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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Persimmon | 1995.5 | 131.5 | 7.1 | -27.1 |
| Berkeley Group | 3423 | 193 | 6.0 | -18.4 |
| Barratt Developments | 473.8 | 23 | 5.1 | -26.8 |
| Taylor Wimpey | 137 | 5.6 | 4.2 | -33.6 |
| Royal Mail | 315.4 | 9.5 | 3.1 | -30.3 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Ashtead | 1672.5 | -103.5 | -5.8 | -16.0 |
| Melrose Industries | 166.35 | -8.9 | -5.1 | -21.6 |
| NMC Health | 3196 | -170 | -5.1 | 10.8 |
| Hargreaves Lansdown | 1891 | -88 | -4.5 | 4.9 |
| John Wood | 626.2 | -26.8 | -4.1 | -3.7 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 6,921.8 | -100.9 | -1.44 | -10.0 |
| UK | 18,271.0 | -58.5 | -0.32 | -11.9 |
| FR CAC 40 | 4,944.4 | -68.3 | -1.36 | -6.9 |
| DE DAX 30 | 11,200.2 | -135.1 | -1.19 | -13.3 |
| US DJ Industrial Average 30 | 25,027.0 | -799.5 | -3.10 | 1.2 |
| US Nasdaq Composite | 7,158.4 | -283.1 | -3.80 | 3.7 |
| US S&P 500 | 2,700.1 | -90.3 | -3.24 | 1.0 |
| JP Nikkei 225 | 21,501.6 | -417.7 | -1.91 | -5.5 |
| HK Hang Seng Index 50 | 26,064.0 | -755.7 | -2.82 | -12.9 |
| AU S&P/ASX 200 | 5,657.7 | -10.7 | -0.19 | -6.7 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 52.31 | -1.14 | -2.13 | -13.0 |
| Crude Oil, Brent ($/barrel) | 61.12 | -1.30 | -2.09 | -8.3 |
| Gold ($/oz) | 1237.42 | 0.12 | 0.01 | -5.0 |
| Silver ($/oz) | 14.50 | -0.10 | -0.65 | -14.1 |
| GBP/USD – US$ per £ | 1.2704 | – | -0.16 | -5.9 |
| EUR/USD – US$ per € | 1.1335 | – | -0.12 | -5.5 |
| GBP/EUR – € per £ | 1.1212 | – | 0.00 | -0.4 |
Click graph to enlarge
UK 100 called to open -45pts at 6875, up from a fresh 2yr low of 6774 overnight but now in a falling channel from Monday’s 7145 high. Bulls need a break above 6900 to escape the channel. Bears require a breach of 6850 to extend the downtrend. Watch levels: Bullish 6900, Bearish 6850
Calls for a negative open come after a another 2-3% sell-off in Asia, once again fuelled by fears of a global economic slowdown from a US-China trade war. The USD is benefiting from its global reserve status, keeping pressure to commodities like Copper, and even safe-haven Gold.
The latest bout of anxiety stems from the arrest and planned extradition from Canada to the US of the CFO (and founder’s Daughter) of Chinese telecom giant Huawei, on allegations of breaching Iran sanctions and suspicions of cyber-espionage.
Having swung between optimism and scepticism about a US-China trade war truce through February, and we note Chinese diplomats making positive noise overnight (“friendly and candid atmosphere” between Xi and Trump), traders are understandably cautious.
Oil prices continue their slide into today’s big OPEC meeting, defying expectations that Saudi Arabia and allies would agree to a 1.3-1.5m barrel production cut (in spite of Trump’s warnings).
In corporate news this morning risk assets and those sensitive to global growth (e.g Banks, Miners) may be under pressure after an a spike in concerns about a trade war/global slowdown.
Vodafone invites holders of up to £300m of outstanding £600m zero-coupon equity linked bonds to sell for cash at price yet to be determined in modified Dutch Auction. UK Index Quarterly Review confirms our view yesterday that Royal Mail and Just Eat would be relegated from the UK 100 , replaced by Hiscox and Spirax-Sarco.
AstraZeneca completes divestment of Alvesco, Omnaris and Zetonna to Covis Pharma for $350m. WPP says veteran Shane Athcison to return as North American CEO of Wunderman Thompson. The BBC reports British gambling companies agree to sports advertising ban (excl. Horse racing).
DS Smith H1 revs +15% YoY (+16% ex-plastics, +6% organic), pre-tax +28%, div +14%. Q3 trading in-line;Outlook positive. US acquisition delivering above expectations. Europac takeover expected to complete year-end. Exploring Plastics divestment (rev. +2%, profits hurt by higher polymer prices).
Ted Baker 16-week like-for-like revenue -0.4% YoY after anticipated drop in wholesale volumes. Trading challenging (weather & weak retail (+2.1%)/wholesale (-7%) although on-line +15.3%. Margins in-line. Appointed law firm to investigate press reports of CEO impropriety.
Ferrexpo doubles special interim dividend to 6.6p after pellet premiums remained high in H1 2018. Seaborne pellet demand to remain strong in 2019 and supply constrained. Beazley estimates $40m costs of claims from 2018 California wildfires, net of reinsurance. Investment markets remain volatile, with 0.5% return on investment year-to-date ($27m).
Euromoney to acquire The Deal (business news website) and BoardEx (executive profiling platform) from TheStreet for $87.3m cash. Grainger announces being shortlisting by TfL as one of three companies for a strategic partnership to deliver ~3,000 London rental homes on 10 sites around tube stations. The selection decision expected in the Spring 2019.
boohoo notes media commentary about advertising of promotional offers. Been in correspondence with Committee of Advertising Practice (CAP) and Advertising Standards Authority (ASA). The former having has issued guidance and considers matter closed.
The focus today will be the day three of the Brexit debate in Parliament. US markets also reopen after President George HW Bush’s funeral, with an expected uptick in volumes and volatility.
In terms of macro data, we have a slew of US figures. Economists expect the US ADP jobs report (1:15pm) to show 195K in November (after a strong 227K in October). The US Trade deficit (1:30pm) is likely to further widen. Q3 Unit Labour Costs are likely to strengthen, while Q3 Non-Farm Labour Productivity may pull back to 2.3% YoY (from 2.9% in Q2).
US Factory Orders (3pm) could fall sharply in October (-2% est) after a drop in big defence aircraft orders. November ISM Non-Manufacturing PMI is forecast weaker a 59.2 vs. 60.3 in October.
In terms of speakers, Fed’s Powell (11:45pm) is set deliver brief remarks at the Housing Assistance Council's conference. Colleague Bostic (5:15pm) gives a speech on the US economic outlook. Meanwhile, Fed’s Williams (11:30pm) is scheduled for a moderated discussion with ex-BoE governor King at a London School of Economics Foundation event.
OPEC continues its second day of meetings in Vienna, with cartel members trying to convince non-OPEC producer Russia to join them in oil production cuts to stabilise falling crude prices.
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Prepared by Michael van Dulken, Head of Research