Reflect & Prepare

Friday, 14th June 2019 14:34 - by Reflect & Prepare

All market attention in the US is on the trade tensions with China and while the president seems confident that a deal will eventually be reached, there is little sign that China is about to roll over and concede to all their demands.  

As such, both sides seem prepared to play the long game, and president Trump for one, will not want to lose face.  However, US businesses are feeling the pinch and 600 companies have written to the White House to push for a resolution as activity is being impacted.  It is unlikely that this will prompt the US administration into a change in stance, so data watchers will continue to monitor the broader effects.  

In the meantime, end of week data was consumer spending in the US showing a healthy rise of 0.5% in May, with some of the weak numbers in April also revised higher.  Added to this was a revival in industrial production with a 0.4% rise to show on the month, reversing a drop off of a similar amount in April.  Whether this will prompt the Fed to push back on expectations of a rate cut this year remains to be seen, though we do not have to wait long as the FOMC meets next week.

In the UK, first round of voting, the candidates have been whittled down to 6 from 10, with Andrea Leadsom, Ester McVey and Mark Harper all receiving the least votes in Thursday's count.  Front runner Boris Johnson received well over 100 votes to cement his position as favourite for the top job, as he is almost certain to make it through to the final 2 who will be decided upon by the Tory party at the end of this month.  Matt Hancock decided to step down, perhaps dissuaded by the vote, so Boris Johnson's contenders are realistically Gove and Raab.  

On the economic front, growth figures have shown the strains of Brexit, with forecasters now looking for a contraction in Q2.  The employment report still shows job growth as well as wages still on the up, and this has prompted MPC members to start talking up the possibility of measured policy tightening.  The BoE also meet next week, but naturally, their rhetoric will be tempered by the overhang of Brexit clouds which continue to darken economic prospects ahead.

Movers and Losers

Ascent Resources -30%:  The Co.'s board is to consider all potential courses of action including arbitration and a claim for damages against the Republic of Slovenia.

Live Company Group -20%:  The Co. announced that its wholly owned subsidiary, Brick Live International Limited, has entered into an agreement with Nickelodeon UK Limited to produce themed tours associated with the Nickelodeon brand

Scapa Group +20%: Scapa are starting to recover after the ConvaTec fiasco, legal proceedings are still on the horizon so this could be rocky stock.

Berkeley Energy +34%: Co. has benefitted from municipal election results and is also awarded three new exploration licences. The licences are located in Retortillo, Spain, which is close to its Salamanca uranium project.

Next Week

Monday - UK Rightmove House Price Index, UK inflation report hearings

AGM / EGM

Challenger Acquisitions Ltd [CHAL]

UK Commercial Property Trust [UKCM]

Zenith Energy Ltd [ZEN]

Interim Result

Scottish Investment Trust Plc (the) [SCIN]

Tuesday - RBA meeting minutes, German PPI, German ZEW, EU CPI, US Building permits

AGM / EGM

Coca-Cola HBC [CCH]

Clearstar Inc. [CLSU]

Ergomed Plc [ERGO]

Evraz Plc [EVR]

MHP SE [MHPC]

Plus500 Ltd [PLUS]

Final Result

Ashtead Group PLC [AHT]

Marlowe PLC [MRL]

NextEnergy Solar Fund Ltd [NESF]

Telecom plus PLC [TEP]

Interim Result

Ashtead Group PLC [AHT]

Safestore Holdings PLC [SAFE]

Schroder European Real Estate Investment Trust Plc [SERE]

Wednesday - Japanese trade balance, German PPI, EU current account, UK CPI/RPI, UK HPI, Canadian CPI, weekly DoE's, Fed rate decision, NZ GDP

AGM / EGM

ECSC Group Plc [ECSC]

Fair Oaks Income Fund Ltd [FAIR]

Mereo Biopharma Group Ltd [MPH]

Midatech Pharma Plc [MTPH]

Novacyt S.A [NCYT]

Saga [SAGA]

Summit Therapeutics PLC [SUMM]

Tarsus PLC [TRS]

Woodbois Limited [WBI]

Final Result

Berkeley Group Holdings (The) PLC [BKG]

Severfield [SFR]

ULS Technology Plc [ULS]

Trading Statement

Saga [SAGA]

Whitbread PLC [WTB]

Thursday - BoJ rate decision, Norges bank rate decision, ECB economic bulletin, UK retail sales, BoE rate decision, US Philly Fed data

AGM / EGM

Anglo Asian Mining PLC [AAZ]

Augean PLC [AUG]

BH Macro Limited GBP [BHMG]

Hydrodec Group PLC [HYR]

Final Result

Best Of The Best Plc [BOTB]

Dixons Carphone [DC.]

Interim Result

CareTech Holdings PLC [CTH]

Friday - AUD manufacturing, Japanese CPI, PMI's from the EU countries and the US, Canadian retail sales, US home sales, Baker Hughes rig count

AGM / EGM

Mitsubishi Corporation [0Q0J]

BH Global Limited GBP [BHGG]

EJV Investments Ltd [EJFI]

Hon Hai Precision Industry Ltd [HHPD]

Have a great weekend

Kind Regards

Rajan Dhall