Investors nervous ahead of US Fed meeting and latest eurozone effortsLeading shares remain in uncertain territory as the Greek financial crisis rumbles on towards its latest deadline with no sign of agreement, and investors await comments later from Federal Reserve chair Janet Yellen on when US interest rates might rise.The FTSE 100 has drifted 8.02 points lower to 6702.02, in the wake of Bank of England minutes and unemployment and average earnings figures. The jobless rate was stable, but average earnings were higher than expected.We initiate with underperform ratings on Tesco (target price 169p) and Sainsbury (target price 219p) and a neutral rating on Morrisons (target price 176p): Like- for-like sales continue to be negative at all three companies, but margins are declining even faster. We see no obvious path back to recent margin levels. Morrisons’ relatively better positioning is due to its more homogeneous store estate, higher freehold levels and opportunities to resolve its internal issues.We initiate on Ocado (target price 466p) with an outperform rating: Ocado is a market leader in the only part of mainstream grocery that is growing strongly. We expect advancements in many areas of its business to improve gross margins, as well as additional third-party sales of its fulfilment technology. Continue reading...
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