UK Market Narrative Thurs 15 Nov 2018:
A turbulent day for the UK markets following the political drama as ministers resigned and PM May fought an embattled defence of what seems to be an unsupported Brexit proposal. GBP plunged almost 2% as Brexit Secretary RAB resigns and fears for the UK government and Brexit outlook faded.
The UKX yo-yoed today but finished flat on the day as many of the multinational components went on sale in GBP terms with the increasing weakness in sterling. Domestic indices didn’t fare so well as the MCIX dropped 1.8% and AIM1 -1.4%. the TechMARK outperformed closing up 0.15%
In sectors O&G producers rallied over 2% boosted by a pop in crude, Mining gained 2.6% while Pharm gained 0.5%. Beverages and Software rallied around 2%
Sectors underperforming included F&D Retail down 3.8% on poor retail sales data: Banks down 0.7%. FS down 3.5% and Life Insurance down -2.9%
Only 5 of the NMX 39 sectors are bullish, Beverages, Telecoms, Utilities, Pharm and Ind Metals.
GPB is down 1.5% against USD at pixel hovering around the $1.278 level , Gold has held firm around $1213 while copper rallied 1.3% on the day
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UK Market Narrative Wed 14 Nov 2018:
Brexit plans will come to a head today in Downing Street as May looks to her cabinet to support the agreed first draft of the Brexit proposal. GBP reacted yesterday and overnight and rallied to regain the $1.30 level as the markets put a bullish interpretation on this development. This is anything but a done-deal so caution is advised as both GBP and UK markets enter a potentially extremely volatile period. The FTSE100 VIX spiked over 30% today touching 22 from a normal level of 15 on fears of a rejection by the Tory cabinet. An announcement is due this evening.
The main UK markets maintained a negative stance today while in a wait-and-see mode: some traders deciding that the side-lines were preferably to betting on a binary outcome. UKX and NMX closed down -0.3% as did the MCIX. AIM1 rallied 0.5% while the TechMARK closed flat.
In sectors, Mining sold-off over 2% with Support Services down 1.4% and Pharm down 1%. O&G sold-off early on the precipitous drop in crude yesterday but recovered as Brent gained almost 2% on the day .
Utilities, Fixed Line Comms and Household goods all rallied today reflecting the defensive nature of current markets. As highlighted earlier in the week, Gold rechecked the $1200 level and is now rallying up 0.5% on the day while Bitcoin has sold-off over 10% in a mirror image of risk appetite. Copper and the base metals are enjoying a day in green albeit with only a weak rally. Tonight’s news from Downing Street is likely to heavily impact tomorrow’s price action
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UK Market Narrative Tues 13 Nov 2018:
A lacklustre day for all of the major UK indices with the exception of the MCIX which regained just over 1% and the TASX which forged ahead 1.7%. The NMX, UKX and AIM1 all closed relatively flat on the day.
In the NMX, Mobile caught a bid as VOD rallied almost 8% on interim results: there were numerous sectors up over 1.5% including Banks, Construction, Support Services and T&L.
Underperforming sectors included Tobacco down another almost 4%, O&G producers down 2.4% and O&G Services -2%. A sharp price drop in crude today on oversupply rumours did the damage to the O&G sectors: Brent is now at the $67 level having been above $85 just over one month ago.
Mining and Utilities also sold-off down around 1%.
GBP rallied hard on Brexit rumours gaining over 1% and climbing above $1.30.
In the metals, Gold revisited sub $1200 levels and is currently at $1202: copper is flat on the day while iron ore has sold-off down over 1.4%. This may have led the miners lower today
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UK Market Narrative Mon 12 Nov 2018:
Another day in red across the board for the UK markets with some shares taking a thorough whacking: in the NMX, BATS lost over 11% as the US announced a ban on menthol cigarettes. Other big losers include OCDO JE, GVC and KGF all down over 5% causing the UKX and NMX to drop around 0.8%. The MCIX dropped 1.7%. with SPD and GLO losing over 10% on the day while BME, ICP, INCH and COM all lost 6% or more
In Aim a number of former growth darlings took steep falls today with IQE down almost 30% while PRSM, KWS were down around 9% and the 5% losses in the two £3bn plus companies of BUR and FEVR did considerable damage to the AIM100 index which closed down 2.4%
The least bad casualty of the day was TASX closing down 0.2%
Oil rallied almost 2% while GBP took a dive against USD to revisit the $1.28 levels as the Brexit fog thickened and got more menacing with more Tory unrest and rumoured ministerial resignations to come. Gold and silver sold-off again today beaten down by the firmer greenback: gold is rechecking the $1200 level yet again, a rally from here may signal a firm bottom and the beginning of a more cyclical shift in gold prices. Base metals were mixed and unrevealing in their price action.
