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FTSE 100 ends Friday on a downer

Producer Prices data gave a lift to US prices after a tepid start

Most followed: Greece, Taylor Swift, Apple and Candy Crush
Tesla made progress as it upped the size of its share offer

The FTSE 100 closed Friday at 6,561, down 0.1%, with mining firm Glencore (LON:GLEN) the biggest faller, down more than 2%.

The blue-chip benchmark gave up the morning’s gains.

But, it has actually also now retreated almost all the way through the year’s early rally.

Smiths Group (LON:SMIN) was another big faller, giving up 1.8%, followed by Weir Group (LON:WEIR) which lost about 1.6%.

At the other end of the market was travel firm TUI (LON:TUI), up 4.3%, and Hikma Pharmaceuticals (LON:HIK), up 2.5%.

Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS) and HSBC (LON:HSBA) were among a group of banks that have agreed settlements amounting to US$2bn in relation to currency rigging.

The settlements with certain US investors represents  another round of pay-outs after six banks, including Barclays and RBS were, in May, ordered to pay US$6bn by UK and US authorities.

All three banks were actually trading steady, though RBS was 0.8% higher at 341p.

Emerging Markets Minerals (LON:EMM) was among the small cap risers, with a 22% gain, meanwhile associates Regency Mines (LON:RGM) and Red Rock Resources (LON:RRR) were up 25% and 18% respectively.

US OPEN

It was deja vu all over again as US markets sought direction at the outset after a mixed showing yesterday.

The Dow Jones industrial average opted to head higher, rising five points to 17,413, but the broader-based S&P 500 was off a point at 2,082 while the Nasdaq Composite shed 11 points at 5,023.

US producer prices for July offered some encouragement for the bulls, rising for the third straight month.

Producer prices rose 0.2% in July, after rising 0.4% the month before. Economists had predicted a rise of 0.1%.

The Dow was supported by energy stocks such as ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) opening on the front foot as the price of West Texas Intermediate recovered from a six-and-a-half year low.

Goldman Sachs (NYSE:GS) was also wanted after it took GE's online deposit business off the industrial holding company's hands in a US$16bn deal.

The transaction includes US$8bn in online deposit accounts and US$8bn in certificates of deposit, Goldman Sachs said.

GE is in the process of selling off its finance arm, GE Capital, bit by bit as it looks to simplify the business and focus on industrial activities.

The deal was announced yesterday, and both stocks advanced this morning, with Goldman Sachs up 0.8% to US$202.29 and General Electric (NYSE:GE) up 0.3% at US$25.86.

Applied Materials (NASDAQ:AMAT) was friendless, however, after it lowered revenue guidance for the final quarter of its fiscal year.

The company reported a 10% year-on-year rise in fiscal third quarter revenue to US$2.49bn late on Thursday and a 17% hike in orders for new equipment, but analysts had expected a higher revenue number, in the region of US$2.54bn.

King Digital Entertainment (NYSE:KING) lost one-tenth of its value as the market found quarterly financials were far from regal.

The mobile games maker is still struggling to follow up the huge success of Candy Crush, which still generates about 40% of group revenue three years after its launch.

During the period King had two new launches, the AlphaBetty Saga word game and a new ‘sim’ game called Paradise Bay.

At US$490mln revenue was down more than 15% compared to the same period of 2014, and second quarter profit fell to US$119mln from US$165mln last year.

In contrast, Nordstrom (NYSE:JWN), the largest US luxury department-store chain, advanced more than 6%, a day after it forecast fiscal full-year earnings above Wall Street’s projections, aided by growing sales.

Earnings per share are projected to be $3.85 to $3.95 in the fiscal year ending January 30, the Seattle, Washington-based company said in a statement on Thursday. That’s up from its previous guidance of $3.65 to $3.80 per share, and surpasses the analysts’ $3.75 average estimate, according to Capital IQ.


LONDON MID-SESSION WRAP

On a Friday afternoon in mid-August the stock market can be far from gripping, and the sensibilities of grown up financial news limits the silliness of the season; so, in this report we’ll simply highlight that FTSE 100 has given up its gains.

