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Souring Economic Outlook Leaves Traders Unsettled
– The major U.S. index futures are pointing to a sharply lower opening on Monday, with sentiment reflecting extreme negativity following the souring of the economic outlook. Many economic indicators released from across the globe have pointed towards a definitive soft patch. The job market in the U.S. is not taking off and manufacturing activity is left limping from geopolitical shocks.The negativity may leave traders unsettled as they are left staring at a muted and frail economic outlook.
U.S. stocks extended their gains in the week ended July 8th, with the markets staying afloat despite Friday’s bleak non-farm payrolls report on the support lent by some fairly positive data released earlier in the week.
After remaining closed last Monday due to a public holiday, the major averages traded in a lackluster fashion on Tuesday and closed on a mixed note amid nervousness about the jobs report. The previous week’s strong advances also sent some traders to the sidelines.
FTSE 100 suffers sharp fall on euro contagion fears
German Finance Minister Wolfgang Schauble (left), Spanish Finance Minister Elena Salgado (second left), Dutch Finance Minister Jan Kees de Jager, and Italian Finance Minister Giulio Tremonti (right) at a Eurogroup meeting on Monday July 11, 2011.
Eurozone finance ministers on Monday promised cheaper loans, longer maturities and a more flexible rescue fund in an effort to prevent debt contagion in Italy and Spain.
But markets effectively told politicians that not enough was being done, with London’s blue-chip index closing down 60.20 points, or 1pc to 5,868.96 as EU ministers set no deadline and a Dutch finance minister said a selective default for Greece was no longer being excluded.
France’s CAC 40 closed down 1pc to 3,770.38, while Germany’s DAX ended the day down 56.11 – 0.8pc – at 7,174.14.
In the US, the Dow Jones Industrial Average was up 30.39 – 0.2pc – at 12,536.15 at 5pm.
Ed Miliband seeks to block Rupert Murdoch’s BSkyB deal
Ed Miliband, the Labour leader, is seeking cross-party support for a motion in Parliament that would postpone any deal until the criminal investigation into the News of the World hacking scandal is complete.
Earlier in the week Crispin Odey, one of the company’s biggest long-term investors, sold some of his 2.7pc stake in BSkyB
News Corporation fears that if the vote is successful the bid will have to be abandoned. Observers said that it would be difficult to see how the Government could “green light” the deal if Parliament has voted against it.
It is believed Labour is hopeful it can get enough support to push through the vote, scheduled for Wednesday. Mr Miliband is expected to make an official announcement this morning on the BBC’s Andrew Marr Show. Meanwhile, one of BSkyB’s most significant long-term investors has bought back into the UK television company, saying that he did not want Rupert Murdoch to get it “on the cheap”.
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City Desk Morning Briefing – Friday July 8, 2011
Rupert Murdoch with lieutenants past and present Les Hinton, Andy Coulson and Rebekah Brooks.
By Richard Fletcher, Daily Telegraph City Editor
8:51AM BST 08 Jul 2011
Top of the agenda
Bovis Homes has updated shareholders this morning. Chief executive David Ritchie claims market conditions are “stable” and is upbeat. “The Group remains confident that it can deliver on its expectations for 2011 and will continue to invest to increase output capacity to deliver higher returns to shareholders.”
It’s not just the housing market that appears to be recovering: there is a rare piece of good news for London’s troubled IPO market this morning with Ophir Energy, the Lakshmi Mittal-backed oil exploration group, announcing that it has raised $375m.
Jobs: 2 Hopeful Signs
The job market got two optimistic signs Thursday as private sector employers added 157,000 positions in June and fewer people filed new claims for unemployment benefits, according to two reports.
Payroll processing company ADP said private jobs grew rapidly in June — a figure that was much higher than expected and more than four times higher than the prior month. May’s figures were downwardly revised to 36,000 jobs.
Economists were expecting a gain of just 60,000 private sector jobs, according to consensus estimates from Briefing.com.
Smaller businesses led the charge in June. Small businesses, defined as those with fewer than 50 workers, added 88,000 jobs in June. Read more…
British Gas raises prices by 18pc
British Gas has raised its prices by 18pc
By Paul Farrow
10:35AM BST 08 Jul 2011
British Gas is putting its prices up by an average of 18pc or £121 for gas and 16pc or £71 for electricity from August 18.
It means that the average household bill for a dual fuel British Gas customer will now go up from £1,096 to £1,288 – an increase of £192 or 17.5pc.
Phil Bentley, managing director British Gas, said its bills were being driven higher by the fact that the company buys 50pc of its gas on the international wholesale market.
He said: “We are buying in a global energy market and have to pay the market rate. Rising wholesale costs is an issue facing all energy suppliers.”
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “We are straying into deeply worrying ‘double price hike’ territory.