The persistent bearishness of these markets combined with steep falls of former momentum stocks all combine to set a bear market flavour to our current situation. More in-depth analysis on a sector and index level will follow this week to highlight the dislocations and sector rotations underway
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UK Market Narrative Fri 09 Nov 2018:
All of the UK indices sold-off today having rallied 5% off recent lows. Mining was the major culprit in weakening the NMX and UKX although concerns over the Italian budget situation and the UK government dissonances over Brexit weighed on macro sentiment.
The UKX and NMX closed down 0.5%, MCIX -0.8%, AIM1 -0.6% and TASX -0.4.
In sectors, Mining lost -3.6% with very significant selling in AAL, GLEN, BLT and Rio all down 3-4% on the day. Banks, A&D and Mobile all sold 1-2%.
Conversely, the more defensive Food Producers, Utilities, Pharm and Beverages enjoyed another day in the green and all are bullish across all timescales.
Oils sold off another 1.5% today while GBP weakened against USD following the Fed session yesterday and Brexit fears pulling back below the $1.30 level. In the metals, Gold and Silver were down heavily as USD strengthened while the base metals ended the session weaker.
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UK Market Narrative Thurs 08 Nov 2018:
US trading overnight saw large rises bolstered by the mid-term election results which supported Trump’s agenda and tax policy. S&P and DJI gained over 2% with the NASDAQ up over 3%. The baton was carried by Asia with the NIK closing up 1.8% though the UK and European opens were more muted but added to yesterday’s gains. In early trading, Banks got off to a good start up over 1% while Pharm, Support Services and Life Insurance were the early leaders. At the close, Pharm was up 2.3%, Gen Retail +2% with Banks up 1.5%. O&G lost 1% on the back of lower oil while Tobacco, Media and Personal Goods all underperformed the index
NMX closed up 0.4% while the MCIX gained 0.6% , AIM 100 0.7% and TASX 0.9%
Oil continues to sell-off floundering below all major moving averages, copper and the other base metals continued to track sideways while Gold and Silver sold-off. GBP remains around the $1.31 level losing 0.3% on the day
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UK Market Narrative Wed 07 Nov 2018:
The predictable nature of the US mid-term elections outcome sat well with global markets today as the rally from the October slump gathered pace and broadened across sectors. All of the UK main markets closed strongly in the green today with the NMX and UKX gaining more that 1% despite GBP strength against USD. While the MCIX lagged at +0.5% (weighed down by SOPH-28% , G4S -17%, JDW -13%), AIM gained over 1.1% as did the TASX.
In the NMX much of the heavy lifting was done by Tobacco (+2%) Pharm (+1.7%) and Mining (+1.5%) although almost all sectors closed the day in the green
Oil rallied 0.8% while the base metals showed modest gains. Gold and silver gained marginally from the weaker dollar but shoed little of the recent sparkle as risk seems to be back on, for now.
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UK Market Narrative Tues 06 Nov 2018:
A quiet morning with little price action in the major indices gave way to an afternoon of subdued selling. With similar action in Europe it may well be that the world is watching the US mid-term elections for a clue on the future direction of the Trump administration: a good result for his Republican party is likely to be bullish the markets
In numbers, the NMX and UKX losing around 0.8%: led lower in the main by Mining (-1.8%), Tobacco (-1.4%) with all of the 10 top sectors in the red with the exception of Support Services (+0.1%).
Mobile and Fixed Line Comms were also heavily in the red today losing 2.7 and 4.2% respectively.
The MCIX closed flat on the day after a promising rally in the am while AIM100 lost 0.7% and the TechMARK a similar amount
Oil sold-off over 1.5% and remains firmly below its 200MA looking bearish across the board. GBP rallied against the USD to regain a $1.31 level which suggest a more bullish take on Brexit negotiations
In metals gold and silver lost ground while copper and the other base metals were flat on the day
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UK Market Narrative Mon 05 Nov 2018: DELAYED OWING TO TECHNICAL ISSUES
While the UKX and NMX treaded water today, the MCIX sold-off dropping 1.6% with some big names dropping 4% or more including CINE, RSW, INCH, CTEC and major players like TCG, PTEC, HSX and BAB down 5-6%.
A boost in oil, up 1% on the day, lifted the O&G sector while Mining and Pharm also caught a bid. These three sectors along with Tobacco helped the FTSE 100 and 350 indices close flat and masked some major losses in Support Services, FS, T&L and Insurance all down 1.5% or more. A&D and Gen Retail lost over 2.3%
AIM100 and the TechMARK also sold-off 0.5% of more.