Whilst that statement rings true for this morning’s 35 point advance, what we actually mean is the FTSE has now retreated through the year’s earlier rally.

The blue-chip benchmark ended 2014 at 6,556, and this afternoon it stands there again.

Renewed crude oil weakness drive oil stocks lower and this week’s Chinese currency devaluation are among the reasons that the springtime highs above 7,100 are now little more than a feint memories.

Investors in the UK need not worry too much about the Chinese goings on just yet, according to a Capital Economics report, which claims that the slowdown there is unlikely to be serious enough to influence the timings of British interest rate rises.

“We remain unconvinced that this is the beginning of an out and out currency war,” the London based economist said in a note.

“What’s more, the UK’s direct export exposure to China is fairly small. Granted, import prices may be pushed down, increasing the risk that deflation becomes ingrained.

“However, time lags mean we are unlikely to see the recent exchange rate moves reflected in consumer prices until next year.”

On the London Stock Exchange, Smiths Group (LON:SMIN) was the biggest faller in the FTSE 100, giving up 2.25%, followed by Old Mutual (LON:OML), Coca-Cola HBC (LON:CCH),  and Weir Group (LON:WEIR) which all lost about 1.3%.

At the other end of the market was travel firm TUI (LON:TUI), up 3.3%, and Hikma Pharmaceuticals (LON:HIK), up 2.5%.

Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS) and HSBC (LON:HSBA) were among a group of banks that have agreed settlements amounting to US$2bn in relation to currency rigging.

The settlements with certain US investors represents  another round of pay-outs after six banks, including Barclays and RBS were, in May, ordered to pay US$6bn by UK and US authorities.

All three banks were actually trading steady, though RBS was nearly 1% higher at 341p.

Emerging Markets Minerals (LON:EMM) topped the small cap risers, with a 40% gain, meanwhile African Potash (LON:AFPO) was up 26% and Regency Mines (LON:RGM) gained 18%.


MOST FOLLOWED

The prospect of Greek Prime Minister Alexis Tsipras resigning despite getting his bailout deal passed through by parliament had bulletin boards buzzing.

Last night, the Greek government passed, albeit begrudgingly, the deal, but only 118 coalition MP’s backed the bailout, meaning Tsipras has lost the minimum constitutional majority for his minority government.

One man who did not vote for the deal was former finance minister Yanis Varoufakis, who stated he could not back the bailout. He wasn’t the only one, as 43 Syriza MPs failed to back the bill.

Still, at least it’s almost over. It only needs to be signed off by the Eurogroup and the rest of Europe can put the whole mess behind it.

That is, … unless Germany doesn’t try and block the deal.

Merkel, Schauble and co. apparently prefer a bridging loan in order to further discuss the conditions of the bailout and, ideally, get the IMF involved, Connor Campbell at Spreadex said.

From Greece to the Scottish Highlands, and Taylor Swift is apparently looking to buy a castle in Scotland for her boyfriend Calvin Harris.

Well, that’s the rumour anyway.

Property agent Colliers, which is selling a boutique castle hotel near Forfar, tweeted the singer to see if it could tempt her, but apparently Tay-Tay doesn’t fancy it.

If she does, she can better move quick if she wants to install an AGA Rangemaster oven.

The brand is being bought out by US company Middleby Corp with the deal expected to be completed on September 23. It announced it made a loss this year due to the costs of the takeover offer.

While she sits back and relaxes with her shortbread baking away in her oven and a bottle of Glenfidditch, Swift can listen to the soothing sounds coming from one of Walker Greenbank’s new radios.

The interior designer has joined up with Pure to release the Pure Evoke digital radios in Sanderson's Chelsea and Dandelion Clocks designs, its most iconic …apparently.

If radios aren’t her thing, Swift can spend her time playing candy crush, goodness knows King Digital, the company behind the game, could use a new player.

That is assuming, of course, that she doesn’t already enjoy crushing some candy while on her tour bus between gigs. Who knows?

