Worst UK stock in 2022

WORST UK STOCK IN 2022 (1110 GMT)

UK bleak economic outlook adds to worries for retailers, the market is closed today for the Queen's funeral, but as of Friday fashion retailer ASOS is the worst stock performer in Britain so far in 2022.

ASOS has shed a whopping 2.5 billion pounds, down almost 75% this year. It warned earlier this month it expects full-year profit to be around the bottom of its guidance.

Other UK fashion retailers have declined between 30% and 50% this year. Primark has also warned about their profits this month.

Data on Friday showed that British retail sales fell much more than expected in August.

DON'T RETREAT TO THE SIDELINES! (0925 GMT)

September is clearly shaping up as a risk-off month for equities across global markets with the latest BofA survey showing investors raising cash allocations to the highest since just after the 9/11 shock in 2001, at 6.1%.

But UBS warns against hoarding too much cash, and advises instead to add exposure in a selective way.

"The risk-off mood in markets has left many investors seeking refuge in cash... But we advise against retreating to the sidelines, especially given the drag on cash from high inflation and the challenge of timing a return to markets without missing out on rebounds," says strategists at the Swiss bank in their daily house view note.

With that in mind, UBS recommends:

(Danilo Masoni)

STOXX SLIDES TO 9-WEEK LOW (0742 GMT)

European stocks kicked off the week on the back foot with caution over big rate hikes and recession risks driving the STOXX 600 to its lowest level in more than 9 weeks.

The pan-European equity benchmark index was last 0.6% lower with all sub-sectors trading below parity, while a volatility gauge for euro zone stocks inched up to an 8-day high.

Here's your opening snapshot:

(Danilo Masoni)

EUROPE EYES CAUTIOUS START (0641 GMT)

Shares in Europe look set to open flat to slightly lower this morning following heavy losses last week on mounting recession fears, and as investors await a batch of interest rate decision this week, starting from the Fed's on Wednesday.

EuroSTOXX50 and DAX futures were last down around 0.1% while London markets will remain closed for the funeral of Queen Elizabeth II. U.S. derivatives were lower too, with Nasdaq and S&P 500 contracts down 0.6% and 0.3%, respectively.

In corporate news, Volkswagen said on Sunday it is targeting an IPO valuation of up to 75 billion euros for luxury sportscar maker Porsche. VW shares rose in early trade in Frankfurt.

(Danilo Masoni)

VIGILS (0559 GMT)

London markets close on Monday for the funeral of Queen Elizabeth II. The tone everywhere else is sombre and nervous as no fewer than 13 central bank meetings loom this week.

Wednesday's U.S. Federal Reserve decision - and the committee members' rate projections - are the centrepiece but decisions in Britain, China and Japan are also in focus.

Stocks took a bath last week as traders re-priced the Fed's outlook, with markets now positioned for a 75 basis point hike on Wednesday and U.S. rates seen galloping above 4% by March.

A holiday in Japan kept a lid on moves in Asia but pressure is building on both the yen and the yuan, as Beijing and Tokyo swim against the policy tide by holding rates low.

China cut reverse repo rates on Monday and the yuan slipped back to the weaker side of 7 per dollar. Benchmark loan rates are set on Tuesday, with an outside chance of more cuts.

The Bank of Japan is under growing pressure from speculators in the FX and bond markets to abandon a policy of pinning yields near zero - a policy change on Thursday is unlikely but not impossible.

The Bank of England also announces a policy decision on Thursday, delayed by the Queen's death, with markets expecting a hike although split on the magnitude.

Meanwhile, London bids Elizabeth a final farewell. An official lying-in-state period ends shortly before sunrise, and mid-morning some 142 sailors pull a gun carriage holding her casket to Westminster Abbey for a funeral service.

Key developments that could influence markets on Monday:

UK markets closed for Queen's funeral

ECB's de Guindos speaks

U.S. Sep NAHB housing market index

U.S. T-bill auction

(Tom Westbrook)