Market overview: No solid recovery expected in UK private consumption



LONDON (ShareCast) - 1630:Close UK Stocks finished more or less unchanged on Thursday, despite weak November (Xetra: A0Z24E - news) retail sales data at home and the less than constructive rhetoric coming out of Capitol Hill. Weir group (Other OTC: WEIGY - news) did well nevertheless after announcing the acquisition of Mathena for $385m. GKN (LSE: GKN.L - news) benefitted from an upgrade out of Citi to buy, from neutral. Carnival (LSE: CCL.L - news) dropped sharply after providing weak guidance for next year. On the macroeconomic front, this was Barclays Research´s take on today´s retail sales numbers: "After a strong third quarter, retail sales have slowed down significantly. Although these are volatile series and prone to subsequent revisions, today's poor reading suggests that private consumption is likely to be very weak in the fourth quarter and to be a drag on overall growth. (...) As economic momentum picks up in the coming quarters and the squeeze on earnings eases somewhat, we think retail sales and overall private consumption are likely to stabilise, although we do not expect a solid recovery." FTSE 100 (FTSE: ^FTSE - news) down 3 to 5,958.

1500: The Federal Reserve Bank of Philadelphia´s manufacturing gauge for the month of December has come in ahead of expectations, at 8.1, after a reading of -10.7 for the month before (Consensus: -3.0). That along with a large rise in the new orders sub-index. Similarly, existing home sales data for the month of November has revealed that these rose to an annualised rate of 5.04m units (Consensus: 4.9m), after 4.76m in October. FTSE 100 down 2 to 5,959.

1457: Carnival Cruise Lines is now the worst stock on the top share index. The company has guided towards adjusted earnings per share for the 2013 year of between 2.20 and 2.40 dollars (Consensus: 2.46 dollars).

1443: Shares of the Intercontinental Exchange and NYSE Euronext (NYSE: NYX - news) have both been suspended. The latter were heading higher by 32 per cent before the trading halt was imposed.

1330: US initial weekly unemployment claims rose by 17,000 to 361,000 (Consensus: 360,000) last week. Third quarter US GDP data have been revised up to show growth of 3.1 per cent, versus a previous estimate of 2.7 per cent (Consensus: 2.8 per cent). FTSE 100 up 4 to 5,966.

1326: Sainsbury (LSE: SBRY.L - news) may announce a successor to its current Chief Executive Officer as soon as February. Spain´s competition authorities have levied fines against Telefonica, Vodafone (LSE: VOD.L - news) (43.5m pounds) and Orange.

1204: The FTSE 100 is up two points at 5,964. Trade is cautious with ongoing uncertainty regarding the 'fiscal cliff' continuing to weigh on sentiment - just 14 points separate the Footsie's intraday low and high. US stock futures are pointing to a flat start on Wall Street ahead of jobless claims and existing home sales data. 'These frictions in Washington dashed hopes built earlier this week on talks of a compromise between both parties and the fact that negotiations stepped-up a gear,' said market strategist Ishaq Siddiqi from ETX Capital. 'It now looks less likely that we will have a deal to avert the crisis just before the deadline at the end of this month - as such, investors are taking no chances before the last full trading week of the year ends and booking some profits on relatively overbought European indices.'

1148: IntercontinentalExchange (NYSE: ICE - news) , the 12-year-old energy and commodity futures bourse, is in talks to buy NYSE Euronext, the owner of the world's biggest stock market, according to a person with direct knowledge of the deal, Bloomberg reports.

1001: The FTSE 100 has pushed into the blue and is trading five points higher at 5,967, just three points shy of the 52-week closing high of 5,970. Engineering (Milan: ENG.MI - news) group Weir (up 2.6 per cent) is now leading the risers on the blue-chip index following this morning's acquisition of pressure control provider Mathena for 240m dollars. Investec (LSE: INVP.L - news) has raised its target price for the stock from 2,020p to 2,100p and reiterated its 'buy' rating, saying that the purchase 'fits in nicely with Seaboard (AMEX: SEB - news) and diversifies Oil & Gas revenues away from the pressure pumping market'. Outsourcing group Serco (up 0.7 per cent) is also on the rise this morning after saying that it is on track to meet forecasts this year.

1000: HSBC (LSE: HSBA.L - news) is to sell Bao Viet Holdings to Sumitomo (Other OTC: SSUMF - news) .

0930: UK November retail sales have come in unchanged month-on-month (Consensus: 0.4 per cent). As an aside, Nomura has raised its price targets for British American Tobacco (LSE: BATS.L - news) (to 3,880p from 3,506p) and Imperial Tobacco (LSE: IMT.L - news) (to 2,510 from 2,814) sharply. FTSE 100 up 1 to 5,963.

0842: UK stocks have begun the day slightly lower, avoiding the downdraft from last night on Wall Street following the negative news regarding the fiscal cliff negotiations on Capitol Hill. Also overnight, the Bank of Japan has instituted a third round of quantitative easing, worth 73bn pounds, as expected. November retail sales data are released at 09:30. Barclays Research expects total sales to have increased by 0.4% month-on-month, in line with the consensus. The FTSE 100 is down 3 points to 5,959.