Highlights of the Day
Asian Markets
Asian stock markets were mostly higher, though gains were modest following the slightly lower close overnight on Wall Street |
U.S. Markets
Finished lower after failing to defend intraday gains as investors struggled to adjust to an investment environment marked by both rising bond yields and signs of inflation. |
Today's News
Tesla has notched up its biggest ever quarterly loss and said it “learned many lessons” from its crucial Model 3 production plans. The firm’s future hangs on the Model 3 sedan, but it has so far struggled with production bottlenecks. Tesla reported a loss of $675.4m (£487m) in three months to 31 December, compared with $121.3m a year earlier. But it said revenues rose to $3.29bn, up from $2.28bn, and that it was addressing Model 3 production issues. “At some point in 2018, we expect to begin generating positive quarterly operating income on a sustained basis,” Tesla, which is yet to make a profit, said.
GlaxoSmithKline said its subsidiary ViiV Healthcare has filed patent infringement proceedings against Gilead Sciences Inc in the US and Canada. ViiV, which Glaxo majority owns alongside other shareholders Pfizer Inc and Shionogi Ltd, has filed the patent over bictegravir, a treatment for the HIV-1 infection.
Smith & Nephew reported a slight year-on-year rise in annual adjusted operating profit, in line with market expectations, and said that it will implement a business improvement program to save $160m. The company, which produces advanced wound management and orthopedic reconstruction products, added that performance in 2018 is anticipated to improve year-on-year due to a strong product portfolio and pipeline of innovative products.
Permanent job placements in the UK grew at the fastest pace in six months in January, the Report on Jobs compiled by the Recruitment and Employment Confederation and IHS Markit showed Thursday. Permanent staff placements increased at the quickest pace since July at the start of the year.
China’s exports grew more-than-expected on global demand at the start of the year, and imports surged as factories lifted stocks ahead of the holidays, data from the General Administration of Customs revealed Thursday. In dollar terms, exports advanced 11.1% year-over-year in January, faster than the 10.7% rise economists had forecast and a 10.9% rise posted in December. Imports surged 37% in January from a year ago, well above the expected growth of 11%.
Ashmore Group reported assets under management grew 18% to $69.5bn in the second half of 2017 underpinned by strong performance across emerging markets. For the six months through December 2017 period, the group reported net inflows of $7.9bn and positive market performance of $3.2bn. The group said its net inflows investment processes continued to deliver strong investment performance with 82% of AuM outperforming benchmarks over one year, 93% over three years and 87% over five years.
Talk Talk is temporarily cutting its dividend to 2.5p to fund its investment in growth and the roll-out of FTTP (fibre to the premises). The group said there will be a final dividend of 1.5p in FY18. FY19 will see an interim dividend of 1.0p and a final dividend of 1.5p. The group intends to return to a normalised dividend of 7.5p when leverage is reduced to 2.0x EBITDA.
Bellway said that first-half housing revenue is expected to jump more than 14% amid strong demand. Housing revenue for the six months to the end of January 2018 is expected to rise to around £1.3bn from £1.1bn in the same period a year ago, on housing completions of 4,741, up from 4,462, with all regions performing well.
Compass guided towards good growth for the full year after a strong start to the year, though the catering group said the first quarter was soured slightly by higher UK cost pressures. As a result of 5.9% organic sales growth, the group expects organic revenue growth will be “above the middle” of its 4-6% target for the full year. Currencies movements will have a £1.2bn effect on revenues for the full year, if current rates continue, with a £97m hit to operating profits.
The Murdoch-controlled 21st Century Fox has said it continues to expect UK approval of its Sky takeover, despite a provisional finding that the deal was not in the public interest. Chief executive James Murdoch said the firm was working with authorities to resolve concerns. Mr Murdoch made the remarks on a call with financial analysts to discuss the firm’s quarterly earnings. Last year, the firm struck a deal to sell assets, including Sky, to Disney.
AA said new members grew 7% for the year ended 31 January 2018, and expects to deliver earnings in line with guidance of between £390m and £395m. The rise in new members for the year comes despite the challenges of passing through insurance premium tax increases and the costs arising from regulatory changes. Retention for the year was broadly flat at 82%.
Millennium & Copthorne Hotels grew its group revenue per available room (RevPAR) by 7.9% to £82.78 in 2017, an increase of 3.2% in constant currency. For the fourth quarter of 2017, RevPAR fell by 1.1% to £83.88 in reported currency and increased by 1.2% in constant currency. Hotel revenue increased by 8.1% to £880m, driven by foreign exchange gains of £39m and full-year contributions from Millennium Hilton New York One UN Plaza (which re-opened in September 2016 after refurbishment) and Grand Millennium Auckland (which joined the group in September 2016).
