Reflect & Prepare

Friday, 23rd August 2019 15:09 - by Rajan Dhall

Another week, and another round of traded blows in the trade war between the US and China which shows no signs of abating any time soon.  Late on in the week, China announced it would introduce tariffs on some $75bln of US goods, including Oil, which will be levied at 10%.  China will also resume the 25% tariffs on US autos, though some exemptions will be allowable, leaving this part of the retaliatory measures opened ended for now.  Nevertheless, any hopes from the US side that their touch policy on trade was going to make China yield and return to the negotiating table can now be dismissed, though it has long been established that China is fully prepared to play 'the long game'.

 

In a tweet ahead of Fed chair Powell's speech at Jackson Hole, President Trump urged the Fed 'to show their stuff', heaping more pressure on the central bank, who will continue to focus on the economy.  Jobs and spending continue to support the growth prospects ahead, but as per the responses from Fed officials - to the Chinese tariffs - there are growing external factors which the policymakers are finding increasingly hard to ignore. 

 

In the UK, the aftermath of the meeting between UK PM Boris Johnson and German chancellor Angela Merkel seems to have sparked some optimism, after the German leader suggested an alternative to the Irish backstop could be found.  Once again, these were short on detail, but such is the bearish outlook on what lies ahead - come 31st October - that any form of concession, no matter how tentative, is a welcome development at this stage.  

 

In the background, however, rebel MPs on all sides of the House are working behind the scenes to work out a way to block a no-deal exit.  Dominic Grieve for one is keen to establish a firm cross-party backing for obstructing a disruptive exit from the EU, but he has stopped short of agreeing to back Jeremy Corbyn of taking charge of a caretaker government in the event that the present government is brought down.

 

Movers and Losers

 

This week has been a good one for M&A with both Entertainment One and Greene King subject to bids from overseas. Its seems the cheaper sterling is tempting international rivals to put in bids for UK firms. Greene King rose 48% while Entertainment One pushed 35% respectively. 

 

Mitchells & Butlers +13%: The Co.'s shares shot higher after they reported like-for-like sales growth of 2.8% in its third-quarter trading update. Total sales also increased by 4.1% in the year to date.

 

Nostrum Oil & Gas -25%: Shares took a beating this week after it was given a downgrade by Berenberg. Shes fell after their hopes for a turnaround on the back of disappointing drilling at Kazakhstan's Chinarevskoye field.

 

Next Week

 

Monday - NZ trade balance, German IFO, US durable good data

Interim Result
PJSC Acron [AKRN]

 

Tuesday - German GDP, US CB consumer confidence, Weekly API's

Interim Result

AFI Development Plc [AFRB]

Bunzl PLC [BNZL]

Bank Of Cyprus Holdings [BOCH]

Jadestone Energy Inc [JSE]

PureTech Health Plc [PRTC]

AGM / EGM

Iomart Group PLC [IOM]

MetalNRG PLC [MNRG]

Vertu Capital Limited [VCBC]

 

Wednesday - Weekly DoE's

Interim Result

Arix Bioscience Plc [ARIX]

Fisher (James) & Sons PLC [FSJ]

Headlam Group PLC [HEAD]

PJSC Phosagro [PHOR]

AGM / EGM

Gordon Dadds Group Plc [GOR]

Oryx International Growth Fund Limited [OIG]

Trading Statement

Diploma PLC [DPLM]

 

Thursday - German employment data, German CPI, US GDP, US pending home sales

Interim Result

Amigo Holdings Plc [AMGO]

Chesnara PLC [CSN]

Hunting PLC [HTG]

Irish Continental Group PLC [ICGC]

Total Produce PLC [TOT]

Final Result

Hays PLC [HAS]

 

Friday - Japanese industrial production, EU CPI, US core PCE, Canadian GDP, Michigan data

Interim Result

BBGI Sicav S.A. [BBGI]

Cathay International Holdings Ltd [CTI]

EMIS Group PLC [EMIS]

AGM / EGM

Stagecoach Group PLC [SGC]

 

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.