Weekly Trading Update
13.06.14 Friday Morning
Risk assets made a positive start to the week when on Monday news that Japan reported Q1 GDP of 1.6 percent, a higher print than forecast, buoyed sentiment. The MSCI Asian benchmark traded 0.3 percent higher on the news in spite of a softening to the Chinese real estate market. Helping to compound this, British manufactures came out to report that their opinion of the growth prospects over the near-term was now more positive than before. The Vix, a measure of fear and volatility in the equity market, sat at 2007 lows.
On the London equity market, Imagination Technologies and Crest Nicholson received support from investors, as their shares were in demand early on, placing them at the top of the FTSE 350 winners’ list. Daejan Holdings lagged. The FTSE 100 closed out the day at 6,875, still testing recent highs.
Tuesday saw a test of confidence for the equity market, however. What was a positive start to the session thanks to more positive news from Asia, investors were soon to start booking profits from the recent good run from stocks. The FTSE 100 opened above 6,870, but then was soon sent lower to around 6,840. Investors showed signs of nervousness at current valuations in the absence of further good news. But, in spite of this, the market picked up the slack by the close, and investors bid stocks up into the close. The FTSE 100 closed almost unchanged on Monday’s close. News that BP Plc had lost its bid to freeze spill pay-outs failed to quash the recent demand for shares, as investors chased the stock 3 pennies higher to 507.2p.
Wednesday then took a knock to confidence from the off. The World Bank reported a downgrade to growth forecasts for the developing world from 5.3 percent to 4.8 percent. Equity benchmarks were softer in Asia in overnight trading as a result, and investors took a cautious tone from there on. The Xetra Dax failed to hold the 10,000 mark once again and FX dealers took note of renewed strength in the yen; speculation continued that the central bank of Japan would not expand its current program of asset purchases. The dollar gained.
In London, shares in Sainsbury’s were in high demand from the off, as the company reported a slowdown to the stream of bad news that’s recently affected the industry. Like-for-like sales, though 1.1 percent lower, were not enough to detract from an overall Q1 growth in sales. The shares touched 345p early in the session on somewhat of short squeeze to then finish at 333p. The FTSE 100 settled at 6,838, down 34 points for the day.
More bad news for investors came on Thursday, as the conflict in Iraq failed to cool. News that terrorist groups had taken almost one third of the country sent oil futures soaring on higher volatility and uncertainty, increasing prospects of a full blown civil war. Oil Stocks, too, were in demand, except, however, for those operating out of the affected region. Gulf Keystone, the Kurdistan-based producer, was sold in huge volume on fears that the vast quantity of oil they have might not be theirs after all, should the region be subject to a major conflict and political upheaval. The shares steadied a little towards the end of the week, but clear, significant risks remain.
Stock of the week
Gulf Keystone (GKP)
News that terrorist groups had taken almost one third of Iraq this week sent oil futures soaring on higher volatility and uncertainty, increasing prospects of a full blown civil war in the region. Oil Stocks, too, were in demand, except, however, for those operating out of the affected region. Gulf Keystone, the Kurdistan-based producer, was sold in huge volume on fears that the vast quantity of oil they have might not be theirs after all, should the region be subject to a major conflict and political upheaval. But news on Friday that GKP guided higher on production numbers helped to support the price. Investors will now be trying to price a rather binary outcome; either they’ve got the oil and the revenues generate earnings, or they don’t. Expect volatility.
Open (Monday)
6868
Close (Thursday)
6823
Change
-0.66%
High
6879
Low
6812
Open (Monday)
16936
Close (Thursday)
16726
Change
-1.24%
High
16969
Low
16723
Open (Monday)
1.6804
Close (Thursday)
1.6837
Change
0.20%
High
1.686
Low
1.674
Open (Monday)
1253.25
Close (Thursday)
1273.85
Change
1.64%
High
1274.95
Low
1250.45
Monday
13.30 - USD - Empire State Manufacturing Index
14.15 - USD - Industrial Production m/m
Tuesday
9:30am - GBP - CPI y/y
10:00am - EUR - German ZEW Economic Sentiment
1:30pm - USD - Building Permits
1.30pm - USD - Core CPI m/m Wed
9:30am - GBP - MPC Asset Purchase Facility Votes Tentative -
EUR - German 10-y Bond Auction
3:30pm - USD - Crude Oil Inventories USD FOMC Statement
Thursday
9:30am - GBP - Retail Sales m/m
1:30pm - USD - Unemployment Claims
3:00pm - USD - Philly Fed Manufacturing Index Friday
7:35am - JPY - BOJ Gov Kuroda Speaks
Next Weeks Earnings:
Monday, 16 JUN 2014
MJW.L - Majestic Wine PLC - Preliminary 2014 Majestic Wine PLC Earnings Release
Tuesday, 17 JUN 2014
JD.L - JD Sports Fashion PLC - JD Sports Fashion PLC Interim Management Statement
DAY.L - Daisy Group PLC - Preliminary 2013 Daisy Group PLC Earnings Release
TRFT.L - Trifast PLC - Preliminary 2013 Trifast PLC Earnings Release
WTB.L - Whitbread PLC - Whitbread PLC Trading Update
Thursday, 19 JUN 2014
INFII.L - Infinis Energy PLC - Preliminary 2013 Infinis Energy PLC Earnings Release
NXR.L - Norcros PLC - Preliminary 2013 Norcros PLC Earnings Release
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