Financial market research and analysis

The FTSE has added 2% in early trade as some of the basic resource stocks are presently retracing some of yesterday’s losses on foot of some consolidation in  copper and oil prices.  The oscillation in equity indices between big declines and big rallies and the nervousness in investor sentiment is evident. The FTSE has been stuck in a 300 point rnage since the beginning of the month and would really need to make some push through the 6300 to put aside any true bearishness.

Randgold (-0.43%) Rated new hold at Jeffries, PT 4000p.

Fresnillo (Flat) shares started well, rising 1.5% but as precious metals settle following yesterday’s drive, the price has pared back. The company announced yesterday that it has completed a $6m investment in the Coneto Project with Orex.

Glencore (+5.11%) despite suspicions that recent steps from the company may be insufficient to reduce debt and bulk up its balance sheet, Glencore is a top riser today. The expression ‘coming off a low base’ has never been more apt. Broker sentiment on the stock seems to be warming nevertheless with 50% having a buy rating and an average 12 month target price of 201.25p.

Anglo American, Rio Tinto and Antofagasta have all seen early gains in excess of 2%.

Johnson Matthey +5% is the top riser as its stock was raised to buy at Redburn following the rather overdone sell off on the back of the VW debacle. To say that traders jumped the gun in respect of this company is probably an understatement. Shares lost more than 11% of stock value last week despite the fact that catalysts account for more than 15% of profits.

German automakers are also staging a bounce back from the recent sell off this morning with BMW(+5%) leading the charge and Daimler not far behind (+3.9%). Volkswagen (+2.59%) is up on the day, beating the benchmark but underperforming its peers as uncertainty still weighs on the fall out of this scandal.

Given that British banks approved its highest number of mortgages in 18 months last month; a five year high its little surprise to see the housebuilding sector looking chirpy this morning. The record low interest rates look set to continue for a while in the UK. Janet Yellen more or less implied a hike in December during her statement last night, thus using historical trends, the BOE may well not look to rise until at least March of next year.

Berkeley Group, Persimmon, Land Securities and Taylor Wimpey have all added 0.85% in early trade.

Other highlights:
Imperial Tobacco  (-0.69%)    Continued bid speculation in the UK press keeps this  stock elevated to a now all time high and price action bang on the average broker 12  target price in early trade

GKN +2.38% is also benefitting from some bargain hunting in the wake of the VW scandal. Average 12 month price is 363p.

US GDP final print is released this afternoon and given that Yellen’s speech more or less confirmed that (depending on data) a rate hike could be expected before the end of the year. Should the number meet expectations, this may well see the dollar pursue higher levels. The probability of monetary tightening in December is at 50%.

We are calling the Dow higher by 145 points to 16346.