GBP continued its bullish reversal against USD up another 0.4% to touch the $1.30 level.
At pixel the NASDAQ continues to sell-off down another 1.2% today as AAPL’s impact continues to be felt. Meanwhile the DJI is rallying 0.5% and the S&P is flat to positive. Tomorrow brings the US mid-term elections which may well prove a catalyst for the markets and today’s price action suggest this may be a bullish outcome.
Metals were negative on the day except for Iron ore with copper and nickel down over 1% possible due to poor China data overnight
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UK Market Narrative Friday 02 Nov 2018
Despite an early rally, the NMX and UKX sold-off into the close and ended the day flat to negative. However, the MCIX and AIM100 continued their upward trajectory closing 0.9% and 0.7% up respectively. The TEchMARK also closed flat on the day in another reversal of the day’s price action
All of these markets are showing some sign of a pause which is either some consolidation or may signal that selling will resume. The S price action may give some clue where the NASDAQ and S&P both rejected their 200MAs and sold-off which is often a bearish sign. The DJI does remain above its 200MA although the Russell is also still bearish.
In short it s probably immature to suggest we are out of the woods in this correction: such was the speed and depth of the correction that aftershocks are to be expected.
Stand-out sectors today were Life Insurance, Gen Retail, Media, Banks and FS while Tobacco, Pharm, Beverages, O&G Producers, Utilities and Mining all sold-off
Oil closed unchanged in a doji of indecision but short of its 200MA: GBP pulled back marginally against USD while the metals were mixed with copper and some of the base metals showing a glimmer of life while gold and silver consolidated their recent moves
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Financial Week Ahead 12-16 Nov 2018
Companies Reporting
FTSE100 9: III, BLND, DCC, EXPN, LAND, MDC, SSE, TW, VOD
FTSE250: 20 incl: AGK, BVS, CBG, COB, INVP, PTEC, RMG, QQ, WKP
AIM 8 : incl. ADT, ORCH, SHED, CDM
Economic Announcements UK
Wed: UK Inflation, CPI, RPI, PPI
Thurs Retail Sales
International Economic Announcements
Tues: CPI (Ger)
Wed: GDP (Ger), GDP (EU), CPI (US)
Thurs : US ISM Manu, PMI manufacturing
UK Markets Narrative Tues 30 Oct 18 EOD
The month of October is drawing to a close with a muted day of trading in the UK. Despite BP’s upbeat earning report, the UKX and NMX were almost flat on the day gaining around 0.3% but holding their 8 EMAs. The MCIX was more bullish rallying 0.6% helped by the larger cap IGG, SMWH, KAZ, CINE and HIK all up 4-5%.
Today’s outperforming sectors included Construction, Comms, Electronic and Electrical, F&D Retail and O&G Producers all up in the range 1 to 2.6%
Underperforming sectors included O&G Equipment, Tobacco and A&D all down by 2% or more.
AIM100 has continued to sell-off and closed down another 1% having fallen almost 18% from its Sep highs
The prevailing sentiment remains bearish though the UK and Europe seem to be stabilising in terms of selling: the US may still have some catching to do although at pixel all the US indices are in the green with the Russell and Dow Jones Transports looking the most bullish: these tend to be early indicators of any recovery.
Oil sold-off today down almost 1.5% dipping below the $76 mark : all of the base metals sold-off as well potentially owing to Trump’s ramping rhetoric on trade sanctions with China. Gold however continues to pull-back suggesting that the worry trade is receding although USD strength is also a cause. GBP is down a further 0.8% against USD at its lowest level since Aug '18.
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UK Markets Narrative Thurs 01 Nov Oct 18 EOD
While the UKX and NMX closed flat on the day, the MCIX and AIM roared back today both lifting over 1.5% with numerous stand out performers recovering 5-15% in price. Clearly confidence is returning to beaten-up markets with dip buyers spotting bargains
BT rose over 10% today on an earnings beat while in the MCIX, SPI rose 12%, JUST 11.5% and TCG 11% with numerous other shares rising 5% or more. Crucially all of the major indices closed above .... more details in full report
UK Markets Narrative Wed 31 Oct 18 EOD
And so October comes to a close, one of the most tortuous month's for the UK markets in years with seismic shifts in many of the UK markets that may prove to be very significant in term so the overall health of the market
What we know
AIM got punished the most this month and was down almost 15%at one stage closing up today to end the month down 12%
The FTSE 250 MCIX which was down 12% at its lows will finish down 8% from the start of October
The FTSE 100 and FTSE 350 recovered some more today to end the month down 6% and coming off a lows of -10%.
