The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Recent data: Global construction increased on average by 3.1% in 2014 and 3.8% is forecast for 2015. This expansion provides huge opportunities to those investing and operating in the industry as well as those supplying goods and services to it. Between 2016-2020 the construction industry in advanced economies combined is forecast for a growth of 2.2% a year on average while in emerging markets a 5% yearly expansion is forecast.
A continued growth in sales in the UK was seen by manufacturers of construction products in 4Q according to latest trade survey. A further increase in sales is expected for 2015 and also with increased demand from overseas markets.
Associated General Contractors : Recent data released revealed total construction spending in USA in January posted the steepest year-on-year increase since 2006. Public construction is up for now on a year-over-year basis but funding into future remains questionable.Public construction spending increased for the first time since 2009. AGC says that the presidents budget proposal and suggested infrastructure funding program should help construction spending continue to grow. For the first time in nearly a decade there was growth in all three major construction sectors,public,private non residential and residential. The full year total of $961 billion was up 5.6% from 2013. The most active segments were in 2014 as a whole were warehouses which leaped 50% and multi family 34% and both these should do well again in 2015.
should read : ''shale gas is being produced 28 days later........''
OIl analyst comment: ''oil is bottoming out in a volatile way and will slowly rise from 2Q'' ''from time frackers arrive at a new site,oil is being produced 28 days later and that is impressive'' Greek comment: ''if Greece imposes capital controls on banks it's the same thing as saying your deposits are no longer safe and no investment from outside will come to Greece'' US data today: Treasury various 160 companies report earnings UK data: retail sales Germany: ppi Good day Friday to all
Oil comment: ''Shale oil producers cutting capex/costs and fracking on and optimistic on price recovetry'' City of London comment: ''cheaper oil gives the average London cabbie about a £3000 saving on his running costs and a significant plus to his disposable/discretionary income'' Market analyst comment: ''markets are now more confident that falling oil was not lack of global demand/slowdown but simply an oil market dynamic'' EOG large US oil/gas independent has cut it's capex and costs but is fracking on.It's eps came in about 20 cents under expectations but retains a strong buy rating. Fed/Boe minutes in no rush to increase rates. US data today: 298 companies release earnings Philadelphia fed index feb leaing indicators jan initial claims crude inventories Bloomberg consumer comfort index UK data: cbi industrial trends survey Greek comment: ''intensified run on deposits from Greek banks will pile pressure on Syriaza'' AHT sp should continue to rise,it depends today how the crude inventories number comes in at and how it affects oil price,and if there is a knock effect to URI if any which could then possibly affect AHT. But with earning season coming to a close and the US market has a better view of what lays ahead it has probably decided that stocks like URI are too low,even with a volatile oil price and are factoring this and adjusting the sp north to where they should be and URI has been very robust recently and that will also bring up the AHT sp,as both are decent companies and oil is only part of a broadly based and diverse business which are major players in a servces/rental sector where demand is high and also contributing to an increase in rental prices and increased cash flow. Good day investing to all
City of London comment: ''we have advised our clients that EU equity markets present a risk at present with geopolitical concerns and fallout of Greece leaving euro,but their is a risk appetite for equities'' ''a few bad headlines and US and Japanese investors could depart EU equities with a resultant 10/15% correction'' ''EU macroeconomics improving and with ECB QE program and accommodative policy is a plus for investment and bank lending/demand for financing is increasing and is a welcome positive going forward'' UK data today: BOE interest rate minutes unemployment rate US data: 251companies release earnings fomc minutes housing starts building permits industrial production january core ppi January some of the big independent oil producers/shale are reporting this week and will be closely watched. Oil analyst comment: ''shale oil is a manufacturing process and these companies have improved and refined their extraction tech which has steadily reduced costs'' URI sp increasing nicely where as one analyst put it a couple of weeks ago,that a lot of smart money was coming it's way when sp was $84,now it's $94+ City of London comment Greece: ''we are looking at a kind of usual EU 11th hour agreement on Greece and Greece stays in euro'' ''Greece departs would cause short term chaos/volatility with a 10% slump in EU equity markets'' Ukraine: Putin nearly has his railway station and I suppose then it may settle down a bit. Good day investing to all
