| The 12 Stocks of Christmas Who could rebound the most in December? The end of the year is an excellent time for traders; data going back over three decades notes that December often sees a stock market rally to cap the end of the trading year. This report looks at 12 Stock Picks for this year's Santa Rally to assess which of them have the best potential for recovery.78% of retail clients lose money, consider affordability. Download Here | | | London open: Retailers pace the decline after shock profit warning from ASOS | | | | | London stocks fell in early trade on Monday, with retailers under pressure following a shock profit warning from online giant ASOS. At 0835 GMT, the FTSE 100 was down 0.3% to 6,826.20, while the pound was up 0.1% against the dollar and the euro at 1.2597 and 1.1134, respectively. London Capital Group analyst Jasper Lawler said: "Suggestions of a second referendum are growing in volume as an increasing number of senior minister’s view this as the only way out of the current impasse, whilst avoiding a hard no deal Brexit. Theresa May is vocally against the idea. We would expect a second referendum to boost the pound, the fact that the pound remains on the back-foot shows this is not being priced in as a realistic possibility right now." On the corporate front, retailers were in focus as ASOS shares tumbled 37% as it joined in the high street gloom, downgrading its guidance for the year as weaker trading in November and heavy discounting took their toll. ASOS cut its sales growth guidance for the year to August 2019 to around 15% from 20-25%, while it EBIT margin expectation were reduced to 2% from 4% and the company said it would cut capital expenditure by £200m. The group said retail gross margin would drop by 1.5 percentage points during the year compared to previous guidance that it would be flat at 49.9%. Chief executive officer Nick Beighton said: "We achieved 14% sales growth in a difficult market, but in the light of a significant downturn in November, we think it's prudent to recalibrate our expectations for the full year. We are taking all appropriate actions and our ambitions for ASOS have not changed." Shares in Boohoo also took a hit, sliding 9% even as it scrambled to set itself apart from ASOS and looked to reassure investors with a very brief update in which it confirmed that trading remains strong, with record Black Friday sales. Retailers were weaker across the board, with Next and Marks & Spencer the biggest losers on the FTSE 100, while Primark owner Associated British Foods, Kingfisher, JD Sports, Dixons, Sports Direct and Ted Baker all fell. Neil Wilson, chief market analyst at Markets.com, said: "If ASOS is finding it tough out there, then just about every retail stock has problem. We knew the high street was struggling due to structural shifts, but ASOS slashing guidance suggests things are even worse in the run up to Christmas than previously thought for the sector and the strife extends well beyond the high street. "Next’s online business has more than offset weaker in store sales, so the warning from ASOS is a worry. In short, online businesses have seemed immune but the warning from ASOS today suggests they too are at risk from the cyclical slowdown. We must stress that the Asos warning is indicative of a cyclical slowdown rather than being suggestive of the structural problems facing the high street." Housebuilders were also on the back foot, with Persimmon, Taylor Wimpey, Barratt Developments and Berkeley all lower after Rightmove's latest survey showed house prices fell 1.5% in December compared with a 1.7% drop the month before. This marked the biggest fall over two consecutive months since 2012, as sellers try to attract buyers despite a combination of the Christmas slowdown, stretched affordability and political uncertainty. On the year, house prices were up 0.7% versus a 0.2% decline in November. Miles Shipside, Rightmove director and housing market analyst, said: "It’s usual for new-to-the - market sellers to price lower in the run-up to Christmas to tempt distracted buyers, so we should not read too much into the mere fact of two consecutive monthly falls . "However, these falls have been larger than usual, making this the largest fall over two months for six years, showing that there are more than just seasonal forces at play. With stretched affordability limiting some people's ability to buy for the first time or trade up, a modest lowering of property prices combined with an increase in wage growth could help more of them to move and thus increase transaction numbers." Elsewhere, energy supplier SSE lost ground as it pulled out of its planned merger with Innogy's Npower retail unit, saying the two companies could not agree on commercial terms. Energy services group Hunting was in the red as it said results to the end of November had remained in line with expectations, but sounded a note of caution over its 2019 outlook with the possibility of deferred orders. Just Eat ticked higher even as it came under attack from activist investor Cat Rock Capital Management, which owns 2% of the FTSE 100 takeaway food marketplace. Connecticut-based Cat Rock has demanded management "address key issues" and produce a new three-year plan within 30 days, or failing that to pursue "strategic alternatives" of selling off non-core assets including Brazil-based iFood and other non-European businesses. | | | | | Are you looking for a profitable trading strategy? Do you have 20 minutes a day to follow this strategy? Yes! Then you need to watch this session. In fact for the past 6 months this strategy has been averaging +1275 pips per month! Book A Free Place To Find Out More | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor | 
