FTSE 100 marches higher, with Wall Street expected to join fun

… (LON:RIO) down amid falling base metals prices, and two general insurers, Admiral Group PLC (LON:ADM) and Direct Line Insurance (LON:DLG).
  • FTSE 100 closes higher

  • Sterling’s loss is Footsie’s gain

  • All eyes on Fed minutes

FTSE 100 closed higher midweek as traders awaited the publications minutes from last month’s US Federal Reserve meeting.

Traders hope the tone from the US monetary policy committee meeting will be towards a further easing of interest rates, rather than a tightening of policy, which is making dealers buy up shares.

“In late July, the Fed cut rates, and dealers are banking on dovish language in the report, which might signal further rate cuts this year,” noted David Madden, analyst at London-based CMC Markets.

“Since the rate cut, the global macroeconomic mood has soured – US-China trade tensions, the UK and Germany saw negative growth, and increased unrest in Hong Kong,” he added.

The UK’s premier share index finished up 78.97 points at 7,203.97. Meanwhile, the more UK company focused FTSE 250 added 199.66 points at 19,207.75 as no-deal Brexit fears were apparently pushed aside.

On currency markets, the pound lost 0.22% against the US dollar further supporting the internationally-focused Footsie, while the gold price was near flat at US$1,513 an ounce.

3.25pm: Markets upbeat

US stocks have joined in with global markets’ good mood, with retailers Target Corporation and Lowe’s Co leading the way after they reported earnings.

The Dow Jones climbed 222 points or 0.9% to 26,186, while the S&P 500 index was up 0.8% and the Nasdaq Composite gained 0.9%.

With market watchers fretting about a possible recession, the retail pair both reported strong consumer demand.

Target shares surged 19% to an all-time high above $101 after second-quarter results from the discounter topped analyst expectations, with same-store sales growing 3.4% compared to the 2.9% expected.

Home improvement chain Lowe’s jumped 11% to $108.43 as it beat the Street’s estimates on revenue, same-store sales and earnings.

“We capitalized on spring demand, strong holiday event execution and growth in paint and our pro business to deliver strong second quarter results,” said chief executive Marvin Ellison, who has been at the company just over a year ago.

Meanwhile, in Brexitland, the pound lurched to day’s lows as newswires AFP and Bloomberg reported that the French government is expecting a no-deal Brexit as the “most likely scenario”, which would result in the immediate imposition of controls on the EU’s borders with Britain.

Sterling was down 0.4% against the dollar at 1.2119 and the euro at 1.0920, while the FTSE 100 was up 1.2% to just over 7,207

Boris Johnson’s Paris visit tomorrow heating up:

Emmanuel Macron aide tells AFP no deal ‘is becoming most likely scenario’

The aide insists that Britain will still have to pay £39bn Brexit divorce bill

‘The idea of saying there’s not a deal so I won’t pay does not work’

— Steven Swinford (@Steven_Swinford) August 21, 2019

2pm: European stocks in the green

There is a focus on Europe today as Boris Johnson heads off to talk Brexit with German premier Angela Merkel, while Germany’s bond sale hits a bum note and Italy reacts to the resignation of prime minister Giuseppe Conte.

After Conte quit and fired off a few epithets at his coalition partners, markets welcomed the populist partnership’s almost-certain end.

Italy’s FTSE MIB is the strongest gainer among the European indices, up 1.9%, while London’s FTSE 100 was up 1.2% at 7,212.

As Germany prepares to welcome the British PM, the country’s central bank created an unwanted record by selling the first ever 30-year government bonds with a zero coupon, which due to the price paid actually will have a negative yield of -0.11%.

READ: Why might investors buy negative yield government bonds?

Merkel meanwhile said in a speech that the talks with Johnson will cover “how we can get the most friction-free British exit from the European Union possible as we must fight for our economic growth”.

Analysts at Monex Europe said: “The chances of a breakthrough seem slim, but given Boris yesterday hinted at Britain being willing to make ‘commitments’, and Merkel said that the Irish backstop could be bypassed by a practical solution, there is at least a glimmer of hope for good news.”