Oil analyst comment: ''Oil glut going into 2Q as refinery maintenance season is kicking in'' ''countries to continue pumping to maintain market share and Saudis could easily add another 3 million barrels a day if they get irritated'' ''Saudi production cost per barrel is about $8'' ''low oil prices give the US consumer about $150 billion in additional disposable income'' US data today: NY empire state index feb 2015 net foreign purchases UK data: consumer/producer/retail price index EU data: Germany ZEW data eu car registrations Greek tabloid headline: '' agreement or accident'' some agreement may materialise before Friday! But Jesus ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ Good day investing to all
AHT sp should move back into low £11+ again with the earning season coming to a close and the US and UK economies approaching March in an upbeat mood. Oil price seems to be $teadying up and Ukraine peaceful! for awhile and market satisfied that Greece/EU will be falling in love again. Hammerson released good figures this am and CEO states that Retail demand is spreading well out of London and into the regions as the consumer has money to spend and the future looks promising. Business comment on oil price this am is that the recent surge in the oil price will continue. So the falling knife was somewhat blunt!!-but heavy bets on oil going under $40 will be over the moon! The bears on the professional trading desks-AT-will bounce the sp around,but approaching Q3 release the sp should be around £11.50ish But she's a bouncey girl. Good day investing to all
Editorial comment: The stock market has advantages and challenges for rental companies who raise money for investment to grow their businesses. The NYSE is capitalised at approx. US $25 Trillion while the global private equity market is around US $2 Trillion. Company management generally has more autonomy on a stock market compared to the private equity route.Most investors are passive and rarely require a seat on the board.Some stock market investors do not rquire even an annual dividend. Investors are happy to see the company grow in value with a rising share price.But it can be a rollercoaster ride as investors move in and out of the market.Share price declines when macroeconomic factors such as fall in oil price and potential fear of a slowdown weighs on investor sentiment. Low or volatile share price makes it difficult for rental companies to raise money and for their investors to realise their investment. Expect to see more rental IPO's in the US and elsewhere and subsequent share issues as companies raise first time and additional money on the stock market despite the temporary decline in share price. Ashtead/United Rentals together have more than $17 Billion of stock market investment and the available investment for growth is worth the cost and inconvenience* of dealing with the rollercoaster. *inconvenience-the initial cost of setting up the paperwork etc for a stockmarket listing-approx. $5 million- and then the routine Quarterly earning releases and mandatory requirements and regulations to observe in keeping the market and investors informed* Wall Street on holiday today-Presidents Day
US Treasury Secretary comment: ''The economy has achieved sustainable growth but wages remain a problem'' Senior portfolio manager comment: ''Earnings will help stocks overcome the headwinds of the strong dollar this year'' Greece comment by CEO of large Italian bank: ''Greece to leave Euro would be a disaster for Greece and only a ripple effect on the markets'' General sentiment is that a deal/compromise will be sorted and Greece stays in. US data tomorrow: 179 companies report earnings university of michigan confidence EU: balance of trade gdp Germany gdp Oil analyst comment: ''Oil production in US will continue at full capacity for 2015 and into 2016'' ''Oil may go to about a 45$ dollar bottom and Citi's 20$ is a nonsense'' AHT sp should steady up now and rise to about £11.50ish-so long as there are no major events in these volatile times BOE Carney predicts inflation to go negative for awhile and upbeat about a higher GDP figure for economy. Good day investing Friday
Some sort of agreement has been reached,at least Germany/France are doing their best and at least its something for the market to digest! US datatoday: 330 companies report earnings retail sales January business inventories Bloomberg consumer data initial claims EU: industrial production UK: BOE inflation report rics housing survey Greece/EU might! come up with something,another few days of tedium remains before market can go on something Come on down Apple the market loves you Good day investing to all
'' EU equity portfolio is attractive and we are looking at 10/15% and the following tailwinds are QE,which encourages risk and makes equities attractive,low oil which is good for consumer and manufacturing and interest rate hike when it comes is incremental and in the long run good for the market,low euro is also a plus''
