Reflect & Prepare

Friday, 28th June 2019 14:20 - by Reflect & Prepare

Markets across the asset classes have largely been in consolidation mode this week as they await the G20 communique in Japan and potentially remedial developments which could sooth trade tensions globally.  Naturally, the main focal point will be the meeting between the US president and China's premier Xi, with expectations of another truce akin to the one offered up in the Buenos Aires meeting some seven months ago. Early Friday however, president Trump commented that he could not promise 'no new tariffs' on China, though markets have developed somewhat of a filter to the plethora of soundbites from the social media-hungry president.  Iran will also be a hot topic this weekend, we could see some pre weekend protection going through given a potentially volatile reaction to events when Asia resumes trading on Sunday night.

 

On the domestic front, Friday's releases of core PCE showed the Fed's preferred measure of inflation unchanged at 1.6% but as we have heard from a number of Fed policymakers, the soft tone suggests easing is required to get this on a sustainable footing above 2.0%.  Personal income was higher than expected though at 0.5%, with spending in line with expectations at 0.4%.  This data as it stands suggests little urgency in easing requirements, though we get more forward looking data out of the US next week, with perhaps some fresh insight into the trade picture post G20.  

 

 

Sentiment in the UK has ground to a standstill as any Brexit progress will first need to have the PM elected, and there is little under a month before the Tory party chooses between Boris Johnson (the favourite) and his competition, Jeremy Hunt.  After last weekend's unsavoury domestic spat, Mr. Johnson looks to have navigated the uneasy media focus, though not before some uncomfortable questioning which at times, bordered on the intrusive.  The public want to hear about plans on Brexit, and here, Johnson delivered an ulitmatum in that 'do or die', the UK will be leaving the EU, come the 31st October.  

 

There will be plenty of opposition to this (a no deal exit) with Tory MPs suggesting there is enough resistance within the ruling party to prompt members to vote against the government should this course of action force a vote of no confidence.  As such, a general election looks a highly likely outcome to developments which will unfurl over coming months, though if Jeremy Hunt was to defy the odds and win the race to No 10, we can assume that another Brexit delay is also a high probability.

 

Movers and Losers

 

Nostrum Oil and Gas -15%: The Co. are looking at the potential sale of the Kazakhstan-focussed oil firm. But they are yet to receive any bids. 

 

Merlin Entertainment +14%: Merlin Entertainments who own Legoland and Chessington agrees GBP 4.8bn offer from a Danish billionaire. 

 

Staffline +29%: The Co. are planning to raise GBP 41mln to cut costs at the firm. 

 

Rightmove -6.70%: Co's shares plummeted after a downgrade by UBS, citing weakness in the sector. 

 

Week Ahead

 

Monday - (Sunday) Chinese manufacturing PMI, Australian manufacturing index, Canada Closed, Japanese Tankan data, Caxian manufacturing PMI, German manufacturing PMI, German unemployment, EU manufacturing PMI, UK manufacturing PMI, EU unemployment, OPEC meeting, US manufacturing PMI

AGM / EGM
Boston International Holdings Plc [BIH]

 

Tuesday - RBA interest rate decision, UK Nationwide HPI, German retail sales, UK construction PMI, weekly API

AGM / EGM

Assura Group Ltd [AGR]

B.S.D. Crown Ltd [BSD]

LCG-Longbow Inv [LBOW]

Shore Capital Group PLC [SGR]

Final Result

Imimobile Plc [IMO]

Interim Result

St Modwen Properties PLC [SMP]

 

Wednesday - UK services PMI, EU services PMI, ADP NFP, US trade balance, Canadian trade balance, US composite PMI, US factory orders, ISM non-manufacturing, DoE's

Trading Statement

Sainsbury (J) PLC [SBRY]

Topps Tiles PLC [TPT]

Final Result

Purplebricks Group PLC [PURP]

Theworks.co.uk Plc Ord 1p [WRKS]

AGM / EGM

Carador Income Fund Plc [CIF]

Third Point Offshore Investors Ltd [TPOU]

 

Thursday - AUD retail sales, EU retail sales

AGM / EGM

Distil PLC [DIS]

Subex Ltd [SBXA]

Twentyfour Select Monthly Income Fund Ltd [SMIF]

Trading Statement

Associated British Foods PLC [ABF]

Persimmon PLC [PSN]

Final Result

Superdry Plc [SDRY]

 

Friday - German factory orders, UK Halifax HPI, US NFP, Canadian employment data, Canadian Ivey PMI, Baker Hughes rig count

Trading Statement
SIG PLC [SHI]

 

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.