The pound was having none of it, still down 0.3% versus the dollar at 1.2137, with tweeted efforts from the White House not moving the dial either, with the negative German debt further enraging President Trump.

…..We are competing with many countries that have a far lower interest rate, and we should be lower than them. Yesterday, “highest Dollar in U.S.History.” No inflation. Wake up Federal Reserve. Such growth potential, almost like never before!

— Donald J. Trump (@realDonaldTrump) August 21, 2019

1.45pm: Experian gets acquisition boost

Among the top blue chips today are credit checker Experian PLC (LON:EXPN), up 2% as it acquired Look Who’s Charging (LWC), an Australian outfit providing nifty technology to the banking sector.

This technology helps with “transaction enrichment and categorisation”, which the London-listed company says is designed to “make banking smoother and more straightforward for bank customers”.

Simply put, LWC shows small businesses and consumers who’s who on their bank statements, rather than a random list of numbers.

Capita PLC (LON:CPI) is also up 2% after it was upgraded to ‘buy’ from ‘neutral’ at Goldman Sachs.

Other broker action saw Victrex PLC (LON:VCT) upgraded to ‘equalweight’ by Barclays as analysts see 20% upside risk to consensus estimates on earnings per share, while Tullow Oil plc (LON:TLW) was lifted by an upgrade to ‘buy’ at Canaccord Genuity.

12.25pm: Wall Street expected to join market march higher

Wall Street is tipped to join in the market merry-making on Wednesday, while the FTSE 100 continues to inch higher.

On futures markets, the Dow Jones is pencilled in for an 0.6% gain to just over 26,000, with the S&P 500 seen adding 0.7% and the Nasdaq Composite best of all at 0.8%.

Nerves about a US recession look to have settled a little after last week’s panic, says market analyst Craig Erlam at Oanda.

“Now that everyone is an expert in inverted yield curves and the apocalyptic foresight they contain, there seems to be an odd acceptance of where we’re heading (or is it denial?)”

Another day spent waiting for that special yield curve to invert. #drumsfingers

— Chris Beauchamp (@ChrisB_IG) August 21, 2019

“The Fed will be all too aware of the events of the last week, not just because of its historic significance, but because investors are now relying on them even more heavily to save the day,” Erlam said.

“Markets are effectively pricing in a rate cut every remaining meeting this year. Are investors setting themselves up for disappointment or leaving the Fed with little choice but to follow?

“Clearly Powell can’t afford to get it wrong on Friday because any signal that markets are way off the mark will likely cause further mayhem, not to mention a backlash from the White House.”

While minutes of the most recent Fed meeting are due later today, Erlam said recent events might make them rather outdated.

Back in London, the FTSE is up 80 points or 1.1% at 7,205.28, as the pound softens further, down 0.3% against the greenback at $1.2130.

10.30am: Gains extended as TUI leads the way

London stocks have continued to rally on Wednesday morning, with news of a smaller than expected UK budget surplus unlikely to be providing the catalyst.

The Office for National Statistics revealed that July saw a small surplus of £1.32bn compared to £3.56bn a year earlier.

Public sector net borrowing, excluding banks, is up 60% year over year in the first four months of the fiscal year at £16bn.

“The small surplus in July’s public finances wasn’t enough to make up for the jump in borrowing since the start of the financial year and means that government borrowing still looks like it will overshoot the OBRs forecast,” said Capital Economics.

Economist Tom Pugh said it was likely that government borrowing will continue to overshoot the Office for Budget Responsibility’s forecast over the next few months as the government ramps up spending on preparations for a no deal Brexit, while a change in accounting approach will raise the deficit by more than £10bn a year.

Among the biggest share price movers in the upper FTSE echelons, tour operator TUI AG (LON:TUI) was flying highest, up 4% to 791.6p.

Research by UBS showed all the airlines showed more deterioration than expected in their most recent customer review scores, nut with TUI showing the highest score among 20 airlines.

Elsewhere, dollar earners were doing well in general as the pound softened another 0.2% against the dollar to 1.2141, with leaders including Smurfit Kappa Group Plc (LON:SKG), Burberry Group PLC (LON:NRBY) and Rolls-Royce Holdings PLC (LON:RR.).

