Reflect & Prepare

Friday, 26th April 2019 13:16 - by Reflect & Prepare

Growth in the US has been a major driver in the mass move into US assets.  Equities, fixed income, and the Dollar have been destination number one for many global investors as the combination of yield and safety make it hard to look anywhere else.  Add in the net better than expected earnings season (in aggregate) terms and it is not hard to see that the US is being favoured over the rest of the world, with its economic peers such as Europe in a less desirable position economically.  

 

Much of the data focus was on the Q1 figure due out at the end of the week, and in the headline, a growth rate of 3.2% blow all estimates out of the water, even after some of the upward revisions seen in the past week or so.  Looking at the composition, we saw trade made a little over 1% contribution to the headline, and this will be partly related to increased demand from China - as part of the ongoing negotiations with the US in addressing the one-way trade balance.  Inventory was also a notable contributor, adding 0.65% to the headline.  

 

Core PCE was much lower though and as one of the Fed's key metrics, is likely to underpin their neutral stance.  From 1.8%, we have seen the measure come in to 0.9% - a large drop.  

Meanwhile, trade talks are ongoing with China, with Japan also kicking off talks.  Europe has yet to engage in meaningful dialogue with the US and has been unnerved by the president's threats over tariffs, with Harley Davidson mentioned again.

 

In the UK the Brexit saga rumbles on, it is hard to focus on any economic direction at present. What data we have had points to resilience in the economy, though the ongoing uncertainty continues to threaten the outlook ahead.  While the delay in the withdrawal date will come as a relief for those concerned over a no deal Brexit, it does continue to warrant ongoing contingency plans.  UK companies are still more inclined to hire temporary staff which suggests projects and demand is holding up, but at some point, business investment could be permanently affected. 

 

Cross-party talks between the government and opposition continue without any material progress, though cabinet members see the process as being constructive.  Talk is cheap, so this offers little optimism.  The PM is looking to bring back the withdrawal deal to parliament and this may happen next week, with talk that we may see some additions to the current deal in order to garner support further afield in the House.  Leaked reports on Huawei have been the only other notable topic of conversation in the Commons and of course, the media.

 

Movers and Losers

 

RBS -8.8%: The company are now looking for a new CEO after McEwen resigned. 16% decline in operating profit before tax to GBP 1bn from GBP 1.2bn last year.

 

Antofagasta -8.6%: Co. left its full-year copper production forecasts unchanged after Q1 output grew in line with expectations.

 

Ferrexpo -21%: Deloitte resigns as Ferrexpo auditor as Co. deals with charity issues. An investigation has been launched into Chief Executive Officer Kostyantin Zhevago at the charity, called Blooming Land.

 

Computacenter +16%: Co. are on course to meet their FY guidance after hitting quarterly targets, revenues top £4bn in 2018.

 

Boohoo +9.7%: The Co.'s share price rose as the Prettlylittlething and Nasty Gal brands move from strength to strength, Pre-tax profits were up 38% at £59.9m.

 

Monday - BoE's Carney speaks, Election day in India, US personal spending

Interim Result

Banco Bilbao Vizcaya Argentaria Sa [BVA]

Lok'n Store Group PLC [LOK]

PROACTIS Holdings PLC [PHD]

UP Global Sourcing Holdings Plc [UPGS]

AGM / EGM

Holders Technology PLC [HDT]

Highway Capital PLC [HWC]

Final Result

Horizon Discovery Group Plc [HZD]

 

Tuesday - Chinese manufacturing PMI, UK nationwide HPI, German unemployment change, EU GDP, German CPI, Canadian GDP, US pending home sales, US CB consumer confidence, AUD employment change

AGM / EGM

Anglo American PLC [AAL]

AFC Energy PLC [AFC]

Aquis Exchange PLC [AQX]

BBGI Sicav S.A. [BBGI]

Countrywide Plc [CWD]

e-Therapeutics PLC [ETX]

LSL Property Services PLC [LSL]

Minoan Group PLC [MIN]

Symphony International Holdings Ltd [SIHL]

Interim Result

Avacta Group PLC [AVCT]

BP PLC [BP.]

