20 September 2019
The FTSE 100 closed 0.6% higher at 7,356.42 on Thursday (19 September) taking its cue from a strong open in the US and after UK interest rates were kept on hold.
Next Monday (23 September) there is a string of purchasing managers index data from the Eurozone. On Tuesday (24 September) the Ifo Business Climate survey in Germany will offer some further insight into the health of the economic bloc. Later in the day a release from the Conference Board will provide a snapshot of consumer sentiment in the US. Wednesday’s (25 September) US oil inventory report will be closely scrutinised given recent disruption to global oil supply. Next Thursday (26 September) the final estimate of US GDP is published (see Economic update). The week is rounded off on Friday (27 September) by more data from across the Atlantic with the publication of durable goods orders. These show the total value of new purchase orders placed with manufacturers for durable goods.
The oil and gas sector was in the spotlight this week amid oil price volatility following the drone attacks on Saudi Arabian oil facilities. Initially the price of Brent crude increased as much as 20% before settling lower, although still above pre-attack levels, as the Saudi authorities allayed fears over the length of any supply disruption. The higher oil price was taken as good news for two of the largest constituents of the FTSE 100, in Royal Dutch Shell (RDSB) and BP (BP.). Away from oil price movements Tullow Oil (TLW) enjoyed a strong start to the week on Monday (19 September) as it announced a second discovery in a little over a month offshore Guyana. The success with the Joe-1 well (16 Sep) reinforced the impression that the company is regaining its exploration credentials. Historically the company made its way from small cap status all the way to the FTSE 100 off the back of large discoveries in Africa. Despite the good news the shares still trade well south of peak levels above £15.The discovery news was also a boon to its small cap partner Eco Atlantic Oil & Gas (ECO).
The final estimate of US GDP for the second quarter will be monitored for any upward or downward revision to the 2% growth figure revealed by the second estimate. An 18 September rate cut by the US Federal Reserve left investors confused. While the cut was widely expected, the market doesn’t know what to make of split views in the Fed as policymakers in the committee failed to agree on economic conditions.
Despite growing market interest in the country, investing directly in India is difficult. Fund Jupiter India (GB00B4TZHH95) is one of the most popular products among UK investors seeking exposure to the region, thanks to manager Avinash Vazirani’s robust long-term track record.
24 September – Posh chocs seller Hotel Chocolat (HOTC) presents its full year results amid a tough time for the high street. A July trading update suggested the company is bucking the negative trend as it unveiled a 14% increase in revenue for the 12-month period to 30 June. Investors will be looking for guidance on current trading.
25 September – First half results from online fashion retailer Boohoo (BOO) should make for pleasing reading for investors after guidance earlier in September that full year numbers would beat expectations. The market will be keen to get more detail on this strong trading and if it is being maintained alongside the numbers themselves.
Over the past two weeks increased turbulence on global stock markets has led many market commentators to ruminate on the possibility that the decade plus long bull run will soon come to an end. So, what precautionary actions can you take?
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