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| | | US close: Stocks close lower following weak Chinese data | | | | | Wall Street stocks closed sharply lower on Friday following the release of some weak Chinese data that spread concerns regarding the state of the world's second-largest economy. At the close, the Dow Jones was 2.02% lower at 24,100.51, while the S&P 500 lost 1.91% to 2,599.95 and the Nasdaq moved 2.26% softer to 6,910.66. Chinese data released earlier showed that industrial production rose 5.4% on the year in November, versus expectations of 5.9% growth. Meanwhile, retail sales were up 8.1%, falling short of expectations for 8.8% growth and marking the weakest pace of growth since 2003. Joshua Mahony, market analyst at IG, said: "Talk of China resuming purchases of US soybeans has helped provide another element of optimism after the recent trimming of tariffs on US cars." "However, with Chinese retail sales and industrial production joined by a batch of weaker eurozone PMI surveys, it is easy to see why that’s been overshadowed." Meanwhile, Russ Mould, investment director at AJ Bell, said: "There is some concern that the impact of the US/China trade war has yet to be properly felt, suggesting that China’s economic data could be in for more shocks in early 2019 unless the countries secure a permanent truce." The downbeat tone came even as China confirmed that it would temporarily halt its additional 25% tariffs on US vehicles. According to a release on the Chinese finance ministry’s website, China will suspend 25% tariffs on 144 vehicles and auto parts from the US and 5% on an additional 67 auto items. The temporary halt - which was part of an agreed truce between the US and China - will kick-off on 1 January and last for three months. "This is a positive development no doubt, but while the US-China trade tensions are thawing slightly, they still remain frosty and are in danger of freezing back over all together at a moment’s notice," said XTB chief market analyst David Cheetham. The US 10-Year Treasury Note was yielding 2.895%, a 0.016 point decline, while the USD picked up 0.53% against the GBP to 0.7945. West Texas Crude was down 2.62% to $51.20 and Brent was 1.90% lower at $60.28. On the US data front, industrial production rose 0.6% last month, the strongest gain this quarter and above Wall Street expectations of a 0.4% increase. November's rise, driven by strong mining and utility output, means that production has risen 3.9% year-on-year, the Federal Reserve revealed on Friday. Capacity utilisation rose 0.4% in November to 78.5%, a touch below 80%, where it is expected to put pressure on costs. Elsewhere, US consumer spending picked up in November, with households purchasing furniture, electronics and a variety of other goods, going a way to allay fears of a significant slowdown in the country's economy. Retail sales excluding automobiles, gasoline, building materials and food services grew 0.9% last month, according to the Commerce Department, after an upwardly revised 0.7% increase for October. IHS Markit’s manufacturing PMI fell to a 13-month low of 53.9 in December, down from the 55.3 recorded a month earlier due to a decline in new orders and employment. Lastly, US business inventories climbed 0.6% last month On the corporate front, AMD closed 0.20% higher after announcing it would be adding in-home game streaming to its phone chips, while Sealed Air delivered a 4.75% increase in the session after the packaging specialist unveiled its Reinvent SEE strategy. Apple shares closed 3.20% as the tech giant tried to find a way around China's recent ban on iPhones, while Cisco slumped 3.48% as analysts became wary of its slowed spending. Starbucks closed 2.35% weaker at the open after announcing a new delivery service overnight. | | | Monday newspaper round-up: Counterparties risk, Brexit, exports, Pat Val | | | | | The pillars of the global financial system are fundamentally unstable and could lead to a frightening chain-reaction in the next crisis, the world’s top watchdog has warned. Giant "central counterparties" (CCPs) that clear much of the $540 trillion (£428 trillion) nexus of derivatives are themselves vulnerable to failure in times of extreme stress. - Telegraph Theresa May’s cabinet allies have publicly demanded that she puts Brexit in the hands of the Commons and allows MPs a series of votes on options to break the deadlock. Liam Fox, the trade secretary and Mrs May’s longest-standing ministerial friend, and Damian Hinds, the education secretary, both backed the plan yesterday. - The Times Theresa May will condemn calls for a second Brexit referendum on Monday, after two of the Prime Minister’s most senior advisers were accused of secretly preparing for a new vote. With Cabinet tensions on EU withdrawal escalating, Mrs May will use an address to the Commons to say a new national poll would do "irreparable damage" to the integrity of British politics. - Telegraph Britain’s goods exports have “collapsed” to levels not seen for three years in response to growing Brexit uncertainty and slowdowns in the Chinese and the US economies, according