Significantly today saw the NMX, the UKX close above their 21EMAs which is a good sign that the recovery is well under way......... more details in full report
UK Markets Narrative Tues 23 Oct 18 EOD
There seems little point in attributing today’s global sell-off to anything other than a continuation of trend even though the wall of worry does seem steep and stark. The US closed last night with both the NASDAQ and DJI in the green, however China and the Asian markets set the tone for today’s trading day with heavy selling in the East. This cascaded to Europe and the UK with broad selling across all markets. Compared to the DAX down 2%, the UKX fared well closing off -1.2%. The MCIX, as highlighted yesterday, had yielded significant support level and closed today down another 2.2% . Oil’s drop of almost 4% sent O&G producers down almost 3% which heavily impacts the UKX and broad sentiment in the UK which has been bruised over the past weeks of selling. Looking into the MCIX highlights how many of the very large cap shares sold-off significantly today – CINE, HSX, AVV, WEIR, CYBG are all down 4-5% on the day while CNE, INDV and IHP all over £1bn market cap are down -7 to -8%. OCDO (- 10%) and GVC (-7%\) dented the UKX.
In sector terms, the biggest carnage occurred in O&G Services (-4%), O&G –(3%) with Chemicals, Engineering and Electronics all down over 3%
There were shades of green in Tobacco (+3.6%), Tech Hardware (+0.8%), Gas Utilities (+0.2)
TASX closed down -1.7%, AIM -2% with WND, CRW and ACSO down 10% or more.
GBP floundered under the $1.30 level while Gold is up almost 1% in a clear worry trade with Silver up over 1.3%.
The US is down 2% or more in the S&P and NASDAQ at pixel, if selling continues then tomorrow may have another red dawn. We would expect the UK to check 6900 as a double bottom to April of this year. What happens next will be key. The MCIX closed near its lows but at a potential support level around 19400. If this fails then then 18500 may be in sight which is a further 4% lower. It is worth noting that the Brexit ’16 low was 15500 on the MCIX and 5600 on the UKX . The markets can exhibit an odd form of prescience and a revisit of these levels as an ugly Brexit become possible can’t be ruled out
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UK Markets Narrative Mon 22 Oct 18 EOD
UK main indices closed down slightly on the day despite a promising start. The early rally in the UKX, NMX and MCIX faded as the US opened and turned sour. The day ended with NMX down 0.12%, UKX down 0.1%, MCIX -0.3%, AIM -0.3% and TASX -0.4%. All of the UK Indices are in the red across all timescales with the MCIX looking the most bearish having today dipped below its 200 week MA for the first time since the Brexit vote in 2016.
Today’s best performing sectors were Tobacco,+1.6%, Mining 0.7% with Banks, Media and Personal goods all up 0.4-0.5%
Utilities, Support Services and Beverages all sold off around 0.3% while A&D was down 0.5% with T&L down almost 1% presumably affected by the RYA dour warning on travel and airlines.
Oil was flat on the day while GBP sold-off against USD to breach the $1.30 level on heightened Brexit fears and the stability of May’s government. Gold and silver sold-off around 0.5% while the base metals all caught a bid with copper up 0.3%
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UK Markets Narrative Fri 19 Oct 18 EOD
While the UKX and NMX tracked broadly sideways today closing mildly in the green, the MCIX continues to sell and dipped below the recent lows to close just shy of that low. A rally off this double bottom next week would be bullish. The present value of 19900 is the 200 weekly moving average which has only been breached once since 2009 and that was the Brexit referendum sell-off. We watch this level for confirmation and a potential rally if it holds. If selling continues then this must be viewed as extremely bearish.
AIM also sold-off today yielding another 1% while the TSX was down 0.5%.
Outperforming sectors today included O&G +1.1%, Pharm +1.5%, Tobacco +0.7% with Bevs +2.6% and Personal Products +2% combining with Utilities and F&D Retail +_1.7% to underline the defensive sectors catching a bid.
Banks (-0.2%), Mining (-0.8%) T&L (-1.6%) Life Insurance (-1.6%) all underperformed
GBP was flat against USD while Brent rallied almost 1%; gold was flat on the day while silver rallied 0.5%. Copper is up almost 1% while iron ore gained almost 2% .
Next week sees the ECB meeting, more news on Brexit and the US GDP
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UK Markets Narrative Thurs 18 Oct 18 EOD
After yesterday’s flat day with the NMX and the UKX, today saw a resumption in selling with both down another 0.4%. The MCIX fell by a similar 0.4% as bearishness pervades the mid and large caps.
