The FTSE 100 (FTSEINDICES: ^FTSE) has risen cautiously this morning, up 0.2% to 6685 points, ahead of the Bank of England’s quarterly inflation report. Investors were yesterday pleased with the news that Janet Yellen, the new chair of the US Federal Reserve, is likely to continue reducing the US central bank’s monthly bond-buying stimulus programme.
We’re now waiting to see whether Bank of England governor Mark Carney will overhaul his interest rate strategy. Carney has previously stated that he wouldn’t consider an interest rate rise until unemployment reached 7%. It was thought that it would take until 2016, but the latest unemployment rate stands at 7.1%.
These are the shares that should beat the market today:
Standard Chartered
Shares in Standard Chartered (LSE: STAN) are up 2.5% to 3,302p this morning, after news that the bank has appointed Michael Benz as the new head of private banking. Benz, formerly of Swiss bank Julius Baer, has spent over 20 years in asset management, private banking and treasury.
Standard Chartered, which conducts more than three quarters of its business in Asia, escaped from the financial crisis largely unscathed. However, in December the bank warned that its 10 year record of successive earnings expansion would likely end. The stock has fallen 26% in the last 12 months.
Morrisons
Shares in Morrisons (LSE: MRW) jumped 2.5% to 243p, easing slightly following an initial 5% surge, after news that the grocer’s founding family is considering taking the chain private. Private equity firms have been approached to gauge interest in a buyout, which could exceed £7 billion, but there is no certainty of a deal taking place.
Morrisons, the UK’s fourth biggest supermarket, has been a late entrant into the online and convenience store sectors. Sales tumbled over a challenging Christmas period,which might be the main reason that the family has thus far been unable to find a buyer. The Morrison family owns around 10% of the chain.
Rio Tinto
The international mining company Rio Tinto (LSE: RIO) (NYSE: RIO.US) posts financial results this week and it has been tipped to lift profits. Rio’s shares added 55p to 3,515 during trading this morning, with analysts also expecting a dividend increase. The firm has been cutting operating costs as well as increasing productivity to combat falling commodity prices.
It is estimated that Rio will produce approximately 330 tonnes of iron ore from the Pilbara, Western Australia, in 2014. The company has a market cap of £65bn and currently trades at 8 times expected earnings. The prospective dividend yield of around 3.5% could shift when new figures are released.
