John Dance

Member Article

Vodafone and ITV lifted on analyst upgrades

Important data for consideration today came in the form of nonfarm payrolls and the
unemployment rate in the US. It was to arrive after strong results from the ADP Employment Report
yesterday, which usually gives a reasonable indication as to the outcome of the official nonfarm
data.

The much anticipated unemployment data came in ahead of expectations, with nonfarm payrolls up
200,000 in December with unemployment at 8.5%. The corresponding figures for November were
100,000 (a downward revision) for nonfarm payrolls and an unemployment rate of 8.7%.

Whilst indices received a nice boost following the upbeat numbers, appetite for risk assets wavered
in mid afternoon and the FTSE 100, which was up around 1%, gave up nearly all of its gains. It was
evident that eurozone concerns persisted, with an earlier release of eurozone unemployment data
for November showing a jobless rate of 10.3% at a total of 16.372 million. Good PMI data out of
Germany did little to help and Italian 10 year bond yields were still trading above the 7% level. Risk
aversion hurt European banking stocks that dragged their American counterparts lower, limiting
gains on US markets.

The FTSE 100 recovered from its afternoon lows to finish 25 points higher at 5649.7, a 0.45% gain
that saw it significantly outperform European indices that traded around 0.5% in the red.

Domestically, we learnt that the struggling Blacks Leisure is to go into administration in a deal that
will leave nothing for the current equity holders.

Vodafone, one of the largest constituents on the FTSE 100 was buyout following an upgrade to
buy from neutral at Goldman Sachs. Analysts highlighted strong earnings growth and an increasing
dividend from Verizon Wireless, of which Vodafone owns a 45% share, in their improved price
target. The shares closed 1.2% higher at 179.5p. ITV was also subject to an upgrade, ensuring it was
one of the FTSE’s strongest performers with a 2.74% gain to 71.35p.

This was posted in Bdaily's Members' News section by John Dance .

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