The Weekly Note is brought to you by the ALPHA: r² discretionary service team.
Brexit and an unprecedented political situation continue to dominate the news in the UK. The longest parliament since the English Civil War ended amidst colourful scenes last night, although the opposition's legislation to prevent a no-deal Brexit received royal assent on Monday. Downing Street has threatened to ignore the bill and refuse a delay to Brexit, which could prompt an emergency judicial review - and risk a possible jail sentence for Mr Johnson. The Prime Minister's woes deepened at the weekend with the resignation from both Cabinet and Conservative Party of Amber Rudd, the Work & Pensions Secretary.
As a counterpoint to the political chaos, the British economy has generated some positive numbers. GDP growth in July was 0.3%, higher than expectations, which vastly reduces the likelihood that the country will slide into a technical recession. Wage growth remains strong, with the figure excluding bonuses for May to July reported at 3.8%. Also at 3.8% is the unemployment rate, lower than the 4% recorded this time last year.
Meanwhile, the government has indicated that the years of austerity may be over. Chancellor Sajid Javid announced his spending review last week, which included a 4.1% increase in day-to-day spending on public services, billed as the fastest year-on-year increase for 15 years.
Saudi Arabia has appointed King Salman's son, Prince Abdulaziz bin Salman, to take over as energy minister, replacing one of the most powerful figures in the global oil industry and breaking a long-held convention separating the royal family from the position. Crude oil prices nudged higher on Monday.
Mario Draghi is expected to propose fresh stimulus measures at the European Central Bank's board meeting on Thursday, but the outgoing ECB president faces growing opposition from other eurozone policymakers.
Japan's economy grew at a slower rate than previously estimated in the second quarter, as the US-China trade war weighed on business spending.
Pilots at British Airways are striking for a second day in an ongoing dispute over pay and conditions, with 1,700 flights being cancelled. Pilots' union Balpa said BA management's cost cuts and “dumbing down” of the brand had eroded confidence in the airline, whilst BA chief executive Alex Cruz countered that investment in the operator had never been so big. Shares in BA's owner IAG were up 4% this morning, although are still down 35% on a year ago.
Barclays and Lloyds Banking Group both revealed on Monday that they face multi-million pound bills to handle a new wave of claims for payment protection insurance. Lloyds reported a “significant spike” in claims in the run-up to the final deadline of 29th August.
Bovis Homes has reported record profits in the first half of £72.4m, a rise of 20%. Private sales rate increased 15% and it said Help to Buy "remains an important scheme" with 25% of total completions using the government scheme in the first half.
JD Sports has reported a 6.6% rise in pre-tax profits and a 47% jump in revenue for the half-year, which it attributes to its significant investment in digital to complement its retail stores.
A group of 50 states and territories in the US have launched an investigation into Google's dominance of the online advertising market, raising concerns over the way Google ranks its search results and protects users' personal data. This follows a separate, similar probe of Facebook which was launched on Friday by a group of US states.
Pub group and brewer Greene King - which announced last month that it had agreed to be bought by Hong Kong operator CKA - has reported a 1.8% fall in first quarter sales, reflecting the “tough comparatives of last year's World Cup and good weather”.
Subscribe today and email [email protected] to register your interest, and receive the full Weekly Note in your inbox every Tuesday.
Old Change House
128 Queen Victoria Street
London EC4V 4BJ
020 3100 8000
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.
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.
Investors should be aware that past performance is not a reliable indicator of future results and that the price of shares and other investments, may fall as well as rise and the amount realised may be less than the original sum invested.
Walker Crips Group plc (Old Change House, 128 Queen Victoria Street, London EC4V 4BJ), registered in England, registered number 1432059, incorporates the following companies which are authorised and regulated by the Financial Conduct Authority: Walker Crips Investment Management Limited registered in England number 4774117 member of the London Stock Exchange, Walker Crips Wealth Management Limited registered in England number 3790291, Ebor Trustees Limited registered in England number 3514268, Barker Poland Asset Management LLP registered in England and Wales number OC341149.