Reflect & Prepare

Friday, 5th April 2019 13:12 - by Reflect & Prepare

Events in the US are pretty stable right now, with the US-China trade talks continuing and in good spirits according to leaders on both sides. Late on in the week, president Trump said that negotiations will continue for another 6 weeks, so hopes of an imminent deal have eased, though not as you would notice on Wall Street.  Analysts feel a deal between the 2 superpowers will bolster stocks, but we have to consider how much of this is priced in already.  

 

On the domestic economy, it was a mixed bag of results this week.  We started off with the ISM PMIs.  The manufacturing index was better than expected, only to be let down by non-manufacturing later in the week.  Retail sales for February were also soft, but all eyes were on the non-farm payrolls report at the end of the week.  While we saw a large recovery in the headline number, gaining 196k jobs in March, this had to redress some of the previous month which was revised a little higher from 20k to 33k.  However, earnings growth is slowing, with the annualised rate slipping from 3.4% to 3.2%.  This could underpin the slowdown in the US to a degree in coming months, and as mentioned already, consumer spending is sluggish.  

 

Odds for a Fed hike at the end of the year have risen in odds, and now stand at 75%, so this has proven supportive for stocks where the index futures pushed up in response to the data and response from short end rates.  

 

This week saw another change in direction from the PM, turning to the opposition for support in order to get a deal as soon as possible in order to honour the result of the 2016 referendum.  In turning to Jeremy Corbyn, she has angered more of her party members, with 2 junior ministers resigning in response to her latest change in stance.  To add insult to injury, parliament led by Yvette Cooper rushed through a bill to force the PM to ask for an extension in the event that no deal is agreed next week.  This ensures the UK will not leave the UK without a deal but is ultimately a can-kicking exercise as the government tries to find a resolution to the impasse within the House of Commons.

 

The ultimate decision is down to the EU, who have insisted on a plan by which to justify the extension, with the current leaving date the 12th of April - next Thursday.  The PM has asked for an extension to the end of June, with a view to curtailing this to the 23rd of May in order to avoid having to put up candidates for the European elections.  Markets are getting nervous, and there is little sign that uncertainty is going to be alleviated soon.  Frustration is apparent all around, with increased odds that we are headed for a general election as the Conservative party fractures continue.

 

Movers and Losers

 

Hargreaves Landsdown +9.6%: Fund manager Nick Train has purchased more shares in the Co. to lift his stake in the UK's largest broker above 11% and close to the £1 billion mark.

 

Saga -38.2%: The company have admitted they may need to take a fresh approach after insurance sales took a massive hit. They have also had to slash their dividend and adjust profit forecasts. 

 

Superdry -18.8%: Founders Julian Dunkerton and James Holder pulled off a boardroom coup this week. The pair have promised to restore the Co. to its former glory but at the moment it's clear the firm is struggling. 

 

Next Week

 

Monday - German trade balance, US factory orders 

 

Tuesday - US Jolts jobs data, weekly API data

Final Result

Anexo Group Plc [ANX]

City Pub Group Plc [CPC]

Destiny Pharma Plc [DEST]

Luceco Plc [LUCE]

One Media IP Group PLC [OMIP]

Mission Marketing Group (The) PLC [TMMG]

Interim Result

Nanoco Group PLC [NANO]

 

Wednesday - UK BRC sales monitor, UK GDP, UK industrial and manufacturing production, UK trade balance, OPEC monthly report, ECB rate decision, DoE's, FOMC meeting mins

Final Result

Central Asia Metals PLC [CAML]

Epwin Group Plc [EPWN]

Ergomed Plc [ERGO]

Futura Medical PLC [FUM]

Petards Group PLC [PEG]

RA International Group Plc [RAI]

Tesco PLC [TSCO]

Warpaint London Plc [W7L]

Walker Greenbank PLC [WGB]

Interim Result

ASOS Plc [ASC]

McCarthy Stone Plc [MCS]

Trading Statement

PageGroup Plc [PAGE]

AGM / EGM

Rio Tinto PLC [RIO]

 

Thursday - RICS house price balance, German CPI, IEA monthly report, OPEC meeting, US PPI 

Large amount of Ex-Divs

Final Result

Corero Network Security PLC [CNS]

hVIVO Plc [HVO]

Trackwise Designs PLC [TWD]

Trading Statement

Man Group PLC [EMG]

AGM / EGM

Smith & Nephew PLC [SN.]

Interim Result

WH Smith PLC [SMWH]

 

Friday - Chinese trade balance, EU industrial production, US import and export price index, Baker Hughes rig count

AGM / EGM

Banco Santander SA [BNC]

Bank Audi S.a.l [BQAD]

HSBC Holdings PLC [HSBA]

 

Have a great weekend

 

Kind Regards

 

Rajan Dhall

 

 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.