| 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: Stocks drop after Apple warning but retailers get a boost from Next | | | | | London stocks fell in early trade on Thursday after US technology giant Apple cut its guidance for the first quarter and miners found themselves under the cosh, but retailers were buoyed by a well-received update from Next. At 0830 GMT, the FTSE 100 was down 0.5% at 6,703.59, while the pound was off 0.4% against the dollar at 1.2557 and 0.6% lower versus the euro at 1.1050. Apple said after the close of US markets on Wednesday that its first-quarter sales would be lower than expected due to weaker sales in China. The company said it now expects revenues of around $84bn in the three months to 29 December, down from previous guidance of between $89bn and $93bn. This would mark Apple’s first year-on-year quarterly drop since 2016. In a letter to shareholders, chief executive Tim Cook highlighted slowing growth in China and trade tensions with the US. "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China," Cook said. Neil Wilson, chief market analyst at Markets.com, said: "For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK. Therefore, Apple’s rare profits warning is a red flag for market watchers. The question is to what extent this is more Apple-specific, or more macro?" "Certainly, last night’s letter to investors from Apple has sent shockwaves through the markets - Apple shares tanked more than 7% in after-hours trading, while US stock futures have also shot lower after a flat session." Wilson said that while the a lot of the issues are specific to Apple, the warning also says a lot about what is happening in the broader global economy, specifically China. "It tells us that China is experiencing a period of softness. Most of Apple’s revenue shortfall versus guidance, and over 100% of its year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad, the company said. It tells us that the trade war between the US and China is having a dampening effect on demand and activity. It is also a factor of dollar strength." The Japanese yen surged to an eight-month high against the dollar after the Apple warning, breaking through key technical support levels as investors looked for a safe haven trade. In what was being described as a "flash crash" in currency markets, the yen also rose nearly 8% against the Australian dollar to its best level since 2009, and 10% versus the Turkish lira. On the corporate front, high street fashion retailer Next was the standout gainer after it trimmed its full-year profit guidance to £723m from £727m but posted a 1.5% jump in sales over the key Christmas period. The update lifted the sector, with Marks & Spencer, Primark owner AB Foods and JD Sports all trading higher. Richard Hunter, head of markets at Interactive Investor, said: "Given recent disappointments, Next has staged something of a late recovery in an attempt to salvage its year, with the share price reacting accordingly. "Next remains a well-managed company which understands its own business as well as the cut-throat sector in which it operates. Careful management of its finances continues to bear fruit against this backdrop, and the outlook for the forthcoming trading year anticipates similar themes, with an estimated 8.5% decline for retail sales but a hike of 11% for online." "At the same time, Next anticipates a cash surplus of some £300m, which would, in the present environment, be earmarked for share buybacks. This should lead to some support for the share price, whilst the current dividend yield of 3.8% is reasonably attractive." Elsewhere, budget airline Ryanair flew a little higher as it said total traffic in December grew 12% to 10.3m passengers. On the downside, miners retreated, with Antofagasta, Rio Tinto, Glencore and Anglo American in the red. Equipment rental firm Ashtead was also weaker after saying it has extended the maturity of its senior credit facility to December 2023 and increased it to $4.1bn. British Land, Experian, Auto Trader, Aveva, Dairy Crest and McCarthy & Stone were among the companies whose stock went ex-dividend. | | | | | MERRY CHRISTMAS For a limited time only we are offering a 2 week FREE Trial of our Trading Alerts. Register now | | | | Top 10 FTSE 100 Risers| Sponsored by Interactive Investor | 
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| | | | | 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 | | | Europe open: Shares dip after Apple warns | | | | | Stocks have started the session lower after Apple warned after the close of trading in New York that sales over the next few months are set to sharply undershoot forecasts. Shares of the global bellwether for technology stocks were pumeled by nearly 8%, taking their drop over the past three months to over 30% and setting-off a wave of risk aversion that drove sharp moves in even the largest currency pairs, with the US dollar at one point crashing by roughly 3.7% versus the Japanese yen. Commenting on the moves overnight in financial markets, Accendo Markets's Michael van Dulken told clients: "Apple's overnight sales warning specifically pointed to China contributing most of the expected shortfall for iPhones, Macs and iPads. This adds fuel to the fire of concerns about slowing global growth and/or a trade war, and compounds this week's China PMI Manufacturing misses. "[...] Automated algo rotation into safe-haven of Japanese Yen, made worse by low post-holiday Asian volumes, led to a flash crash in most of the main currencies (USD, EUR, GBP). Although the Pound is now off its worst levels, weakness is helping the FTSE cushion yesterday's Tech blow." Against that backdrop, as of 0824 GMT the benchmark Stoxx 600 was trading lower by 0.72% or 2.44 points to 334.77, alongside a drop of 0.69% or 74.13 points to 10,506.12 for the German Dax and a decline of 0.91% or 42.55 points to 4,647.03 for the Cac-40. Unsurprisingly, the biggest drag in stockmarkets was coming from technology issues, with the Stoxx 600 sector gauge retreating by 2.43% to 382.42. After the closing bell on Wall Street, Apple chief, Tim Cook, told investors he expected the company's first quarter sales to clock-in at approximately $84bn, which was significantly less than the range of between $89bn to $93bn that the company had guided towards previously. Cook blamed weaker demand for iPhones and slower growth in China for the lowered guidance. "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," the executive said. Nevertheless, while not all analysts were quite as upbeat, there was some talk in markets to be heard regarding the prospect for