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Market buzz: Russia-exposed Evraz, Polymetal tank after US sanctions
1633: Morgan Stanley sounding a positive note on SSE and National Grid.
"UK utilities appear to have found support. The UK market looks cheap versus Europe, and UK utilities likewise versus EU peers. Can they rally from here? We like SSE and National Grid for now. And whilst coal has fallen, power has remained resilient as carbon rallied. But is carbon now rolling over?" their analysts say.
And JP Morgan's Mislav Matejka chips in: "Dividends to stay a support for stocks - Financials offer the best surprise potential At the market level, we believe that equities are likely to find support soon."
1542: A "significant market development" has been highlighted by JPM Cazenove in note that came out on Friday but is making the rounds today.
The forward curve for the 1-month US OIS rate, a proxy for the Fed policy rate, has slightly inverted after the two-year forward point, which if taken at face value, analysts say, would imply some expectation priced in of a reduction in the Fed policy rate after Q1 2020.
"An inversion at the front end of the US curve is a significant market development, not least because it occurs rather rarely. It is also generally perceived as a bad omen for risky markets. In our mind, two potential fundamental explanations stand out: that markets have started pricing in a Fed policy mistake or have started pricing in end-of-cycle dynamics."
Since the record highs in January, equity and bond fund flows have declined sharply, with the sharp drop in fund buying since January removing a crucial flow support to both equity and bond markets, Cazenove says.
1533: From Pantheon Macroeconomics: "Investors have started to doubt that the MPC will raise Bank Rate twice this year. The implied probability of two rate hikes by November's MPC meeting dropped slightly below 50% last week, for the first time since early February."
1443: Just reporting the news, but for what it's worth:
1413: The Commodity Futures Trading Commission's publishes commitments of traders report shows a further increase in net long GBP positions to the highest level so far this year, while speculators are modestly net short the US dollar and net long EUR positions are down from the previous week.
Commenting on the report, Rabobank also noted that bullish sentiment amongst speculators was also reflected in the latest Reuters FX survey, where the EUR/USD is expected to rise to 1.28 on a 12-month view. "In contrast to the consensus expectation, we revised lower our forecast for EUR/USD last month from 1.28 to 1.21."
Following the precipitous fall of the dollar throughout 2017 and earlier this year, an upbeat message about the US economy from various Fed officials, including Chairman Powell, has allowed the Greenback to stabilise, Rabo noted. "To improve the outlook for the DXY Index, a strong break above the 91 pivot is required. Above that, the 92.50~ is another important level to watch. A close above it would indicate that the USD bulls are gaining the initiative."
1321: US equity futures have trimmed earlier gains: Dow Jones Industrials: +158.00 to 24,084.00, S&P 500: +13.25 to 2,619.0, Nasdaq-100: +44.50 to 6,499.25.
1204: Moscow's RTS index is down 9.46% at 1,119.53 alongside falls in Russia-exposed and London-listed Polymetal (-9.89%) and Evraz (-13.36%). Glencore stock also lower, now trading down by 3.12% in the wake of Washington's decision to impose sanctions against various of the country's biggest billionaires.
In currency markets meanwhile, the Russian currency, the rouble, is shedding 2.85% of its value against the Greenback to 0.0167.
1136: Trade tantrums and tech troubles are spooking markets and putting pressure on stock prices, but Lilian Chovin, multi-asset strategist at Coutts thinks fundamentals for investing remain good ahead of earnings season.
He says: "A tit-for-tat trade tiff between the US and China is in full swing while the technology sector is under fierce scrutiny. Facebook CEO Mark Zuckerberg is testifying to a US committee this week about data use and President Trump has tweeted tax allegations about Amazon. All this has shaken market sentiment, with most major indices around the world falling last week. But in our view, it doesn't paint the complete picture of the economic fundamentals that really drive long-term market returns."
He sets out four reasons to back up his confidence, beginning with expectations of healthy profits across the board in the coming first quarter earnings season. The Institutional Brokers' Estimate System - which gathers the estimates of stock analysts - sees corporate profits expected to rise this year by 34% in Japan, nearly 19% in the US, 8% in the UK and 7% in Europe.
Chovin also says that, while the major stock markets have slipped in 2018, many areas of the market still offer long-term opportunities "for investors who have done their homework", such as emerging market debt and certain section of the tech sector. He also points to still-solid economic data looking positive across the globe and finally that investing remains, while more risky than holding cash, the best way of beating inflation.
1121: Credit Suisse looks back at last week's emerging market equity funds, noting net inflows of $3.0bn driven by flows into mostly Asian ETFs, followed by pan-emerging ETFs and some pan-emerging active funds. Active EMEA focussed funds were the only fund category to record (pretty slight) net outflows over the week.
Emerging market investors continue to accumulate Chinese equities, working towards closing their underweight stance on the market which they have held since October 2014. On an asset-weighted basis, global emerging market dedicated funds' positioning on China is now only 4% below the MSCI EM benchmark compared to 18% below benchmark in September 2016."
1050: Looking at the Halifax house price data, the jump "just looks like volatility, rather than the start of a strong upward trend", says Pantheon Macroeconomics. "Halifax's index is prone to large swings; the standard deviation of month-to-month growth since 2010 has been twice as high as for Nationwide's measure."
1045: Credit Suisse look to next week's interim results from Primark owner AB Foods, whose shares have fallen 25% in the last six months, a de-rating partly put down to the cyclical downturn in sugar but in response to the de-rating of clothing peers.
"However, we now believe that Primark is discounted at £11bn, ie 12.7x 12m FWD EBIT and 16.3x PER which materially undervalues its L-T growth prospects relative to peers, particularly given the strengthening margin outlook," said analysts trimming their 12-month forward target price to 3,300p from 3,700p and reiterating their outperform rating.
1035: Three-month LME copper futures up from $6,768 per metric tonne at last week's close to $6,830 per tonne.
0925: The new Halifax measure of house prices showed a 1.5% month-to-month rise in March, much more than the 0.1% expected. The three-month average of year-over-year growth in prices increased to 2.7%, from 1.8% in February, exceeding the consensus, 2.0%.
0921: Earlier, investors were denied their usual hit of company news as the London Stock Exchange Group's regulatory news service was choked off by a technical hitch.
Several traders in the City confirmed there was a problem. "It's a global issue all we're told but I don't think much was due out today anyway," said one, while Fidessa told clients: "Support RNS news is unavailable for multiple clients" and adding that it was investigating the cause of this issue.