June 5, 2023
Good morning and welcome to another week in the markets. 😊
After a holiday-shortened trading week in which markets surged on the heels of a deal to raise the debt ceiling, this week could be more subdued. Apple will help kickstart the week today with its worldwide developer conference, at which it’s expected to unveil new releases.
We’ll also get updates on U.S. factory orders, non-manufacturing services, the U.S. trade deficit, and consumer credit data. J.M. Smucker, GameStop, Brown Forman, DocuSign, and Seneca Foods will be among the companies reporting earnings this week.
As the U.S. stock market continued its climb, investors holding shares of the massive tech and growth companies leading the charge are debating whether to cash out or stay on for the ride.
A record $8.5 billion flowed into tech stocks in the latest week, data from BofA Global Research showed, as investors piled into a rally fuelling the tech-heavy Nasdaq. The benchmark S&P 500 now stands at a 10-month high.
At the close on Friday, the FTSE 100 was on strong footing, gaining 1.7% on the day to finish the week at 7,607 points.
After a few days of losses, that puts the index back in positive territory and 0.5% stronger than the beginning of the week.
London stocks rose after the US Senate passed a bi-partisan agreement to raise the debt ceiling, and as investors eyed the latest non-farm payrolls report.
Miners were the top performers as copper prices rose, with Antofagasta, Anglo American, Glencore and Rio Tinto all up.
NatWest rose 0.57% after it confirmed it had reduced its stake in Ireland’s Permanent TSB.
Diageo struggled for direction as Deutsche Bank reiterated its sell rating. "We believe consensus estimates remain too optimistic for Diageo and we note US alcohol inventories are currently at a 30 year high vs shipments," the bank said.
Shares of Dechra Pharmaceuticals rose over 8% and hit a two-week high after the vet drugmaker agreed to be taken private.
The mid-cap FTSE 250 company said it had agreed to a £4.5bn bid from Swedish private equity firm EQT. The offer, worth 3,875p, is below the terms of an indicative proposal from EQT of 4,070p per share made in April.
The Cheshire-based company listed on the London Stock Exchange in 2000 with a market value of £60m.
Good news for savers as HSBC is boosting rates on a number of its savings accounts just as two smaller players make their plays for customers’ hard-earned cash.
HSBC said it is increasing the interest rates on some savings accounts by up to 0.75 percentage points raising hopes that the big players on the high street may be finally set to reward savers.
The rises by HSBC will come into effect next week, on June 8, and include a 0.75 percentage point increase on the bank’s my savings and premier savings youth accounts, taking rates to 5.00%.
Saver instant access account, for balances up to £10,000, will rise by 0.50 percentage points to 4.00% with the ISA rates also on the up.
We have an inflation update from China, final gross domestic product revisions from the EU and Japan, and a comparison of the performances of G7 nations with the latest purchasing managers’ index (PMI) figures on services.
Rate decisions this week come from Australia and Canada. Some analysts expect the Bank of Canada to raise rates on Wednesday for the first time since pausing in January because of the country’s stronger-than-expected economic performance this year, but most see the central bank holding off until at least July.
The run of earnings will begin slowly but gather pace as the week progresses with a mixed bag of budget airlines (Wizz Air), drinks and cigarette suppliers (Brown-Forman and British American Tobacco) plus mass transport operators (FirstGroup).
Among the highlights is Inditex, the Spanish owner of high-street fashion retailer Zara, whose first-quarter figures are expected to beat the market average, despite ongoing problems in the Russian market.
London’s standing as a place to list companies will be back in the news, with CRH holding an extraordinary general meeting for shareholders on Thursday to vote on a proposed change of primary listing from London to New York for the Dublin-based building materials business.
Here is a complete list of what to expect regarding company reports and economic data this week.
“TPP might just be about to revolutionise investment for the retail market.”
- London Stock Exchange 2020