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14 Dec 2016 18:34 GMT+0 - Closing Wrap

In European Equity Markets stocks fell from an 11-month high on Wednesday, with Switzerland's Actelion falling after U.S. healthcare company Johnson & Johnson ended discussions over a potential deal with Europe's largest biotech firm. The pan-European STOXX 600 ended down 0.5 percent, with healthcare and consumer staples sectors the biggest drags on the benchmark index. Actelion shares fell 9.2 percent after J&J said it was not able to reach an agreement that it believed would create adequate value for its shareholders. German retailer Metro jumped 3.6 percent after reporting better than expected fourth-quarter operating profit for the food and consumer electronics businesses it hopes to split in a demerger next year.

 

In Currency Markets the U.S. dollar edged lower against a basket of major currencies on Wednesday after traders took profits from the greenback's recent gains on expectations that the Federal Reserve would take a cautious stance on future rate hikes this afternoon. The dollar index was last down 0.3 percent at 100.77. The euro was last up 0.28 percent against the dollar at $1.0655. The dollar was down 0.2 percent against the yen  at 114.93 yen, easing further from Monday's 10-month high of 116.12 yen. The dollar hit a six-day low against the Swiss franc of 1.0084 francs. Sterling climbed to as high as $1.2721 in afternoon trade as Brexit Minister David Davis spoke to a committee of lawmakers in parliament.

 

In Commodities Markets  oil prices fell about 1 percent on Wednesday on renewed concerns about an oil glut sparked by rising U.S. crude inventories in storage and OPEC saying output cuts must be implemented to avoid the prospect of a growing surplus. Brent futures for February delivery fell 35 cents to $55.37 a barrel, a 0.6 percent loss. U.S. crude fell 58 cents to $52.40 per barrel, a 1.1 percent loss. Crude inventories overall fell by 2.6 million barrels in the last week, compared with analyst expectations for a decrease of 1.6 million barrels, the data showed. OPEC pumped 33.87 million bpd last month, according to figures OPEC collects from secondary sources, up 150,000 bpd from October.   Spot gold was up 0.4 percent at $1,162.46 an ounce.

 

In US Equity Markets  the post-election rally in stocks took a breather on Wednesday, as investors turned their attention to the outcome of the Federal Reserve's policy meeting. The S&P 500 was down 0.15 percent, at 2,268.12 and the Nasdaq Composite was down 0.52 points, or 0.01 percent, at 5,463.31. Wells Fargo fell 2.2 percent after the bank's "living will" failed U.S. regulators' assessment for a second time this year. General Motors fell 3.1 percent and Ford  declined 1.5 percent following a report that China will soon slap a penalty on an unnamed U.S. automaker for monopolistic behavior. Hertz Global fell 4.5 percent after the car rental company said on Tuesday it would replace its chief executive and reduce its board size.

  

In Bond Markets  U.S. Treasury yields fell on Wednesday, pressured by lackluster retail sales last month that suggested the economy's performance in the fourth quarter may not be as strong as people thought.  In late morning trading, benchmark 10-year Treasury prices were up 13/32, yielding 2.433 percent, down from 2.48 percent late on Tuesday. U.S. 30-year bonds were up 31/32, with a yield of 3.095 percent, compared with Tuesday's 3.146 percent. U.S. two-year notes, meanwhile, were flat, yielding 1.161 percent.

 

European Equity Earnings

  • Aurubis (NDA GY) - Co. Q4 pretax profit EUR 65.0bln vs. Exp. EUR 68.6mln, revenue EUR 2.40bln vs. Exp. EUR 2.43bln.
  • Inditex (ITX SM) - Co. 9-month net EUR 2.2bln vs. Exp. 2.2bln, EBITDA EUR 3.6bln vs. Prev. EUR 3.6bln, revenue EUR 16.4bln vs. Exp. EUR 16.4bln.

 

European Equity Upgrades/Downgrades

  • BHP (BLT LN) HAVE BEEN REMOVED FROM THE ANALYST FOCUS LIST AT JP MORGAN
  • BARCLAYS (BARC LN) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT EXANE BNP PARIBAS
  • GLENCORE (GLEN LN) DOWNGRADED TO UNDERWEIGHT FROM NEUTRAL AT JP MORGAN
  • CAPITA (CPI LN) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES
  • CENTRICA (CNA LN) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
  • CARL ZEISS MEDITEC (AFX GY) UPGRADED TO BUY FROM HOLD AT HSBC
  • WIRECARD (WDI GY) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT MORGAN STANLEY
  • BMW (BMW GY) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
  • UNIPER (UN01 GY) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
  • HENKEL (HEN3 GY) STRONG BUY FROM OUTPERFORM AT RAYMOND JAMES
  • ACCOR (AC FP) RESUMED BUY AT DEUTSCHE BANK
  • ENGIE (GSZ FP) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
  • AHOLD DELHAIZE (AD NL) UPGRADED TO STRONG BUY FROM HOLD AT RAYMOND JAMES
  • MELIA HOTELS (MEL SM) RESUMED BUY AT DEUTSCHE BANK
  • RED ELECTRICA (REE SM) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
  • FERROVIAL (FER SM) UPGRADED TO STRONG BUY FROM HOLD AT RAYMOND JAMES
  • UNICREDIT (UCG IT) UPGRADED TO OUTPERFORM FROM SECTOR PERFORM AT RBC
  • MEDIASET (MS IM) CUT TO NEUTRAL FROM BUY AT UBS
  • MAERSK (MAERSKB DC) UPGRADED TO BUY FROM HOLD AT DNB MARKETS
  • UNICREDIT (UCG IM) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT EXANE

 

 

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