Today’s worst sectors were Construction down another 2.7% and firmly in bear territory off almost 30% from its 2018 highs: A&D dropped over 2%, Mining -1.5% with Support Services down 1.3% and Banks off -1%.
Pharm (+0.8%), Fixed Comms (+1.3%) and Beverages (+2.1%) were the major winners on the day . Indeed, these have joined Industrial Metals and O&G Services as the least bearish sectors of a fairly ugly bunch.
The worst performing shares today were MDC off another 9%, CPI -6%, WIZZ -6%, SPI -5%: best performers were NEX +6%, DOM +5.5%.
AIM continued to buck the trend recovering form it massive sell-off and rallying a further 0.8% today : The TASX was flat on the day helped by Pharms
Oil dropped another 0.7% to close below $80 again: GBP sold-off against USD and is close to the psychological $1.30 level. In the metals, gold is up moderately by 0.3%, silver joined all of the base metals in selling off
At pixel the US is down heavily with the S&P -1.7%, NASDAQ -2.5%, DJI 2.5%. Bearishness pervades the global markets for now. Much emphasis is being placed on earning in the US to lift the markets from the doldrums but the bias remains to the downside.
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UK Markets Narrative Wed 17 Oct 18 EOD
The NMX and UKX treaded water today following the marked rally in US markets overnight: both closed flat to negative on the day and remain in extremely bearish territory over all major timescales. The MCIX sold-off another 0.8% with MDC (-17%), INCH (-13%) , SCT (-12%) inflicting significant damage to the index while numerous of the bigger mid-caps lost 5% and more on the day including SGC, ECM, SMWH, CTEC and PMO. These relatively large price dislocations in bigger cap shares are very symptomatic of market jitters and don’t auger well for the overall mood of the market
Conversely, AIM rallied almost 1.2% as it comes back from a steep sell-off though ti has now rallied almost 5% in fewer days.
Oil sold-off heavily today down over 2% which inflicted some damage on the O&G sector but more on the )&G services down 9.8%. Worst performing sectors of size were Healthcare services, Construction, Household Good, T&L all down 1.6% to 3%.
Tobacco recovered lost ground to rally 2.8% today while Pharm and REIST made over 1%
GBP closed down 0.5% against USD while the base metals were all relatively flat on the day with gold and silver pulling back from recent gains.
At pixel the US remains flat pending more earning reports and the FOMC minutes.
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UK Markets Narrative Tues 16 Oct 18 EOD
Broad relief swept across the global markets today as buyers began to put money to work after the recent sell-off. The TASX rallied the hardest up 2% with MGGT gaining over 6% while CCC, NCC and VEC all added almost 5% each. Life returned to AIM with 1.5% rally while the MCIX gained over 2%
While many sectors caught a bid today there were some notable exceptions: a poor TU from BATS send the Tobacco sector down another -4%, Banks (-0.5%) and Mining (-0.6%) were joined in the red by Life Insurance, Gen Retail and F&D Retail with TSCO down -5% at one stage
Brent was flat on the day while gold and silver continued their upward momentum and seem to have broken away from their bases potentially heralding the return of inflation. The base metals were mixed with copper selling off while iron ore rallied mildly.
GBP rallied above $1.32 suggesting that fears over a no-deal Brexit may be easing. With the FOMC, Chinese GDP and Brexit-EU meetings this week, there a numerous risk events which may change the course of the markets. For now, all short, medium- and long-term indicators are advising caution with selective outperforming longs
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UK Markets Narrative Mon 15 Oct 18 EOD
The NMX took a breather from the hard selling today as life returned to a number of the sectors: most notably Pharm, Mining and Tobacco all up 1.5-2%. Tensions with Saudi gave oil an initial boost which in turn favoured the oilers as the O&G sector rose 0.8% though the rally in Brent faded in later trading. Given the UKX was up 0.5% and the NMX 0.2% there is relatively cold comfort in this whimper of a rally.
The MCIX conversely sold another 1% with the likes of CTEC (-33%) and SDRY (-21%) inflicting damage on the whole index owning to their market caps. GNC announcing its withdrawal from the US also took almost 9% of its market cap while many of the larger cap MCIX banks were off 3% or more.
AIM also continued to sell down -0.8% while the TechMARK rallied up another 0.4% and is now the least bearish of a pretty ugly set or indices.
GBP was flat against USD on the day while gold, silver and copper all rallied with gold up another 1%. The US has opened bearish with the NASDAQ giving back over 1% of Friday’s gains to check the 200MA again while the S&P has yielded 0.4% and is currently below its 200MA. The DJI and Russell are turning green which may help boost sentiment.
