Reflect & Prepare

Friday, 12th April 2019 12:21 - by Reflect & Prepare

It has been a relatively quiet week for fresh news out of the US.  The FOMC midweek was largely a non-event as the upshot of the communique was effectively that rates will likely remain on hold through 2019 and that only under certain circumstances would policymakers consider raising rates again.  The market clearly does not believe there is another opportunity to raise rates and continues to price in a potential rate cut at the end of the year, if not early 2020.  

The trade talks with China continue with an optimistic outlook on the resolution.  This looks to be largely baked into the equity markets, though events further afield have been largely attributable to the latest round of gains seen on Wall Street.  At the start of the week, Chinese manufacturing PMIs rebounded into expansionary territory and this set the tone for a more positive outlook on the global economy.  Fast forward to the end of the week and the Chinese trade balance for March came in at a much higher surplus of just over $32.5bln against expectations of $7bln.  Despite the fact that this is just a month's worth of data, positive risk sentiment has taken hold with the leading S&P 500 eyeing the all-time highs through 2900.

It is, however, earnings season, so Q1 results should lead to a period of volatility considering some of the cautious forecasts which have been circulating the market recently.  

Another Brexit date comes and goes.  April 12 was the second date which the UK has had to pass on, achieved by requesting an extension from the EU, who agreed to push out the leaving date to Oct 31.  This, however, is a flexible date, which can be cut off early if the UK can find a resolution in parliament to get a withdrawal deal over the line.  Given it has taken this long to effectively get nowhere, hopes are not particularly high, though there is a clear incentive to do so for ardent Brexiteers.

If the UK is not ready to leave by the end of May, then it has to (by law) partake in the European elections - something which all factions in the Conservative party are keen to avoid.  Cross-party talks have already been initiated in order to find consensus on a way forward, so this does show some compromise on behalf of the cabinet and the PM, though Theresa May continues to rule out a second referendum despite this providing a way out for the impasse.  Parliament has now broken up for the Easter break, so talks behind the scenes may reveal some developments over coming weeks, though don't hold your breath!

Movers and Losers

Fresnillo -10%: Q1 Silver production fell 14.8%, Gold production also fell 8.8%. The latest stats came from the Co.'s Q1 19 production report. 

Easyjet +10%: The Co.'s shares have risen in Apr since bouncing off the psychological low of 1000p. The share price dropped after downgraded from various brokers and institutions. Also, the prospect of a Brexit free summer holiday period boosted shares all over the airline industry.  

Indivior -65%: The Co. are being investigated for one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and twenty-two counts of wire fraud.

G4S +21.45%: Canada's Garda World said it was considering making an offer for G4S, sending shares soaring. 

Next Week

Monday - Canadian business outlook, NY state manufacturing 

Final Result

Crossword Cybersecurity PLC [CCS]

Filta Group Holdings Plc [FLTA]

Mobile Tornado Group PLC [MBT]

Trading Statement

Petra Diamonds Ltd [PDL]

Rio Tinto PLC [RIO]

Interim Result

Carrs Group Plc [CARR]

Tuesday - RBA meeting minutes, UK earnings/ jobs data, German ZEW, US industrial production, NZ CPI, Weekly API data

Final Result

ASA Resource Group PLC [ASA]

Card Factory Plc [CARD]

Flowtech Fluidpower Plc [FLO]

JD Sports Fashion PLC [JD.]

Parity Group PLC [PTY]

Telit Communications PLC [TCM]

Trading Statement

BHP Group Plc [BHP]

Hays PLC [HAS]

AGM / EGM

Eland Oil & Gas PLC [ELA]

Wednesday - Japanese trade balance, Chinese GDP, Chinese industrial production, UK CPI, EU CPI, Canadian CPI, BoE's Carney speaks, Weekly DoE's

AGM / EGM

Dialight PLC [DIA]

Drax Group PLC [DRX]

Hunting PLC [HTG]

Harwood Wealth Management Group Plc [HW.]

Interim Result

Etalon Group [ETLN]

Trading Statement

Bunzl PLC [BNZL]

Mediclinic International Plc [MDC]

Segro [SGRO]

Final Result

AFI Development Plc [AFRB]

Amryt Pharma [AMYT]

Serica Energy PLC [SQZ]

Thursday - Australian employment change, Manufacturing data from all over the EU, UK, US and Canadian retail sales, US services manufacturing, services and composite PMI.

Trading Statement

Moneysupermarket.com Group PLC [MONY]

PZ Cussons PLC [PZC]

Rentokil Initial PLC [RTO]

Unilever PLC [ULVR]

Final Result

Modern Water PLC [MWG]

Friday - Good Friday, Japanese CPI, US building permits, US housing starts, US Baker Hughes rig count

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.