Reflect & Prepare (By Rajan Dhall)

Saturday, 23rd March 2019 09:23 - by Reflect & Prepare

The FOMC meeting was the focal point in the US this week, with all eyes on the dot plot to see whether policymakers had changed their projections for the year.  In December, Fed members plotted a median forecast of 2 hikes through 2019, and expectations were for this to be revised down to one hike but were cut to none.  Stock markets did not react to the news in the way we are accustomed to seeing, and this in spite of the news that the Fed would halve the reinvestment cap from $30bln to $15bln in May and stop them altogether in September.  As this had been anticipated, stocks were largely unmoved by the announcement.  The Dollar took a hit, however, but this was later tracked back.  

 

Meanwhile, German manufacturing was in the spotlight at the end of the week, with the purchasing manager's index dropping further to accentuate the slowdown.  This sent ripples through the markets, with the Dax dropping sharply, but Wall Street followed suit later in the day.  With the Fed turning dovish and Eurozone weakness underlined by the latest numbers, investors are beginning to show their nervousness, with China's slowdown simmering in the background. 

 

Brexit continues to dominate events in the UK, so much so that the BoE has to sit on their hands for now.  In its latest meeting, it maintained its position on policy as the fog of Brexit needs to clear first and recent events show that we are no nearer a resolution - if anything further away.  

 

The EU has agreed to give an extension to the UK to the 12th of April in order to try and pass the EU deal through the House of Commons.  If this is successful, which looks highly unlikely according to MP rhetoric, the EU is prepared to extend the delay through to the 22nd of May, just ahead of the European elections.  

 

Given the dissatisfaction with the EU deal, the outlook has soured again with both the EU and UK seeing higher risks of a no deal outcome.  While the UK parliament has voted against this, the default position is that the UK exits without a withdrawal deal and on WTO terms.  Hardline Brexiteers clearly welcome this outcome, though this is not the majority of the House.  Even so, there is a risk that the UK accidentally crash out, and inaction and delay are proving unsettling all round.  Frustrations will be running high next week, with the House set to agree on the extension as well as the meaningful vote which will be re-tabled for the third time.

 

Movers and Losers

 

Hammerson -11%: The European shopping centre owner has been hit but the struggling retail shopping sector. It has been said payouts to the four executive directors fell from GBP 5.4m to GBP 3.7m in 2018 after the directors did not hit bonus targets for earnings, rental income and investment returns.

 

Keir Group -22%: The construction and maintenance company posted a GBP 35mln loss. Revenues at Kier pushed to 3% to GBP 2bln and even as the Co. managed to save GBP 4mln over the six months, the massive cost-cutting programme cost GBP 14mln to implement.

 

Inmarsat +14%: The satellite company is considering a USD 3.3bln takeover offer from a consortium of investors. There is also said to be a counteroffer from another combined party Apax and Warburg Pincus.

 

Next Week

 

Monday - German Ifo, NZ trade balance

Final Result

ADES International Holding Ltd [ADES]

BigBlu Broadband PLC [BBB]

Brady PLC [BRY]

Hansteen Holdings PLC [HSTN]

IFG Group PLC [IFP]

Microgen PLC [MCGN]

MD Medical Group Investments Plc [MDMG]

Quixant [QXT]

SpaceandPeople PLC [SAL]

Spectra Systems Corporation [SPSY]

Trading Statement

Pennon Group PLC [PNN]

AGM / EGM

Velocity Composites Plc [VEL]

 

Tuesday - US building permits, RBNZ rate decision, French GDP, weekly API's

Final Result

Access Intelligence PLC [ACC]

Alliance Pharma PLC [APH]

Barr (A G) PLC [BAG]

Boku Inc. [BOKU]

Clarke (T) PLC [CTO]

Fevertree Drinks Plc [FEVR]

Gulf Marine Services PLC [GMS]

LiDCO Group PLC [LID]

Moss Bros Group PLC [MOSB]

Personal Group Holdings PLC [PGH]

Pelatro Plc [PTRO]

Premier Technical Services Group Plc [PTSG]

S & U PLC [SUS]

XLMedia Plc [XLM]

AGM / EGM

Jyske Bank AS [0MGD]

Tritax Eurobox Plc [EBOX]

I-nexus Global Plc [INX]

LXB Retail Properties Plc [LXB]

Trading Statement

United Utilities Group PLC [UU.]

 

Wednesday - ECB's Draghi, Mersch, Praet & de Guindos all speak, US trade balance, DoE's 

Final Result

Anglo Pacific Group PLC [APF]

Brave Bison Group Plc [BBSN]

Cloudcall Group Plc [CALL]

Churchill China PLC [CHH]

CPP Group PLC [CPP]

Hilton Food Group PLC [HFG]

RHI Magnesita NV [RHIM]

Trading Statement

Diploma PLC [DPLM]

Imperial Brands Plc [IMB]

AGM / EGM

Amino Technologies PLC [AMO]

Premier Veterinary Group PLC [PVG]

Interim Result

Bellway PLC [BWY]

 

Thursday - Nationwide HPI, US GDP, US pending home sales, Japanese industrial production and retail sales

Final Result

Arix Bioscience Plc [ARIX]

BBGI Sicav S.A. [BBGI]

Biome Technologies PLC [BIOM]

Eddie Stobart Logistics Plc [ESL]

Gulf Keystone Petroleum [GKP]

India Capital Growth Fund Ltd [IGC]

Intelligent Ultrasound Group PLC [MED]

Interim Result

Ceres Power Holdings PLC [CWR]

Diurnal Group Plc [DNL]

Tritax Eurobox Plc [EBOX]

International Public Partnership Ltd [INPP]

AGM / EGM

Aukett Swanke Group PLC [AUK]

Chenavari Capital Solutions [CCSL]

Trading Statement

MITIE Group PLC [MTO]

 

Friday - German retail sales, German employment data, UK GDP, EU CPI, US PCE, CAD GDP, US new home sales and on the weekend Chinese manufacturing PMI

AGM / EGM

Angus Energy Plc [ANGS]

Idox Plc [IDOX]

Local Shopping REIT (The) PLC [LSR]

Micro Focus International PLC [MCRO]

St Modwen Properties PLC [SMP]

Final Result

Chesnara PLC [CSN]

Cathay International Holdings Ltd [CTI]

GAN Plc [GAN]

 

Have a good weekend

 

Kind Regards

 

Rajan Dhall