The candy crush maker reported a drop in profits with bookings falling 13% sending shares 7% lower in after-hours trade.

She’ll have to wait to watch AppleTV though as the tech giant said it is to delay its TV service to at least next year.

A lack of content and slow talks with CBS and Twenty-First Century Fox has led to Apple scrapping the plans.

Among the small caps  Tekcapital (LON:TEK) acquired the licensing rights to a group of nine patents that make air conditioning up to 25% more efficient.

Bought from the University of Central Florida, the system incorporates a condenser fan that is based on aircraft propeller design elements. Pretty cool, huh?


LONDON OPEN

Steadier trading in Asia means the market in the UK has got that Friday feeling, with the FTSE 100 on the front foot rising 35 points, 0.6%, to 6,602.

After the three preceding daily devaluations the People’s Bank of China (PBoC) yuan fixing resulted almost no change.

The PBoC said it believed the 3.3% devaluation was far enough after three days of depreciation.

Experts still expect more measures at some point in the future, though with less immediate volatility equities have gone better.

Here in Europe, though, there’s still a little Greek meze to put away; ministers in Greece green lighted the new bail out deal, and later today European finance ministers will be required to do the same.

"Greece returns to the spotlight in European trading hours as Eurozone Finance Ministers convene to decide on whether to approve the beleaguered country’s third bailout,”

“Germany has expressed reservations about the deal that could unlock as much as €86 billion so approval at today’s sit-down would go a long way toward warding off fears that the arrangement may unravel.”

Elsewhere, also in Europe, there were some uninspiring GDP stats from France and Germany with the former flat and the later growing only 0.3% in the second quarter.

London listed Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS) and HSBC (LON:HSBA) were among a group of banks that have agreed settlements amounting to US$2bn in relation to currency rigging.

The settlements with certain US investors represents  another round of pay-outs after six banks, including Barclays and RBS were, in May, ordered to pay US$6bn by UK and US authorities.

All three banks were actually trading steady, however, and RBS was actually 1% higher at 342p.

Rising 2.69% travel firm TUI (LON:TUI) was the top performer in the FTSE 100, followed up by Hikma Pharmaceuticals (LON:HIK) and St James’s Place (LON:STJ).

Engineer Weir Group (LON:WEIR) was the FTSE’s biggest faller, down 1.15%, while another drop in oil prices had BP (LON:BP.) and Shell (LON:RDSB) down almost 1%.

From the paucity of research received this morning it seems most of the City’s number crunchers are on vacation. There wasn’t upgrade or downgrade worthy of mention in the first pass.

African Potash (LON:AFPO) topped the small cap risers, with a 25% gain, meanwhile Regency Mines (LON:RGM) and Beowulf Minerals (LON:BEM) were up 18% and 15% respectively.


MARKET PREVIEW

Asian markets rallied today after the People’s Bank of China (PBoC) CNY fixing announcement came out largely unchanged.

The PBoC said it believed the 3.3% devaluation was far enough after three days of depreciation.

IG said: “In the short-term, there is likely to be relative stability in the CNY exchange rate, but there is a high likelihood that the Chinese government will be forced to devalue the currency further.”

However, much of these gains have been given back later in the session with most major markets down on the day.

The Japanese Nikkei 225 ended 77 points lower to 20,519 while the Hang Seng was 7 points lower to 24,013.

The Shanghai Composite rose on the news, albeit modestly, gaining 19 points to 3,974.

Meanwhile, in America, it was the opposite, with blue-chips reversing early losses to notch up modest gains.

The S&P 500 index (INDEXSP:INX) was down 3 points at the at the end of the session at 2,083, while the Dow Jones industrial average (INDEXDJX:.DJI ) was boasting a 5 point gain at 17,408. The Nasdaq Composite (INDEXNASDAQ:.IXIC) was down 10 points at 5,034.

In the UK, the FTSE 100 is expected to open ten points higher to 6,568 on the PBoC fixing.

In focus today will be Greece its funding package through Greek parliament and the Eurogroup.

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