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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Kingfisher | 256.3 | 13.6 | 5.6 | -24.1 |
| Glencore | 336.8 | 15.1 | 4.7 | -13.6 |
| Antofagasta | 895.8 | 37.8 | 4.4 | -10.9 |
| TUI | 1424 | 54.5 | 4.0 | -7.5 |
| Anglo American | 1760.8 | 65.4 | 3.9 | 13.6 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Just Eat | 674 | -34 | -4.8 | -13.7 |
| Smiths Group | 1520.5 | -70.5 | -4.4 | 2.1 |
| Barratt Developments | 560 | -17 | -3.0 | -13.5 |
| Persimmon | 2366 | -68 | -2.8 | -13.6 |
| Next | 5200 | -122 | -2.3 | 14.9 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,490.2 | 122.9 | 1.67 | -2.6 |
| UK | 20,590.4 | 39.1 | 0.19 | -0.7 |
| FR CAC 40 | 5,494.2 | 42.6 | 0.78 | 3.4 |
| DE DAX 30 | 12,430.9 | 104.4 | 0.85 | -3.8 |
| US DJ Industrial Average 30 | 26,743.5 | 86.5 | 0.32 | 8.2 |
| US Nasdaq Composite | 7,987.0 | -41.3 | -0.51 | 15.7 |
| US S&P 500 | 2,929.7 | -1.1 | -0.04 | 9.6 |
| JP Nikkei 225 | 23,869.9 | 195.0 | 0.82 | 4.9 |
| HK Hang Seng Index 50 | 27,593.7 | -359.9 | -1.29 | -7.8 |
| AU S&P/ASX 200 | 6,186.3 | -8.3 | -0.13 | 2.0 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 71.82 | 1.35 | 1.92 | 19.5 |
| Crude Oil, Brent ($/barrel) | 80.06 | 1.28 | 1.62 | 20.1 |
| Gold ($/oz) | 1195.79 | -1.62 | -0.13 | -8.2 |
| Silver ($/oz) | 14.35 | 0.09 | 0.6 | -15.0 |
| GBP/USD – US$ per £ | 1.3075 | – | 0.05 | -3.2 |
| EUR/USD – US$ per € | 1.1740 | – | -0.07 | -2.1 |
| GBP/EUR – € per £ | 1.1137 | – | 0.13 | -1.1 |
Click graph to enlarge
UK 100 Index called to open -30pts at 7460, back from Friday’s 7501 highs but holding the 7455 breakout above August falling highs. Bulls need a break above the overnight gap down from 7480. Bears require a breach of 7450 overnight lows which could result in a break back below the aforementioned August trendline. Watch levels: Bullish 7480, Bearish 7350
Calls for a negative open come after China cancelled the latest round of US trade talks, bolstering trade war concerns. The irony of cancelling today is not lost on us, being the same day the US imposes its latest round of tariffs on $200bn of Chinese goods. Downbeat trading in Hong Kong (most of Asia closed), Australia mixed with Mining weakness offset by Energy strength.
Brent crude oil prices are back around $80/barrel after OPEC & allies snubbed US demands for higher output (to offset Iranian sanctions) pointing to higher near-term energy demand, airlines being the highest growing user.
As OPEC+ compliance with production cuts runs over 120% (cutting more than required), bullish sentiment for oil and UK Index Energy prevails, with a potential knock on for certain Miners (note BHP outperformed RIO overnight in Australia).
GBP flat (vs USD and EUR), neither helping nor hindering the UK Index , in spite of much weekend rumblings about Brexit (after Salzburg) and domestic politics, be it from the Labour conference, ahead of the Conservative conference or about another yet General Election.
In corporate news the weekend auction for Sky saw Comcast triumph over Fox with a sealed bid of 1728p, a 9% prem. to Friday close, valuing the broadcaster at almost £30bn (Fox only bid £27bn). Sky’s board has already recommended the Comcast bid to shareholders.
Elsewhere in M&A Randgold Resources agrees 33/66% $18bn all share zero premium merger with Canada’s Barrick, creating world’s biggest gold producer ($10bn revs, adj. EBITDA $4.7bn). Shareholders to get 6.128 new Barrick shares and still entitled to 2018 $2 Randgold dividend.
AstraZeneca says Farxiga met primary end-point of reduced hospitalisation in Phase III DECLARE-TIMI 58 trial, a large cardiovascular outcomes trial in 17K patients with type-2 diabetes. WPP is considering an asset consolidation, merging Young & Rubicam and VLM ad agencies in a single business unit.
The FT and Sky news report BT in advanced talks a with outgoing Worldpay CEO Philip Jansen to replace Gavin Patterson later this year. Ahead of an analyst/investor visit, Debenhams says it has "strong team, solid financial position and clear strategic priorities" to navigate market turbulence in challenging times for UK retailers.
Thomas Cook warns again on profits (FY underlying EBIT now expected circa £280m) after hot summer weather meant many holidaymakers stayed at home and put off bookings. CFO Bill Scott to leave 30 November.
Tullow Oil says non-commercial hydrocarbons found in Cormorant-1 well in Namibia well being abandoned. Drax in early discussions with Iberdrola about acquisition of UK portfolio of energy storage and generation assets, funded by debt. Pennon on track to meet FY expectations, confident in UK waste fundamentals. Secured £430m financing (£240m under new sustainable framework).
In focus today will be influential German IFO Surveys (9am). Both Business Climate and Current Sentiment in September are expected to hold most of August’s strong bounce, though Expectations are forecast weakening. The UK’s CBI Industrial Orders (11am) look set to continue summer declines, hitting their lowest levels since May.
In the US, the Chicago Fed National Activity index (1:30am) is forecast to continue falling in August, nearly back to breakeven, neither expanding nor contracting. The Dallas Fed (3:30pm) counterpart may paint a contrasting picture of stronger activity in September.
In terms of speakers today, all eyes will once again be on ECB President Draghi (3pm) giving an introductory statement at ECON (European Committee on Economic and Monetary Affairs).
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Prepared by Michael van Dulken, Head of Research