Reflect & Prepare

Friday, 1st March 2019 13:59 - by Reflect & Prepare

As the trade talks continue, US stocks continue to hold a high degree of optimism over a possible deal with the president himself having suggested another summit - perhaps to sign a deal.  Trade Rep Lighthizer gave the market cause for much caution as he highlighted the number of structural issues which continue to keep both sides apart from now, and rather ominously suggested that nothing is agreed until everything is agreed.  Beijing will not agree to this, but markets are pricing in a compromise and the key indices are all pushing on notable highs with the S&P leading the charge on the 2500-20 area. 

President Trump also met with North Korea's Kim, but despite leaving without an agreement or statement, the market took this in its stride.  The conflict between India and Pakistan also caused minor jitters in sentiment, but the international community quickly called for calm, and matters have simmered down since. 

On the economic front, the Q4 GDP figure was a little better than expected, though there was a notable rise in inventories which bloated the numbers, and again suggests stockpiling ahead of any fresh tariffs.  Not everyone is as complacent about a trade deal.  Fed members are, however, realistic about the level of growth this year and are fully aware that 2018 may difficult to replicate.  Even so, they expect another solid year but are prepared to stand back and watch the incoming data.  This was reiterated by the Fed chair Powell in his semi-annual testimony this week.

In the UK, few can look past Brexit in the UK, but what has become increasingly apparent in recent weeks is that a no deal withdrawal will not be countenanced by parliament.  This view has seen the Pound rally from sub 1.3000 levels against the Dollar, posting strong gains across the board, and continues to act as a bellwether for sentiment in the markets. We now await news from ongoing talks with the EU, but chief negotiator Michel Barnier said yet again, that the treaty will not be reopened and there can be no changes to the Irish backstop. 

We will now have to wait until the week after next in order to see where we genuinely progress from here, with Theresa May offering the House of Commons to vote on motions to take no deal off the table as well as to delay Brexit if here deal is not passed when presented ahead of this.  The cabinet will present this motion by the 12th of March, so next week looks set to be a quiet one for political news. 

At the end of the week, we saw the manufacturing PMIs holding steady in expansionary territory, but the numbers mask some uncomfortable developments including stockpiling due to a sharp rise in input and finished goods, while job losses rose to a 6 year high.

Movers and Losers

Metro Bank -36%: The investigation into the companies misclassification of assets has been confirmed.

Centamin -32%: The Co. warned its output this year would be below expectations at between 490,000-520,000 ounces.

Ocado +17%: The company announced its partnership with Marks and Spencer and seems to be going from strength to strength.

Travis Perkins +13%: The companies shares were boosted by a turnaround in Wickes.

Monday - UK construction PMI

Interim Result

Gfinity Plc [GFIN]

Litigation Capital Management Ltd [LIT]

Sareum Holdings PLC [SAR]

Final Result

Greencoat Renewables Plc [GRP]

Johnson Service Group PLC [JSG]

AGM / EGM

Alpha Growth Plc [ALGW]

Tuesday - UK BRC sales monitor, RBA interest rate decision, EU,UK,US services PMI, US ISM manufacturing data, US new home sales, weekly oil API’s

Final Result

Apax Global Alpha Ltd [APAX]

BioPharma Credit Plc [BPCR]

Direct Line Insurance Group PLC [DLG]

e-Therapeutics PLC [ETX]

Getbusy Plc [GETB]

GVC Holdings Plc [GVC]

Huntsworth PLC [HNT]

Harworth Group Plc [HWG]

MPAC Group Plc [MPAC]

Science Group [SAG]

The Simplybiz Group PLC [SBIZ]

AGM / EGM

Schroder European Real Estate Investment Trust Plc [SERE]

Interim Result

Ashtead Group PLC [AHT]

Wednesday - AUD GDP, US ADP NFP, BoC rate decision, DoE’s

Final Result

Tritax Big Box Reit Plc [BBOX]

BATM Advanced Communications Ltd [BVC]

Foresight Solar Fund Ltd [FSFL]

Glenveagh Properties Plc [GLV]

Headlam Group PLC [HEAD]

Just Eat [JE.]

PageGroup Plc [PAGE]

Paddy Power Betfair [PPB]

Seplat Petroleum Dev Company Plc [SEPL]

Secure Income Reit Plc [SIR]

VR Education Holdings PLC [VRE]

Vivo Energy Plc [VVO]

Thursday - AUD retail sales, UK Halifax HPI, ECB rate decision, Japanese GDP

Final Result

Admiral Group PLC [ADM]

Cairn Homes Plc [CRN]

Countrywide Plc [CWD]

Funding Circle Holdings Plc Ord 0.1p Wi [FCH]

Greggs PLC [GRG]

Inmarsat PLC [ISAT]

NMC Health PLC [NMC]

Total Produce PLC [TOT]

AGM / EGM

Aluminium Bahrain BSC [ALBH]

Impax Asset Management Plc [IPX]

Friday - US jobs data, Canadian jobs data

No significant earnings

Have a great weekend

Kind Regards

Rajan Dhall