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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Johnson Matthey | 3300 | 91 | 2.8 | 7.3 |
| NMC Health | 3102 | 70 | 2.3 | 7.5 |
| Associated British Foods | 2891 | 63 | 2.2 | 2.5 |
| Sainsbury (J) | 256.2 | 5.3 | 2.1 | 6.1 |
| Just Eat | 806.2 | 16.2 | 2.1 | 3.2 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Fresnillo | 1378.5 | -49.5 | -3.5 | -3.5 |
| Rio Tinto | 4046.5 | -126 | -3.0 | 2.7 |
| Antofagasta | 1009.5 | -29 | -2.8 | 0.5 |
| BP | 518.3 | -14.4 | -2.7 | -0.8 |
| BHP Billiton | 1620 | -40 | -2.4 | 6.4 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,755.9 | -13.2 | -0.17 | 0.9 |
| UK | 20,877.3 | 44.5 | 0.21 | 0.7 |
| FR CAC 40 | 5,513.8 | 4.1 | 0.07 | 3.8 |
| DE DAX 30 | 13,246.3 | 45.8 | 0.35 | 2.5 |
| US DJ Industrial Average 30 | 25,792.8 | -10.5 | -0.04 | 4.3 |
| US Nasdaq Composite | 7,223.7 | -37.4 | -0.51 | 4.6 |
| US S&P 500 | 2,776.4 | -9.8 | -0.35 | 3.9 |
| JP Nikkei 225 | 23,868.3 | -83.5 | -0.35 | 4.8 |
| HK Hang Seng Index 50 | 31,868.5 | -36.3 | -0.11 | 6.5 |
| AU S&P/ASX 200 | 6,015.8 | -32.8 | -0.54 | -0.8 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 63.77 | -0.13 | -0.2 | 6.1 |
| Crude Oil, Brent ($/barrel) | 69.18 | -0.17 | -0.25 | 3.8 |
| Gold ($/oz) | 1335.05 | 0.95 | 0.07 | 2.5 |
| Silver ($/oz) | 17.14 | -0.20 | -1.16 | 1.6 |
| GBP/USD – US$ per £ | 1.3777 | – | -0.15 | 2.0 |
| EUR/USD – US$ per € | 1.2247 | – | -0.20 | 2.1 |
| GBP/EUR – € per £ | 1.1249 | – | 0.04 | -0.1 |
Click graph to enlarge
UK 100 Index called to open -20pts at 7735, after yesterday’s breakdown from January’s rising channel. It is, however, off its worst levels after 7715 kicked in as support for an overnight bounce. Bulls need a break above 7740; Bears require another test of 7715 to increase the chances of a bearish flag towards last week’s lows of 7688. Watch levels: Bullish 7740, Bearish 7715
Calls for a negative start come after small losses on Wall St, where strong post-long weekend gains evaporated by the close and led to a down day in Asia. Note oil prices off their highs as the USD finds support (easing of government shutdown concerns) and markets contemplate higher barrel prices attracting US shale producers to offset OPEC production cut efforts.
Australia saw profit-taking in heavyweight dual-listed miners (BHP Billiton, Rio Tinto) which continue to pull-back from recent multi-year highs. Recent USD weakness is unable to counter concerns about downstream metals demand from China while unhelpfully keeping GBP near post-referendum highs vs USD.
In UK corporate news this morning: Informa + UBM to create leading B2B Information Services Group; UBM shareholders to get 1.083 Informa shares + 163p cash. Pearson expects FY adjusted operating profit at upper end of guidance, adjusted EPS above; small charge from US tax cuts.
Burberry Q3 underlying retail sales +1%, comparable +2%, reported -2%; backs FY2018 operating profit guidance. Interserve being monitored by UK government after collapse of peer Carillion.
Beazley expects FY profits ahead of consensus; to report a combined ratio of 99% and an investment return of 2.9% on average invested assets of $4.8bn. Cineworld announces fully underwritten £1.7bn 4-for-1 rights issue to fund part of cash consideration of Regal Entertainment acquisition Faroe Petroleum awarded eight exploration licences in Norway.
US equity markets closed lower yesterday on their return to regular trading hours, with the Dow Jones wiping out a 240 point gain to notch its biggest one-day reversal since February 2016. United Technologies was the biggest laggard, reflecting tech weakness on both the S&P 500 and the Nasdaq, the former having traded above 2,800 for the first time earlier in the session while the latter was the notable underperformer of the day.
Note Bank of America Merrill Lynch and Goldman Sachs release Q4 earnings at approximately 11:45pm and 12:30pm, respectively.
Crude Oil benchmarks are trading lower overnight as the US dollar extends its recovery, however both Brent and US crude have found tentative support as the dollar finds resistance. Global benchmark Brent is trading back below $70, although is supported above $69.2, while US crude trades below $64 with support $63.6. The holiday-delayed API inventory data will be of note tonight (9:30pm).
In focus today will be Eurozone inflation (9.30am) for December, with potential knock on for inflation expectations and thus both the EUR and German DAX.
Eurozone Consumer Price Inflation (CPI) is forecast faster last month (0.4% vs 0.1% prev.), back to its highest since April ‘17, although the annual rate is expected to be confirmed slower at 1.4% for an eighth consecutive month of price growth of 1.5% or lower, and the 10th below the ECB's 2% target. The Core inflation measure is expected to be confirmed at 0.9% for a third straight month.
Thereafter, US Industrial and Manufacturing Production (2:15pm), with both prints seen improving a little in December, however, NAHB Housing (3pm) likely topped out from last month’s best in more than eighteen years (72 vs 74 prev).
It’s a much busier day for central bank speakers with the Bank of England’s Saunders (11:45am) followed by a trifecta of Fed contributors beginning with non-voters. Dallas Fed head Kaplan (8pm) and Evans take part in a discussion and Q&A session at a Life Insurance roundtable, while incoming FOMC voter Mester (9:30pm) discusses monetary policy communications in New jersey.
Note Bank of America (11.45am) and Goldman Sachs (12.30pm) report Q4 results today leaving just Morgan Stanley tomorrow, as markets continue to digest the updates from JPMorgan and Wells Fargo last Friday and Citigroup yesterday, all three having highlighted chunky one-time charges.
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