to a quarterly trade monitor. Business consultants BDO found that the UK’s goods exports, which have suffered a slowdown in growth since the beginning of 2017, contracted in the last three months of the year to leave them at a level not seen since 2015. - Guardian Britain’s exit from the European Union could spark a flurry of activity among continental fund managers keen to establish a foothold in the UK. Many non-UK asset managers are considering opening offices in Britain for the first time as a result of Brexit, according to fresh industry research. - Telegraph Retailers vying for customers in the last full week of trading before Christmas are in for a tough time according to the latest predictions, with footfall expected to fall by about 3% this week as cash-strapped shoppers rein in spending. The forecast by retail analysis firm Springboard adds to the bleak picture facing the sector in the key festive trading season, as consumers uncertain about what Brexit will mean for the economy and their finances cut back on gift-buying this year. - Guardian Thousands of Jaguar Land Rover jobs are to be cut next year under a £2.5bn turnaround plan as Britain’s biggest car maker is buffeted by “three big shocks”. JLR has suffered from weakening demand in China, a crackdown on diesel cars and concerns about the impact of Brexit. - Telegraph The government has introduced what it claims to be the biggest package of workplace reforms for 20 years after concerns that ministers have failed to appeal to voters who are “just about managing”. Legislation that comes into effect on Monday will increase fines for employers who have deliberately victimised their staff, and give workers details of their rights from the first day in their job. - Guardian Asking prices for homes coming on to the market in the UK are nearly £10,000 lower than they were in October, as the property market headed for its worst annual performance in almost a decade. - Guardian The technology industry fears that a skills shortage could stunt its growth, with new figures showing that job vacancies are growing. The number of unfilled positions in the information and communication technology sector last quarter rose by 24.3 per cent compared with a year ago, according to data from the Office for National Statistics, one of the largest increases of any industry. - The Times More than a quarter of Britons do not have their financial situation under control and parents are struggling to make ends meet, Europe’s largest credit management firm has claimed. Intrum said that its latest review of consumers had shown that as many as 44 per cent of all parents in the UK had borrowed money recently in order to buy something for their children. This was an increase from 30 per cent last year. - The Times A compensation scheme set up by Lloyds Banking Group for small business owners ruined by a banking fraud has been labelled “defective”, based on a “flawed” methodology and “partial” to the bank’s interests. A barrister’s opinion commissioned by representatives of some of the victims outlines alleged failings with the redress process established for business owners who suffered after a fraud at the Reading branch of HBOS. - The Times Bosses at HS2 have been accused of deliberately undervaluing homes and land needed for the £56 billion line in an attempt to cut costs. Businesses and householders on the route of the 250mph line claimed that they had been “robbed” by HS2 Ltd, the government-owned company responsible for delivering the scheme. - The Times Frankie & Benny’s owner The Restaurant Group is now among the most shorted stocks in London after hedge funds ramped up bets against it in the wake of its controversial £560m takeover of Asian food chain Wagamama. Almost a tenth of its shares are on loan to short sellers, including Luxembourg-based Cigogne Management, which increased its short position by a third to 0.9pc on Tuesday, and Mayfair financier Crispin Odey. - Telegraph An influential Commons committee has requested details of Patisserie Valerie’s payment practices with suppliers amid concerns about lengthy delays. MPs on the business, energy and industrial strategy select committee have written to Steve Francis, the new chief executive of the scandal-ridden café chain, after The Times revealed that the company had faced a series of winding up petitions from creditors. Fund managers should reduce their emphasis on short-term performance and give more prominence to results since the fund’s inception, the industry’s professional body has said. CFA UK has urged fund managers to reverse the traditional order in which they disclose investment returns to improve public trust in the industry. - The Times Uber is planning to bring electric bikes to Britain as it seeks to expand beyond its ride-hailing and food delivery services. The US company’s Jump business, which lets users rent e-bikes and electric scooters via an app, is hiring a general manager for the UK, job adverts show. - Telegraph Pressure is mounting on Britain’s largest privately owned construction company as its banking partners delay signing off on a crucial refinancing. Laing O’Rourke, the contractor behind projects ranging from the London 2012 Olympics site to the Scottish parliament, is more than two months late filing its UK accounts amid increased scrutiny from lenders and accountants. - The Times | |
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