Rental News editorial comment 9th Februaryt: Expansive north American rental company has acquired US based north Virginian rental company Theros equipment rental following a string of recent bolt on acquisitions in recent months. Vice president for Sunbelt business development stated: ''Acquisition of Theros presents a unique opportunity to broaden our service network in a very active market and brings with it a team of rental professionals eager to provide our combined customer base with expanded equipment availability distribution and support''. This follows a bolt-on acquisition and also Sunbelt's initial expansion into Canada. Good day investing to all
Economic data: 240 companies report earnings crude inventories mortgage applications Good jump on S&P500 index but little movement on URI-which seems to move when oil moves!,or the market is just keeping it at around 90$ for the minute-markets are loopy anyway. Earning season drawing to a close Crunch day for Greece-whatever happens anyway as one commentator put it,EU is a much more robust and structured thanks to the banking/credit debacle and a sound financial structure has been put in place since 2008. Another comment is that if Greece EXITS it will become one of the most attractive countries in Europe to do business in. Apple has got plenty of money,so they good do a deal with Apple-come on down Apple came a voice from the heavens and Jesus was smiling all the way to the bank. Good day investing to all
Market comment-Greece: ''Though US markets reacted negatively economists agree that for the most part the actual impact on Wall Street will be negligible'' Oil comment: ''...according to Citi analysts the bounce in oil prices will be short lived ,a meaningful pullback in oil production is not likely till 3Q and until then the oil price could crater as low as 20$'' in a note to investors. Market comment: '' Stocks will continue to be volatile and going nowwhere'' Analyst oil comment: ''no bounce in oil expected and by 2018 the price is estimated to be around 70$'' UK market comment-Greece: ''There's a deal in their somewhere and all will be playing out for sometime'' US data release: 191 companies report earnings wholesale inventories-decr 2014 UK data release: brc sales monitor industrial production manufacturing production Good day investing to all
Inflation/interest rates market comment: ''Fed will move in June'' ''Fed will wait till Septr'' ''with these jobs/wage figures,2015 will be a inflation story'' ''Fed will move when GDP averages about 4%,looks more like 2016'' Layoffs in the oilfields: Skilled tradesmen like carpenters,welders/fitters,electricians,groundwork,site managers,engineers and machine operators have moved back into the construction sector where tradesmen are in high demand.The oil sector when it was up and running before the oil price caved in offered very high wages.The construction sector has helped big time to more than compensate for oilfield job losses. US Transport secretary comment: '' US infrastructure needs investment right across the board to the tune of about 1.8 trillion $'' ....'' by 2045 the US population will have increased by about 70 million and immediate infrastructure upgrade/improvement needs to start right now and the president's 450 billion $ infrastructure budget has to be passed by congress'' ...private investors need to be accommodated by federal states and US government to make our infrastructure an attractive investment'' US data today: earnings as 173 companies report in Germany: balance of trade retail [price index Greece talking tough but if the Syriaza wofflers have all the answers then the greeks will have to vote again if they want a euro exit.Some agreement I suppose should present itself to safeguard euro! With Ukraine crisis thrown in,how the market reacts for the remainder of the month should be steady enough,so long as there is a good run into AHT Q3 release in early march. Oil price may continue to stabilise and rise which will be a plus for URI and AHT sp Energy analyst comment: ''oil price overshot going south and demand is OK going through to 2Q,chemicals and products production is positive'' A busy week ahead and if the AHT sp can remain at high £10 will be ok, but should move up into low £11 for awhile and better still stay there. Good day investing to all.
Analyst comment: ''crude oil inventories in US at a 30 year high,fundamentals remain the same-over supply- but oil is going up,oil at the moment is trading on a technical basis which is one way of explaining it,seems to be bottoming out in a volatile way'' URI does not seem to go over 90$,but if oil can steady and rise to 60$ then shale extraction is viable again.They are now looking at about a three year recovery period. New Tier 4 emission regulations should be a boost for rental companies as it may very well deter companies in investing in their own plant.And equipmdent that they do have which now doesn't meet these stricter requirements will invite the attention of the federal states. February hopefully will be a more stable! month for the market
Market comment: ''the Greek situation as it exits at the minute does not tell the market anymore that it already knows and a agreement will eventually surface on Greek debt'' UK data today: balance of trade new car registrations Twitter results came in well.
