Proactive Investors -
- FTSE 100 up 114 points at 7,644
- Consumer confidence hits 2-year high
- Burberry, Diageo (LON:DGE) boosted by LVMH (EPA:LVMH), Remy Cointreau
Rightmove to benefit from more conservative market expectations
Rightmove PLC (LON:RMV) is up 1.7% after Morgan Stanley (NYSE:MS) upgraded the online property portal to ‘overweight’ from ‘equal weight.’
The investment bank sees the stock benefiting from conservative market expectations, priced in CoStar risk, as well as a housing environment turning from a headwind to neutral impact.
MS believes 2028 group targets as achievable, even if growth areas fall short of targets, creating upside risk to estimates.
It has increased its discounted cash flow price target to 600p from 530p.
“At our price target, Rightmove's valuation continues to be at the cheaper end of European vertical pureplays, given its lower FCF/share versus Hemnet and Scout24 over time,” the bank said.
Meanwhile, the FTSE 100 has brought up its century, bat raised, as it tests fresh highs for the day.
UK firms expect pick-up in M&A in 2024
Takeover deals will pick up in the UK this year as British companies and institutional investors are optimistic about the outlook for acquisitions, a survey by investment bank Deutsche Numis showed.
Almost nine out of 10 UK corporates see a positive picture for M&A in 2024, with larger transactions expected.
Nearly a quarter of the survey’s respondents are more likely to go after “transformational” deals, double last year’s figure, reflecting growing confidence as market conditions improve.
“Both UK corporates and investors are starting the year with a sense of positivity on M&A,” said Stuart Ord, co-head of M&A at Deutsche Numis.
“Corporates’ ambitions for larger deal sizes, higher levels of cross-border dealmaking and collaborative deal structures could start to reshape the UK M&A landscape in 2024.”
US markets seen lower ahead of inflation data
Stocks in New York are expected to open lower on Friday as investors await the personal consumption expenditure report which includes the Federal Reserve's preferred inflation gauge.
In pre-market trading, futures for the Dow Jones Industrial Average were down 0.1%, while those for the S&P 500 were down 0.1% and contracts for the Nasdaq 100 futures fell 0.5%.
On Thursday, US economic growth was markedly stronger than expected at the end of last year, numbers showed, suggesting the world's largest economy is still in fine fettle despite interest rates entering restrictive territory.
But while the economy grew at a faster pace than expected, inflation pressure ebbed, boosting hopes for an economic soft landing.
In the fourth-quarter, the personal consumption expenditures index rose 2.8% on-year, easing from a 3.1% rise in the third-quarter.
Monthly PCE data for December, including the Federal Reserve's preferred core measure, are released at 1330 GMT on Friday.
The next Fed decision is on Wednesday next week.
Stocks to watch include Intel (NASDAQ:INTC), down 10% in pre-market trading after first quarter guidance disappointed the Street.