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UK Markets Narrative Fri 12 Oct 18 EOD
A tumultuous week drew to an end with the UKX and the NMX finishing on a whimper: despite early signs of a rally, this faded as the day progressed with insufficient appetite to put money at risk in the UK’s biggest indices: they closed flat to negative.
Not so for the mid-caps MCIX and AIM market which saw rallies of 0.7% and 2.7% respectively: presumably many PI bargain hunters went shopping in the enforced Autumn sales. Whether this proves to be premature will be seen in the next few days to weeks.
In the NMX, the standout performance sectors were O&G Services, Tech Hardware, Electronic and Electrical, Gen Retail and Mining all gaining between 1.5 to 4% on the day
By contrast Tobacco had another torrid day down 4.5%, Utilities shed 1.5% with banks in the red too.
The UK didn’t underperform its European peers and it may well be a Brexit fear that is also plaguing the EU zone. UK markets invoke a currency risk as well as the equity risk of a bad Brexit outcome so many will not be willing to take this binary bet until the trajectory becomes clearer.
Brent sold-off another 1% while GBP softened against the USD. In commodities, copper was flat as were most of the base metals: gold and silver pulled back mildly after yesterday's strong rally.
At pixel, the US, which had opened stronger has sold-off though both the S&P and DJI remain positive. The NASDAQ is up almost 2% which, if it holds, will auger well for the global markets.
UKX futures have ominously dropped below 7000 suggesting that the selling may not yet be done: we expect at least a visit to the 6900, potentially during the cash on Monday but this will depend on how the US closes and Asia re-opens.
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UK Markets Narrative Thurs 11 Oct 18 EOD
And still the selling continues in what has become relentless: the major UK indices have been selling for the last 6 sessions with no let-up. This last occurred during the February 2018 sell-off which finally bottomed in March 18 at 6900. Today the UKX closed just shy of 7000 having had that level tested on a few occasions today. This suggests solid support but is clearly a level to watch tomorrow. Today’s volume was above the average as was yesterday’s so selling may be reaching a climax.
UKX closed down almost 2%, MCIX -2.1%, AIM -2.3%, TechMARK -2%. In the NMX some major sectors suffered losses of 3% or more today including Household/Construction, Life Insurance, FS, O&G Producers and Banks.
F&D retail as the only sector in green today by 0.6% with DLM, MONY and OCD catching a bid. A few other islands of green in the sea of red were the precious metals miners FRES, RRS and CEY buoyed by today’s over 2% pop in gold: another symptom of a worry trade in play
GAW sold-off by another 5% today making this a fall of almost 20% in 5 days: like many growth shares with good run-ups, it is falling foul of take-profits and a potential shift in sentiment towards the safer, more value-oriented propositions as interest rates bite and monetary policy tightens.
At pixel the US continues to sell with the S&P and NASDAQ dropping below their 200MAs although the DJI remains above its 200MA. The US small caps index, the Russell 2000 has also been having a torrid few days and is down another 2.2% taking its losses to over 10% since Sep
Brent sold-off over 2% today while the base metals were flat to positive with copper showing signs of bottoming.
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UK Markets Narrative Wed 10 Oct 18 EOD
Yet another day in the red as markets continued to take fright with the IMF helping to stoke fears on the global macro and interest rate concerns. It seems that the wall of worry has become insurmountable for now and so selling has continued. As often occurs in rapid sell-offs, cascades of selling can overshoot logical setpoints when fear become the dominant motivator. These selling climaxes can offer good value opportunities when quality prospects are on offer at discount prices.
AIM has truly developed into a rout with a fairly precipitous sell-off which while severe, is not unprecedented nor is it yet cause for too much concern. Price action in many of the story stocks have been giving clues that we were ripe for correction.
Today saw every major index lose an additional 1% or more with AIM 100 down almost 4% taking losses to almost 10% in 5 days. From a sector point of view, the more defensive sectors such as Utilities, Comms, Gen Retail and Tobacco caught a bid today and ended in the green
The damage to some sectors today was particularly severe with many losing in excess of 3% including A&D , Mining and Support Services. That all sectors were not evenly sold off is of some cheer and probably points to major rotations rather than broad selling and a panic scenario.
Banks may at last be catching a bid in keeping with increasing interest rates. If inflation is starting to stir then grocery should also do well as would consumer staples: the things everyone need no matter the economic environment.
