Friday, 31st May 2019 13:03 - by Reflect & Prepare
There is only one piece of major news which has dominated the US markets and this came at the end of the week when president Trump decided to impose 5% tariffs on all Mexican goods until stronger measures were adopted to curb immigration. This sent ripples through the Asia markets, permeating through Europe, London and NY and stock markets have posted new lows with more to come as the global trade tensions show no signs of easing off. The US stance is combative to say the least, and this will continue to keep investors on the defensive as the major indices on Wall Street soften to new recent lows.
Domestically, there has been little in the way of tier one data, though next week offers plenty of fresh indicators including the ISM PMIs but more significantly, the jobs report on Friday. Inflation levels as per the Fed's preferred core PCE measure came in at expected levels, and are unlikely to change the Fed stance as yet. However, the market is making its views known as long term yields have fallen further in the US, with the benchmark 10yr Note now just 15bps from the 2.00% mark. 2-5yr yields are now under 2.00%, signaling a clear series of rate cuts to begin from the end of this year. Softening US data as well as growing sentiment that the tariff wars will eventually hurt the US will maintain this view of a potential inflection point in Fed policy stance.
There has been little fresh news out of the UK this week. Even so, the Pound has been reflecting the concerns that the UK is at greater risk of crashing out of the EU without a deal. The EU will not reopen the withdrawal agreement so there is a standoff brewing with the leading candidates in the Tory leadership race maintaining that they will keep no deal on the table.
Next week is Theresa May's last week as PM, and the contest for the Tory top spot begins the week after. President Trump meets the outgoing PM next week, and there could be some sparks over Huawei, where the UK is still open to including the company's participation in the 5G rollout.
Movers and Losers
De La Rue -28%: The UK printing firm is counting the cost of lost Venezuelan revenue due to sanctions on the Maduro government. They also lowered their profit forecasts.
Vast Resources -19.31%: Co. raised GBP 900,000 to start pre-production work in Romania, the funds were raised was via a share placement and placing saw a total of 775mln new shares being issued at a price of 0.116p each.
Lonmin +18%: The Co. are subject to a bid from bid from Sibanye-Stillwater which will create the world’s second-largest producer of platinum.
Galliford Try +17%: The Co. rejected a GBP 1bln bid from Bovis which led to speculation of a higher bid.
Week Ahead
Monday - Chinese Caixin manufacturing, German manufacturing, UK manufacturing, US manufacturing, US ISM manufacturing
Final Result
Sirius Minerals PLC [SXX]
Tatton Asset Management PLC [TAM]
Tuesday - BRC retail monitor, AUD retail sales, RBA interest rate decision, UK construction PMI, Fed Chair Powell speaks, weekly oil API’s
AGM / EGM
Arrow Global Group [ARW]
Northbridge Industrial Services PLC [NBI]
Nostrum Oil & Gas Plc [NOG]
Rockrose Energy Plc [RRE]
Sagicor Financial Corporation [SFI]
Sherborne Investors (Guernsey) B Ltd [SIGB]
Sherborne Investors Guernsey C Ltd [SIGC]
TruFin PLC [TRU]
Final Result
AO World [AO.]
Carclo PLC [CAR]
Palace Capital PLC [PCA]
Interim Result
Driver Group PLC [DRV]
Gooch & Housego PLC [GHH]
Wednesday - AUD GDP, services PMI from EU, UK & US, EU retail sales, US ADP employment change, US ISM non-manufacturing PMI, weekly DoE’s
AGM / EGM
Advanced Medical Solutions Group PLC [AMS]
Funding Circle Holdings Plc [FCH]
Hurricane Energy Plc Ord 0.1p [HUR]
Ocean Outdoor Limited [OOUT]
Plaza Centers NV [PLAZ]
Final Result
GB Group PLC [GBG]
Workspace Group Plc [WKP]
Trading Statement
Card Factory Plc [CARD]
Interim Result
Impax Asset Management Plc [IPX]
Thursday - German factory orders, EU GDP, ECB Rate decision, CAD Ivey PMI
AGM / EGM
IQ-AI Limited [IQAI]
P2P Global Investments Plc [P2P]
RHI Magnesita NV [RHIM]
Safestay Plc [SSTY]
Telefonica SA [TDE]
TP Group Plc [TPG]
Final Result
Auto Trader Group Plc [AUTO]
Camellia PLC [CAM]
CMC Markets Plc [CMCX]
First Property Group PLC [FPO]
MITIE Group PLC [MTO]
Stenprop Limited [STP]
Trading Statement
Go-Ahead Group (The) PLC [GOG]
Joules Group Plc [JOUL]
Interim Result
PJSC RusHydro [HYDR]
Friday - German industrial production, German trade balance, Halifax house price index, US NFP, Baker Hughes rig count
AGM / EGM
Golden Rock Global Plc [GCG]
Final Result
Fuller Smith & Turner PLC [FSTA]
Have a great weekend
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.