Reflect & Prepare

Friday, 4th October 2019 14:11 - by Reflect & Prepare

Focus is very much on the incoming data at present, with the latest ISM surveys in both manufacturing and non-manufacturing painting a downbeat picture.  This has knocked some of the confidence in US stocks, which have so far been resilient to the weakness seen further afield.  China and more so Europe, are showing notable weaknesses and this has not been helped by the combative stance of the White House on trade.  As per comments from adviser Navarro, issues such as IP theft remain a sticking point in the talks, which resume towards the end of next week.  In the meantime, US businesses are showing the strains, though not without warnings which have seemingly fallen on deaf ears as yet.

 

Needless to say, the odds for further rate cuts from the Fed have risen this week, but this does not seem to have tempered any of the losses on Wall Street, as the underlying issues regarding global demand dawn on risk asset holders.  Friday's non-farm payrolls in the US saw jobs growing more or less in line with expectations, with the prior month revised higher.  However, wage growth stalled in September to pull the yearly earnings growth just below 3.0%.  Could this impact on consumption down the line?

 

The Brexit sage continues, though markets have had something fresh to consider in the form of the proposals put forward by the PM in order to break the deadlock on the Irish backstop.  The plan is to set up customs checks either side of the border to create a clearance zone, but so far, this has not been well received by the Irish government and the EU is ready to stand by Ireland.  Ahead of the submission of details, press reports had given officials on the EU side a taste of what was to come, but since looking at the details, they remain 'open but not convinced' that this could 'fly'.  The plan also keeps Northern Ireland inside the single market but not in the customs union, which has been agreed by the DUP.  However, the actual border operations remain a sticking point and highlight the incremental steps being taken by the government to try and get to a deal by the middle of October.

 

Meanwhile, opposition parties remain committed to seeing a delay in Brexit and a Scottish judge has been asked to consider whether the PM could be jailed if he forced a no-deal exit at the end of the month.  Documents from lawyers are said to claim that the PM will indeed ask for an extension if no deal is reached by the 19th of October, though there is plenty of uncertainty left to consider, given the EU has to agree to this with the vote of all member states.

 

Moves and Losers

 

The FTSE 100 had a dismal week after the pound strengthened following reports that UK PM Boris Johnson may be able to carve out a deal. On the global front, PMI data from the US indicated that the global economy is slowing down quicker than analysts think. Today there were also reports that Boris Johnson will extend article 50. 

 

Ted Baker -50%: The company issues another profit warning this week. What is more of a concern is that online sales fell too, this indicates that it is not only a high street slump causing the concern but the actual brand and products.

 

AA PLC -17%: The companies share price fell after the UK’s financial watchdog said they may ban loyalty premiums for customers who renew their home and motor insurance as it outlined some changes to address market competition issues.

 

Next Week

 

Monday - China off, Halifax HPI, German factory orders

Sensyne Health Plc [SENS]

 

Tuesday - China back to the market, UK BRC sales monitor, China trade balance, German industrial production, UK labour productivity, US PPI, weekly oil API inventories

Trading Statement

easyJet PLC [EZJ]

Stock Spirits Group [STCK]

Final Result

YouGov PLC [YOU]

Interim Result

Air Partner Plc [AIR]

 

Wednesday - US Jolts jobs data, DoE's, FOMC meeting minutes

AGM / EGM

Ashley (Laura) Holdings PLC [ALY]

Fastforward Innovations Ltd [FFWD]

Trading Statement

PageGroup Plc [PAGE]

Final Result

Volution Group Plc [FAN]

 

Thursday - RICS house price balance (UK), German trade balance, UK GDP, UK industrial and manufacturing production, UK trade balance, OPEC report, US CPI

Trading Statement

Dunelm Group PLC [DNLM]

Hargreaves Lansdown PLC [HL.]

Mondi PLC [MNDI]

AGM / EGM

Hargreaves Lansdown PLC [HL.]

Interim Result

Brown (N) Group PLC [BWNG]

 

Friday - German CPI, OPEC meeting, Canadian employment change, Michigan consumer sentiment

Trading Statement
Jupiter Fund Management plc [JUP]

 

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.