February 2, 2016

Pegler’s market report – 02.02.16

by David Pegler

in Press Releases Research

As published in the Brighton Argus (02.02.16) Business on page 21 under the title Pegler’s Market Report:

Moving in the right direction but volatility still the dominant theme

Stock market volatility has been the dominant theme for the month and that is likely to continue for a while longer yet.

Over the last week we have witnessed a surprise move from the Bank of Japan adopting negative interest rates. The Fed has signalled that it will be cautious in raising US interest rates, as fears over the global economy and uncertainty over oil prices have jolted investor confidence since the beginning of the year. Saudi Arabia has proposed a 5% oil production cut, which has fuelled a minor rally in the oil price. The UK economy expanded by 0.5% in Q4, which was in line with expectations. Growth remains lacklustre but reasonably resilient. Elsewhere Chancellor George Osborne has postponed the government’s Lloyds share sale amid ‘turbulent’ market conditions.

The rise in oil prices dragged down airline and cruise operators. Shares in EasyJet had already weakened after the company confirmed demand for travel had been hurt by security fears following the terrorist attacks in Paris.

The was a flurry of corporate activity excitement with BG Group’s shareholders voting through Shell’s £40bn. takeover and then a bit of speculation that Johnson & Johnson was casting its eyes on UK pharmaceutical giant, GlaxoSmithKline.

Positive gains were made by Cineworld after analysts’ upgrades and recent share weakness. Talk Talk also benefited after it signed a new distribution deal with Dixons Carphone, although Dixons has announced that Carphone Warehouse will look to close 134 standalone stores. Elsewhere, in the UK, the housebuilder, Crest Nicholson, which has a number of new developments in Sussex, posted strong results after benefiting from government-backed schemes such as Help to Buy. Company CEO said rising house prices were covering building costs as demand continues to outstrip supply.

In overseas company news, Weight Watchers continues to make stellar gains as Oprah Winfrey announced she’d lost 26 pounds after following the weight loss program. One commentator Tweeted that the share price is now inversely correlated to Oprah’s weight and puts a whole new spin on the term ‘crash dieting’. Oprah had previously revealed that she would buy a 10% stake in Weight Watchers.