Reflect & Prepare

Friday, 6th September 2019 14:58 - by Reflect & Prepare

This week the US markets have been focusing on data as much as they have politics, though it seems stimulus in China and an agreement between the US and China to resume trade talks have played a key part in helping risk assets regain some lost ground.  It is, however, worth mentioning, that in recent months, during the escalation of US trade tensions with China through the imposition of fresh tariffs, the key Wall Street indices have managed to hold off the lows seen at the beginning of summer.  There is, therefore, a strong bid presiding near the lows and we can only put this down to the view that policy easing from the major central banks is being pre-empted.  Global bond markets have also calmed in a bid to add some stability to the overall risk mood out there and on the week, the leading S&P 500 is looking at an 80pt gain as we look towards the weekend.

 

However, increased expectations (hopes) of Fed easing (still seen at 25bps later this month) have come off the back of data which show that the US is not as immune to the global environment as perceived earlier in the year. The forward-looking PMIs have put paid this idea, with the ISM manufacturing index for August slipping below the pivotal 50.0 mark to reflect the move into contractionary territory.  Later in the week, the non-manufacturing PMIs from the ISM was a little less gloomy, with the index comfortably above the expansionary 50.0 pivot, with a rise in new orders and the business climate maintaining a certain degree of optimism in the economy.  The labour market still looks relatively healthy, though the latest payrolls release covering August fell short of expectations by adding 130k jobs to the economy.  Forecasts were once again for a number above

150k, with wages still growing by a tepid 3.2% year on year.

 

A week is a long time in politics, but for Boris Johnson, it must have felt a lot longer as the PM suffered a series of defeats which have put a serious dent in his plan to take the UK out of the EU at the next deadline - 31 October.  On Tuesday, the government lost the vote and control of the parliamentary timetable, later losing the Benn-Burt bill which asks the government to go back to the EU and ask for an extension.  At the time of writing, bill has been passed to the House of Lords, who look set to complete its passage by the end of play Friday.  The PM is now likely to call for an election, though a snap election was also rejected by the House of Commons this week, setting up a very testing time for Boris Johson, who (perhaps now reluctantly) said he would 'rather be dead in a ditch' than go back to the EU to ask for an extension.

 

The upshot now is that a general election is looking ever more likely, but the timing will be the issue as the opposition party and its allies are keen not to allow the government to use this process to exit the EU by the back door, and crucially without a deal.  The PM will continue to try and get a deal by the middle of next month, but as he sees it, these latest developments have taken away a major bargaining chip and parliament is becoming ever more polarised by the day.  In the event of a general election, we may well get a 'second referendum', though not in name.

 

Movers and Losers

 

G4S +6%: The Brink's Company (US-based) could make a £1bn bid for the security services firm's cash solutions arm.

 

NMC Health +9.87%: The Co.'s shares jumped on report of Chinese interest in stake said to be worth around USD 1.9bn. 

 

CYBG -22%: The share price plunged after warning of potential £450m hit from PPI.

 

Restaurant Group +17%: The owner of Frankie & Benny's and Chiquito announce the plan to close more than 150 outlets.

 

The week ahead

 

Monday - Japanese GDP, German trade balance, UK GDP, UK trade balance

Interim Result

Blackbird Plc [BIRD]

Diaceutics Plc Ord Gbp0.002 [DXRX]

Filta Group Holdings Plc [FLTA]

MD Medical Group Investments Plc [MDMG]

Medica Group Plc [MGP]

AGM / EGM

Anglo African Oil & Gas PLC [AAOG]

appScatter Group Plc Ord 5p [APPS]

First Property Group PLC [FPO]

Totally PLC [TLY]

Final Result

Abcam PLC [ABC]

Associated British Foods PLC [ABF]

 

Tuesday - Chinese CPI, UK earnings data, US Jolts Job data

Interim Result

888 Holdings PLC [888]

Ashtead Group PLC [AHT]

Boku Inc. [BOKU]

Concurrent Technologies PLC [CNC]

Cairn Energy PLC [CNE]

EKF Diagnostics Holdings PLC [EKF]

Gulf Keystone Petroleum [GKP]

Good Energy Group Plc [GOOD]

Hilton Food Group PLC [HFG]

Harworth Group Plc [HWG]

Integrated Diagnostics Holdings Plc [IDHC]

IP Group PLC [IPO]

JD Sports Fashion PLC [JD.]

Nucleus Financial Group PLC [NUC]

Petropavlovsk PLC [POG]

The Simplybiz Group PLC [SBIZ]

Team17 Group Plc [TM17]

TP Group Plc [TPG]

Trinity Exploration & Production [TRIN]

Urban Exposure Plc [UEX]

Vectura Group PLC [VEC]

Xaar PLC [XAR]

AGM / EGM

Mirada PLC [MIRA]

Hipgnosis Songs Fund Ltd [SONG]

Final Result

Litigation Capital Management Ltd [LIT]

 

Wednesday - OPEC monthly report, US PPI, DoE's

Interim Result

Advanced Medical Solutions Group PLC [AMS]

Anpario PLC [ANP]

Avesco Group PLC [AVS]

DP Eurasia [DPEU]

ECSC Group Plc [ECSC]

Futura Medical PLC [FUM]

Gulf Marine Services PLC [GMS]

AGM / EGM

IG Design [IGR]

SDCL Energy Efficiency Income Trust Plc [SEIT]

Staffline Group PLC [STAF]

Tricorn Group PLC [TCN]

Final Result

Galliford Try PLC [GFRD]

 

Thursday - Chinese trade balance, German CPI, EU industrial production, OPEC meeting, ECB rate decision, US CPI

Final Result

Brooks Macdonald Group PLC [BRK]

Haynes Publishing Group PLC [HYNS]

AGM / EGM

Atlantis Japan Growth Fund Ltd [AJG]

Better Capital Ltd [BCAP]

Scancell Holdings PLC [SCLP]

Trident Resources PLC [TRR]

XPS Pensions Group PLC [XPS]

Interim Result

Cairn Homes Plc [CRN]

Greencoat Renewables Plc [GRP]

Morrison (Wm) Supermarkets PLC [MRW]

Safestore Holdings PLC [SAFE]

Silence Therapeutics PLC [SLN]

 

Friday - EU trade balance, US core retail sales, US Michigan data

Trading Statement

Wetherspoon (J D) PLC [JDW]

AGM / EGM

Panthera Resources PLC [PAT]

 

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.