| | | | | | | 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 flops as mixed earnings and housebuilders weigh After hitting a fresh all-time high in the morning, London's FTSE 100 ended Monday in the red after another retail profit warning and disappointing numbers from Micro Focus on revenues and from Halifax on house prices. The UK benchmark index finished the session down 27.71 points or 0.36% at 7,696.51, having earlier hit a new intraday high of 7,733.39. The pound was up 0.4% against the euro at 1.1325 and 0.1% lower versus the dollar at 1.3561. London stocks missed out on an up-day for most European bourses as the barnstorming start to 2018 continued with the MSCI World index having gained 2.5% in the first five trading sessions of the year to lay down its best start in five years. But over in Wall Street, the Dow Jones began the day on the back foot, which often sours the mood in London. "The day has gone from bad to worse for euro bulls, as the greenback continues to enjoy a resurgence following Friday's job numbers," said analyst Chris Beauchamp at IG. "Also worth noting was the upgrade to US Q4 GDP forecasts by the New York Fed, which has further emboldened dollar bulls. Everyone now has their eyes squarely on earnings season, with the upcoming barrage of numbers from the US likely to slow the soaraway rally to a crawl." Adding a weight on the UK index were falls for major housebuilders Taylor Wimpey, Persimmon and Barratt Developments as data from lender Halifax that showed house prices in the UK fell in December for the first time since June last year. Persimmon is due to put out a trading statement on Tuesday, one of the first of the sector in the new year. House prices across the UK fell 0.6% last month following 0.3% gains in November and October and missing expectations for a 0.2% increase, Halifax said. Prices in the last three months of 2017 were up 2.7%, slowing down from a 3.9% jump in November and falling short of expectations for a 3.3% increase. Russell Galley, Halifax's managing director, said: "As we'd anticipated, the housing market in 2017 followed a similar pattern to the previous year. House price growth slowed, whilst building activity, completed sales and mortgage approvals for house purchase all remained flat. This has been driven by a squeeze on real wage growth and continuing uncertainty over the economy." Nevertheless, Halifax, which saw its index rise 3.6% between June and November, still expects house prices to rise this year. Elsewhere, software group Micro Focus tumbled to its lowest since August as it warned that revenues for the year to the end of October 2018 would fall by 2% to 4% from 2017's $4.2bn. Overall the group posted a rise in pre-tax profits to $145.7m after the acquisition of Hewlett Packard Enterprise's software unit helped to increase revenue, but stripping out the HPE merger meant revenue was lower. With a reshuffle of the boardroom seeing CFO Mike Phillips moving to a new position as director of mergers and acquisitions, analyst Mike van Dulken at Accendo Markets said the healthy numbers did "nothing to offset guidance being considered below par. Which is a worry when the CFO has moved to a more M&A focused role, suggesting more purchases, acquisition risk and integration of slower growth". Drug developer Shire was down after confirming that it is going to split itself into two but that while it was dividing itself into two divisions, it was holding off from confirming a spin-off of its neuroscience unit. While chief executive Flemming Ornskov said the ADHD arm was not ready for a spin-out of the right now, he said the split was setting the foundation for the "next stage". Inter-dealer broker TP Icap edged down as it acquired US-based energy and commodities broker SCS Commodities based for an undisclosed cash sum and further performance-related amounts over five years. Babcock gave up its initial gains made on saying it will lead a bespoke team of industry partners in a bid for the UK Ministry of Defence's new £1.25bn Type 31e general purpose light frigate programme. G4S was lifted by an upgrade from UBS as was Standard Life by Jefferies, respectively, while Thomas Cook was boosted by an upgrade to 'overweight' by Morgan Stanley, and BBA Aviation was up after an upgrade to 'buy' at Citi. Ladbrokes Coral and Paddy Power were hit by downgrades from Morgan Stanley. Outside of the FTSE 350, parenting retailer Mothercare nosedived after it warned over profits after sales fell over the Christmas period. It was the first retail sector update in a week that will see results and statements from the likes of Morrisons and Joules on Tuesday, Sainsbury's, Marks & Spencer, Tesco, and Boohoo. |
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| | Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Analysts a tad cautious on near-term outlook Stocks on the Continent held onto an early advance, following bumper gains during the prior week and amid an ongoing debate among analysts regarding the outlook for shares in 2018. By the close of trading, the benchmark Stoxx 600 was edging higher by 0.27% or 1.06 points to 398.41, alongside gains of 0.36% to 13,367.78 on the German Dax and a rise of 0.30% to 5,487.42 for the Cac-40. Over in FX markets, euro/dollar was down by 0.49% to 1.1970. On the more cautious side of the spectrum of analysts' opinions, Michael Hewson, chief market analyst at CMC Markets UK, pointed out to clients how the German Dax was still shy of the record highs posted several months ago, despite which it notched up gains of 3.5% over the previous week. Hewson added: "Having got off to such a positive start in 2018 and with economic data continuing to look reasonably resilient despite a fairly average US jobs report, investors continue to appear to be happy to push this bull market even higher, despite some misgivings that, particularly in the case of US markets valuations remain stretched." Weighing in with a more constructive view, in a research note on the outlook for global equities, JP Morgan's Mislav Matejka said: "Given the strong 23% MXWO rally in '17 and a bullish opening to this year, we note some indicators are starting to show signs of overheating and complacency. "Notably, RSIs are overbought and Bull-Bear is the highest since 2010. These suggest some consolidation ahead, but we believe fundamentals stay strong, advise to remain OW equities and keep seeing any dips as buying opportunities." Acting as a backdrop, over the weekend Germany's CDU/CSU and the SPD began 'exploratory' talks, with