The FTSE 100 was up 75 points or 1.05% to 7,199.81, with only five stocks in the red, with miners BHP Group PLC (LON:BHP) and Rio Tinto PLC (LON:RIO) down amid falling base metals prices, and two general insurers, Admiral Group PLC (LON:ADM) and Direct Line Insurance (LON:DLG).

8.52am: Stronger start than expected

The FTSE 100 got off to a stronger than expected start, rising 31 points to 7,155.74.

Sentiment for the coming days could be shaped by the US Federal Reserve minutes out after hours London time.

Ahead of their publication trading volumes in the dealing rooms of the Square Mile are likely to remain subdued.

Gold, a haven investment in times of uncertainty, continued to hold firm above US$1,500 an ounce, reflecting the nerves of the market.

The pound was steady at US$1.2153 with forex traders buoyed by comments by German chancellor Angela Merkel stating the EU would look at “sensible” suggestions for solving the UK-Ireland border issue.

Turing to the stock market, construction group Costain (LON:COST) led the All-Share with a 12.6% rise.

This after its profits crumbled. It appears, however, the carnage wasn’t quite as bad as the market had been anticipating.

Nostrum Oil & Gas (LON:NOG) was the day’s big loser as it tanked 20% after Berenberg slashed its target price and downgraded the shares to ‘sell’.

READ: Nostrum gets bloody nose after Berenberg double-downgrade

6.30am: FTSE 100 set to open a “touch higher”

The FTSE 100 is expected to open a touch higher on Wednesday as investors seemed content to stay put while awaiting possible direction from Fed minutes due later.

Spread-betting firm IG expects the FTSE 100 to open about 4 points higher after the index closed 64 points lower at 7,125 on Tuesday.

Fears of a recession have been mixed with hopes of renewed fiscal and economic stimulus by national governments to counter the slowdown, with US President Donald Trump recently floating the idea of tax cuts while the German government is seemingly considering a bond sale.

Traders will also be looking to the minutes from the Federal Reserve’s previous policy meeting in June, when it cut interest rates for the first time since 2008, to gauge the possibility of further cuts this year.

This will also be in focus ahead of the Fed’s annual Jackson Hole seminar later this week, which will provide further clues on how the central bank plans to boost growth.

The gloomy mood around a recession weighed on US markets overnight, with the Dow Jones ending Tuesday 0.66% lower at 25,962 while the S&P 500 fell 0.79% to 2,900 and the Nasdaq dropped 0.68% to 7,948.

The pessimism continued into the Asian markets on Wednesday, with the Japanese Nikkei 225 down 0.3%, although Hong Kong’s Hang Seng bucked the trend slightly and was up 0.11%.

On the currency markets, the pound slipped 0.12% to US$1.2154 against the dollar and was also down 0.05% at €1.0955 against the euro amid ongoing doubts that Boris Johnson will be able to extract any concessions from major EU leaders when he visits Berlin and Paris this week.

Quiet day for company news

Wednesday looks like being another quiet one in the Square Mile, with only a handful of companies known to be releasing news, while there is also some relatively small-time data due.

One of the few set to report is industrial REIT, Hansteen Holdings plc (LON:HSTN), which is due to post its half-year numbers.

Significant events expected on Wednesday August 21:

Interims:Charter Court PLC (LON:CCFS), Costain PLC (LON:COST), Empresaria Group plc (LON:EMR), Hansteen Holdings plc (LON:HSTN)

Economic data: UK public sector net borrowing, US existing home sales, MBA US mortgage applications, US crude oil inventories

Around the market:

Sterling: US$1.2154, down 0.12%

Brent crude: US$60.35 a barrel, up 0.5%

Gold: US$1,502.47 an ounce, down 0.14%

Bitcoin: US$10,230.4, down 5.3%

Proactive news headlines:

ReNeuron Group PLC (LON:RENE) has appointed three people with “world-class breadth of expertise” in the fields of ophthalmology and stem cell research to its scientific advisory board.

Brady PLC (LON:BRY) had reported that recurring revenues for the first half of its financial year have been in line with expectations.

Canadian Overseas Petroleum Limited (LON:COPL) said it will raise £500,000 via a stock placing at 0.1p a share.