Oil closed the day down 1.6%, copper and the base metals off between 1 and 2%. GBP was up almost 0.5%. At pixel, the US is still selling off although the NASDAQ may be finding some support
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UK Markets Narrative Tues 09 Oct 18 EOD
UK markets opened weaker this am with the UKX and NMX dropping almost 0.5% at their lowest: meanwhile AIM continued to sell-off dropping over 1.5% at the intraday lows in a continuation of yesterday’s selling climax.
Firmer oil prices and a strong bounce in copper and the other base metals helped lift the O&G and Mining sectors which catalysed a recovery in the UKX and NMX. With the US opening in the green, the scene was set for some respite in selling after a sustained period of down-days. At its low, the MICX was down almost 7% in as many days.
The sectors that are currently on the bounce include Ind Metals (+3%), Mining (+1.6%), O&G (+0.8%) , O&G Services (+2.3%), F&D Retail (+1.4%).
The result was the UKX and NMX closed flat on the day with the MCIX down 0.6%, AIM down 1% and the TechMARK -0.8%. Looking through the sector list is a sea of red across most timescales: the most bullish sectors being those listed above in the main as well as Software and Leisure Goods (GAW)
Oil is holding firm at +1.2% on the day and close to $85 while GBP hovers around the $1.32 with USD.
Today looks like it may have been a reversal day so tomorrow may open stronger assuming the US markets remain in the green today.
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UK Markets Narrative Mon 08 Oct 18 EOD
More blood in the streets as a concerted global sell-off continued today with the American markets participating in the rout, NasDAQ being the weakest at pixel. This is probably a knock-on from the strong NFP jobs number as well as increasing concern on the health of the Chinese market and the background of trade tensions. That said, a healthy sell-off in the markets was overdue after a subdued summer so the recent pullback can still be viewed in that light. Today’s volumes did appear relatively light which could presage a relief rally in the UKX and NMX. The downward move in AIM may be more ominous given its scale and speed and may be indicative of a change in sentiment in the UK market and a flight to cash in advance of any potential Brexit shock . There were numerous double digits declines in some of the AIM favourites today including FEVR, PRSM with AMO down over 33% on a profit warning
At the close, UKX and NMX -1.2%: MCIX -1.5%: AIM -3.3% and TechMARK -1.6%. All UK indices are now bearish on all timescales
In the UK, the continuing market slump is now a sustained move with today’s selling seeing weakness in O&G producers and services which had both remained bullish. Oil has pulled back form its recent high of almost $87 and fell to around $83 today.
The worst performing sectors of note today were Mobile -3.45: A&D -2.1%, Construction -2.4%, Support Services -2.3%.
Of the few sectors in the green today, Beverages +0.3% and Utilities 0.3% were the most significant
Notable shares selling off today included SPE -6%, CCC -6%, ECM -6%: LRE -5.8% and IGG -5.6%.
GBP yielded 0.5% to the dollar today closing around the 1.308 level
In commodities copper and iron ore finished the day positive while gold and silver sold off as did the other base metals.
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UK Markets Narrative Fri 05 Oct 18 EOD
The week ended with further weakness across all of UK indices with almost all indices down 1% or more. GBP strengthened against USD which provided some headwinds for the UKX and NMX. Brent yielding over 1% on the day did inflict some damage on the O&G sector but equally some profit taking is also to be expected given recent runs. That might also be applicable to Mining which suffered the most today losing over 3% although AAL and AAL lost 4% and 5% respectively with BLT and RIO close behind them: there are suggestion that weakness in China may also be a root cause. Almost all sectors were down on the day with only Utilities and REITs showing green: a sign of some defensive positioning given the recent weakness across most UK markets
The day ended with NMX -1.1%, UKX -1.2%, MCIX -0.75%, AIM -1.31 and TechMARK -1.2%
US NFP jobs number did nothing to soothe neither domestic US nor UK and European markets woes: the assumption being higher rates sooner may now be more likely.
We end the first week of October deeply in the red on all UK indices and on all timescales:
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UK Markets Narrative Thurs 04 Oct 18 EOD
UK Markets Narrative Wed 03 Oct 18 EOD
TSCO started the day on a downer as profits disappointed investors, closing down almost 9% on the day and dragging the F&D Retail sector into the red with it. OCDO, SBRY and MRW did seem unperturbed closing the day up 1-2% to the good suggesting this is a TSCO problem and not a sector one
The MCIX Was up a more muted 0.2% while AIM rallied 0.3%. The TechMARK performed the best up 0.6% with BATM and CCC up almost 5% on the day.
IN the commodities complex, gold dipped back below $1200 while the base metals were all flat to positive on the day
UK Markets Narrative Tues 02 Oct 18 EOD
The MCIX dropped 0.8% while AIM was down by almost 1.5% with ASOS, BUR and LTG inflicting much of the damage down -5%, -8% and -8% respectively.