Beazley reported profit before tax fell 43% to $168m in 2017 from $293.2m a year ago amid numerous natural catastrophes in the year that generated heavy claims for the insurance industry. The return on equity for the year to the end of December was 9% (2016: 18%) Gross premiums written increased by 7% to $2,343.8m and the combined ratio was 99% (2016: 89%)
Tate & Lyle said it remains on track to deliver progress in adjusted profit before tax for the year ending 31 March 2018, in line with guidance. In the three months ended 31 December 2017, it saw volume momentum in its Speciality Food Ingredients and Bulk Ingredients divisions. In Speciality Food Ingredients, the core business delivered good volume growth, including a continuation of modest volume growth in North America.
Gold remained near four-week lows on a firmer dollar amid expectations of more U.S. interest rate hikes.
Oil Prices largely reversed earlier falls as a North Sea pipeline outage and record Chinese imports countered U.S. crude production soaring past 10 million barrels per day.
Companies Reporting this week
Day |
Companies |
Tuesday: |
Ocado * BP * St Modwen * BNP Paribas * Munich Re |
Wednesday: |
Rio Tinto * Tllow Oil * Smurfit Kappa * GlaxoSmithKline |
Thursday: |
Beazley * Smith & Nephew * Total |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,229.9 |
-49.5 |
-0.7% |
UK 250 |
19,645.1 |
-46.5 |
-0.2% |
GER 30 |
12,508.5 |
-81.9 |
-0.7% |
FRA 40 |
5,231.5 |
-24.4 |
-0.5% |
U.S. 30 |
24,893.35 |
-19.42 |
-0.1% |
U.S. 500 |
2,681.7 |
-13.5 |
-0.5% |
OIL (BRENT) |
65.43 |
-0.08 |
-0.1% |
GOLD |
1,311.94 |
-6.45 |
+0.5% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
WPP |
1299.5 |
+38 |
+3.0% |
RSA Insurance |
612.6 |
+9.4 |
+1.6% |
AA |
145.4 |
+12.05 |
+9.0% |
Sage Group |
697 |
-17 |
-2.4% |
BHP Billiton |
1483.6 |
-28.6 |
-1.9% |
TalkTalk |
103.45 |
-16.25 |
-13.6% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Imperial Brands |
Deutsche Bank |
Buy |
2760 |
3400 |
GlaxoSmithKline |
Bernstein |
Market-Perform |
1285.4 |
1430 |
Randgold Resources |
HSBC |
Buy |
6214 |
7700 |
DCC |
JPMorgan |
Overweight |
7075 |
8380 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
12.00pm: U.K. BOE Inflation Report |
– |
– |
– |
12.00pm: U.K. MPC Official Bank Rate Votes |
0-0-9 |
0-0-9 |
– |
12.00pm: U.K. Monetary Policy Summary |
– |
– |
– |
12.00pm: U.K. Official Bank Rate |
0.50% |
0.50% |
– |
Sources
https://www.marketwatch.com/story/dow-poised-to-slide-give-up-chunk-of-rally-2018-02-07
https://www.nasdaq.com/article/asian-markets-mostly-higher-with-modest-gains-20180207-01734
https://www.reuters.com/article/us-global-oil/oil-reverses-falls-as-north-sea-outage-china-demand-outweigh-soaring-u-s-output-idUSKBN1FS05E
https://uk.reuters.com/article/global-precious/precious-gold-holds-losses-on-firmer-dollar-amid-rate-hike-views-idUKL4N1PY035
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1518076387726701000.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1518075930176684300.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1518074775836607000.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1518073229416309800.html
http://www.stockmarketwire.com/article/5848162/AA-memberships-grows-paid-members-decline-after-scrapping-free-roadside-membership.html
http://www.stockmarketwire.com/article/5848077/Millennium-Copthorne-struggles-amid-political-instability.html
http://www.stockmarketwire.com/article/5848063/Beazley-full-year-profits-fall-as-natural-catastrophes-generate-heavy-claims.html
http://www.stockmarketwire.com/article/5848023/Tate-Lyle-on-track.html
http://www.stockmarketwire.com/article/5848058/Ashmore-Group-AuM-grows-pretax-profit-falls.html
http://www.stockmarketwire.com/article/5848035/Talk-Talk-cuts-dividend-to-fund-growth.html
https://uk.webfg.com/news/news-and-announcements/bellway-sees-first-half-revenue-up-14-amid-strong-demand–3123297.html
https://uk.webfg.com/news/news-and-announcements/compass-points-towards-north-end-of-growth-targets–3123305.html
http://www.bbc.co.uk/news/business-42980841
http://www.bbc.co.uk/news/business-42984017