market commentary & day ahead

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UK Corporate Announcements

Centrica announces H1 sales gained 4% to £12bn and expects further earnings growth for the full year and states it will decide on Hinkley Point Nuclear by the end of the year

BG Group reports Q2 net profit of $283m from $1.24bn on sales of $5.57bn from $5.1bn as it books a $1.3bn non cash impairment, earnings ex items were $1.07bn from $1.12bn and largely in line

Moneysupermarket announces H1 adjusted EBITDA of £28.7m from £23m on net income of £8.8m from £8.8m on revenues of £102.2m from £91.7m

De La Rue states that its trading performance has been satisfactory and that its full year expectations are unchanged

Travis Perkins states that the exceptional weather conditions have impacted, and comp revenues are down 0.7%

AstraZeneca announces Q2 core EPS of $1.53 ahead of the forecasts of $1.39bn seen and maintains its full year forecasts

Unilever announces Q2 underlying sales growth of 5.8% ahead of the forecasts of 4.8% seen, on revenues of €25.4bn

Lloyds reports an H1 group underlying profit of £1.1bn from £349m and states that its impairment charge fell 42% and remains on track to meets its 2012 guidance

BSkyB reports a full year pre-tax profit of £1.19bn from £1.01bn and plans a £500m share buyback

ITV announces an H1 EBITA of £265m up 10% with external revenues up 10% to £1.13bn just ahead of the forecasts

National Express states that it expects H1 trends to continue into H2 as it reports an H1 pre-tax profit of £82m from £95.5m

Shell announces Q2 adjusted net profit of $5.7bn, against forecasts of around $6.3bn seen with oil products sales volumes up 4% from last year

Invensys states that it has made a satisfactory start to the full year


UK Market News

Fidelity and BlackRock are amongst the groups seen managing more than $7tn that are reportedly taking detailed investigations on whether to take legal action on the manipulation of Libor

David Cameron is to announce details of the 412.4bn planned regeneration of Battersea Power Station

The FT writes on how Carnwaith has resigned from the board of Barclay’s yesterday, with the paper writing that he was the director ‘responsible for Bob Diamond’s £17m final pay package’, while The Telegraph details that COO Missier received a pay-off of almost £9m when he resigned three weeks ago

The FT suggests that Manchester United has temporarily postponed its IPO plans reportedly due to the market volatility

The paper also writes that due to the double dip recession in the UK its AAA rating may come under pressure

British Immigration officers have called off planned strike action


UK Dividends

FTSE 100 Ex dividends (net): SSE, SSE, (56.10) FTSE 100 Ex dividend impact estimate: 1.4 points

FTSE 250 Ex dividends (net): Bankers Investment Trust PLC/The, BNKR, (3.30), Fenner PLC, FENR, (3.50), Investec PLC, INVP, (9), London Stock Exchange Group PLC, LSE, (19), WS Atkins PLC, ATK, (20.75)

FTSE Small Share Ex dividends (net): Artemis Alpha Trust PLC, ATS, (1.75), Throgmorton Trust PLC/The, THRG, (.62), Volex PLC, VLX, (.03)

