The Morning Call – US raises interest rates by a quarter point to 2%

Highlights of the Day

Asian Markets Asian stock markets were down in early trading, after the U.S. Federal Reserve raised interest rates and indicated two more rate hikes were coming later this year.

U.S. Markets U.S. stock benchmarks ended near session lows as the Federal Reserve completed its second increase to benchmark interest rates in 2018, as expected, but signaled a slightly more aggressive plan to tighten monetary policy this year than had previously been projected.

Today's News

The US Federal Reserve lifted interest rates by a quarter point to 2% and chairman Jay Powell signalled that two more increases are likely in 2018 amid accelerating growth and rapid job creation. Projections released after the Fed’s two-day meeting in Washington show policymakers expect the US economy will grow 2.8% this year, while unemployment falls to 3.6%.

 

Standard Chartered said it was setting up its latest global business services hub in the Polish capital of Warsaw, in the latest hit to London’s status as Europe’s premier financial centre. The new office, which is expected to open in September, will house a range of operations serving the lender’s growing European and U.S. client base, including technology and finance services, cyber security, as well as traditional banking activities.

 

Rolls-Royce said it would cut 4,600 jobs primarily in the UK as part of a plan to simplify its business and save £400m ($536 million) a year by the end of 2020. The engineering company said the job cuts and overhaul of its business would cost it 500 million pounds and be spread across 2018, 2019 and 2020. It will be reported as separate one-off costs, allowing it to stick to its targets for free cash flow.

 

Comcast Corp offered $65bn to lure Twenty-First Century Fox Inc away from a merger with Walt Disney Co, setting up a bidding war between two of the largest U.S. media companies with its 20% higher offer. Comcast Chief Executive Brian Roberts said he was highly confident regulators would allow Comcast to acquire most of Fox’s media assets after AT&T Inc’s court victory on Tuesday, which allowed it to buy Time Warner Inc for $85bn.

 

Aveva Group reported pre-tax profits fell 34.3% in the year through March, as costs related to the combination with the Schneider Electric industrial software business weighed down performance. For the 12 months to March 31, reported pre-tax profit fell 34.3% to £64.6m from £98.3m the previous year despite an 8.6% jump in revenue to £704.6m.

 

Oil Prices eased this morning, dragged down by rising output and a decline in China’s refining activity, although strong fuel consumption in the United States and a drop in its crude inventories provided some support.

 

Gold Prices remained steady after the second interest rate hike of 2018 was announced. The price was effected very little, hovering just over the all-important US$1,300-per-ounce mark.

Companies Reporting this week

Monday:	Games Workshop
Tuesday:	Halma
Wednesday:	Mulberry
Thursday:	Aveva
Friday:	–

Early Market Movements

UK 100	7,663.0	-40.7	-0.5%
UK 250	21,138.1	-94.8	-0.5%
GER 30	12,813.1	-77.5	-0.6%
FRA 40	5,428.8	-24.0	-0.4%
U.S. 30	25,201.20	-119.53	-0.5%
U.S. 500	2,775.63	-11.22	-0.4%
OIL (Crude)	76.39	-0.35	-0.5%
GOLD	1,302.84	+3.53	+0.3%

UK Risers & Fallers (8:15am)

Rolls Royce	854.2	+25.6	+3.1%
Glaxosmithkline	1561.6	+16.4	+1.1%
Aveva	2807	+275	+10.9%
Persimmon	2669	-137	-4.9%
Severn Trent	1850	-81	-4.2%
Petra Diamonds	59.55	-14.45	-19.5%

Latest Broker Views

Standard Life Aberdeen	Barclays	Overweight	350.2	440
Ashtead	HSBC	Buy	2372	2850
Halma	Berenberg	Buy	1435	1570
Ferguson	UBS	Neutral	6045	3550

Forthcoming Economic Data

9.30am: Retail Sales m/m	1.6%	0.5%	–
12.45pm: European Main Refinancing Rate	0.00%	0.00%	–
1.30pm: Core Retail Sales m/m	0.5%	0.3%	–

 

Sources:

https://uk.reuters.com/

http://www.stockmarketwire.com/

http://www.digitallook.com/