Reflect & Prepare

Friday, 21st June 2019 14:24 - by Rajan Dhall

All eyes were on this week's FOMC and as the projections all leaned towards a dovish message, Fed chair Powell did not disappoint, leaving the door open to rate cuts due to global risks permeating through to the US economy.  In subtle rhetoric, Jerome Powell managed to negotiate a tricky meeting, which had been hyped up for a number of weeks and pressured not only by the US president but also bond markets - which saw the benchmark 10yr Note slipping briefly under 2.0%.  All this was good news for equities, with the S&P 500 tipping new all-time highs.  

Markets are now pricing in a full 25bp cut in July, with some pundits looking for the Fed to go the whole hog and lop 50bps off the Fed funds.  Either way, market calm was maintained with the Dollar losing some ground to boot - so we can assume the president was also left happy with the results.  

 

On the political front, the Twitter-sphere has been dominated by comments on Iran, while the trade spat with China seems to have been put on hold with G20 now in focus.  The two leaders are due to meet for an extended meeting the week after next.  On Iran, reports on Friday suggested the US was close to initiating military strikes in response to a drone being shot down, but the president is said to have pulled back at the last minute.  

 

The final two candidates for the PM job have been decided, with Jeremy Hunt joining the favourite Boris Johnson Tory party vote which as to go through a month of hustings starting from this weekend in Birmingham.  The schedule finishes in London, with the final votes counted on the weekend before the announcement on Monday 22nd of July.  The odds are over 90% in favour of Mr. Johnson, but Hunt's campaign naturally promises to give him a run for his money, though it is fair to say that this is Boris Johnson's contest to lose.

 

The Bank of England met midweek, and despite hawkish comments from some of the MPC members recently, all 9 voted for rates to stay on hold.  Q2 growth projections were revised down to flat from 0.2% with the Brexit delay clearly causing hesitation in industry as many feared.  The 'Bank' also saw wage growth leveling off, though they maintained that gradual tightening was still required.  The market was and is not convinced.

 

Movers and Losers

 

Ashtead group +11%: Co. reported a 17 per cent rise in annual profits to GBP 1.1billion. Revenues also increased by 19 per cent to GBP 4.5billion.

 

Carnival -12.62%: The Co. struggled this week as it revealed that some of its operations in Cuba have been shut due to a travel ban. Almost GBP 3bln has been wiped off the market cap.

 

Dixons -8.85%: The electrical retail firm continues to struggle with its mobile business as phone contract lengths hit the business. 

 

Westminster Group +94%:  Co. set up a joint venture to capitalise as Saudi Arabia privatises transport infrastructure.

 

Week Ahead

 

Monday - German IFO, UK inflation report hearings, NZ trade balance

AGM / EGM

Anglo-Eastern Plantations PLC [AEP]

Globalworth Real Estate Investments [GWI]

Nautilus Marine Services Plc [NAUT]

RA International Group Plc [RAI]

Spectra Systems Corporation [SPSY]

TBC Bank Group Plc [TBCG]

Interim Result

Porvair PLC [PRV]

Final Result

Cake Box Holdings Plc [CBOX]

Civitas Social Housing Plc [CSHC]

D4T4 Solutions Plc [D4T4]

Fastjet PLC [FJET]

Polar Capital Holdings PLC [POLR]

Thruvision Group Plc [THRU]

 

Tuesday - Japanese Mon Pol mins, OPEC meeting, US new home sales, Fed Chair Powell speaks, Weekly API's

AGM / EGM

Afarak Group [AFRK]

Aston Martin Lagonda [AML]

Animalcare Group PLC [ANCR]

Argo Blockchain PLC [ARB]

Asiamet Resources Limited [ARS]

Attraqt Group Plc [ATQT]

Exillon Energy PLC [EXI]

Foresight Solar Fund Ltd [FSFL]

IQE PLC [IQE]

Silence Therapeutics PLC [SLN]

Final Result

Gear4music Holdings Plc [G4M]

Mind Gym Plc [MIND]

Northgate PLC [NTG]

RedT Energy PLC [RED]

Interim Result

Pressure Technologies PLC [PRES]

 

Wednesday - RBNZ rate decision, German GFK, UK gross mortgage approvals, US core durable goods orders, DoE's

 AGM / EGM

Curzon Energy Plc [CZN]

Datang Intl Power Generation Co Ld [DAT]

Federal Grid Company Of Unified Energy System [FEES]

Hummingbird Resources [HUM]

Regal Petroleum PLC [RPT]

Spinnaker Opportunities PLC [SOP]

Sumo Group PLC [SUMO]

Trading Statement

Bunzl PLC [BNZL]

Tullow Oil PLC [TLW]

John Wood Group PLC [WG.]

Final Result

BCA Marketplace Plc [BCA]

Creightons PLC [CRL]

Stagecoach Group PLC [SGC]

Interim Result

Autins Group Plc [AUTG]

 

Thursday - Japanese retail sales, German CPI, US GDP, US pending home sales

AGM / EGM

Altus Strategies Plc [ALS]

Africa Opportunity Fund [AOF]

Atalaya Mining Plc [ATYM]

Erris Resources Plc [ERIS]

Escape Hunt Plc [ESC]

First Derivatives PLC [FDP]

Gama Aviation Plc [GMAA]

Inspiration Healthcare Group [IHC]

Jersey Oil And Gas Plc [JOG]

JZ Capital Partners Ltd [JZCP]

Marble Point Loan Financing Ltd [MPLF]

Serco Group PLC [SRP]

Trian Investors1 Limited [TI1]

Tissue Regenix Group PLC [TRX]

Trans-Siberian Gold PLC [TSG]

Touchstar Plc [TST]

Yu Group Plc [YU.]

Final Result

Greene King PLC [GNK]

Itaconix Plc [ITX]

Liontrust Asset Management PLC [LIO]

Manolete Partners Plc [MANO]

SDCL Energy Efficiency Income Trust Plc [SEIT]

XPS Pensions Group PLC [XPS]

Trading Statement

Serco Group PLC [SRP]

 

Friday - UK GFK consumer confidence, Japanese industrial production, Nationwide HPI, UK GBP, UK Business investment, EU CPI, US Core PCE data, Canadian GDP

AGM / EGM

Anglo African Oil & Gas PLC [AAOG]

Allied Minds PLC [ALM]

Alexander Mining PLC [AXM]

Boussard & Gavaudan Holdings Ltd [BGHL]

Boussard & Gavaudan Holding [BGHS]

Chapel Down Group PLC [CDGP]

Cellcast PLC [CLTV]

Goals Soccer Centres PLC [GOAL]

Grand Vision Media Holdings Plc [GVMH]

KRM22 PLC [KRM]

PJSC LSR Group [LSRG]

Nostra Terra Oil & Gas Company PLC [NTOG]

Pjsc Gazprom [OGZD]

Pennpetro Energy Plc [PPP]

Surgutneftega PJSC [SGGD]

Crimson Tide PLC [TIDE]

W Resources PLC [WRES]

 

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.