Finance /Small company: Small companies financing/investment increased by over 10% and their confidence in US economy going forward is very strong as report reveals. Small companies will be the driving engine of US economy through 2018 and beyond.These companies are diverse and the core investment is in transport,warehousing,accomodatiobn,construction,retail,food not to mention tech and niche markets. Small companies activity will contribute over 900 billion $ to the US economy and a financial structure that offers US companies a varied choice where they source the $$$$$$$$$ In the US for example the active investor who invests in companies wants/demands results and is more than prepared to kick a$$ to get a return on their investment,from the smallest company to the biggest. 78% of S&P 500 companies that have released earnings have beaten expectations. US data today: non-farm payrolls January workweek-wages unemployment January consr credit decr Good day investing to all
Goldman Sachs comment: ''Broadly neutral outlook as regards economy,unemployment under 6%,wages rising,cheaper oil,not worried on deflation! and a floating currency'' ....''market has not responded to growth impact of oil'' ...''80$ would be a fair recovery price for oil but bottoming of price may take some time'' Will market reflect anything on ECB/Greece comment yesterday-more pressure on Greece and more expensive money when they next require it. US data today: initial claims Bloomberg consumer comfort index trade balance Q4 unit labour costs Q4 Germany: factory orders pmi construction BOE/UK Interest rate decision Good day investing to all
Market sentiment: ''Fed will be less aggressive 2015 and patient remark means just that'' ''Greece debt outcome beginning to give a clearer and more realistic conclusion'' Earnings were OK and car sales robust for January! URI moved north 6% and now over 90$ which is encouraging. US data today: ADP employment figures ISM non-mfg index crude inventories AHT sp looking $teady and should start to move up into low£11 for the beginning of march. But where will the oil story settle at? Good day investing to all ''CEO of BP states they are cutting back production and will produce with 50$ a barrel as a focus point,but volatility will be here for awhile'' Asset manager comment: ''Long term US is a good investment for stocks,sound economy and energy independent'' ''EU has sressed tested their banks,they are capitalised and with QE the growth in economy will improve'' ''Geopolitical concerns in EU and democracy versus austerity will be the theme''
Economist comment: ''US GDP for 2015 will be about 2.2%'' ''lack of new investment and deflationary pressures'' Analyst comment: ''strong dollar and slow EU,China and Japan will be strong headwinds for stocks into Q1/Q2'' Economy: Small businesses sales were up 5.4% in 4Q and 64% surveyed were very optimistic for 2015. Small businesses reluctant to increase their prices. Small businesses make up about 48% of US economy. Obama's budget plans is for a 470 billion $ investment in US infrastructure projects financed through a 19% corporation tax if he can get it through congress. Tuesday data: factory orders decr car sales January Approx 200 companies report earnings AHT sp bouncing along,recent broker forecast/Jefferies was £13+so recent analyst/investor presentation by Ashtead has market onboard. Good day investing
Construction employers added 290000 jobs in 2014,the largest increase since 2005. Obama administration Jan/2015 announce a set of new proposals designed to promote private investment in the nations roads,bridges,water systems and broadband networks. The heavy and civil engineering construction segment which includes pipelines,petrochemical and power plants and public works construction added 11600 jobs In December and a 6.6% increase over 2013. AGC urges congress to reform and increase funding for the Perkins Act which funds most careers and technical education programs in the USA 110 companies report earings Monday including Exxon Monday data: ISM manufacturing Personal spending Inflation figures Analysts expect oil company earnings to be down about 30% and also companies that supply oil field equipment will be closely watched. Where S&P 500 index finds support-1900!-will be critical and how much URI is affected during week and hopefully present sp of URI can hold its own will be a plus-anyway a clearer picture will be available by Friday. AHT sp could either slide to low £10 or demonstrate its value and ri$e to low£11 which it may well do. The QE/ECB stimulus anyway will be a plu$ for EU stocks. Former US treasury secretary commented in Davos that QE in EU will fail as QE goes through banks and will be clogged up by regulatory processes,whereas in US QE went via the capital markets. Newsworthy: One of the structural!!reforms that Greece needs to address is tax evasion/corruption and Syriaza promises to address it- so long as the resident Russian oligarchs keep out of the equation We wish them well but Jesus wept Good week investing to all
Never a dull moment Market comment: '' strong dollar,low commodities causing problems for some companies,the rapid fall in Euro and fears of global growth all contributing to the volatiity'' Next week volatility to continue in another busy week.