February 9, 2016

Pegler’s market report – 09.02.16

by David Pegler

in Insights Press Releases

As published in the Brighton Argus (09.02.16) Business on page 21 under the title Pegler’s Market Report:

Markets continue to struggle as US jobs growth slows in January

The latest US labour market report was mixed. On the one hand, payrolls surprised on the upside. On the other hand, the unemployment rate dipped to a new cyclical low with signs of rising wage pressures. The dollar has certainly had an uneasy week as traders boosted bets the Federal Reserve may now keep interest rates on hold this year. UK-listed miners enjoyed better trading after a weak US dollar lifted the sector from the doldrums.

Earlier last week all eyes were on BP, which became one of the biggest casualties after shares in the oil giant plunged by over 8% when the company posted its worst annual loss in more than 20 years and announced plans to axe a further 3,000 jobs in the wake of the oil price crash.

Just Eat stock enjoyed a bit of recovery on news that it had bought rivals in Spain, Italy, Brazil and Mexico from German start-up incubator Rocket Internet. Previously shares in the online intermediary, that provides services between independent takeaway food outlets and customers, had come under increasing pressure after analysts voiced worries that Just Eat will be hurt in Britain by rivals such as Deliveroo and the imminent launch of UberEATS, part of the popular taxi-hailing app company.

Shares in Legal & General dipped following the announcement that its chief financial officer, Mark Gregory, will retire in January 2017. The insurer has significant operations in Hove, which may now need to accommodate staff relocated from the Group’s flagship offices in Kingswood, following the recent decision not to renew its lease on the Surrey site.

The big pharmaceutical giants were back in the news. AstraZeneca was a market laggard after it warned of a low to mid-single-digit decline in sales this year. It was a different story for GlaxoSmithKline, which was among the risers after its fourth-quarter revenue of £6.3bn came in ahead of market expectations. GlaxoSmithKline’s chief executive has dismissed speculation that the company is headed for an imminent break-up and said that the positive annual results showed that the restructuring process is paying off. GSK is on track to return to profit growth in 2016, following five years of decline.

 By David Pegler, Brighton Capital Management