morning round up and day ahead

6 mins. to read

UK Corporate Announcements

Britvic announces Q3 revenues fell 7.6%, 5.1% constant currency, impacted by the poor weather and product recalls and states it is reviewing its plans for 2013 and expects a reduction in its 2013 guidance

Kingfisher details Q2 LFL sales fell 0.4% stating the inclement weather affected sales, and expects gross margins to be down

Howden Joinery states that trading has been in line and details an operating profit of £29.1m on revenues of £364m

Mothercare announces that Q1 group sales fell 4.4% with total UK sales down 10.2% and states its cost cutting plan is on track

Halfords announces that its Group CEO is to step down, as it details LFL revenues fell 5.6% and expects continued negative LFL revenues for the remainder of the year

Sports Direct reports a full year pre-tax profit of £151.5m, from £118.8m on revenues of £1.84bn just ahead of the forecasts

Mitchells & Butlers states that it is well positioned to grow its business, but the consumer environment remains difficult as it details 42 week comparable sales gained 1.9%

Xaar announces that H1 margins have been slightly ahead of the expectations, due to deferring volume discounts into H2, with sales broadly in line

Ricardo states that its order book remains strong and sees full year profit at the upper end of the range of forecasts

Acal states that the difficult market conditions continued into Q2, but that orders improved into July

Hilton Food states that the trading environment remains challenging, but that its balance sheet remains strong

JJB Sports states that it is in talks with partners on funding after sales and margins are materially short of expectations and states it has a ‘lot of work to do

Kcom states that it has continued to perform well


UK Market News

Reports suggest that David Cameron is planning a cabinet reshuffle when the government returns from the summer break, while The Telegraph highlights how Cameron has suggested that austerity may well last until 2020

The UK states today that it is to review previously failed bids for bank licenses and seeks to shut ‘rogue’ payday-loan companies

Lloydhas now finalised the sale of 632 branches to Co-Op for an initial £350m, and a further performance based £400m

Manchester United is thought to be meeting with investors next week and could launch its $300m US IPO as early as next month

G4S will stay in focus after Ed Milliband states that its ability to deliver policing contracts should be reviewed before any more deals are signed

BP detailed yesterday that it has started a 90 good faith negotiations with Renova over selling its stake in TNK BP, and is willing to enter parallel talks with other interested parties

The yield on UK government two year notes fell to a record low of 0.168% yesterday, the lowest since Bloomberg started tracking the data in 1992

Rio Tinto states that it is to cut jobs at its Clermont Queensland coal mine citing the lower coal prices as the need for additional cost cutting

The UK sells £1.75bn in 2053 bonds at 10:30


UK Analyst Upgrades

BAT Rated New Overweight At Barclays, Pt 3,750P

Genus Rated New Buy At Goldman, Pt 1,750P

Hiscox Raised to ‘Sector Perform’ at RBC Capital

Imperial Tobacco Rated New Equal weight At Barclays, Pt 2,725P



UK Analyst Cuts

Aberdeen Asset Mgmt Cut to ‘Underweight’ at HSBC

BG Group Cut To Neutral From Outperform At Credit Suisse

Premier Foods Pt Cut To 100P Vs 250P At Morgan Stanley

Ultra Electronics Cut To Neutral Vs Buy At Goldman


UK Insider Buys

Mitie Group Plc, (MTO), 1 insider(s) bought 10,000 shares, £2.67


UK Insider Sells

Synergy Health Plc, (SYR), 2 insider(s) sold 26,250 shares, £9

Melrose Plc, (MRO), 1 insider(s) sold 182,190 shares, £0.84



Major European Companies Reporting

Actelion Ltd, Q2, 0.654,  Akzo Nobel NV, S1, 0,  Electrolux AB, Q2, 2.448,  Fortum OYJ, Q2, 0.28,  Husqvarna AB, Q2, 1.452,  Kone OYJ, Q2, 0.594,  Marine Harvest ASA, Q2, 0.033,  Modern Times Group AB, Q2, 6.677,  Nokia OYJ, Q2, -0.097,  Novartis AG, Q2, 1.34,  Sandvik AB, Q2, 2.042,  Skanska AB, Q2, 3.977,  Svenska Cellulosa AB, Q2, 1.986,  Tele2 AB, Q2, 2.485,  Trelleborg AB, Q2, 2.128



European Market Summary

Veolia announces it is selling its US Solid Waste unit to Highstar for $1.9bn, subject to regulatory approval

Deutsche Bank and SocGen are in the news on reports that regulators are looking at more serious allegations of collusion between its traders in the setting of Libor

The German government today debates aid for Spanish banks, while Deutsche Bank is the focus of speculation that it will need to increase its capital, after the moves from Credit Suisse yesterday

Spain is due to sell up to €3bn in 2014, 2017 and 2019 bonds today at 10:30, while France is to sell 2015-1017 notes at 11:00


Major US Stock Movers After Hours

IBM after hours announced an operating EPS ahead of the expectations and increases its full year outlook, and gained 3% after hours on the news

Qualcomm however has cut its full year targets but still traded higher in late trading as it detailed that consumers in emerging markets are increasingly trading up to smartphones

EBay gained over 5.5% as it announced solid earnings and as it confirms a $2bn share buyback program

Yum Brands sank 2% in late trading as Q2 numbers missed the expectations, citing higher wage bills in China

American Express detailed higher than expected Q2 EPS of $1.15 citing higher customer spending, but stayed largely unchanged in late trading as revenues just missed the forecasts



US Market News

The US reporting season continues apace, with the busy news flow allowing traders to shift their near term focus off the eurozone concerns

Viacom has stated that the talks with DirecTV have reached an ‘impasse’ comments which have resulted in DirecTV stating that the statement was inaccurate and that they were still ready to resolve the dispute

The Times writes on how global leaders continue to put pressure on Russia to drop their support of Assad, especially after three of his senior aides were killed in a bomb blast yesterday

The VIX has now fallen to its lowest levels since April


FX Summary

The yen has gained, as its traditional safe haven status remains the dominant story, ahead of the vote in Germany today on the bailout for Spanish banks

The Aussie dollar has also gained up to 11 week highs as the volatility in global markets continues to cool, making the higher interest rate nations increasingly attractive


Commodity Summary

The FT writes on how prices for UN backed carbon credits fell to a record low yesterday after concerns that the trading will get full EU backing and on ongoing concerns over the reliability and security of information in the market

Oil has continued the recent near term strength buoyed by US gasoline supplies falling by more than expected

India states that it may limit the amount of food crops that traders can stockpile after concerns that the worst monsoon in three years could drive prices higher

The Department of Agriculture has stated that the drought tin the Midwest could continue for the rest of the growing season


Economic Data Due

09:30 UK June Retail Sales, 0.4% exp. 0.9% previous

13:30 US July Initial Jobless Claims, 365k exp. 350k previous

15:00 US June Existing Home Sales, 4.62m exp. 4.55m previous

15:00 US June Leading Indicators, -0.1% exp. 0.3% previous



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