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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Next | 5424 | 84 | 1.6 | 19.9 |
| Smurfit Kappa | 2860 | 44 | 1.6 | 14.1 |
| Segro | 618.4 | 9 | 1.5 | 5.4 |
| Centrica | 152 | 1.5 | 1.0 | 10.7 |
| Compass | 1609 | 14 | 0.9 | 0.6 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Melrose Industries | 181.3 | -10.4 | -5.5 | -14.6 |
| Ashtead | 2181 | -121 | -5.3 | 9.5 |
| Halma | 1368 | -68 | -4.7 | 8.6 |
| Rolls-Royce | 922 | -38.2 | -4.0 | 8.9 |
| GVC Holdings | 887 | -35 | -3.8 | -4.1 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,233.3 | -85.2 | -1.16 | -5.9 |
| UK | 19,646.0 | -271.9 | -1.37 | -5.2 |
| FR CAC 40 | 5,300.3 | -59.1 | -1.10 | -0.2 |
| DE DAX 30 | 11,947.2 | -164.7 | -1.36 | -7.5 |
| US DJ Industrial Average 30 | 26,486.8 | 39.8 | 0.15 | 7.2 |
| US Nasdaq Composite | 7,736.0 | -52.5 | -0.67 | 12.1 |
| US S&P 500 | 2,884.4 | -1.1 | -0.04 | 7.9 |
| JP Nikkei 225 | 23,489.1 | -294.7 | -1.24 | 3.2 |
| HK Hang Seng Index 50 | 26,287.9 | 85.4 | 0.33 | -12.1 |
| AU S&P/ASX 200 | 6,041.1 | -59.2 | -0.97 | -0.4 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 74.64 | 0.56 | 0.75 | 24.2 |
| Crude Oil, Brent ($/barrel) | 84.29 | 0.60 | 0.72 | 26.5 |
| Gold ($/oz) | 1191.12 | 6.82 | 0.58 | -8.6 |
| Silver ($/oz) | 14.30 | -0.34 | -2.34 | -15.3 |
| GBP/USD – US$ per £ | 1.3098 | – | 0.04 | -3.0 |
| EUR/USD – US$ per € | 1.1493 | – | 0.00 | -4.2 |
| GBP/EUR – € per £ | 1.1399 | – | 0.07 | 1.3 |
Click graph to enlarge
UK 100 Index called to open +8pts at 7241. Whilst holding yesterday’s bounce from 7222 1-month lows (and April shallow rising support), it is back from 7271 overnight highs, maintaining the downtrend from the 3 Oct peak. Bulls need a break above overnight highs. Bears require a breach of yesterday’s lows. Watch levels: Bullish 7270, Bearish 7225
Calls for a positive open come in spite of a mixed lead from both Wall St and Asia (Japan back from holiday, sharply lower, but China rebounding; US Tech lower after Google data breach), as investors looking to recover some of yesterday’s (and recent) sharp losses on global equity markets.
The IMF estimates that any escalation of the US-China trade war would cut both countries’ growth, while denting the outlook for emerging markets. Disagreements persist ahead of a G20 meeting with the US still demanding concessions while Beijing wants to deal with a decision-maker.
US government bond yields at 7-year highs, adding to financial strains. The USD is, however, weaker, helping the Pound. Not great for the internationally exposed and FX sensitive UK Index but good for commodities and Miners which had it tough yesterday. Parallel EUR weakness as Italy and Brussels spar, and hopes of a Brexit solution rise, are also helping GBP hold onto this week’s gains.
In corporate news this morning, Aviva CEO steps down after successful turnaround; stays until Apr 2019 for orderly transition; successor search to include internal and external candidates. WPP loses lead creative agency role at top client Ford; retains activation business (media planning, buying, digital, production). Ferrexpo Q3 production +5.9% QoQ (9M +1.3% YoY) boosted by Q2 refurbishment.
GVC says its MGM-GVC joint venture partners with United Auburn Indian Community to offer retail and mobile sports betting and online poker and casino if and when permitted under California law. Wood Group has won $250m of midstream contracts across the US over the past year to deliver construction, fabrication, engineering and operations & maintenance services.
Greggs 13-week sales +7.3% YoY, like-for-like shop sales +3.2%, net +58 shops YTD (93 opened, 35 closed), still expects net +100 shops by year end. FY guidance unchanged. Great Portland Estates sold the Mortimer St office/retail building on behalf of St James’s Place for £38.5m.
Unite Group issues £275m senior unsecured bond at 3.5%, reducing weighted average debt maturity from 4.6 to 5.8 years, and cuts pro-forma all-in debt cost to 3.6%. Sees full year rental growth in line with 3-3.5% target; expects EBIT margin +200bp and sets new 74% target by 2021.
RPC says UK takeover panel extends deadline to 5 Nov for Apollo Global Management and Bain Capital to make a firm offer for the company. Margins and operating profitability levels from continuing operations remain in line with management expectations. CYBG/Virgin Money merger to be reflected on UK Index indices (250/350/All Share) on 15 Oct.
In focus today - another quiet session for macro economic data - will be September’s US NFIB Business Optimism (11am), forecast only a touch higher but still a fresh record high. In contrast, October’s US IBD/TIPP Economic Optimism (3pm) is expected lower, retreating further from August’s best level since Jan 2004. September US Consumer Inflation Expectations (4pm) could move the USD, should they sway from August’s 3%, which was supportive of further Fed rate hikes.
Speakers on the roster today include the Fed’s Evans (3pm; opening remarks at the Opportunity Finance Network conference), the Fed’s Kaplan (12pm; speaking to Economic Club of New York), the ECB’s Mersch (2.30pm; panel discussion "Shaping the Future of Central Banks").
Closer to home, the Bank of England’s (BoE) Broadbent (3.35pm) testifies before the Economic Affairs Committee on the use of the Retail Price Index [RPI] inflation metric and the BoE’s Financial Policy Committee (FPC) statement from its 3 Oct meeting will also be published (9.30am).
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Prepared by Michael van Dulken, Head of Research