| | | | | | | Share Tips for 2018 The Share Centre’s investment research analyst Ian Forrest, comments on five equities, an investment trust as well as an ETF that our expert research team think could flourish in 2018. Read more. Capital at risk. | | |
| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: FTSE falls as pound hits 18-month high, Primark fails to impress London stocks had extended their losses for a fourth day on Thursday, dragged lower by a stronger pound and a bout of profit taking as investors sifted through a torrent of trading updates. The FTSE 100 fell 0.3% to 7,700.96 as the pound rose to its highest level against the dollar since June 2016, up 0.4% to 1.3891 but was flat against the euro to 1.1353. A firmer pound tends to dent the top-flight index as around 70% of its constituent derive most of their earnings from overseas. IG analyst Chris Beauchamp said the FTSE 100 index was "looking overextended after a remarkable rally from the lows down at 7,300 at the beginning of December", with Brexit discussions now looming once more and a mixed stream of corporate results dampening spirits. "Nonetheless, from a technical standpoint the breakout above the 7,600 highs of 2017 is a positive sign, and some weakness back in this direction should both take some heat out of the market and also allow others to buy in. At least it makes a change from the relentless grind higher in the US." IG colleague Joshua Mahoney noted that cryptocurrencies got back in the driving seat, with a resurgence in Bitcoin being joined by a whole plethora of alt-coins. "Fears over the demise of the sector have been rife since their inception, and with back-to-back double digit declines this week, many believed we were seeing the beginning of the end for this latest bubble. However, we are seeing signs of a recovery from here, with a host of money moving back into the crypto space as traders look to take advantage of bargain basement prices." In corporate news, profit taking hit Royal Mail, which declined after a strong recent run and as it reported on a solid performance over the Christmas trading period, Retailers were on the lurch lower again as Primark owner Associated British Foods's 3% increase in revenues from the past quarter was not enough to satisfy the market. Strong growth from its Primark clothing retail arm of 9% in the quarter or 7% at constant currencies was better than most of the market and helped offset a big decline in sugar, but was short of some analysts expectations. Fellow retailer Halfords fell as it reported a rise in third-quarter sales and record sales over Christmas and Black Friday, though growth was slower than in the first half of the year. GKN slipped as it called Melrose Industries out over its offer statement, saying it was "misleading", after the engineer rejected a sweetened but hostile bid of £7.4bn a day earlier. Rightmove was hit by a downgrade to 'underweight' at JPMorgan, while Premier Oil was lower after a downgrade to 'hold' by Investec. Metro Bank was weaker as Berenberg initiated coverage of the stock at 'sell'. Information services giant Experian turned lower even as it reported an 8% improvement in revenue for the three months to 31 December. Mining giant BHP Billiton lost its earlier gains made when it confirmed that it was looking at offloading its US shale oil business either a trade sale, demerger or public offering. In a quarterly update the company reported a 20% rise in copper production to 429,000 tonnes, iron ore output rose 3% to 62m tonnes, 6% per cent to 48m barrels. AA was under the cosh as Barclays slashed the price target to 200p from 270p as it lowered its 2019 EBITDA forecasts. SSE, Compass Group, Shaftesbury and Micro Focus were all in the red as their stock went ex-dividend. On the upside, Whitbread was in the black as reports that its new activist investor Sachem Head was pushing for a break-up of the Costa Coffee and Premier Inn owner, which offset the company's warning that tough UK conditions were brewing, with sales up just 0.3% in the third quarter. The activist investor was reported by Reuters as having asked the group to consider selling off or floating Costa as a way to boost the value of its individual businesses. Shares in Evraz jumped after the steelmaker reported that consolidated crude steel output was at 3.5m tonnes during the final three months of 2017, unchanged from the prior quarter. Production of steel products, net of re-rolled products on the other hand, was 5.7% higher on the quarter at 3.3m tonnes. Infrastructure group Balfour Beatty rallied after saying the recently-enacted US tax changes would lower its effective tax rate on US earnings to 26% from 40% in 2018 and beyond. The boost to earnings per share would be circa 4%, said broker Numis, and adding some 8% to directors valuation. Hargreaves Lansdown was the standout gainer as Barclays analysts reiterated their 'overweight' stance on the stock and lifted the price target to 2,100p, while Britvic was boosted by an upgrade to 'buy' at Deutsche Bank and its target to 950p from 700p. On the data front, the Royal Institution of Chartered Surveyors' monthly house price index rose to +8 in December from 0 in November, which had been the worst reading since March 2013. Economists had been expecting the index to be unchanged. But the survey found that last year's cut in stamp duty for first-time buyers has done nothing to boost demand, with the new buyer enquiries balance falling to -15 in December from -5 in November. |