Asiamet Resources Ltd (LON:ARS) expects to improve the economics of its Beruang Kanan Main (BKM) copper project Indonesia after signing up a well-connected Chinese engineering, procurement and construction management contractor.

Galantas Gold Corp (LON:GAL) confirmed sales of US$460,000 in its second-quarter following the start of shipments from the Omagh mine in Northern Ireland.

City headlines:

Giuseppe Conte has resigned as Italy’s prime minister, deepening the country’s political crisis – Financial Times

A major newspaper closely connected to Turkish President Recep Tayyip Erdoğan has raised concerns over Oyak’s deal to rescue British Steel from insolvency – Telegraph

British technology start-ups have received a record $6.7 billion in new funding this year, shrugging off concerns over a no-deal Brexit – The Times

Britain will automatically enrol nearly 90,000 companies in a customs system in order to reduce the risk of Brexit disruption, the government said, its latest attempt to show it can leave the European Union without a deal if necessary – Reuters

Mike Ashley has sacked the boss of Jack Wills just weeks after buying the preppy clothing retailer out of administration – Telegraph

The EU turned down Boris Johnson’s latest call to renegotiate the terms for Britain’s withdrawal from the bloc – FT

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As Far Right In Italy Rises, A Blockchain-Friendly Government Teeters

As Far Right In Italy Rises, A Blockchain-Friendly Government Teeters … contract” and “distributed ledger” recognized by Italian law for the first time.

A mural painted on a building shows Italian Deputy Premiers 5-Star Movement’s Luigi Di Maio, left, and The League’s Matteo Salvini with their backs to each other and their phones in their hands, in Milan, Italy.

ASSOCIATED PRESS

Italy’s government is fast-approaching a crisis. The coalition government of the e-voting oriented, populist, anti-establishment Five Star Movement (M5S) and the far-right League party have fractured at the seams, with League leader and Deputy Prime Minister of Italy, Matteo Salvini, looking to grab power by forcing a snap election. With polls showing that he could almost single-handily win a majority by slightly improving his popularity in an autumn election, Salvini looks to ride a wave of anti-migrant sentiment, a flat tax, and his “Italians First” motto to consolidate his power, abandoning his current coalition partners.

Italy’s current Deputy Prime Minister and Minister of Economic Development, Labour and Social Policies, Luigi Di Maio, is the leader of the Five Star Movement and a blockchain supporter — and up to now, the main coalition partner of Salvini, the two of them lending their party support to Prime Minister Giuseppe Conte while benefitting from cabinet positions.

In his travels to the United States for a technology event, Di Maio would note that “Italy is the first country in Europe that has already introduced the blockchain in its own legislation, equating the notarization of deeds made by a notary with that made with blockchain. Smart contracts have been a reality in our system since December.”

With his economic powers, Di Maio has implemented a one billion euro fund to complete the digitization of Italy, with heavy emphasis on supporting cryptocurrency/blockchain and AI initiatives. The investment in this fund was billed as a way to encourage innovation and to try to get young people to stay in Italy.

Di Maio’s Ministry of Economic Development convened a panel of 30 experts to help it develop a cohesive blockchain strategy. Driven by him, Italy joined the European Blockchain Association and was part of a series of amendment of laws in the Italian Senate that saw the terms “smart contract” and “distributed ledger” recognized by Italian law for the first time. He has openly mused about blockchain being used to support “Made in Italy” initiatives.

This forward-looking attitude to blockchain has its basis in the Five Star Movement that Di Maio now leads, which pioneered the use of e-voting for party decisions and participatory budgeting among its internal movement and which advocated for more online direct democracy in Rome when the party took power there. M5S founder Beppe Grillo commented that “It should be the citizens and the local community who govern cities through the Internet, using collective intelligence. The web is revolutionizing the relationship between citizens and institutions making direct democracy feasible, as applied in ancient Greece.” He has blogged about blockchain solutions in science and off-handily (and perhaps in jest) referred to blockchain concepts to enforce accountability in politics.

