There was a strong open for US stocks this morning with the Dow Jones pushing +0.70% higher. That took the index of the 30 top US companies back across the 25,000 waterline. Later on Cisco Systems was trading more than +4.2% higher while United Technologies and Boeing rose +2.5% up (though somewhat short of Airbus' performance today, see below).
If the stronger stock market run continues that will make it the fifth straight daily gain though stronger US core producer price index (PPI) numbers have since undermined investor sentiment. In total the Dow is up around +3.5% this week, or around -6% off recent all-time highs.
In contrast UK shares were more lukewarm with the FTSE 100 up +0.26% mid-afternoon not helped by Standard Life Aberdeen plunging more than -8% following a major lost contract with Lloyds Banking Group (more below).
Some positive momentum though for South African stocks following Jacob Zuma’s resignation – finally – yesterday: stocks with close links with the country such as Mondi, up +3.10%, and Old Mutual, up +2.9%, surged. “I will try very hard not to disappoint the people of South Africa,” new incumbent President Ramaphosa said to Parliament.
As to forex sterling was +0.27% up on the dollar mid-afternoon at 1.4053 while the euro crept +0.12% higher against the greenback to 1.2481. Tonight the FTSE 100 lifted just +0.28% overall to 7,234.11
- UK FTSE 100 7,234.11 +0.28%
- DAX 12,345.00 +0.05%
- CAC 40 5,218.50 +1.03%
- Euro Stoxx 600 376.34 +0.48%
- Dow 25,043.88 +0.60%
- S&P 500 2,709.72 +0.41%
- Nasdaq 7,197.81 +0.76%
- Nikkei 225 21,464.98 +1.47%
- Gold 1,352.90 -0.38%
- Oil WTI 60.28 -0.54%
Shares in Standard Life Aberdeen dive on Lloyds exit
A bad day today for the UK’s biggest fund manager. Shares in Standard Life Aberdeen (SLA) sank hard – initially by as much as -10% – following the cancellation by Lloyds Banking Group of its £109bn investment mandate.
Also a very bad day for Martin Gilbert who was Aberdeen’s chief exec when the two investment companies merged in March 2017. The Lloyds contract was worth more than 25% of Aberdeen’s overall asset base at the time. According to Lloyds the cutting of the contract was down to competition issues. It’s likely SLA will suffer an impairment charge of up to £40m.
“While almost a fifth of Standard Life Aberdeen's assets look like they might be walking out the door,” said Laith Khalaf, senior analyst at Hargreaves Lansdown, “this only equates to 5% of revenues, as these investment services are relatively low margin."
Airbus absorbs A400M charge but shares lift strongly
Elsewhere Airbus has had to write off another hefty chunk – around €1.3bn – on its beleaguered military transport plane project, the A400M. However Airbus boss Tom Enders said “a re-baselining with government customers will significantly reduce the remaining programme risks. This is reflected in a substantial one-off charge”.
But there was solace in the form of a hefty +9% climb in its share price to €92.48 thanks to strong underlying profits. Airbus is intent on delivering 800 commercial aircraft this year that should see a +20% hike in adjusted earnings.