Wednesday 2 January 2013
QUOTE OF THE DAY
"Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man"
- Benjamin Franklin
THIS MORNING IN LONDON
FTSE 100
6,030.24
132.43 2.25%
FTSE 250
12,619.80
244.83 1.98%
FTSE 350
3,226.71
69.73 2.21%
FTSE All Share
3,160.95
67.54 2.18%
AIM 100
3,209.87
42.10 1.33%
AIM All Share
714.79
7.58 1.07%
13:00 pm
THOUGHT FOR THE DAY
Hello Share Folk,
As I write this, the American fiscal cliff crisis has almost been resolved. I’m told all sorts of frantic talks are going on to try and secure a deal between the Republicans and the Democrats, so we should get some sort of resolution pretty soon, I would have thought.
There comes a time when playing with politics has to give way to common sense to get the USA out of a big mess. Their stock markets have already been hit by the crisis and they might even go into a major panic if nothing is forthcoming.
CLICK HERE for the full article
TIP OF THE DAY
Over the festive period Zak Mir, perhaps the UK’s most well know technical analyst, is posting extracts of his new eBook Lessons From The Financial Markets For 2013.
Burberry – China Proxy
From a trading perspective the attractions of Burberry, over and above any modelling Emma Watson may being doing for the luxury goods group, is that it is not difficult to regard the shares as being a China hard landing proxy. In fact, while I am a fan of the company on a fundamental basis as a long-term growth story, it remains vulnerable to any hiccups in the Far East, and having wobbled already on the profits warning front you cannot help but think there is at least another one on the way, particularly if the Fiscal Cliff situation and/or China stimulus measures cannot keep GDP growth at 7% plus per annum.
CLICK HERE for the full article
THIS MORNING IN LONDON
Markets welcome fiscal cliff deal with two per cent surge
- US leaders pass budget deal to avert fiscal cliff
- Mining and banking stocks celebrate with decent performance
- UK manufacturing ends 2012 on a high
Mining stocks were registering impressive gains on Wednesday in the aftermath of the US fiscal cliff agreement, which could have plunged the world economy back into recession.
"Immense New Year relief rally for global financial markets following the passage of a bill in the US to avert the full force of the fiscal cliff," said market strategist Ishaq Siddiqi from ETX Capital.
"2013 has kicked off with a bang with bulls in full control of price-action – the risk rally sees all your traditional investments in vogue [stocks EUROSTOXX making 16-month high, euro, commodities, peripheral bond yields, banks, miners et al] while core government bonds and US Treasury’s take a beating."
London's blue-chip index, the FTSE 100, broke through the psychologically-important level of 6,000 in morning trade, rising over 2% on the day. The last time the Footsie closed higher was at the end of April 2011. Nevertheless, the largest technical hurdle will come in towards the 6,100 point level, add analysts at Digital Look.
Despite the above, the fiscal headache is far from over as talks over spending cuts (the so-called sequestration) go on and the US Treasury announced the country has hit its borrowing limit again.
"The fiscal measures are estimated to be worth around $600bn in additional revenue over 10 years. However, the precise nature of spending cuts is yet to be agreed: the bill delays the start of automatic sequestration by an additional two months," Barclays Research adds.
Manufacturing data comes in mixed
UK manufacturing finished 2012 on a positive note after hitting a 15-month high in December. The Markit purchasing manager’s index (PMI) rose back above the 50.0 no-change level in December, beating expectations by registering 51.4. Economists had pencilled in a contraction in activity, with a consensus estimate of 49.1.
Commenting on the data economists at Barclays had this to say: “The PMI survey has been painting a more downbeat picture of the manufacturing sector than official data in recent months and, despite the improvement in December, the gap between the two remains sizeable. (…) We expect manufacturing to experience only a slow recovery this year (0.5% annual growth).”
In contrast, manufacturing figures from the Eurozone weren't so cheery: the Markit PMI for December was revised down to 46.1 from the 46.3 flash estimate. The consensus estimate was for no change.
FTSE 100: Miners surge in London
Riskier assets in the resource sectors were among the best performers in London this morning. Mining peers EVRAZ, Vedanta, Glencore, Rio Tinto, ENRC, Xstrata and Kazakhmys were all making gains of at least 5%.
Meanwhile, banks were also in demand with Barclays the standout performer after Investec hiked its target price from 260p to 285p and hailed the lender as its "preferred UK domestic bank". Despite an impressive 79% rally over the past five months, the broker said that the shares are still trading "only in line with loss-making RBS and at a peculiar discount to Lloyds". These latter two banks are rated 'sell' by Investec.
Oil giant BP rose after announcing the "successful start of production" at the Skarv field in the Norwegian Sea, adding new output from one of its core higher-margin areas.
Sector peer Shell was subdued on reports that its Kulluk drilling rig has ran aground off the coast of Alaska after being caught in a storm.
Engineering support services firm Babcock was higher after saying that it has acquired liquid gas plant unit LGE Process from Weir for £23m.
Just three stocks on the blue-chip index were in the red today as defensive sectors like tobacco and supermarkets bear the brunt of the increase in risk appetite. British American Tobacco, Morrison and Sainsbury were all stuck in the red.
CLICK HERE FOR THE DAY'S FASTEST MOVING STOCKS
WHAT THE BROKERS SAY
Jefferies has slashed its target price for temporary power and temperature control solutions group Aggreko by over a fifth from 2,535p to 2,000p following the group's pre-close update.
Panmure Gordon has highlighted ASOS and Dunelm as its 'conviction buys' in the UK retail sector ahead of the critical Christmas reporting season in the next few weeks.
Barclays was performing well on Wednesday morning after Investec hiked its target price from 260p to 285p and hailed the lender as its 'preferred UK domestic bank'.
Click here for the rest of the broker recommendations
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
LAMPRELL (LAM) - Now have Main Market Quote.
DDD group
B P (BP.)
STANDARD CHARTERED (STAN)
Corac (CRA) In the smelly business.
Click here to discuss shares with other ShareCrazy members
Regards,
ShareCrazy
No comments:
Post a Comment