12,638.7	+48.6	+0.4%
FRA 40	5,324.4	+34.7	+0.7%
U.S. 30	20,796.18	+133.16	+0.6%
U.S. 500	2,384.1	+18.3	+0.8%
OIL (BRENT)	53.56	+1.05	+2.0%
GOLD	1,253.59	+6.52	+0.5%

UK Risers & Fallers

Company	Price	Change	% Change
Senior	237.95	+14.5	+6.5%
Micro Focus	2472	+64	+2.7%
Anglo American	1093	+26	+2.4%
Hays	166.4	-6.9	-4.0%
Smiths Group	1584	-45	-2.8%
Land Securities	1069	-23	-2.1%

Reported Economic Data

Time/Date	Previous	Forecast	Outcome
10:00am: CBI Industrial Order Expectations	4	4	9
2:00pm: E.U. Consumer Confidence	-4	-3	-3

 

Sources:

http://www.bbc.co.uk/news/business-39966078