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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| RELX | 1765.5 | 80.5 | 4.78 | 9.22 |
| Schroders | 2080 | 35 | 1.71 | 0.73 |
| British Land | 580.8 | 7 | 1.22 | 8.93 |
| Land Securities | 879.4 | 10.2 | 1.17 | 9.32 |
| Morrison (Wm) Supermarkets | 229.85 | 2.6 | 1.14 | 7.78 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Centrica | 121.15 | -16.1 | -11.7 | -10.19 |
| BAE Systems | 464.8 | -39.6 | -7.85 | 1.22 |
| Imperial Brands | 2601 | -112.5 | -4.15 | 9.42 |
| Fresnillo | 990.4 | -37.1 | -3.61 | 15.16 |
| DS Smith | 336.9 | -12.6 | -3.61 | 12.56 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,167.4 | -61.2 | -0.85 | 6.5 |
| UK | 19,237.0 | 34.9 | 0.18 | 9.9 |
| FR CAC 40 | 5,196.1 | 0.2 | 0.00 | 9.8 |
| DE DAX 30 | 11,423.3 | 21.3 | 0.19 | 8.2 |
| US DJ Industrial Average 30 | 25,850.8 | -103.8 | -0.40 | 10.8 |
| US Nasdaq Composite | 7,459.7 | -29.4 | -0.39 | 12.4 |
| US S&P 500 | 2,774.9 | -9.8 | -0.35 | 10.7 |
| JP Nikkei 225 | 21,425.5 | -38.7 | -0.18 | 7.0 |
| HK Hang Seng Index 50 | 28,686.0 | 56.1 | 0.20 | 11.0 |
| AU S&P/ASX 200 | 6,167.3 | 28.1 | 0.46 | 9.2 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 57.03 | 0.03 | 0.00 | 25.5 |
| Crude Oil, Brent ($/barrel) | 67.10 | 0.00 | 0.00 | 23.9 |
| Gold ($/oz) | 1325.35 | -6.35 | 0.00 | 3.3 |
| Silver ($/oz) | 15.89 | -0.23 | -0.01 | 2.7 |
| GBP/USD – US$ per £ | 1.3034 | – | -0.05 | 2.2 |
| EUR/USD – US$ per € | 1.1340 | – | 0.00 | -1.1 |
| GBP/EUR – € per £ | 1.1497 | – | -0.01 | 3.4 |
Click graph to enlarge
UK 100 called to open +10pts at 7175, up off yesterday’s 7140 lows, however now officially in a 7130-7230 falling channel towards intersecting rising support at 7095. Bulls need a break above 7185 overnight highs. Bears require a breach of 7170. Watch levels: Bullish 7185, Bearish 7170
Calls for a positive open come in spite of a lower Wall St close, where equities pared several days of gains following disappointing macro data that saw US Durable Goods Orders, Manufacturing PMIs and the Philly Fed all miss consensus.
Trading has been more mixed in Asia, with China positive after the PBoC indicated it might inject more stimulus via further targeted cuts to banks’ reserve rate requirements (RRR). GBP flat in spite of expectations that UK PM May will request a 3-month extension to the Article 50 Brexit deadline.
Company news this morning;
Centrica renews £2.4B revolving credit facilities with 21 banks with initial 2024 maturity (max 2026), replacing those expiring 2021. Vodafone Italia and Telecom Italia intend to enter network sharing partnership for both 4G and 5G, extending passive sharing, potentially including active sharing; weighing merger of 22K towers.
Pearson FY underlying revenue -1% (miss), adj. op. profit +8% (in-line/slight beat), op. cash flow -23.3%. Final div +8.3%. Forecasts 2019 £590-640m op. profit, above consensus. £130m cost savings and £102m restructuring costs ahead of plan. Expects sales to stabilise in 2019 growing again in 2020. Signs £500m pension insurance deal with Legal & General.
Merlin Entertainments sells Australian Ski Resorts for £95m to Vail Resorts (8.8x EBITDA). Dairy Crest agrees to 620p/share acquisition by Saputo Dairy, representing a 11.7% premium. Metro Bank awarded £120m in funding by Banking Competition Remedies (BCR), an RBS incentivised switching scheme, to fund UK SME lending. Peer CYBG did not received a grant.
FlyBe completes sale of assets and operations to Connect Airways JV; no funds left for shareholder distribution above 1p/share offer. Bahamas Petroleum says second exploration period of four current southern licences extended until 31 December 2020. Sage completes sale of US Payroll Outsourcing Business.
In focus today will be January Eurozone Inflation (CPI, 10am), expected to confirm an extension of a 4-month downtrend to 1.4% YoY (from 1.6% prev.), though Core Inflation excluding energy prices (weak recently) is forecast to firm to 1.1% from 1% prev. This comes hot on the heels of yesterday’s ECB meeting minutes where policymakers expressed anxiety over further Eurozone slowdown from the trade-hit automotive sector moving into general manufacturing and private consumption.
Watch out for headlines from continuing US-China trade negotiations in Washington. In terms of speakers, the focus will be on ECB Chief Draghi (3:30pm), speaking at the University of Bologna for an honorary doctorate award ceremony.
Later on, we also have a smorgasbord of Fed members, including Bostic (1:15pm) and Williams (10:30pm), discussing using on quantitative tools for monitoring financial conditions. Colleagues Clarida (5pm), as well as Bullard, Quarles and Harker (6:30pm) participate at the “The Future of the Federal Reserve’s Balance Sheet” panel at the 2019 Monetary Policy Forum in Chicago.
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Prepared by Michael van Dulken, Head of Research