 Banner.jpg)
29 October 2019
The Weekly Note is brought to you by the ALPHA: r² discretionary service team.
Global equities have made a bullish start to the week, with the S&P 500 closing yesterday's trading at a record high. The beginning of a busy US earnings week brought decent results, while trade talks with China are currently transmitting positive signals. Another boost for investors is expected to come from the Federal Reserve on Wednesday, when it concludes its policy meeting. Another quarter-point cut to interest rates is widely forecast.
Asian stocks are trading at relatively high levels, also buoyed by the prospect of a trade deal. Japan's Nikkei rose to fresh 2019 highs overnight, while the MSCI Asia ex-Japan index is at its highest level since mid-summer. Hong Kong's Hang Seng index is underperforming this week, whilst the city's leader said the territory was likely to record negative economic growth this year amid the long-running protests.
Sterling, previously on the defensive, rose sharply this morning on the news that the Labour party will support an early general election. Boris Johnson has been bidding to arrange an election since the EU granted another three-month Brexit extension last week. The UK can leave before January 31st, however, if a deal is agreed by Parliament earlier, making any election effectively a proxy vote on Johnson's Brexit deal.
Meanwhile, MPs are set to investigate the government's public information campaign that was supposedly readying the country for a potential no-deal Brexit. It was talked up as the most extensive campaign since the Second World War but there are doubts over its cost-effectiveness.
UK consumer confidence is at its lowest level in six years according to the latest YouGov report, as people grow more anxious about their job security. House prices rose 0.2% month-on-month in October, slightly higher than economists' forecasts.
In the US, the House of Representatives will vote on whether to formalise the impeachment inquiry into President Trump this week. The allegations relate to a call he made to the Ukrainian President in July, during which Trump encouraged him to investigate the son of Joe Biden, a political rival.
Alphabet disappointed expectations on Wall Street last night, announcing a profit of $7bn for the three months to the end of September, down from $9.1bn last year. Google's parent company has spent aggressively on marketing and cloud computing in a bid to catch up with rivals. Just before the results, reports emerged that Google is considering buying Fitbit, the wearable technology company.
BP made a loss of $351m in its third quarter, having been hit by a number of headwinds. Profits suffered from lower oil prices and the force of Hurricane Barry, which shut down its Gulf of Mexico operations for a fortnight. BP also had to book expensive revaluations of oil and gas fields that it is selling in the US. Its shares are down over 3% in early trading.
Plus500 reported a 10% rise in revenue to $110.6 for the quarter to the end of September. The London-listed spread-betting company spoke of the challenging transition period that has followed new regulations, but said that “client trading patterns subsequently have adjusted and stabilised”. The number of active users rose 8.7% compared to last year.
HSBC announced yesterday that pre-tax profit for the third quarter fell 18% year-on-year, to $4.8bn. Poor performance in the US and Europe undermined resilient figures from other parts of the business, namely Asia. Interim chief executive Noel Quinn said that “in some parts the performance was not acceptable” and announced plans to cut costs and redirect investment.
LVMH has made a $14.5bn offer for Tiffany, the American jeweller. It is expected not to be the last offer, however, with Tiffany potentially looking to reject it and push up the value. LVMH, which is owned by Europe's richest man, Bernard Arnault, is the dominant force in the luxury goods industry but it could face competition from its rivals.
Subscribe today and email [email protected] to register your interest, and receive the full Weekly Note in your inbox every Tuesday.
Walker Crips
Old Change House
128 Queen Victoria Street
London EC4V 4BJ
020 3100 8000
www.wcgplc.co.uk
[email protected]
This publication is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips.
Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Registered office: Old Change House, 128 Queen Victoria Street, London, EC4V 4BJ. Registered in England number 4774117.
Important Note
No news or research content is a recommendation to deal. It is important to remember that the value of investments and the income from them can go down as well as up, so you could get back less than you invest. If you have any doubts about the suitability of any investment for your circumstances, you should contact your financial advisor.
