Weekly Digest - INVESTEC
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Please find attached Weekly Digest. Equity markets secured another week of recovering share prices last week, the fourth in succession after the malaise of November and early December. Markets this morning opened on a positive note across most of Asia, whilst the UK was also in the blue, though most of the Continent saw a weaker tone. In the forthcoming days (note that the US is closed today for Martin Luther King public holiday), investors will be focused on Theresa May’s unveiling of Plan B to Parliament, the assembly of some of the world’s leaders at Davos, and the ECB meeting on Thursday.
This afternoon Mrs May will address Parliament with her thoughts about how to re-visit the Brexit; weekend press coverage included almost every feasible possibility, but Whitehall suggestions seem to be highlighting her favoured path will be to modify the Good Friday Agreement in order to get round the Irish border impasse. Sterling, having been strong last week, has lost some of that ground in the past 24hrs as the chances of Brexit have increased.
No new breakthrough emerged over the weekend in relation to the US shutdown, with the Democrats still refusing to permit Donald Trump’s borrowing to finance the building of the Mexican wall. Forecasts for US GDP are now beginning to be adjusted downwards, with the rough rule of thumb being 0.11% for each week of the shutdown. Neither was there any further news on the Chinese trade talks, despite the positive rumours abounding late last week. Early today, China released economic data, with GDP for Q4 at 6.4%, Industrial production for December +5.7% and Retail Sales for the month +8.2% all in line with market consensus.
This week brings several key earnings releases from the corporate sector on both sides of the Atlantic. Due to report in the US are Johnson & Johnson, Procter & Gamble and Colgate Palmolive, whilst UK announcements are due from Anglo-American, BHP Billiton and Vodafone. Corporate news flow is set to continue next week with Apple, Paypal and Visa all releasing earnings data.