Highlights of the Day
Asian Markets
Most stocks in Asia traded slightly lower as markets processed new geopolitical uncertainty related to North Korea and the U.S. 10-year Treasury yield rising to its highest level in seven years overnight. |
U.S. Markets
A surge in U.S. government bond yields to their highest level in almost seven years sent Wall Street shares sliding after strong retail sales data stoked inflation concerns |
Today's News
North Korea on Wednesday threatened to abandon a landmark summit between leader Kim Jong Un and President Donald Trump if the US insisted that it completely abandon its nuclear weapons. “If the US is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the (North Korea)-US summit,” Kim Kye Gwan, Vice Minister of Foreign Affairs.
Paddy Power Betfair has said it is in talks over a merger in the US with fantasy sports site Fan Duel. Talks centre around combining its US operation with Fan Duel to create a business to “to target the prospective US sports betting market”. It comes as the American Supreme Court overturned 1992 legislation that banned sports betting in most US states.
Crest Nicholson Holdings said its full-year operating margin would be at the lower end of its prior forecast, as rising construction costs hurt pricing of its homes. Home sales at higher price points will continue to be impacted by a slow second-hand market and will likely to restrain overall price growth in the near term, the company said. “The experience of generally flat pricing against a backdrop of continuing build cost inflation at 3-4 percent will mean that operating margins for the full year are expected to be around 18 percent,” the company said.
Burberry reported annual profit rose 5% to £467m in the year to end of March, supported by retail growth, improve beauty profitability and cost savings. After stripping out the benefit of currency movements, adjusted profit before tax rose 2%, the firm said.
Micro Focus International said it expected to beat its recently-downgraded revenue guidance for the first half thanks to the closing of a large licence deal. The company, however, reiterated its revenue guidance for the full year. For the six months through April, Micro Focus said it expected to report revenues better than its guidance of a fall of 9-12% on a constant currency basis.
Mondi Group said first-quarter earnings grew 15% after higher average selling prices helped offset rising operating costs, maintenance disruptions and foreign exchange losses. The company, however, raised its guidance for maintenance cost disruptions for the full year.
Mitchells & Butlers has managed to produce a rise in like-for-like sales of 1.6% in the half year to the end of April. That’s no mean feat given the current state of consumer spending. But the firm admits it’s a tough market. Chief executive Phil Urban says its margins are being hit by higher costs “most notably from wage inflation, property costs, energy and food and drink costs”
National Express Group said revenue grew by 6.2% in the first fourth months of the year on a constant currency basis, boosted by a strong performance at its North American bus business. On a reported basis, revenue grew by 1.7%.
Cineworld said it expects to deliver full-year performance in line with expectations after reporting that revenue grew 10.1% supported by a strong film state that drove admissions. For the period from 1 Jan to 13 May, the firm said group admissions increased by 1.1% on a pro-forma basis, largely driven by the success of ‘Black Panther’ and ‘Avengers: Infinity War’ in the US.
Oil Prices fell, weighed down by ample supplies despite ongoing output cuts by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran.
Gold Prices recovered slightly after sliding to the lowest level this year in the previous session on surging U.S. bond yields and a stronger dollar.
Companies Reporting this week
Day |
Companies |
Monday: |
– |
Tuesday: |
DCC * Vodafone * Land Securities Group |
Wednesday: |
Burberry Group |
Thursday: |
3i Group * British Land * National Grid * Royal Mail * Sophos Group |
Friday: |
– |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7,727.3 |
+4.3 |
+0.1% |
UK 250 |
20,795.2 |
+10.3 |
+0.1% |
GER 30 |
12,985.7 |
+15.7 |
+0.1% |
FRA 40 |
5,546.6 |
-6.6 |
-0.1% |
U.S. 30 |
24,706.41 |
-193.0 |
-0.8% |
U.S. 500 |
2,711.45 |
-18.68 |
-0.7% |
OIL (BRENT) |
78.20 |
-0.23 |
-0.3% |
GOLD |
1,294.31 |
+3.78 |
+0.3% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Micro Focus |
1379.5 |
+110.5 |
+8.7% |
Anglo American |
1841.6 |
+39 |
+2.2% |
Allied Mind |
123.3 |
+5.1 |
+4.3% |
Centrica |
145.15 |
-3.25 |
-2.2% |
Barratt Developments |
560 |
-8.2 |
-1.4%
|
Crest Nicholson |
437.3 |
-56.5 |
-11.4% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
BHP Billiton |
JPMorgan |
Neutral |
1712.2 |
1650 |
Intercontinental Hotels |
Credit Suisse |
Outperform |
4714 |
5800 |
British American Tobacco |
Credit Suisse |
Outperform |
3826.5 |
5200 |
BT Group |
Bernstein |
Market-Perform |
206.8 |
215 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
1.30pm: U.S. Building Permits |
1.35m |
1.35m |
– |
3.30pm: U.S. Crude Oil Inventories |
-2.2m |
-1.1m |
– |
Sources
https://www.nasdaq.com/article/us-stockswall-st-drops-as-treasury-yields-surge-20180515-01481
https://www.cnbc.com/2018/05/15/asia-markets-us-bond-yields-stocks-dollar-and-oil-in-focus.html
https://www.reuters.com/article/global-oil/oil-dips-on-signs-of-ample-supply-despite-opec-cuts-iran-sanctions-idUSL3N1SN07N
https://uk.reuters.com/article/global-precious/precious-gold-prices-edge-up-on-short-covering-idUKL3N1SN1NV
http://www.stockmarketwire.com/article/5972936/Cineworld-sees-full-year-results-in-line-with-expectations-as-revenue-jumps-10pct.html
http://www.stockmarketwire.com/article/5972913/Burberry-annual-profit-up-5pct-amid-improved-retail-growth.html
http://www.stockmarketwire.com/article/5972909/Micro-Focus-International-to-beat-downgraded-first-half-revenue-guidance.html
http://www.stockmarketwire.com/article/5972900/Mondi-first-quarter-earnings-up-15pct-raises-maintenance-cost-guidance.html
http://www.stockmarketwire.com/article/5972894/National-Express-Group-revenue-up-1-point-7pct-boosted-by-America-bus-unit.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1526449449347156000.html
http://www.bbc.co.uk/news/live/business-44085189
http://www.bbc.co.uk/news/business-44136288
https://uk.finance.yahoo.com/news/crest-nicholson-cuts-full-operating-margin-forecast-063011142–sector.html?guccounter=1