an expected end date of 11 January, on the possibility of forming a coalition, with the SPD set to vote at a special party conference on 21 January on whether to enter formal negotiations with that same aim. On the economic front, Germany's Ministry of Finance said factory orders declined by 0.4% on the month in November (consensus: 0.0%). That 'miss', according to Tomasz Wieladek at Barclays Research, was the first sign of an economic impact from Germany's uncertain political landscape. Nevertheless, Wieladek believed the SPD might agree to a coalition treaty by mid-February, with political uncertainty possibly being resolved shortly after then. To take note of as well, Romania's central bank surprised most analysts on Monday, with rate-setters in Bucharest opting to hike their main policy rate by 25 basis points to 2.0%. In parallel, the European Commission reported that its consumer confidence index for the single currency bloc in December printed at 0.5, unchanged from a preliminary estimate. Meanwhile, earlier during the session Sentix's barometre of Eurozone investor sentiment advanced from a reading of 31.1 for December to 32.9 in January (consensus: 31.3). German sportswear-maker Adidas was on track to quadruple its digital sales by 2020 to €4.0bn, the company's chief Kasper Rosted told the Frankfurter Allgemeine Sonntagszeitung. Meanwhile, Deutsche Telekom shares were making headway despite a report in Wirtschaftswoche, citing consultants at FAS AG, according to whom the introduction of IFRS 16 accounting rules might force the operator to add at least €14.4bn of leasing liabilities to its estimated debt pile. Elsewhere, Airbus chief Tom Enders inked a non-binding agreement with Turkish Airlines for the potential shipment of 25 A350-900 jets. At the weekend, various reports surfaced in Italian media dismissing rumours of possible M&A involving Fiat Chrysler. Other reports in that same country indicated Telecom Italia may be planning to cut as many as 10,000 positions over the next three years. |
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| | Cryptocurrencies Report | | Top Cryptocurrencies | # | Name | Market Cap($) | Price(%) | Change | Price Graph(3m) | | 1 |  | Bitcoin (BTC) | 251,224,660,687 | 14,920.81 | -7.81% |  | | 2 |  | Ethereum (ETH) | 106,951,982,881 | 1,132.64 | +1.49% |  | | 3 |  | Ripple (XRP) | 96,955,944,332 | 2.47 | -10.87% |  | | 4 |  | Bitcoin Cash / BCC (BCH) | 40,072,995,004 | 2,377.66 | -5.94% |  | | 5 |  | Cardano (ADA) | 23,419,870,963 | 0.895249 | -2.08% |  | |
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| | US Market Report | | US open: All eyes on Fed speakers Wall Street is trading on a mixed note come Monday, following a solid performance last week as traders wait on multiple Fed speakers. At 1729 GMT, the Dow Jones Industrials Average was 0.12% lower to 25,264.46, while the S&P 500 was clinging on to a marginal gain, trading up by 0.01% to 2,743.47. Meanwhile, the Nasdaq Composite was 0.20% higher to 7,150.50. From a sector standpoint, the best performance was being seen in the following industry groups: Drug retailers (2.32%), Medical supplies (2.09%) and Paper (2.08%). In a session bereft of fresh economic reports, the market spotlight was on the potential for market-moving remarks from three top Fed officials. Thus, speaking on the subject of the US economic outlook, the president of the Federal Reserve bank of Atlanta, Raphael Bostic reportedly said that the US central bank might not need to hike interest rates three times in 2018 because of weak inflation. Ahead of his remarks, Craig Erlam, senior market analyst at Oanda, had told clients: "Perhaps today's Federal Reserve speakers will provide the catalyst for a move higher in the dollar, with John Williams, Raphael Bostic and Eric Rosengren all making appearances. Williams and Bostic will both be voters on the FOMC this year and so their views will be very closely monitored and could have an impact, although with Jerome Powell set to succeed Janet Yellen as Chair next month and a number of roles still to be filled, there remains an element of uncertainty when it comes to Fed policy going forward. "While there is a number of key data releases that will be closely monitored this week, the bulk of these will come later on, most notably US retail sales and CPI inflation on Friday. Friday will also mark the start of earnings season which will be a key focus for investors over the coming weeks now that tax reform is over the line." Still on Monday's calendar, San Francisco Fed chief John Williams was due top take to the podium at 1835 GMT, followed by his opposite number at the Boston Fed, Rosengren, at 2100 GMT. In corporate news, Nvidia was on the up after the chip maker announced a partnership with Uber to provide the company with self-driving hardware, amid reports of a similar deal with Volkswagen. Elsewhere, biotech company Celgene was also in the black after announcing a deal to buy biotechnology group Impact Biomedicines for up to $7bn. Lululemon was on the other hand were trading lower even after lifting its fourth-quarter profit and revenue forecasts. |
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| | Broker Tips | | Broker tips: G4S, BP, Shell, Ashtead Security services and solutions outsourcer G4S is approaching a trough in its growth profile thanks to its leadership position in the cash handling market, supported by quicker growth in emerging markets, analysts at UBS said. On the back of all of the above, the Swiss broker lifted its target for the shares from 300p to 310p and raised its recommendation for the stock from 'neutral' to 'buy'. In fact, excluding one-off installation work, growth had been relatively stable at between 2% and 4%, and as it began delivering on its pipeline of new cash solutions that would accelerate to between 5% and 6% over the second half of 2018, with an inflection point being reached during the second quarter, UBS said. "Our detailed review indicates G4S's solution is more developed than those of its peers (bank agnostic). The growth should be a net positive for margins, given the high-margin service component: we forecast 15bps/10bps of margin expansion in 2018/19," Bilal Aziz, Rory McKenzie and Denis Moreau said in a research note sent to clients. There was also upside to be had from consolidation in its industry given the structural trend towards lower rates of cash usage. | | | | To advertise in the Euro Markets Bulletin please contact advertise@advfn.com |
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