Market Snapshot
European markets had moved little by midday Friday, with investors on pause ahead of a closely-watched speech from the Federal Reserve’s Ben Bernanke. The FTSE slipped lower, as economic worries overshadowed US corporate earnings.
At midday today, the FTSE 100 had lost 0.4% to 5,704 points, and the FTSE 250 stood at 10,836 points, down 0.4% as well.
Data released in the US yesterday revealed an unexpected increase in weekly jobless claims and a record trade deficit with China that sent the total US trade gap 8.8% higher to $46.4 billion in August.
US producer prices rose 0.4% in September--the third monthly increase in a row. Higher food and energy prices were primarily responsible as core inflation remained very low. Investors are eyeing inflation numbers to gauge how willing the Federal Reserve will be engage in another round of quantitative easing.
Fed Chairman Bernanke’s speech is scheduled for 1pm GMT. Other data due today includes the New York State manufacturing survey and retail sales.
In the eurozone, the trade balance swung to a deficit of EUR 4.3 billion in August 2010 from July’s EUR 6.2 billion surplus, as seasonally-adjusted imports rose 1.8% month-on-month versus an increase of just 1.0% for exports. Annual inflation came in at 1.8% in September, fuelled by transport costs, alcohol and tobacco, and housing.
Futures point to a timid start on Wall Street, though the Nasdaq is likely to find support following Google’s strong results after the close of US markets yesterday.
Market Risers
BT Group (BT.A), up 2.1%: BT struck a deal with the UK government to keep all its central government contracts in place, and reiterated its outlook
Rolls-Royce (RR.), up 1.7%: Broker upgrade
Royal Bank of Scotland (RBS), Lloyds Banking Group (LLOY), Barclays (BARC); up 1.3-0.7%: Banks bounce back after a couple of trading sessions in the red.
Resolution (RSL), up 1.2%: Buys Bupa Health Insurance; will be open to buying smaller yet "financially accretive" insurance companies.
Market Fallers
Old Mutual (OML), down 6.1%; RSA Insurance group (RSA), Standard Life (SL.), down 2.8-2.9%: HSBC ends discussions with Old Mutual regarding the potential purchase of the latter’s stake in Nedbank Group; Citiroup downgrades UK life insurance sector.
Xstrata (XTA), Kazakhmys (KAZ), down 2-2.7%: Miners down on profit-taking after gains in previous sessions.