Both the Five Star Movement and the center-left coalition that governed Italy before the League and the M5S are now looking to delay snap elections being held as Salvini has approached the current peak of his popularity. Salvini is looking to govern in a majority government by himself, or perhaps in coalition with the Brothers of Italy, a far-right nationalist party that draws its roots from the Italian Social Movement, formed in 1946 by supporters of the deposed Benito Mussolini — or the center-right coalition brought together by the eternally-present Silvio Berlusconi.

His pursuit of power is linked to the next budget bill Italy must pass. Salvini wants a flat tax, while the M5S want universal basic income. The two parties, drawn together in a pragmatic power-sharing relationship, have now split at the seams and are unlikely to want to have anything to do with one another for the next few elections. Both sides have descended into a flurry of insults.

While Di Maio and his Five Star Movement have championed blockchain in many instances, Salvini has never noticeably mentioned it.

After sweeping to power in European elections, the League leader has mentioned creating an alternative currency to the Euro, the “mini-BOT”, a government issued security that could be used to pay down debt, essentially threatening to undermine the Euro by giving Italy a way to finance its large public debts by issuing liquidity on its own. Though supported by Five Star Movement, the alternative was originally proposed by the League.

The securities would be government-issued and controlled and it’s fair to say that the “mini-BOT” may be an “anti-cryptocurrency” in many of its principles — centralized, and built to expand political power for an authority — though interestingly localist and autonomous when compared with the larger Euro it seems to undermine. Coupled with Salvini’s drive to tax safety deposit boxes at 15% to make room for his flat tax however (where Italians have an estimated $200 billion Euros stashed), and it’s easy to see how a Salvini-led government with no M5S support could quickly be indifferent at best to blockchain and cryptocurrencies, and hostile at worst.

Italy’s coalition government, shaky as it was, had leaders that were at the center of government who were blockchain advocates and who advanced policy that made a meaningful difference in Italy’s blockchain adoption. With the rise of the far right and an attempt to sideline those figures in government who made those advances, it looks like the blockchain friendly government present in Italy will be no more.

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Aurora Stock is Downgraded Despite Securing Major Order from Italy

In another major development, Aurora Cannabis, announced today that it has emerged as the winner in the public tender by the Italian government to …
Aurora stock

On Thursday morning trade, Aurora stock slide by as much as 6% as Bank of America Merrill Lynch expressed concerns about the company’s cash burn and downgraded Aurora Cannabis (TSX:ACB) (NYSE:ACB) from buy to neutral.

Surprise Downgrade

The analyst Christopher Crey stated that although the company has emerged as one of the most efficient operators in the industry, it has continued to burn through cash far too quickly and hence, the company is in danger of becoming cash negative.

Christopher Crey stated that “[Aurora] is burning cash and by our estimates could be cash negative by CQ120 (absent financing), namely if a large convertible debenture due in CQ120 stays out of the money.”

Aurora Gets Big Order from Italy

For the biggest marijuana companies in North America, international expansion remains the next big target, and many of them are making important moves in overseas markets.

In another major development, Aurora Cannabis, announced today that it has emerged as the winner in the public tender by the Italian government to supply medical cannabis to the country. As many as five companies were in contention to land this lucrative tender, but in the end, the Italian government went with Aurora.

>> TGOD Stock: FDA Expedites CBD Regulations, but Will Shares Benefit?

Aurora stock is trading lower by 5.50% at $9.15 on the TSX. On the NYSE, however, ACB stock is up 5.95% and now trading at $6.95.

Aurora also won the very first tender to supply medical cannabis to Italy back in January of 2018, and the latest development further reinforces the company’s standing as a supplier of repute in the country. Moreover, it is also important to note that Italy has an extremely stringent requirement from companies that supply them, which bodes well for Aurora if it is looking to also supply other countries in Europe. According to the terms of the deal, Aurora is going to send 400 kilos of medical cannabis to Italy over the next couple of years.

Aurora Cannabis has been making pretty impressive moves over the recent past. Recently the company announced that it has acquired outdoor cultivation license at two new sites, one in British Columbia and the other in Quebec. The award of outdoor cultivation licenses is a big win for a company of its size since it allows the company to bring down its costs rapidly. At the end of the day, Aurora would not have to spend heavily on artificial sources of light because it can use natural sunlight.

