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| UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| DCC | 6070 | 210.0 | 3.6 | 7.2 |
| Intertek | 3414 | 96.0 | 2.9 | 22.9 |
| Fresnillo | 1124 | 31.0 | 2.8 | 58.8 |
| Paddy Power Betfair | 8735 | 220.0 | 2.6 | -3.8 |
| Randgold Resources | 5790 | 140.0 | 2.5 | 39.8 |
| UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| BHP Billiton | 1270.5 | -21.0 | -1.6 | 67.2 |
| Rio Tinto | 3081 | -30.5 | -1.0 | 55.7 |
| Barclays | 227 | -1.8 | -0.8 | 3.7 |
| Anglo American | 1126 | -8.5 | -0.8 | 276.0 |
| Pearson | 819 | -5.5 | -0.7 | 11.3 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,063.7 | 22.3 | 0.32 | 13.2 |
| UK | 17,891.6 | 146.2 | 0.82 | 2.7 |
| FR CAC 40 | 4,834.6 | 0.8 | 0.02 | 4.3 |
| DE DAX 30 | 11,456.0 | -12.5 | -0.11 | 6.6 |
| US DJ Industrial Average 30 | 19,919.0 | -23.0 | -0.12 | 14.3 |
| US Nasdaq Composite | 5,447.4 | -24.0 | -0.44 | 8.8 |
| US S&P 500 | 2,261.0 | -4.2 | -0.19 | 10.6 |
| JP Nikkei 225 | 19,427.7 | Closed | Closed | 2.1 |
| HK Hang Seng Index 50 | 21,531.4 | -104.8 | -0.48 | -1.7 |
| AU S&P/ASX 200 | 5,627.9 | -16.0 | -0.28 | 6.3 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 52.67 | -0.28 | -0.52 | 42.1 |
| Crude Oil, Brent ($/barrel) | 54.84 | -0.21 | -0.37 | 45.9 |
| Gold ($/oz) | 1132.55 | 2.25 | 0.2 | 6.8 |
| Silver ($/oz) | 15.85 | -0.01 | -0.08 | 14.7 |
| GBP/USD – US$ per £ | 1.2290 | -0.0287 | 0.05 | -16.6 |
| EUR/USD – US$ per € | 1.0450 | -0.0112 | 0.11 | -3.8 |
| GBP/EUR – € per £ | 1.1761 | -0.0148 | -0.06 | -13.3 |
Click graph to enlarge
UK 100 Index called to open flat around 7065, maintaining its northerly course and Santa rally grind towards October all-time highs of 7130. Bulls need the current rising channel to break above December highs of 7065 to open the door towards 7100 and then 7130. Bears point to a potential bearish rising wedge that could put paid to the uptrend of the last two weeks should 7040 give way. Watch levels: Bullish 7070, Bearish 7050.
Calls for a flat open are understandable heading into the Christmas weekend with Japan’s Nikkei closed for Emperor day and the Aussie ASX closing early, offering a limited read across from Asia following a negative US close. Geopolitical risk still rife with US president-elect Trump suggesting the US must strengthen and expand its nuclear capability, echoing what Putin said about Russia. M.A.D.!
Note much fuss in the banking sector with Monte dei Paschi confirming a state bailout overnight and continental giants Deutsche Bank and Credit Suisse settling legal claims with the DoJ ($5-7bn each) while Barclays continues to fight against what it sees as inflated claims of crisis-era mis-selling of mortgage backed securities.
US equity markets once again closed on the back foot despite firmer Q3 GDP data, as lower trading volumes held back the blue-chip Dow Jones index from reaching the key 20,000 point mark. Weaker readings for consumer income and spending saw retail heavyweight Walmart contributing the most losses to the Dow, as the S&P 500 and Nasdaq indices also closed lower (0.2%/0.4% respectively).
Despite a late afternoon spike yesterday based upon US trader optimism, Crude Oil prices settled posting only marginal gains for the day. With scepticism surrounding the OPEC/non-OPEC production cut deal still rife in many investors’ minds, an element of profit taking has seen both Brent and US crude failing to challenge the post-deal highs.
Gold continues to trade in its narrowing $1125-1145 trading channel, maintaining its recovery from 10-month lows as the US Dollar remains shy of its 14-year highs posted earlier in the week. USD weakness sees the precious metal testing the channel ceiling, however investors digesting a hawkish US Federal Reserve outlook is keeping the safe haven asset from making any significant weekly gains.
In focus today will be the be the latest on the situation regarding Italy’s banks after Monte dei Paschi failure to recapitalise privately (debt/equity swap, rights issue, bad loans sale). Overnight the bank confirmed it would receive the necessary “extraordinary and temporary financial support” from a €20bn bailout package approved by Rome to keep the nation’s troubled banking sector afloat.
Sticking with the banks, settlements with the US DoJ by Deutsche Bank ($7.2bn) and Credit Suisse ($5.3bn) for mis-selling of mortgage securities should allow a line to be drawn under stateside crisis-era legal issues, although note a rather more stubborn Barclays refusing to settle for anything more than $1-2bn, and thus now being sued for a similar figure as its continental peers.
The key data point on this shortened UK trading day will be UK Q3 GDP seen confirmed at 0.55% QoQ and 2.3% YoY, the pace of growth slowing versus last quarter but accelerating over the year from 0.7%/2.1% in Q2. With Services making up around 80% of UK GDP, the Index of Services reading for October will provide a first suggestion of how the fourth quarter began.
In the afternoon, US New Home Sales are forecast slightly improved while the Uni of Michigan Consumer Sentiment holds firm at 2016 highs of 98 just shy of the 98.1 posted in Jan 2015. For those with oil exposure the latest Baker Hughes US Rig Count will provide us with an idea as to how much the higher oil price is attracting stateside drillers back to their wells, increasing output to counter that planned OPEC-led production cut.
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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research