Reflect & Prepare

Friday, 8th March 2019 15:26 - by Reflect & Prepare

Markets have been rattled this week by events in Europe, notably the ECB meeting, which along with the BoC in Canada surprised on a clear dovish note to send jitters through global stock markets - Wall Street included.  While the markets have been riding a wave of optimism over a trade deal between the US and China, the underlying theme of weak growth has been underlined by the change in tone from global central banks, having started in earnest with the Fed earlier this year.  The ECB announcement to introduce another series of loans to help banks and business underlined need to act, and act now.

Global growth concerns were further weighed by the drop in Chinese exports, which also hurt sentiment and after testing recent highs, the benchmark S&P 500 moving firmly away from the key 2800-20 zone to record some notable losses on the week.  

From the US, the key data release was the non-farm payrolls report for February, which produced a meager 20k rise against expectations of a 180k rise.  Government shutdowns from earlier this year were blamed for the freak number, though stock markets reacted badly on the release. Wage growth is creeping higher as the annualised average hourly earnings rate is now at 3.4%, so there were some positive points to the report which also saw the unemployment rate dip again to 3.8%.  

This week was never going to be a major week in the UK as Theresa May and her team led by Brexit Sec Barclay and Attorney General Cox were in Brussels to try and get more binding assurances to the Irish backstop.  Without this, senior ministers in the UK are convinced that the current deal will not pass a vote in parliament, which will be brought to the House (of Commons) on Tuesday. Late on in the week, officials said the EU had not moved on their stance, so the fear is now that the Commons will be voting on the same deal which was voted upon in February.  

Looking ahead, Tuesday is the all-important vote as we have just mentioned, but if this is rejected then Wednesday and Thursday will see motions put to the House on whether to take no deal off the table or indeed back a second referendum.  There will also be a vote to delay Brexit, which now looks set to be the minimum we can expect as little has improved in recent weeks. The PM gave a speech in Grimsby on Friday where she urged MPs to back her deal but also made an indirect plea to the EU to try and get the deal over the line.  It is all desperate stuff, but it now comes to a head next week.

Movers and Losers this week

Debenhams +17%: The company’s shares shot up as high st. mogul Mike Ashley looks to take control of the battered high st. giant.

IAG -9%: Shares in the airline giant fell as the group told investors its free cash flow would fall this year.

GVC -11%: Co’s shares fell even after revenues rose to £2935.2 million from £789.9 million reported in the same period last year. The company’s loss before tax stood at £18.9 million compared to a loss of £22.6 million. The market are still very worried about the cap on fixed odds gambling.

Week Ahead

Monday - German trade balance, German industrial production, US retail sailes

Final Result
Banco Santander SA [BNC]
Hutchison China Meditech Ltd [HCM]
Kcell JSC [KCEL]
Microsaic Systems PLC [MSYS]
Old Mutual Limited [OMU]
Silence Therapeutics PLC [SLN]
AGM / EGM
Blockchain Worldwide PLC [BLOC]
Interim Result
River And Mercantile Group [RIV]

Tuesday - UK industrial manufacturing production and manufacturing production, UK trade balance, US core CPI, Brexit vote

Final Result
888 Holdings PLC [888]
Computacenter PLC [CCC]
Cairn Energy PLC [CNE]
Domino's Pizza Group PLC [DOM]
Forbidden Technologies PLC [FBT]
French Connection Group PLC [FCCN]
Forterra Plc [FORT]
G4S PLC [GFS]
Gresham Technologies PLC [GHT]
H&T Group PLC [HAT]
Midwich Group Plc [MIDW]
Menzies (John) PLC [MNZS]
Pendragon PLC [PDG]
Pennant International Group PLC [PEN]
Surgical Innovations Group PLC [SUN]
TCS Group Holding Plc [TCS]
Interim Result
PRS Reit Plc [PRSR]
PureCircle Ltd [PURE]
AGM / EGM
Starvest PLC [SVE]

Wednesday - UK Brexit vote, Annual budget release, US core durable goods, US PPI, DoE’s

Final Result
Advanced Medical Solutions Group PLC [AMS]
Balfour Beatty PLC [BBY]
Burford Capital Ltd [BUR]
Dignity PLC [DTY]
ECSC Group Plc [ECSC]
EKF Diagnostics Holdings PLC [EKF]
Hikma Pharmaceuticals PLC [HIK]
hVIVO Plc [HVO]
Lookers PLC [LOOK]
Morrison (Wm) Supermarkets PLC [MRW]
Provident Financial PLC [PFG]
Prudential PLC [PRU]
Standard Life Aberdeen [SLA]
StatPro Group PLC [SOG]
TransGlobe Energy Corporation [TGL]

Thursday - RICS house price balance, Chinese industrial production, German CPI, OPEC monthly report, US new home sales

Final Result
Capital & Regional PLC [CAL]
Capita Group (The) PLC [CPI]
Just Group Plc [JUST]
Marshalls PLC [MSLH]
Oxford BioMedica PLC [OXB]
Savills PLC [SVS]
AGM / EGM
Benchmark Holdings Plc [BMK]
Banco Bilbao Vizcaya Argentaria Sa [BVA]
Interim Result
Brooks Macdonald Group PLC [BRK]

Friday - BoJ rate decision, IEA monthly report, EU CPI, US Jolts data, US industrial production, Baker Hughes

Trading Statement
Berkeley Group Holdings (The) PLC [BKG]
Final Result
Restaurant Group (The) PLC [RTN]
AGM / EGM
LG Electronics Inc [LGLD]
Interim Result
Wetherspoon (J D) PLC [JDW]

Have a great weekend and good luck next week!

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.