18/03/10

FTSE 100	5644.63, +24.20	Dow	10733.67, +47.69
FTSE 250	10008.50, +78.46	Nasdaq	2389.09, +11.08
FTSE All Share	2889.26, +13.37	S&P 500	1166.21, +6.75
Nikkei	10744.03, -102.95	Hang Seng	21350.49, -34.00
Oil (Crude)	$82.93	Gold	$1124.20
Base Rate	0.5%	10 Yr Gilt	4.024%
£/$	1.5296	Euro/Gbp	0.8936

Markets

Stocks rallied on Wednesday, with the Dow, Nasdaq and S&P500 all closing at new fresh 2010 highs, after the US and Japanese central banks chose to keep interest rates low and the Senate passed a key jobs bill. The DJIA added 47.69 points to close at 10733.67, the highest close since 10831.07 on October 1 2008. The Nasdaq closed 11.08 points higher at 2389.09, its highest point since 2411.64 on August 29 2008. The S&P500 rose 6.75 points to close at 1166.21, its highest close since 1213.01 on September 19 2008.

In economic news, the Senate passed a $17.6bn jobs bill and sent it to President Obama to sign it into law. The measure, which includes tax breaks and funding for highway projects, has been much debated in both houses of Congress over the last few weeks. It is seen as being the first in a series of bills designed to help bring unemployment down from its current level of 9.7 percent.

Ben Bernanke was on Capitol Hill to testify before the House Financial Services Committee about the central bank's supervision of banks.

PPI fell 0.6 percent in February for the biggest drop since July of last year after being expected to fall 0.2 percent. PPI gained 1.4 percent in January. The so called core PPI rose 0.1 percent in the month, as expected. Core PPI gained 0.3 percent in January.

US light crude for April delivery rose $1.23 to settle at $82.93 a barrel on NYMEX.

COMEX gold for April delivery rose $1.70 to close at $1,124.20 an ounce.

Treasury prices rose, lowering the yield on the 10 year note to 3.64 percent from 3.65 percent.

The Nikkei average fell 1 percent today, as property stocks like Mitsui Fudosan retreated on a brokerage downgrade and recent gainers like Canon lost ground. A fall in the euro accelerated profit taking in Japanese stocks, market players said, after a report saying Greece is not hopeful of aid from the March 25 European Union summit. The Nikkei fell 102.95 points to close at 10744.03.

UK stocks closed at a 21 month high on Wednesday, as investors welcomed the Federal Reserve's pledge to hold down US interest rates and metals prices rose. The FTSE100 closed 24.20 points at 5644.63, its highest close since late June 2008, after the Fed held US benchmark rates near zero and maintained its pledge to keep them low for an extended period.

Miners added the most points to the index against a backdrop of buoyant metals prices as the dollar softened and market sentiment after the Fed comments. Fresnillo, Kazakhmys and Vedanta Resources added 1.8 to 3.4 percent. Rio Tinto climbed 1.8 percent. China's top state owned nonferrous metals company Chinalco confirmed it is in talks with Rio Tinto about potential joint ventures in Mongolia and Guinea, a Chinese newspaper said on Wednesday.

Oil stocks were also in demand, as crude rose above $82 a barrel, with BG Group, BP, Cairn Energy and Royal Dutch Shell up 0.1 to 2.1 percent.

GlaxoSmithkline and AstraZeneca fell 1.2 and 0.5 percent respectively, and Shire fell 1.8 percent following a downgrade by Citigroup.

Marks and Spencer was also hit by negative broker sentiment, falling 2.3 percent as JPMorgan cut its rating noting forecast risks and strategic questions.

G4S was the biggest faller, down 4.9 percent after falls on Tuesday following inline results, with traders noting talk that top shareholder Skagen Trust was selling 141 million shares, or around 10 percent of the firm.

HSBC, Inmarsat, Standard Life, Thomas Cook and WPP Group all traded ex-dividend, taking 6.14 points off the FTSE100 index.

In economic news, UK employment data came in better than expected, and the Bank of England minutes showed policymakers voted unanimously to keep monetary policy unchanged this month, with some pointing to an increase in upside inflation risks.

Economics

UK Public finances (Feb) 09:30 GMT

In January, borrowing was much worse than expected, largely because the month’s borrowing depends on self-assessment tax receipts for the previous year. In November and December, tax receipts have broadly stabilised at the levels seen last year so analysts expect borrowing of GBP10bn in February and total borrowing in the 09/10 fiscal year to be GBP160bn, which would be less than the GBP178bn the Chancellor anticipated in the Pre-Budget Report.

UK CBI industrial trends (Mar) 11:00 GMT

Analysts expect the manufacturing surveys to continue to move higher in March as the global trade cycle improves and weaker sterling starts to boost prospects for the tradable goods sector.

US Initial jobless claims (wk. 13 Mar) 12:30 GMT

Last week’s claims fell to 462,000. Over the past two weeks, initial claims have reversed some of the upward drift seen since the start of the year. Analysts look for a further decline to 455,000 this week.

US CPI (Feb) 12:30 GMT

The 0.1% drop in January’s core CPI was largely due to a 0.5% fall in shelter costs. Hotel prices have fallen nearly 11% since the middle of 2008, while rental costs have drifted lower over the past six months. Given the sizeable housing overhang in the US, these trends are not likely to be reversed anytime soon. Meanwhile, core services inflation excluding shelter has also been subdued, so the only sign of inflation pressure is coming from the core goods CPI, which is up 3% from a year ago. Analysts look for February’s core CPI to rise 0.1%, with headline CPI coming in flat due to a drop in gasoline prices.

US Current account balance (Q4) 12:30 GMT

The trade deficit on goods and services was around USD109bn in Q4, versus USD96bn in Q3. Assuming the balance on income rises to USD26bn and net transfers out of the US are steady at USD34bn, analysts look for the current account deficit to widen to USD117bn (-3.2% of GDP) in Q4, from USD108bn in Q3 (-3.0% of GDP).

US Philadelphia Fed (Mar) 14:00 GMT

The long-run average for the Philadelphia Fed during periods of economic expansion is around 14. The index has exceeded that mark for the past four months, ranging from 15 to 23. Last month’s report showed the employment series in positive territory for the third month in a row, while the inventory index turned modestly positive for the first time since the recession started. Analysts look for this month’s Philadelphia Fed to remain expansionary at around 15, but the index should not be expected to keep rising at the same trajectory that analysts saw for most of 2009.

The details published in this e-mail are intended for information only and should not be construed as advice under the Financial Services and Markets Act 2000. Aventus Capital Management will not accept responsibility for any actions taken (or not taken) on the basis of information published in this e-mail.

Aventus Capital Management is a trading name of Rickerbys LLP (OC328675) registered in England and Wales, registered office Ellenborough House, Wellington Street, Cheltenham GL50 1YD. A list of the Members of Rickerbys LLP will be provided on request or can be inspected at this address. Aventus is a trade mark and the “A” logo is a registered trade mark of Rickerbys LLP. Rickerbys LLP is regulated by the Solicitors Regulation Authority. Authorised and regulated by the Financial Services Authority.