Proactive Investors - Run By Investors For Investors

London Finance Show: BoE boat unlikely to be rocked; Prosecco bars in Next stores

Commentator Matt Brown previews the Bank of England monetary policy meeting, and thinks the vote will be 7-2 to keep UK interest rates on hold once again, with the two new MPC members “unlikely to want to rock the boat.”

He says the key thing is that, despite UK inflation bumping up near to the Bank’s 3% target, earnings growth isn’t there for the BoE to start think of raising rates, as wages are lagging significantly.

But while he doesn’t  believe there will be any surprises at midday today, there could still be a more hawkish stance to the meeting minutes published at the same time.

The FTSE One to Watch is Next Plc (LON:NXT) , with the stock strong today after the clothing retailer raised its guidance, indicating that it won’t be as bad a year as it could be, and Brown points out that while in-store sales were down 7% to 8%, it is all about online development and strategy.

He notes that the FTSE 100-listed group is looking at closing underperforming stores, while those that are performing well, Next is looking at having concessions in, such as Prosecco bars for a drink after you’ve gone in to buy your pants and socks, which may boost footfall.

On the small cap front, Brown highlights Venture Life PLC (LON:VLG), a “pharma company involved in lotion and potions for skin, hair and nails”, which has a strong portfolio and is doing well in Europe, with a shift up in male interest in cosmetics.

The commentator also notes yesterday’s broker downgrade by Macquarie for ITV plc (LON:ITV), with the Aussie broker almost halving its target price to 110p from 200p as it thinks even if the long-mooted takeover bid from significant shareholder Liberty Global happens, it will only be at around the 125p a share level.

And with currencies, the commentator highlights a “very difficult pairs trade” between sterling/dollar and sterling/euro , particularly with the BoE decision likely to be key as it may disappoint the bulls after the boost from Tuesday’s above-forecast inflation data.

But Brown also tells investors not to forget about the big US CPI inflation data, due out today, which may have an impact on the dollar.

Meet Core Exploration Ltd, Arrow Minerals Ltd, PNX Metals Ltd and King River Copper Ltd at our event, Melbourne , 25 June 2018. Register here »
View full PROAC profile View Profile

Proactiveinvestors Timeline

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use