Aurora stock is up about 32% since the beginning of this year and remains among the most popular companies in the cannabis sector. Do you agree with the analysts who downgraded Aurora stock, or do you agree more with Italy’s decision to order from the company?

>> Read More Aurora News

Featured image: Canva

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Aurora Wins Italian Medical Cannabis License

Canadian cannabis company Aurora Cannabis Inc. has been selected as the only winner of a license to provide medical cannabis in Italy. The firm …

Canadian cannabis company Aurora Cannabis Inc. has been selected as the only winner of a license to provide medical cannabis in Italy. The firm beat out five other companies who applied with the Italian government for the position.

Aurora won Italy’s first tender in January 2018 and has since been providing the nation with medical cannabis products. The new two-year contract requires Aurora to supply a minimum of 400 kilograms (about 882 pounds). The products are imported through the Canadian company’s wholly-owned European subsidiary Aurora Deutschland but are cultivated at its Canadian facilities, according to a press release.

In Italy, medical cannabis is distributed through pharmacies. Medical cannabis is purchased through an agency within the Italian Ministry of Defense. The Italian Army also cultivates medical cannabis but in 2017 the program only produced 220 pounds for the entire nation. The end product is reportedly low quality but over the next two years the Army’s cannabis production is expected to triple and recent health legislation allocated $2 billion in funding for the program.

Under Italy’s program, medical cannabis is approved for patients suffering from severe conditions including chronic pain; spasms associated with pain, such as those suffering from spinal cord lesions or multiple sclerosis; patients undergoing chemotherapy, radiotherapy, and HIV therapies; drug-resistant glaucoma; and Tourette’s syndrome. Additionally, medical cannabis use is permitted in cases that require appetite stimulation, such as cachexia and anorexia. The guidelines allow for medical cannabis use when all other conventional treatments fail.

The government does not make available the program’s patient count figures. Medical cannabis was legalized in Italy in 2013.

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Italy Launches New Project for Waste Collection Management

… contribute to the growth and development of AI, blockchain and distributed ledger tech (DLT) systems as applied to solid and liquid waste collection.
Jul 14, 2019 at 12:13 // News
Author

Coin Idol

The company plans to roll out new blockchain related technologies in the coming two years, especially those targeting at creating solutions towards solid waste management in Italy and Europe at large.

A new project for solid waste collection management was recently launched in Italy. The blockchain-based initiative was implemented by Partitalia, a company that develops innovation based on artificial intelligence (AI), blockchain and wearable to simplify and improve people’s lives.

The company plans to roll out new blockchain related technologies in the coming two years, especially those targeting at creating solutions towards solid waste management in Italy and Europe at large. The project will later work in the management of other types of wastes including liquid waste, organic waste, recyclable rubbish and hazardous waste.

The company has chosen 3 universities that are internationally recognized to help it carry out these trailblazing development projects. These selected universities have been found out to be Scuola Superiore Sant’Anna in Pisa, University of Pisa as well as Politecnico di Milano. In order to keep the Italian environment clean, Partitalia has partnered with a team that was started to add technological proficiency in the field of fintech popularly known as Meditchain consortium of Palermo.

A Step in the Right Direction

According to Luca Del Col Balletto, Partitalia’s Chief Executive Officer, the planned investments will contribute to the growth and development of AI, blockchain and distributed ledger tech (DLT) systems as applied to solid and liquid waste collection.

Partitalia is a big addition in the blockchain industry since it is pro to innovation and has been for long advocating for the use of the technology in the circular economy, the management of the cycle as well as the enhancement and valorization of waste products. The economy will have a great impact in future since it will help in the prevention of pollution, hence stopping global warming.

Through blockchain technology, a general incentive system for the Italians plus the effective system for the Public Administration will be created. The system will enable a timely service based on exact calculation of wasted emitted and conveyed for landfill. Therefore, ensuring the authorization of the whole supply chain in a technological and certified way is a main purpose that Italy can’t afford dodging.

There are other blockchain-related projects in Italy that are contributing to the sustainable life in the country. For instance, a bioplastic producer EarthBi is trying to use blockchain to effectively trace all of its bioplastic products that it manufactures in Italy.

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