UK Analyst Upgrades

British Land Pt Raised 2% To 610P At Exane; Kept At Outperform

Drax Raised To Neutral Vs Reduce At Nomura

Drax Raised To Neutral Vs Sell At Citi

UK Analyst Cuts

Capital & Counties Cut To Neutral Vs Buy At Ubs


UK Insider Buys

Sepura Ltd, (SEPU), 1 insider(s) bought 50,000 shares, £0.75

UK Insider Sells

Aveva Group Plc, (AVV), 3 insider(s) sold 17,763 shares, £17.82


Major European Companies Reporting

ABB Ltd, Q2, 0.359,  Aixtron SE NA, Q2, -0.069,  Alcatel-Lucent/France, S1, -0.03,   Banco Santander SA, S1, 0,  BASF SE, Q2, 1.487,  Bolsas y Mercados Espanoles SA, S1, 0,  Cap Gemini SA, S1, 1.04,  Casino Guichard Perrachon SA, S1, 1.805,   Christian Dior SA, S1, 0,  Cie de St-Gobain, S1, 1.595,  Clariant AG, S1, 0.34,  Dassault Systemes SA, S1, 0,  Deutsche Boerse AG, Q2, 1.067,  EDP – Energias de Portugal SA, S1, 0,  Ferrovial SA, S1, 0.1,  Fonciere Des Regions, S1, 2.66,  France Telecom SA, S1, 0,  ICADE, S1, 2.14,  Ingenico, S1, 0.535,  Intertek Group PLC, S1, 0.572,  ITV PLC, S1, 0.04,  Kemira OYJ, Q2, 0.206,  Lloyds Banking Group PLC, S1, 0.015,  Logitech International SA, Q1, -0.09,  Luxottica Group SpA, S1, 0.73,  LVMH Moet Hennessy Louis Vuitton SA, S1, 3.27,  Mapfre SA, S1, 0.15,  Metso OYJ, Q2, 0.641,  Nutreco NV, S1, 1.47,  Petroleum Geo-Services ASA, Q2, 0.165,  Pirelli & C. SpA, S1, 0,  PPR, S1, 3.963,  Puma SE, Q2, 2.468,  Randstad Holding NV, S1, 0,  Repsol SA, S1, 0,  Roche Holding AG, S1, 6.836,  Sanofi, Q2, 1.385,  Siemens AG, Q3, 1.549,  Sika AG, S1, 0,  Societe Television Francaise 1, S1, 0,  SSAB AB, Q2, 1.709,  Statoil ASA, Q2, 4.239,  Syngenta AG, S1, 16.977,  Technip SA, S1, 0,  Telefonica SA, S1, 0,  Telenet Group Holding NV, S1, 0,  Valeo SA, S1, 3.35,  Vallourec SA, S1, 0,  Volkswagen AG, Q2, 5.65,  Wincor Nixdorf AG, Q3, 0.447,  YIT OYJ, Q2, 0.323

European Market Summary

Moody’s continues to be the more proactive of the ratings agencies and states that it has cut Peugeot to Ba2 and states that it may yet be cut further

It also announces that it has changed its outlook on 17 German banking groups to negative

Telefonica announced late yesterday that it was cutting its 2012 revenue targets to at least flat growth, based on constant FX and details it was cancelling its dividend and share buyback for 2012

Italy is expected to sell up to €2.5bn in zero coupon bonds maturing in 2014

France Telecom’s Richard has confirmed that it has no DTE merger plans

Spanish 10 year yields moved up to highs of 7.751% yesterday

Alcatel Lucent announces today that it plans an additional 5,000 job cuts globally

Siemens today announces numbers under the forecasts and describes its outlook as stating that its previous full year targets now look ambitious

S&P 500 Companies Reporting

3M Co, Q2, 1.652, Inc, Q2, 0.034,  Ameriprise Financial Inc, Q2, 1.351,  AmerisourceBergen Corp, Q3, 0.694,  Amgen Inc, Q2, 1.548,  Ball Corp, Q2, 0.869,  Bemis Co Inc, Q2, 0.523,  BorgWarner Inc, Q2, 1.369,  Boston Scientific Corp, Q2, 0.103,  CA Inc, Q1, 0.604,  Cameron International Corp, Q2, 0.723,  Celgene Corp, Q2, 1.183,  Cerner Corp, Q2, 0.543,  Chubb Corp/The, Q2, 1.145,  Cincinnati Financial Corp, Q2, 0.109,  CME Group Inc, Q2, 4.123,  CMS Energy Corp, Q2, 0.366,  Colgate-Palmolive Co, Q2, 1.335,  CONSOL Energy Inc, Q2, 0.322,  Covidien PLC, Q3, 1.058,  Dr Pepper Snapple Group Inc, Q2, 0.818,  EQT Corp, Q2, 0.312,  Expedia Inc, Q2, 0.722,  Exxon Mobil Corp, Q2, 1.949,  Federated Investors Inc, Q2, 0.395,  FLIR Systems Inc, Q2, 0.313,  Gilead Sciences Inc, Q2, 0.956,  Hershey Co/The, Q2, 0.611,  International Paper Co, Q2, 0.459,  Interpublic Group of Cos Inc/The, Q2, 0.206,  Invesco Ltd, Q2, 0.431,  Iron Mountain Inc, Q2, 0.311,  Kimberly-Clark Corp, Q2, 1.278,  L-3 Communications Holdings Inc, Q2, 1.993,  Leggett & Platt Inc, Q2, 0.362,  McGraw-Hill Cos Inc/The, Q2, 0.76,  McKesson Corp, Q1, 1.481,  Mead Johnson Nutrition Co, Q2, 0.767,  MetroPCS Communications Inc, Q2, 0.222,  Moody’s Corp, Q2, 0.708,  Mylan Inc/PA, Q2, 0.549,  National Oilwell Varco Inc, Q2, 1.402,  NextEra Energy Inc, Q2, 1.153,  Noble Energy Inc, Q2, 1.013,  Occidental Petroleum Corp, Q2, 1.656,  Precision Castparts Corp, Q1, 2.361,  Principal Financial Group Inc, Q2, 0.739,  Prologis Inc, Q2, 0.416,  PulteGroup Inc, Q2, 0.057,  Raytheon Co, Q2, 1.225,  Republic Services Inc, Q2, 0.49,  Sprint Nextel Corp, Q2, -0.408,  Starbucks Corp, Q3, 0.454,  Starwood Hotels & Resorts Worldwide Inc, Q2, 0.614,  United Technologies Corp, Q2, 1.417,  Ventas Inc, Q2, 0.916,  VeriSign Inc, Q2, 0.451,  Vulcan Materials Co, Q2, 0.055,  Waste Management Inc, Q2, 0.528,  Watson Pharmaceuticals Inc, Q2, 1.38,  Zimmer Holdings Inc, Q2, 1.316