economic stimulus in China, with those at Danske Bank saying: "We look for US-China deal in next 3-6 months to remove a key headwind. We also expect further stimulus coming soon (big tax cut to both consumers and companies and one or more reductions in the reserve requirement ratio)." Meanwhile, in the background, a meeting between top Democratic and Republican congressmen and the US President, Donald Trump, in the White House, failed to yield any progress in talks aimed at ending the partial federal government shutdown. On the economic front, investors were waiting for the release of the latest on euro area money supply data covering the month of November. For later in the session, and ahead of Friday's monthly jobs report in the States, the focus was expected to be on other key US labour market indicators, including consultancy ADP's private sector payrolls figures covering the month of December and weekly unemployment claims data. Also due out in the afternoon, the US Department of Energy was scheduled to publish its weekly inventory figures. | | | US close: Markets end higher despite data disappointment | | | | | US stocks reversed earlier losses to finish in the green on Wednesday, ringing in the new year despite disappointing Chinese manufacturing data undermining sentiment before the opening bell. The Dow Jones Industrial Average was up 0.08% at 23,346.24, the S&P 500 added 0.13% to 2,510.03, and the Nasdaq 100 improved 0.49% to 6,360.87. Not long after the open, both the Dow and the S&P were down 0.7%. “The year has already got off to a disappointing start, with risk aversion weighing heavily across asset classes as the trend that battered confidence in the final month of last year carries over into this,” said Oanda analyst Craig Erlam of the negative start to the session. “Naturally, it was a rather quiet end to the year with nothing really changing on the fundamental landscape but unfortunately during that time of reflection, investors found no reason to be less pessimistic.” China’s private Caixin/Markit manufacturing purchasing managers’ index released earlier showed a drop to 49.7 in December from 50.2 in November. This was the first contraction in 19 months and missed expectations of 50.1. The figures confirmed a trend seen in the official PMI released on Monday, which slipped to 49.4 in December - its weakest level since early 2016. That weak Chinese data initially overshadowed news overnight that US President Trump was reaching out to Congress to help end the partial government shutdown. Trump reportedly invited congressional leaders to a White House briefing on border security on Wednesday. On the data front, the seasonally-adjusted IHS Markit final US manufacturing purchasing managers’ index printed at 53.8 in December, down from 55.3 the month before. This marked a 15-month low amid a weaker rise in new business and the joint-softest expansion in output since September 2017. “Manufacturers reported a weakened pace of expansion at the end of 2018, and grew less upbeat about prospects for 2019,” said Chris Williamson, chief business economist at IHS Markit. “Output and order books grew at the slowest rates for over a year and optimism about the outlook slumped to its gloomiest for over two years. “The month rounds of a fourth quarter in which manufacturing production is indicated to have risen at only a modest annualised rate of about 1%.” In corporate news, electric car maker Tesla tumbled 6.81% as it revealed that it delivered 90,700 vehicles in the fourth quarter, falling short of analysts’ expectations, and announced a $2,000 price cut on its vehicles. Nicholas Hyett, equity analyst at Hargreaves Lansdown, said that for most automotive groups, it would be a very impressive update. “Almost tripling the number of vehicles you deliver in just one year is no mean feat, and Musk and his team deserve a huge amount of credit. “But unfortunately for Tesla shareholders, the market has come to expect Herculean achievements, and sometimes that means the bar is just that little bit too high. “Deliveries have fallen short of what some analysts had expected and the shares are suffering as a result.” | | | Thursday newspaper round-up: Manufacturers, Apple, Deutsche Boerse, Iceland | | | | | Britain’s manufacturers are facing the biggest shortage of skilled workers since 1989 amid record levels of UK employment and falling numbers of EU27 nationals coming to the country to work since the Brexit vote. The British Chambers of Commerce (BCC) said more than four-fifths of manufacturers struggled to hire the right staff in the final months of 2018. – Guardian Apple cut its sales forecasts for its key end of year period on Wednesday, citing the unforeseen “magnitude” of the economic slowdown in China. Trading in the company’s shares was temporarily halted as Tim Cook, Apple’s chief executive, issued a letter to shareholders explaining the reason for the change. When selling started again, Apple shares fell by 7.45%, wiping $55bn (£44bn) off its value. - Guardian A high-profile insider trading case against Deutsche Boerse's former boss Carsten Kengeter has closed after he agreed to pay €4.75m (£4.2m) and make a donation to charity. The decision to drop the probe ends a long-running investigation which began when Deutsche Boerse was in merger talks with the London Stock Exchange (LSE) over a potential £21bn deal. The ill-fated tie-up was eventually quashed for competition reasons. - Telegraph A Californian fashion brand that counts celebrities Jennifer Lopez and Cara Delevigne as fans is gearing up for a £25m listing on London's junior stock market. LA-based photographer and DJ Corey Epstein and entrepreneur Mark Lynn set up DSTLD in 2014 to sell premium jeans directly to consumers at a lower price than traditional retailers. - Telegraph The government could raise almost £7 billion a year by tightening up five wealth taxes, a think tank has claimed. Income growth in Britain has been stagnant for more than a decade, but levels of wealth have soared and the taxation system is not properly geared towards taxing it, the Resolution Foundation said. - The Times An influential parliamentary committee is investigating why HM Revenue & Customs threatened Iceland Foods with a £21 million bill over a Christmas savings scheme for low-paid staff. Nicky Morgan, chairwoman of the Treasury select committee, said that the decision appeared “perverse” and risked dissuading the company from assisting its employees. The supermarket chain attacked what it called the taxman’s “idiotic” actions. - The Times | |
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