| | The Top 10 Stocks for 2018 | | What does the year hold for these 10 blue chips? A look at some of the key themes in the coming 12-months, the key numbers from 2017, FTSE 100 companies that reached record highs… and those that fell to all-time lows, and our Top Stock Picks for 2018. Losses can exceed deposits. Get your copy |
| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks climb despite bounce in euro Stocks on the Continent ended the session higher as Wall Street steadied, albeit with traders keeping a close eye on government bond yields on both sides of the Atlantic as some of the world's top policymakers met in Frankfurt to discuss the challenges facing Germany. At the closing bell, the benchmark Stoxx 600 was standing 0.19% or 0.76 points higher at 398.73, albeit alongside a 0.74% or 97.47 point gain for the Dax to 13,281.43 while the Cac-40 was 0.02% or 0.84 points higher to 5,494.83. In parallel, euro/dollar added 0.52% to 1.2234, as the yield on the benchmark 10-year bund pared earlier gains to rise by one basis point to 0.57%, mimicking a grind higher on similarly-dated US Treasuries which earlier in the session had traded to within just a whisker of their 2017 highs. Earlier, German central bank chief Jens Weidmann sounded a warning against focusing too much on his country's elevated current account surprlus, saying it was the result of the ECB's "very accomodative" monetary policy. He also argued against there being any need for expansionary fiscal policies given the country's positive output gap. Weidmann was speaking at a joint conference between the IMF and the Bundesbank and responding to a blog post by the head of the IMF, Christine Lagarde, calling on the German government to use part of its budget surplus to boost long-term growth. At the same conference, ECB governing council member Benoit Coeure said the euro area had already abandoned the last crisis and was now in an expansion phase. Hence, the emphasis now was on preparing for the next crisis. No major economic reports were released on Thursday in the single currency bloc. Acting as a backdrop, there was keen interest in whether an expected US House of Representatives vote, possibly as soon as on Thursday evening, on whether to extend the US federal government's debt ceiling would pass. In the corporate space, Airbus got a lift from an Emirates Airline order for 36 Airbus A380s valued at $16bn, including an option for 16 more jets of the same model. Carrefour on the other hand lowered its guidance for profits in 2017 for the second time in just six months, despite which its shares were moved higher. |
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Top of the stocks Number of Deals Bought Number of Deals Sold |
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| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Bitcoin (BTC) | 198,784,582,361 | 11,671.94 | +6.51% |  | | 2 |  | Ethereum (ETH) | 104,230,428,064 | 1,058.51 | +10.43% |  | | 3 |  | Ripple (XRP) | 64,092,362,215 | 1.65 | +47.76% |  | | 4 |  | Bitcoin Cash / BCC (BCH) | 31,457,171,323 | 1,838.26 | +5.98% |  | |
| | Atlantic Advisory - Share Tips of the Year 2018 | | Download Our Latest Report Here Losses can exceed deposits |
| | US Market Report | | US open: Risk of federal government shutdown looms over stocks Wall Street is trading on the back foot ahead of a House vote on the legislation needed to avert a government shutdown and amid another leg lower in the Treasury market, amid reports that Apple might unload some of its holdings of US government debt to pay its tax bills. Simmering in the background perhaps, Reuters reported the White House was contemplating levying a large fine against China in response to allegations of intellectual property theft by that country's firms. At 1521 GMT, the Dow Jones Industrials Average was trading off by 0.25% or 64.75 points to 26,051.51 and the S&P 500 by 0.13% to 2,798.98, although on Wednesday both gauges had hit fresh record highs. Significantly, some reports indicated that Republicans in the House of Representatives were facing a bit of a revolt from members of the Freedom Caucus which might endanger