Wednesday, March 16, 2016

MARKET COMMENTARY 16/3/16


The FTSE 100 is called to open 15 points higher at 6155.
UK Gilt 10 Year Yield 1.5368%, Spot Gold $1234.95+2.70 Brent Crude $39.30 +0.34
$ per £ 1.4108
$ per € 1.1091
€ per £ 1.2716
U.S. stocks slipped in light trading, with the Standard & Poor’s 500 Index posting back-to-back declines for the first time this month, as investors considered the capacity of central banks to boost global growth. The complexion of Tuesday’s retreat mirrored yesterday’s results, with commodity companies among the biggest losers, joined again by health-care and financial shares. Valeant Pharmaceuticals International Inc. plunged 51 percent after cutting its profit forecast. Apple Inc. added 2 percent amid positive analyst comments on iPhone sales, while baby formula maker Mead Johnson Nutrition Co. surged 11 percent on deal speculation.  The S&P 500 declined 0.2 percent to 2,015.93 at 4 p.m. in New York, trimming an earlier 0.7 percent slide. The Dow Jones Industrial Average added 22.40 points to 17,251.53, after erasing a 108-point decline. The Nasdaq Composite Index slid 0.5 percent, while the Russell 2000 Index sank 1.6 percent. About 6.5 billion shares traded hands on U.S. exchanges, 26 percent below the 2016 average. Yesterday’s session saw the fewest shares traded this year.
PRESS COMMENTARY  
Financial Times: Shares in Valeant lost half their value on Tuesday after the besieged Canadian drugmaker raised the prospect of defaulting on its $30 billion of debt and slashed full-year profit targets for the second time in five months.

The Daily Telegraph: The trigger for the next global recession is at last coming into view after a series of loud distractions and false alarms; the Atlanta Federal Reserve's gauge of "sticky-price" inflation in the US soared to a post-Lehman peak of 3% in February.
COMPANY NEWS
Deutsche Boerse AG and London Stock Exchange Group Plc agreed to merge, a deal that would create a titan of European trading as long as rival suitors don’t upend the agreement and regulators give it their blessing. LSE’s equity holders will own 45.6 percent of the enlarged group, while Deutsche Boerse stockholders will get the remaining 54.4 percent, according to a statement on Wednesday.

Smiths Group PLC (SMIN.LN) Wednesday reiterated its expectations for 2016 as it recorded a 28% rise in pretax profit and increased its dividend during the half year. The technology company said its pretax profit during the six months ended Jan. 31, rose to 168 million pounds ($241.5 million) from GBP131 million on revenue of GBP1.37 billion and GBP1.42 billion respectively.
Swiss Re requests authorization for share buyback program of as much as CHF1b, according to e-mailed statement. Proposes 8.2% increase in regular div. to CHF4.60/share.
U.K.-listed independent oil producer Tullow Oil PLC (TLW.LN) said Wednesday that the Cheptuket-1 well in Block 12A in Northern Kenya has encountered "good oil shows."
Volkswagen AG lost market share in Europe for the sixth month in a row as the German carmaker’s diesel- emissions scandal pushed buyers to the likes of Fiat Chrysler Automobiles NV, Mercedes-Benz and Ford Motor Co. Volkswagen’s brands accounted for 24 percent of new auto registrations in February versus 25.4 percent a year earlier, the ACEA, said Wednesday.

Sodexo Wins 10-Year A$2.5 Billion Contract From Rio Tinto. The French on-site services company said in an e-mailed statement that it was awarded a 10-year contract estimated at A$2.5, or $1.87 billion, to provide facilities management services at mining company Rio Tinto’s operations in Australia’s Pilbara region.
Cape 2015 statutory revenue GBP711.4m vs GBP690.5m year earlier. Co. releases preliminary results. Cape FY pretax GBP29.1m vs GBP30m. Cape sees mkt conditions to continue to weaken through 2016. Cape FY dividend maintained at 14p/share.
Allied-Bristol Life Sciences, a biopharmaceutical enterprise jointly owned between Allied Minds and Bristol-Myers Squibb Company, announced that it has launched a new subsidiary, iβeCa Therapeutics, to license proprietary compounds from NYU School of Medicine that target the Wnt signalling pathway.

Mead Johnson Shares Rise After Blog Speculation on Deal Interest. Shares of infant formula maker Mead Johnson Nutrition Co. rose as much as 11 percent Tuesday after a blog post on the Betaville website suggested that rivals Nestle SA and Danone might be interested in taking it over. Mead Johnson has started working with bankers from Lazard Ltd. after receiving expressions of interest from Nestle and Danone, according to the short blog post on Monday, which cited unidentified sources.
Price comparison website Moneysupermarket.com Group PLC's (MONY.LN) founder Simon Nixon is selling a 6.9% stake in the company. Source Quilter Cheviot

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