Weekly Blog 22/02/2019

Mike BaxterWeekly Blog0 Comments

The fractures in the UK political system have resulted in a new organisation being established, called the Independent Group, created by the defection of 8 former Labour MPs, as a result of the party’s approach to Brexit negotiations and claimed anti-Semitism, with 3 former Conservative MPs joining the new group as a result of Theresa May’s weakness to the Eurosceptic wing of the party. The move is an attempt to seize the centre ground of British politics and it will be interesting to see if there are anymore MP resignations or relationships developed with the Liberal Democrats.

Meanwhile, Prime Minister May has held ‘constructive’ talks with President Juncker, where she has stressed the need to see legally-binding changes to the backstop….in order for a deal to be passed through the House of Commons….sound familiar..! However, the E.U remain sceptical and she is unlikely to receive any amendments. The Eurosceptic Conservative MPs have since chipped in with a warning that they will try to end the UK government if May delays Brexit.

In the US, the Federal Reserve kept interest rates on hold, with commentary suggesting that further increases would only be necessary if inflation accelerated by more than expected, reiterating their dovish U-turn. In addition, policymakers have signalled that they will complete the job of reducing its balance sheet this year, in a boost to financial markets. Turning to trade, Vice Premier Liu He, China’s lead negotiator, and US representative Robert Lighthizer are due to wrap up their third round of face-to-face trade talks today, after which Mr Liu will meet President Trump. In a recent tweet, Trump indicated that he may be willing to reduce the pressure on Huawei, which may facilitate negotiations. I suppose this is better than trading insults…!

 Markets in a minute

  • The FTSE 100 is down 0.66% this week.
  • The 10 year Gilt yield has remained at 1.18%.
  • Investors of Lloyds awaited the FY results with interest and were rewarded with shares moving up 5%, following the announcement of the positive results they were banking on.
  • Sainsbury shares were creamed (-16%) as the CMA voiced grave concerns over the proposed merger with Asda.
  • BAE systems had no defence to shares falling 8%, after their FY results. Investors were unimpressed with the compressed cash flow figures.
  • Centrica shares were far from electric, falling 12% on news that the energy price cap will impact on 2019 results.
  • Relx, don’t do it… It seems Frankie and Hollywood were mistaken as shares for the company were up 4.5%, as their FY18 results were well received by investors.

Stories you may have missed over half-term

Moooove aside Tinder, UK farming start-up Hectare has launched its own equivalent for livestock called Tudder…! The app features data profiles of animals from 42,000 UK farms to help farmers find the perfect breeding partner for their cattle. It has raised more than £3m and tennis player Andy Murray is listed as an investor.

A survey of over 7,000 UK workers has revealed that 62% of employees have at least 1 co-worker they dislike enough to consider them a ‘work enemy’. The survey also showed a telling difference in the nicknames that men and women give their office opponents; with men likely to create nicknames based on physical attributes, while women turn to mythological creatures, animals and even Disney villains to label their adversaries!

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