C4x Discovery Holdings Plc [C4XD]

Magnitogorsk Iron Steel Works [MMK]

Samsung Electronics Co Ltd [SMSN]

Trading Statement

Elementis PLC [ELM]

Greene King PLC [GNK]

Jupiter Fund Management plc [JUP]

PPHE Hotel Group [PPH]

Standard Chartered PLC [STAN]

St James's Place PLC [STJ]

Weir Group PLC [WEIR]

Final Result

Animalcare Group PLC [ANCR]

Atlas Mara Co-invest Ltd [ATMA]

Novacyt S.A [NCYT]

Proteome Sciences PLC [PRM]

Rosenblatt Group Plc [RBGP]

Whitbread PLC [WTB]

Xeros Technology Group Plc [XSG]

 

Wednesday - Labour day in Asia and Europe, Japanese monetary policy meeting mins, UK nationwide CPI, UK manufacturing PMI, US ADP NFP, US ISM manufacturing PMI, DoE's, FOMC rate decision

AGM / EGM

TechnipFMC plc [0RMV]

Getbusy Plc [GETB]

Lighthouse Group PLC [LGT]

Lancashire Holdings Ltd [LRE]

Location Sciences Group Plc [LSAI]

London Stock Exchange Group PLC [LSE]

Ocado Group Plc [OCDO]

Witan Investment Trust Plc [WTAN]

Final Result

Circassia Pharmaceuticals Plc [CIR]

Sainsbury (J) PLC [SBRY]

Trading Statement

GlaxoSmithKline PLC [GSK]

IWG Plc [IWG]

London Stock Exchange Group PLC [LSE]

Next PLC [NXT]

Persimmon PLC [PSN]

Rank Group (The) PLC [RNK]

RPS Group PLC [RPS]

Interim Result

Avon Rubber PLC [AVON]

GlaxoSmithKline PLC [GSK]

Inmarsat PLC [ISAT]

 

Thursday - Caixin Chinese Manufacturing PMI, German manufacturing PMI, UK construction PMI, BoE interest rate decision, US factory orders, BoE Carney speaks.

AGM / EGM

Barclays PLC [BARC]

Blackrock World Mining Trust Plc [BRWM]

Dalata Hotel Group Plc [DAL]

Equiniti Group Plc [EQN]

Empiric Student Property Plc [ESP]

Eve Sleep Plc [EVE]

Forbes Ventures [FOR]

Gresham Technologies PLC [GHT]

Mpac Group PLC [MPAC]

Phoenix Group Holdings [PHNX]

Reach Plc [RCH]

Schroders PLC [SDR]

Unilever PLC [ULVR]

Trading Statement

Coca-Cola HBC [CCH]

Fisher (James) & Sons PLC [FSJ]

Howden Joinery Group PLC [HWDN]

International Personal Finance PLC [IPF]

Lloyds Banking Group PLC ORD [LLOY]

Reckitt Benckiser Group PLC [RB.]

Schroders PLC [SDR]

Smith & Nephew PLC [SN.]

Interim Result

Indivior Plc [INDV]

Lancashire Holdings Ltd [LRE]

Paddy Power Betfair [PPB]

Royal Dutch Shell [RDSA]

Smith & Nephew PLC [SN.]

 

Friday - UK services PMI, EU CPI, US NFP jobs data, US services PMI, Baker Hughes rig count and comments from Fed's Williams, Clarida and Evans.

AGM / EGM

AssetCo PLC [ASTO]

Intu Properties [INTU]

Merlin Entertainments PLC [MERL]

Symphony Environmental Technologies PLC [SYM]

Trading Statement

ConvaTec Group Plc [CTEC]

InterContinental Hotels Group PLC [IHG]

Intu Properties [INTU]

Interim Result

HSBC Holdings PLC [HSBA]

Numis Corporation PLC [NUM]

Smurfit Kappa Group PLC [SKG]

 

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.