June 21, 2016 in
Pegler’s market report – 21.06.16: From Brexit jitters to Brexit panic!
As published in the Brighton Argus (21.06.16) Business on page 21 under the title Pegler’s Market Report: From Brexit jitters to Brexit...
March 22, 2016
As published in the Brighton Argus (22.03.16) Business on page 21 under the title Pegler’s Market Report:
US now in positive territory for the year
The dollar sank after the US central bank kept interest rates unchanged and flagged fewer rate hikes in the coming months due to the fragile global economy. The weakened dollar makes commodities, such as oil and metals, less expensive for consumers paying with other currencies. The Dow Jones industrial average, one of the most well-known US indices, has reversed its losses for the year and over the last week finally moved into positive territory.
Meanwhile, the Bank of England’s decision to keep rates on hold has steadied the pound, which has recently been rocked by uncertainty ahead of the impending referendum on Britain’s membership in the European Union. It is expected that interest rates are more likely to rise over the next two years but when the policymakers move to hike rates it will be gradual.
The fallout from the sugar levy, introduced during last week’s Budget, continued to weigh on mid-cap stock AG Barr, which owns the Irn-Bru brand. Shares in Britvic, which is associated with Robinsons, Tango, J2O and has the UK and Ireland license for Pepsico products, also came under pressure. Another short-term loser was Tate & Lyle, the sugar-based food producer. Generally the budget winners were housebuilders, oil producers, gambling companies and investment managers.
Away from the Budget, tour operators became the subject of a bearish note by city analysts. Despite expectations of solid second-quarter trading updates in the coming weeks, some commentators cited there are growing threats from weaker UK demand growth and pricing pressure from increased airline capacity. Shares in TUI AG and Thomas Cook were weaker on the analysts’ downgrades.
Good news for Admiral employees. The outgoing boss, Henry Engelhardt, has decided to give his own leaving present to staff, offering £1,000 in cash to every full-time Admiral worker. The gesture, which will cost him £7m, was a thank-you for helping create the insurer from scratch and building it into a £5bn member of the FTSE 100.
Other FTSE-100 company bosses to retire over the coming months will be Sam Walsh from Rio Tinto and Sir Andrew Witty from GlaxoSmithKline. Simon Nixon, the founder of Moneysupermarket.com, who launched the website in 1999 and officially stepped down at the end of 2015, has been selling down his £124m stake in the company and finally concluded his exit.
By David Pegler, Brighton Capital Management
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