Reflect & Prepare

Friday, 19th July 2019 14:13 - by Reflect & Prepare

Trade talks with various counterparts around the world seem to have taken a backseat in market matters.  US-Sino relations seem to be going nowhere fast, but the current narrative seems to be that if there is no deterioration (or breakdown) in the relationship, then financial markets are comfortable with the current status quo.  It seems pretty clear that any trade deal between the US and China will take a significantly extended period of time to sort out.   Meanwhile, hostilities with Iran continue, but again, no major escalation to speak of this week which would cause any undue concern for investors.  

 

As such, the focus is very much on domestic matters, and ones pertaining to financial conditions for the economy.  In a little over a week, we have the FOMC meeting which looks set to deliver a rate cut of at least 25bps.  However, Fed speak has the markets guessing and there are still modest expectations that they could cut rates by 50bps.  In the wake of comments from NY Fed President Williams, the markets raised the odds of the larger cut, but have since been moderated after Williams' comments on zero rates were clarified as academic rather than directly related to near term policy thinking.  Either way, equity markets are buoyed on hopes that this is the start of an easing cycle, though we will know more in a little over a week.  

 

Once again, the fears of a no-deal Brexit have been rising and this has been reflected in another hit on Sterling, which dipped under 1.2400 to levels not seen in 2 years.  The question of prorogation has been circling the market to perpetuate these fears, though, on Thursday, parliament made amendments to the Northern Ireland (Executive Formation) Bill which effectively forced parliament to remain in place over the period which covers the next exit date - 31 October.  

 

Further to that, Tory MPs have been voicing strong opposition to the pursual of a no-deal Brexit, and it seems Chancellor Hammond is leaning towards voting against the government in a vote of no confidence if developments point to a hard Brexit.  

 

In the meantime, the EU may have shone a tiny light on proceedings with the incoming EU president von der Leyen opening the door to further discussions and a further delay should the UK request it.  Michel Barnier also suggested that alternatives to the Irish backstop could be discussed, so there are faint signs that the fear factor may be unnerving the EU, but this is pure conjecture and is more likely a case of the EU looking to make progress on what has been a detrimental process (for both sides) so far.

 

Movers and Losers

 

Fresnillo -6.71%: Co. downgraded their production targets for the year after lower-than-expected ore grades and delays in construction at its Herradura gold mine in Mexico hit Q2 output.

 

Burberry +15.61%: Co. increased its retail revenue of over 3% to GBP 498m on a reported currency basis in the 13 weeks to June 29.

 

AG Barr -29%: Co. recently released a profit warning as Co. stated its expected sales to drop by 10% and profits by up to 20% as they struggle against a strong year in 2018.

 

Acacia Mining +23%: Barrick and Co. finally reached a deal for the remaining 36% that it doesn't already own.

 

Asos -21%: The Co. have released another profit warning, The Co. said sales growth in the US and Europe had been held back by problems at its warehouses.

 

Next Week

 

Monday - UK CBI industrial trends, Canadian wholesale inventories

Final Result

GRC International Group Plc [GRC]

Tungsten Corporation [TUNG]

Trading Statement

Petra Diamonds Ltd [PDL]

AGM / EGM

Malvern International Plc [MLVN]

 

Tuesday - US existing home sales, weekly API data, NZ trade balance

Interim Result

PZ Cussons PLC [PZC]

Segro [SGRO]

Synectics Plc [SNX]

Unite Group PLC [UTG]

Final Result

Carclo PLC [CAR]

Cohort PLC [CHRT]

IG Group Holdings PLC [IGG]

AGM / EGM

Norcros PLC [NXR]

Primorus Investments Plc [PRIM]

Stobart Group Ltd [STOB]

Vodafone Group PLC [VOD]

Trading Statement

ASOS Plc [ASC]

Paragon Banking Group PLc [PAG]

 

Wednesday - Japanese, French, German, EU & Australian manufacturing PMI, DoE's, US new home sales

Interim Result

Croda International PLC [CRDA]

Drax Group PLC [DRX]

GlaxoSmithKline PLC [GSK]

Hammerson PLC [HMSO]

Informa PLC [INF]

ITV PLC [ITV]

Segro [SGRO]

Tullow Oil PLC [TLW]

Final Result

Totally PLC [TLY]

AGM / EGM

Mediclinic International Plc [MDC]

QinetiQ Group PLC [QQ.]

Vertu Motors PLC [VTU]

Wizz Air Holdings Plc [WIZZ]

Trading Statement

Brewin Dolphin Holdings PLC [BRW]

Britvic PLC [BVIC]

Marston's PLC [MARS]

PayPoint PLC [PAY]

 

Thursday - German IFO, Turkish & ECB rate decision, US core durable goods data, 

Interim Result

Anglo American PLC [AAL]

Acacia Mining Plc [ACA]

AstraZeneca PLC [AZN]

Bodycote PLC [BOY]

Burford Capital Ltd [BUR]

Capital & Counties Properties PLC [CAPC]

Howden Joinery Group PLC [HWDN]

Inchcape PLC [INCH]

Inchcape PLC [INCH]

Lancashire Holdings Ltd [LRE]

Mail.RU Group Ltd [MAIL]

Morgan Advanced Materials [MGAM]

National Express Group PLC [NEX]

RELX Plc [REL]

Unilever PLC [ULVR]

Vesuvius [VSVS]

Wizz Air Holdings Plc [WIZZ]

AGM / EGM

Caffyns PLC [CFYN]

CMC Markets Plc [CMCX]

Federal Bank Limited [FEDS]

FirstGroup PLC [FGP]

Honye Financial Services Limited [HOYE]

Harbourvest Global Private Equity [HVPE]

Intermediate Capital Group PLC [ICP]

Pennon Group PLC [PNN]

Tate & Lyle PLC [TATE]

Weiss Korea Opportunity Fund [WKOF]

Final Result

Diageo PLC [DGE]

Fuller Smith & Turner PLC [FSTA]

Scholium Group Plc [SCHO]

Trading Statement

AJ Bell PLC [AJB]

CMC Markets Plc [CMCX]

Compass Group PLC [CPG]

Daily Mail and General Trust PLC [DMGT]

Intermediate Capital Group PLC [ICP]

Sage Group (The) PLC [SGE]

 

Friday - US GDP, Russian rate decision, Baker Hughes rig count

Interim Result

Kcell JSC [19PS]

Aberforth Smaller Companies Trust Plc [ASL]

Foxtons Group PLC [FOXT]

IMI PLC [IMI]

Novolipetsk Steel [NLMK]

Rightmove PLC [RMV]

AGM / EGM

RedT Energy PLC [RED]

Smartspace Software Plc [SMRT]

Trading Statement

Vodafone Group PLC [VOD]

 

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.

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