S&P 500 Ex Dividends (Gross):- Bank of New York Mellon Corp/The, BK, (.13), Unum Group, UNM, (.13), Covidien PLC, COV, (.225)

Major US Stock Movers After Hours

Zynga dropped a hefty 38% after hours as it announced a Q2 EPS of 1c against forecasts of 6c and as it cuts its full year forecasts, Facebook was down over 6% in late trading in sympathy and it reports its first quarterly numbers itself today

LogMeIn the remote PC connection services company fell 16.4% as it announces its sees Q3 revenues missing the targets, and full year coming in under the expectations

Visa gained 1.5% after it announces Q3 adjusted EPS of $1.56 ahead of the estimates of $1.45 and announces plans for a $1bn buyback

Synacor came off 15% as it now sees its full year results towards the lower end of the forecasted range

Western Digital moved over 15% higher as it reported a Q$ EPS of $3.35 well ahead of the forecasts of $2.45 seen

Akamai also gained over 15% as it details that cloud computing growth has buoyed its profits, allowing it to lift its full year targets

US Market News

The US reporting season continues apace allowing entire focus to stay away from the Eurozone issues

IBM announces that it is to sell 10 year bonds at a record low coupon of just 1.875%

Rambus has lost a case arguing that STMicroelectronics infringed upon one of its patents, it fell 5% after hours on the news

Citigroup states that it now sees a 90% chance that Greece will leave the euro, while Sanford Weill who helped created Citigroup has stated that now it is time to break up the larger banks to avoid additional bailouts

Overnight Market News

Canon has fallen over 11% overnight after it cuts its net income forecasts after the close yesterday

Terumo Corp announces a possible $640m merger with Olympus, as it looks to compete with existing plans by Sony Corp

Nomura’s CEO and COO are reportedly preparing to step down as the insider trading scandal continues

A sentiment indicator of global nervousness is the opening of new gold storage facilities and Hong Kong is due to open a new facility in September that could hold as much as 20% of the gold currently held at Fort Knox

The South China Post details how two mainland ‘activists’ have been sent to a labour camp after being arrested during the protest March in Hong Kong earlier this month, and it is the first time official documents state that participation in a protest of this kind is an offence

Chinese press details how Huawei Technologies has become the largest manufacturer of telecoms equipment in the world as it announces H1 revenues ahead of previous leader Ericsson

FX Summary

Overnight New Zealand as expected has left rates unchanged at 2.5%

The Canadian dollar has come off two week lows, on renewed talk of possible global central bank co-ordinated intervention

The pound fell against the euro yesterday as the ‘safe haven’ buyers that have switched into the currency in recent days exited on the surprise GDP news, and on increasing speculation that rates will be cut further and additional QE measures implemented

The yen has gained, as its traditional safe haven status sees continued inflows, and is up near 8 week highs

Economic Data Due

09:00 Eurozone June M3, 2.8% exp. 2.8% previous

13:30 US June Durable Goods, 0.4% exp. 1.1% previous

13:30 US Initial Jobless Claims, 380k exp. 386k previous

15:00 US June pending Home Sales m/m, 0.9% exp. 5.9% previous

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