30/06/09

FTSE 100	4294.03, +53.02	Dow	8529.38, +90.99
FTSE 250	7477.21, +90.95	Nasdaq	1844.06, +5.84
FTSE All Share	2194.11, +26.82	S&P 500	927.23, +8.33
Nikkei	9958.44, +174.97	Hang Seng	18578.85, +50.34
Oil (Crude)	$71.49	Gold	$940.70
Base Rate	0.5%	10 Yr Gilt	3.62%
£/$	1.669	Euro/Gbp	0.844

Markets

US markets finished higher yesterday as a rise in the price of oil bolstered energy shares. The approaching quarter end also helped stocks as fund managers picked up the quarter’s big winners in a process known as "window dressing". Investors also had one eye on the trial of Bernie Madoff, who was sentenced to the maximum 150 years in prison for orchestrating the biggest Ponzi scheme in modern history. It is thought that Wall Street will be pleased with the verdict, however, it may lead to increased government regulation of money management.

The Dow Jones rose 90.99 points to close at 8,529.38 while the S&P 500 added 8.33 points to end at 927.23. The Nasdaq gained 5.84 points to finish at 1,844.06.

US light crude oil for August delivery jumped $2.33 to $71.49 a barrel. Exxon Mobil gave the Dow its biggest lift, rising 2.2% followed by Chevron Corp, which rose 7%. Elsewhere, Microsoft managed a 2.2% gain after Deutsche Bank raised its price target on the stock, saying the software manufacturer's Windows operating system is "poised for rapid production". The only loser on the Dow was Alcoa, falling 3%, after FBR Capital downgraded the stock to Underperform from Market Perform.

COMEX gold for August delivery slipped $0.30 to $940.70 an ounce. Treasury prices went higher, lowering the yield on the 10 year note to 3.48% from 3.54%.

The Nikkei jumped 174.97 points to close at 9,958.44 this morning after commodity prices climbed and the outlook for steel improved. Japan Petroleum Exploration, the nation's second biggest oil explorer, climbed 7.2%. Nippon Steel, Japan's largest maker of the alloy, added 3.6% after a government report said declines in steel output are expected to slow.

The Hang Seng is currently 50.34 points higher at 18,578.85. Energy shares go higher after crude oil prices rose and China increased rates for gasoline and diesel fuel. While banking stocks improve on speculation that lending continued to grow in June.

The FTSE 100 is currently 5.99 points lower at 4,288.04. United Utilities leads the faller, down 2.8%, after JPMorgan downgraded the stock to Neutral from Overweight and cut its price target from 850p to 580p. Wolseley tops the risers board, adding 5.8%, after saying that Ian Meakins was replacing its chief executive Chip Hornsby. Meakins was recently Chief Executive of foreign exchange and payments business Travelex Holdings and ran Alliance UniChem. Mining stocks are also prominent following rising metal prices. BHP Billiton adds 1.8%, Vedanta Resources gains 1.5% and Kazakhmys advances 1.1%.

Economics

UK GDP (Q1, third release) 09:30 BST

While the most likely outcome is that GDP growth is unrevised at -1.9% on the quarter, there is a chance it may be revised up. In this final estimate of GDP we are given the full national accounts, which include the income breakdown of GDP. The focus will be on the household sector savings rate. This leapt up to 4.8% in the final quarter of last year (from just 1.7% in Q3 2008) with little discernible impact on consumer spending, as falling interest rates and oil prices increased disposable income. Interest rates fell further in the first quarter, but this will, to some extent, be offset by a rise in unemployment over the quarter, so analysts expect the saving rate to dip slightly to 4.4%. The Bank of England noted in last week’s Treasury Select Committee hearings that consumer spending has proved more resilient than anticipated. The GDP forecast contained in the May Inflation Report had incorporated a steeper rise in the saving rate.

US S&P/Case-Shiller home prices (Apr) 14:00 BST/09:00 EDT

The Case-Shiller home price index for 20 metropolitan areas has fallen for 32 months in a row, including declines of 2% or more for the past six months. However, other measures such as the FHFA house price index and Radar Logic home price data are suggesting the declines may be starting to slow. Analysts look for the Case-Shiller index to fall 1.0% in April, with the year-on-year rate of change rising slightly to -18.5%.

US Chicago PMI (Jun) 14:45 BST/09:45 EDT

In contrast to the other main manufacturing surveys, the Chicago PMI took a step backwards in May, falling to 34.9 from 40.1. Chicago-area comments in the June Beige Book noted weak demand from abroad (apart from Asia) and negative comments from metals and autos-related industries. Still, analysts expect the Chicago index to make up some of the gap to the other surveys over the next few months, and look for the June reading to rise to 40.

US Consumer confidence (Jun) 15:00 BST/10:00 EDT

Analysts look for June consumer confidence to fall slightly to 54.5, from 54.9 in May. The present situation index appears to have bottomed out in March and should begin to trend higher, assuming labor market declines continue to moderate. Analysts look for this series to rise to 31.5 from 28.9. However, the outlook for the expectations index could be choppy after climbing 45pts over the past three months, and analysts expect a 2pt drop to around 70. Gasoline prices have been rising since the beginning of the year. The weekly ABC News consumer index has fallen 11pts since the middle of May, and the latest Michigan consumer expectations reading for June fell by 4pts.

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