Reflect & Prepare

Friday, 25th October 2019 13:45 - by Reflect & Prepare

Events in the US surround the ongoing trade negotiations with China, and on this, hopes are once again raised as both sides are looking to agree on a 'Phase One' deal.  This will involve China purchasing more agricultural goods from the US, while its counterpart will agree to hold off tariff hikes.  The deal is no small part due to some of the respective weaknesses seen in both domestic economies.  Manufacturing sectors are feeling the pinch and this week alone, we saw poor results from Caterpillar, which made the headlines in direct response to trade policies.  In this respect, a mutual agreement seems to have been forced upon them to some degree as the economic consequences come to light.  

For the US, the data schedule has been relatively light, but in spite of this, next week's FOMC meeting is still expected to produce another rate cut, and it will not have gone unnoticed that towards the end of the week, Donald Trump again criticised the Fed for now cutting rates - even though they have - but not by nearly enough to please the US President.  We will also get fresh labour market data as well as the first reading of Q2 GDP, so this will make for interesting reading with the blame game likely to hit twitter if we get soft numbers. 

We have been thrust into Brexit chaos once again as it looks like another Brexit deadline will come and go without any consequence.  Early on in the week, the PM won a hollow victory as MPs passed the second reading on his deal negotiated with the EU, but the following 3 day timetable was voted down, as opposition MPs argued that this was nowhere near enough time to scrutinise the nuts and bolts of the plans agreed on in principle.  As a follow on, a letter was sent to the EU requesting an extension, though Boris Johnson refused to sign it, insisting that this was sent on behalf of parliament.  

Since then, he has called for a general election, but opposition parties will not toe the line until they can guarantee no deal is off the table.  On Friday, the EU postponed giving a decision on the length of a possible delay, opting to wait until next week to decide after the House of Commons conducts a vote on holding a snap election.  A pre-Christmas election was the last thing on anyone's mind, but in order to break the deadlock, the PM's frustration has led him to this course of action as further debating on the current deal is expected to run into obstacle after obstacle.  Many will agree!

Movers and Losers

Just Eat +15.63%: The Co. is now the target of two takeover bids, the latest being £4.9bn in cash. Prosus is the Amsterdam-listed new bidder who are trying to compete with takeaway.com.

KAZ +7.95%: There has been a small bounce back in the copper price and the Co. posted record copper production in third quarter.

Boeing -9.86%: The Co. is still struggling with the fallout from the Boeing 737 model. The company said profits fell by half.

Prudential -8%: The Co's fund management and UK arm of Prudential has been valued at £5.7bn on its first day of trading on the London Stock Exchange as M&G demerged from Prudential.

Week Ahead

Monday - Chinese industrial profits, German import price index, US goods trade balance

AGM / EGM

Verseon Corporation [VERS]

Interim Result

HSBC Holdings PLC [HSBA]

Tuesday - Nationwide HPI (UK), US CB consumer confidence, US pending home sales, weekly API's

Interim Result

Bloomsbury Publishing PLC [BMY]

BP PLC [BP.]

Wednesday - Japanese retail sales, Australian CPI, German employment data, EU consumer confidence, EU industrial & services sentiment, German CPI, US ADP jobs data, US GDP, BoC rate decision, DoE's, FOMC rate decision, NZ building consents

Trading Statement

Computacenter PLC [CCC]

ConvaTec Group Plc [CTEC]

Next PLC [NXT]

Smurfit Kappa Group PLC [SKG]

Standard Chartered PLC [STAN]

Interim Result

Jyske Bank AS [0MGD]

GlaxoSmithKline PLC [GSK]

AGM / EGM

Angle PLC [AGL]

Goldplat PLC [GDP]

Ideagen [IDEA]

Origo Partners PLC [OPP]

Redde [REDD]

Final Result

Leaf Clean Energy Company [LEAF]

Thursday -  Japanese industrial production, Australian building consents, Chinese manufacturing PMI, BoJ rate decision, German retail sales, EU CPI, EU GDP, Canadian GDP, Australian manufacturing index

Interim Result

Thomson Reuters Corp [0VKQ]

Acacia Mining Plc [ACA]

BT Group PLC [BT.A]

International Consolidated Airlines Group [IAG]

Indivior Plc [INDV]

Magnitogorsk Iron Steel Works [MMK]

Royal Dutch Shell [RDSA]

Samsung Electronics Co Ltd [SMSN]

Trading Statement

International Personal Finance PLC [IPF]

Lloyds Banking Group PLC ORD [LLOY]

Provident Financial PLC [PFG]

PPHE Hotel Group [PPH]

Smith & Nephew PLC [SN.]

AGM / EGM

Argos Resources Ltd [ARG]

Block Energy PLC [BLOE]

Go-Ahead Group (The) PLC [GOG]

MaxCyte Inc [MXCT]

Final Result

Oncimmune Holdings Plc [ONC]

Friday - Japanese jobs data, AUD PPI, Japanese manufacturing PMI, Chinese Caixin PMI, UK manufacturing PMI, US NFP, US manufacturing PMI, US ISM manufacturing PMI, 

Interim Result
Millennium & Copthorne Hotels PLC [MLC]

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.