01/09/10

FTSE 100	5225.22, +23.66	Dow	10014.72, +4.99
FTSE 250	9825.14, +45.24	Nasdaq	2114.03, -5.94
FTSE All Share	2696.72, +12.31	S&P 500	1049.33, +0.41
Nikkei	8927.02, +102.96	Hang Seng	20565.08, +28.59
Oil (Crude)	$71.10, -$3.00	Gold	$1250.30, +$11.10
Base Rate	0.5%	10 Yr Gilt	2.86%
£/$	1.54	Euro/Gbp	0.826

Markets
The FTSE 100 added 23.66 points to close at 5,225.22 yesterday led by miners and ARM Holdings. Fresnillo Plc and Randgold Resources Ltd. jumped more than 2% after the greater than forecast US consumer confidence boosted the sector. ARM Holdings soared 8.6%, the highest close since January 2002 after Intel, the world’s largest chipmaker, agreed to buy Infineon’s wireless unit for about $1.4 billion, gaining a foothold in the mobile-phone business. Analysts at RBS said this news was “neutral to positive” for ARM – a designer of semiconductors used in Apple Inc.’s iPhone. RBS cited Intel’s intention to “support ARM-based platforms” and plans to add Wireless 3G to its core notebook PC platform.

US indices finished almost unchanged bringing an end to a disappointing August for the markets. Upbeat economic data had pushed stocks higher early in the session, but the release of the minutes from the latest Federal Reserve meeting sent indices back to their opening level. The Dow Jones rose 4.99 points to 10,014.72, the S&P 500 added 0.41 points to 1,049.33 and the Nasdaq slipped 5.94 points to 2,114.03. In economic news, consumer confidence rose to a reading of 53.5 in August, from 51 in July, and against expectations of a small decline. Another report showed that house prices jumped 3.6% in the past year, against expectations of a 3.1% gain. Furthermore, the S&P/Case-Shiller Home Price Index also showed that prices climbed 4.4% in the second quarter, compared with a 2.8% plunge in the first quarter. On a slight downside, the Chicago PMI, a regional reading on manufacturing activity, fell to 56.7 in August. That's down from 62.3 in July and slightly weaker than expected. Analysts were looking for 57 in August, but this didn’t keep stocks from moving higher. It wasn’t until the minutes from the Fed meeting were released that stocks went lower. The minutes raised concerns that the US economy is going to have to deteriorate significantly before it receives fresh support from the central bank.

Asian markets are higher this morning following faster than expected growth in Chinese manufacturing and Australia’s economy. The Nikkei rose 102.96 points to 8,927.02 while the Hang Seng is currently 28.59 points higher at 20,565.08. China’s purchasing managers’ index rose to 51.7 in August from a 17 month low of 51.2 in July, exceeding forecasts, a government-backed report showed. In Australia, gross domestic product climbed 1.2% from the first quarter, when it rose a revised 0.7%, the statistics bureau said today. Analysts had expected a 0.9% rise.

Economics
UK PMI manufacturing (Aug) 09:30 BST

The UK manufacturing PMI has edged down only slightly after peaking in May, but details of the recent surveys suggest that a larger decline is in store for the coming months. The July release showed backlogs of work started falling again, export orders barely increased, and growth in raw material purchases eased sharply to an eight month low. Analysts expect the headline index to fall by more than a point in August, to 55.9 from 57.3 in July.

US ADP employment (Aug) 13:15 BST/08:15 EDT

Analysts look for August ADP employment to fall by 20,000. This would be the first outright decline since January.

US ISM manufacturing (Aug) 15:00 BST/10:00 EDT

Both the Empire and Philadelphia Fed surveys have showed pronounced signs of weakness, with new orders and shipments falling into negative territory. Other surveys, such as the Richmond Fed series, are still in expansionary territory. The latest durable goods report also reflected sharply lower orders in a number of categories. Analysts expect August ISM manufacturing to fall to 51.5, but a possible drop below the break-even level of 50 cannot be ruled out.

US Construction spending (Jul) 15:00 BST/10:00 EDT

The level of overall construction spending is roughly unchanged since the beginning of the year. Given the recent drop in housing starts, analysts expect July spending to fall by 0.7%.

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