The TechMARK bled the least today down only 0.23% as Pharms remain bullish with the sector up 0.45%. Other islands of green included Mining up 1.4% and O&G +0.13%.
Brent remains just shy of $85 while GBP dropped below $1.30 today which should bolster the FTSE if wider macro concerns abate.
For now all major UK indices are bearish on all timescale except AIM and the TechMARK although both of these are short and mid term bearish.
UK Markets Narrative Mon 01 Oct 18 EOD
UKX closed flat on the day, muted by a boost to GBP /USD but offset by a further uptick in oil with Brent now above $83. The oilers and O&G services responded to the rallying oil price with improving price action with BP just shy of £6 for the first time since pre-Deepwater Horizon days of 2010.
Mining pulled back again down 0.3% as the sector consolidated following the recent manic up-thrust in price. Banks remain bearish and sold-off while Pharm was flat and T&L positive
Support Services rallied over 1% with RTO, DCC and SRP all firmly in the green by 3-5%.
MCIX was boosted up 0.5% presumably aided by Hammond’s business friendly speech at the Conservative Party Conference. AIM was up 0.4% while the TechMARK managed 0.2%
Elsewhere in the commodities complex, base metals were mainly negative with copper down 0.6% while gold and silver continue to tumble following the price action from last week’s FOMC announcement.
UK Markets Narrative Fri 28 Sep 18 EOD
Outperforming sectors included Utilities, A&D, O&G services , Mining, T&L all up on the day
Banks were down 2% accounting for most of the main index losses along with Non-life insurance was down over 3% while Mobile comms was down 2%
Oil rallied on the day while GBP sold off against USD
UK Markets Narrative Thurs 27 Sep 18 EOD
The Tech MARK closed up 0.45% helped by the Pharms.
Banks Pharm, O&G, Media, Utilities and Tobacco all had a good day in green while Mining pulled back another 0.8% with FS dragged lower by IGG (-13%) and TCAP (-7%). With PLUS and CMCX joining IGG in bear territory, questions must be in investors’ minds on the full effects of legislation changes on this sector.
Oil continued to hold around the $82 level which augers well for the oilers and oil services sectors.
Gold slipped below the $1200 on stronger USD while the base metals were mixed with iron ore down almost 2% and copper mildly in the red.
UK Markets Narrative Wed 26 Sep 18 EOD
There were some major price moves with INDV bombing just before the close on a TU - down 16.5% on the day: AA also lost almost 14% today blaming poor weather for higher costs owing to the number of call-outs.
Miners gave back some recent gains where profit taking took the sector down 1.7% on the day: similarly, O&G Producers slipped by 0.7%
Outperforming sectors of note included Tobacco, Food Producers, F&D Retail , T&L all +0.6%: Banks , Pharm and non Life Insurance all +0.5%
Oil closed flat as did cable with base metals treading water. Gold and silver sold-off which may be presaging further dollar strength following the FOMC rate decision at 19:00
UK Markets Narrative Tues 25 Sep 18 EOD
The UKX was further lifted by NXT pleasing investors with its second quarter TU: rallying almost 10% intraday. There was no halo effect for the rest of this embattled sector with the MCIX Gen Retailers all losing ground; CARD reported today and dropped over 5%.
Other sectors in the green today included Mining +1.9%, Pharm +1.3%, Software +1.2%
Utilities continued to underperform losing 1% today while Gen Industrials and REITs also dropped around 1%.
The MCIX closed down 0.2% weighed on by Financial Services (IGG, PLUS) Banks and Retailers. AIM was flat on the day while the TechMARK rallied led by Software and Electronics & Electricals.
GBP firmed against USD up over 0.3% at pixel
UK Markets Narrative Fri 21 Sep 18 EOD
This cheer was not shared across all indices and sectors as the MCIX ended the day flat with the likes of JD down almost 5%, GNS -4.5%, with £1bn plus mid -caps IPO, WKP, GFRD and SRP all down over 3%.
AIM closed up over 0.5% while the TechMARK closed up 0.7% with CCC rallying over 5% and MCRO up 2.7%.
Brent touched $80 intraday before retreating and was flat on the day at pixel. Gold reversed sharply on the day from a touch over 1211 to a low of 1191 in less than 30 minutes. Silver did similar but recovered lost ground in a similar time. Copper was up over 4% on the day while all the base metals with the exception of iron ore rallied strongly. This combined with a weak pound and a strong recovery form oversold accounts for the storm back in Mining