passage of a short-term spending bill needed to keep the US federal government open. Complicating matters, early on Thursday, President Trump tweeted that he was opposed to making concessions on child healthcare in order to gain the backing of lawmakers from the other side of the aisle, with Democrats having already said that what they wanted was a fix for DACA, or the Deferred Action for Childhood Arrivals programme which the White House had recently promised to axe. In parallel, the yield on the benchmark 10-year US Treasury note was moving higher by two basis points to 2.61%, having come within a whisker of their 2017 highs earlier in the session. GKFX analyst David Morrison said: "Even the most cursory look at charts of the US majors shows the explosive move higher since the beginning of the month. Even the wobble earlier this week was completely erased by yesterday's price action. Obviously the big question is just how much further can this rally go? "The answer is that for now, every piece of market news or economic data is used to justify further buying. One day that will change and the resulting sell-off will be ugly. But it's impossible to forecast when that time will come, even if reduced monetary stimulus may prove to be the trigger." On the economic front, traders were surprised by a 41,000 person drop in initial US jobless claims for the week ending on 13 January (consensus: 250,000), the reference week for the next monthly employment report. Banks were still firmly in focus, with Morgan Stanley off a touch even after its quarterly earnings beat expectations despite a hit to trading revenues. The bank posted adjusted earnings of $0.84 a share versus expectations of $0.77. Bank of New York Mellon was in the spotlight too as it posted a 37% jump in fourth-quarter profit and recorded an estimated net benefit of $427m from the new US tax system. Yet traders sent its shares duly lower. Stock in aluminium giant Alcoa was another big drag, sliding after its fourth-quarter net loss widened to $1.06 a share from $0.68 one year ago, mainly due to the closure and sale of some of its smelting assets. Elsewhere, La Quinta Holdings rallied as it agreed for hotel operator Wyndham WorldWide to buy its hotel franchise and management business for $1.95bn in cash. Still to come, IBM and American Express are slated to report after the markets close. |
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| | Broker Tips | | Broker tips: Hargreaves Lansdown, Rightmove Barclays reiterated its fondness for Hargreaves Lansdown shares on Thursday, saying drivers for the business remain in place in 2018. Barclays, reiterated its 'overweight' rating and raised its target to 2,100p, said the savings, pensions and investment group has enjoyed great operational success over the past decade and the structural drivers of large savings and advice gaps in the UK "remain strong". "Fee pressures appear manageable and flows and cash yields are likely to surprise on the upside, in our opinion." On current forecasts the shares trade at 32 times calendar 2018 forecast earnings per share, falling to 28 times on 2019 estimated EPS, which is within the historical forward PE range of 15-35x. Rightmove was under the cosh on Thursday as JPMorgan Cazenove cut the stock to 'underweight' from 'neutral' and trimmed the target to 4,168p from 4,183p, pointing to limited scope for earnings upside. In the same note, the bank also initiated coverage of Purplebricks at 'overweight', with a 733p price target. JPM said the company's financials are "impressive". On its assumption of a 15% market share by 2022, JPM forecasts a 17-22 revenue compound annual growth rate of 48% in the UK. For the international operations, it estimates a conservative 11% and 4% penetration by then. "Marketing spend/launch costs are holding back profitability, but we expect the company to be profitable next year and to generate earnings before interest, tax, depreciation and amortisation of £190m by 2022." As far as Rightmove is concerned, it said a rising share of online agents will accelerate pressure on commission rates for traditional agents, amplifying tough market conditions post Brexit. In this environment, it sees limited scope for earnings upside risk at Rightmove. "We believe the property agent market faces significant changes over the next few years with the rise of new disrupters in the form of online agents. These players are benefiting from low fixed costs (as property costs are not incurred in the way a high street agent does and labour costs are more variable as agents are self-employed) which provides strong cost advantages. As a result, online agents charge a significantly lower fee and are rapidly taking market share." | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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