1630: Close The FTSE has ended the week marginally higher, despite the NIESR warning that ill-timed fiscal consolidation in Europe and other external risks continue to pose risks to the UK economy this year. The British economy is consequently now expected to grow by 0.1% this year, which marks a slight upwards revision on its previous forecasts. IAG was higher after technical analysts at Charles Stanley said "a close above 168p would suggest that this line is giving way and would amount to a 'trading buy' signal." The stock closed at 169.10p. Ending the day in the bottom spot was Admiral, which dropped after seeing a 2% decrease in third-quarter turnover. The FTSE 100 ended the week at 5,869.
1530: The Footsie continues to swing between gains and losses as markets digest the US jobs report. The index is just one point up on the day at 5,863. Banks are continuing to limit gains for the benchmark after RBS disappointed with its third-quarter figures this morning. Nomura maintained its 'reduce' rating on the stock today saying that while adjusted profits were ahead of expectations, the beat was due to 'low quality income'. Sector peer HSBC was also under the weather after the Financial Stability Board said that it (along with Citigroup, Deutsche Bank and JPMorgan Chase) must hold additional capital in order to be able absorb possible losses.
1423: Gains on the Footsie have now been erased after the initial spike on the back of the better-than-expected US jobs report. While analyst Michael Gapen from Barclays Research acknowledged that the data was strong, and upwards revisions to previous months added 'more lustre to an already-solid report', he did highlight some reservations going forward: 'The labour market, in our view, is exhibiting good momentum heading into Q4, although we would not be surprised to see some volatility in upcoming jobless claims and payrolls as a result of Hurricane Sandy. We do not see the momentum in hiring and decline in the unemployment rate in recent months as changing the calculus for the Fed at this stage.' The FTSE 100 is now down two points at 5,860.
1330: Royal Bank of Scotland (RBS) is now in the red after an initially positive response this morning to its third quarter trading update. The state-owned bank still holds a chunk of Direct Line Insurance, which issued its first trading update since being spun off from RBS last month, and its prospects of getting a good price when it floats the rest of its stake in the insurer will not have been improved by Direct Line's disappointing update. FTSE 100 is up 19 at 5,881.
1230: The Footsie has spiked higher following the release of the latest employment data Stateside. US non-farm payrolls rose by 171,000 last month, well above the 125,000 expected by the market consensus. The unemployment rate did increase, by a tenth of a percentage point, to 7.9 per cent, but this was expected.
1220: Former Bank of England Deputy Governor John Geive is being cited as having said that the MPC will hold off on further expanding stimulus next week.
1111: Goldman seems to like Croda quite a bit. Here´s their take on the current state of affairs at the specialty chemicals manufacturer: "While a negative reaction is understandable, we note that the shares
are down nearly 15 per cent relative to Stoxx Europe 600 Chemicals index in the last month. We would view any weakness as an opportunity to buy a 2020 Vision Leader at a depressed valuation. Croda trades at 8.6 times estimated 2014 EV/EBITDA versus a historical average of 9.5 times despite stronger returns relative to history. Our 12 month price target moves to 3150p (from 3340p) and is based on an 11.5 times estimated 2014 EV/EBITDA." Goldman also reiterates its Conviction Buy on the shares of the company. FTSE 100 down 3 to 5,859.
1110: Shares in luxury brand Burberry are making gains ahead of its first-half results on November 7th. Seymour Pierce has raised its target price and maintained its 'buy' rating this morning, saying that risks to forecasts are now 'on the upside'. Tullow Oil is also being boosted by some broker commentary: JPMorgan Cazenove raised its target on the stock to 'overweight' this morning.
1047: Technical analysts at Charles Stanley are continuing to track the progress -or lack thereof- by shares of International Airlines Group. More specifically, the company´s shares are now up against their downtrend-line of the past 24 months approximately, they comment. This is what they are saying: "A close above 168p would suggest that this line is giving way and would amount to a 'trading buy' signal." They also point out that BSkyB needs to break technical resistance at 770p while Croda´s charts continue to point to weakness. "However, the outlook remains pretty unclear and further weakness in the near term still seems like a realistic expectation," they say of the chemicals maker. FTSE 100 flat at 5,862.
1034: In today´s Financial Times James Mackintosh tells readers that recent market moves -rises led by cyclicals- show that there is quite some optimism as regards economic growth. In his opinion, however, that is only justified if one believes that central banks have more ammunition left in their armouries -or not- as Governor King has recently suggested. Other considerations to be taken into account by the shortest-term investors and traders, comment analysts at Digital Look, are that the last two months of the year are usually amongst the best for equities and the still relatively ´bearish´ sentiment of small investors, according to the latest weekly survey data out from AAII.
0930: The UK Markit construction PMI for the month of October has come in at 50.9, versus 49.5 for the previous month. The consensus estimate was for a reading of 49. Credit Suisse has raised its view on shares of Croda to neutral, from underperform, with a price target of 2100p. Goldman Sachs on the other hand has this morning reduced its price target on the company´s shares.
0907: This is a snippet of what Credit Suisse is saying today as regards the UK water sector: "We view United Utilities (Underperform, price target: 610p) as the most vulnerable of the three listed water companies. We are also negative on Pennon (Underperform, price target: 690p), where we see both subsidiaries (water and waste) under pressure. Severn Trent (Neutral, TP 1,630p) is exposed to the same regulatory uncertainty, but we believe its low cost retail cost base and its arms-length services subsidiary could mitigate downside from regulatory changes. The potential for a large-scale takeover remains the greatest upside risk to UK Water." FTSE 100 down 11 to 5,851.
0903: It would seem that retail sales in the UK have not been tracking very well in the last two weeks. Thus, analysts at Seymour Pierce are this morning indicating to clients that: "A weaker performance than recent trends again with department store sales up 4.3 per cent as numbers were affected by a comparison against last year's half term. Interestingly, on-line remained strong with sales up 39 per cent. (...) A similar picture was reflected across the High Street with the BDO sales tracker reporting LFL sales down 3 per cent. Fashion and home-related stores were badly hit."
0900: Eurozone manufacturing sector purchasing managers index fell to 45.4 in October, from 45.7 in the month before, but even so managed to beat expectations for a reading of 45.3. Jefferies has downgraded its view on shares of Weir to hold.
0811: The initial market response to the third quarter update from nationalised lender Royal Bank of Scotland (RBS) has been positive, although that could change as the morning wears on, with the group's Regulatory News Service announcement being so lengthy it had to be published in seven parts. RBS followed its sector peer Lloyds in making further provision for the potential fall-out from the mis-selling of payment protection insurance (PPI), adding 400m quid to the PPI pot. This provision was dwarfed, however, by a 1.46bn pound adjustment reflecting the increased theoretical cost of buying back the group's corporate debt. In contrast, car insurer Admiral is softer in the early going after it saw growth slow down in the third quarter. All of the above ahead of this afternoon´s employment report Stateside. FTSE 100 is down 13 at 5,849.