Morning Market Pulse - It's Mueller time!


Mike van Dulken at Accendo Markets, commented to clients this morning:


Markets Overview:

FTSE 100 called to open -10pts at 7460, after another retreat current 4780 resistance. Support at 7445, however, puts it in a short-term 3-day sideways channel. More consolidation? Bulls need a break above 7485 to extend the 4-month up-channel towards 7650. Bears require a breach of 7445 to breach the sideways channel towards 7400. Watch levels: Bullish 7485, Bearish 7440


Calls for a slightly negative open are in tune with expectations for a slow day into the long Easter holiday weekend and a largely negative session in Asia and a down day for Wall St after more corporate earnings reports and concerns about policy changes on Healthcare.

Gold continues its move to the downside after breaking 2019 support level at $1280. Brent Crude Oil is still hovering around its freshly made highs around $72. GBP/USD continues to float about above 1.30, but could be moved by UK and US data due today.


In corporate news this morning;

Unilever Q1 underlying sales +3.1%, o/w 1.2% from volume and 1.9% from price rises. Emerging markets +5% (50/50 vol. and price). Quarterly dividend +6%. Full year guidance reiterated of underlying sales +3-5% with an improved operating margin and strong free cash flow.

Rentokil Q1 Organic growth better than 2018; ongoing revenues +10.6% (+8.9% at constant FX o/w 4% organic & 4.9% acquisitions). Pest Control +12% (+5% organic) with Growth markets +12.1% and Emerging +11.5%. Hygiene +7.2% (+4.3% organic). M&A guidance unchanged.

INTU Properties and Cale Street Investments/ Kuwait Investment Office announce 50/50 joint venture for INTU’s Derby shopping centre. Deal valued at £372m; 6.6% net initial yield.

Polymetal Q1 gold equivalent production +27% YoY; Silver -15%; Revenues +28% (Gold sales +41%, Silver -4%, Copper +38%); Net debt +12% but leverage -8%; On-track for 1.55m oz of gold equivalent production in 2019; Reiterates $600-650/oz cost guidance ($800-850/oz all in), contingent on FX; Free cash flow to be H2 weighted as usual.

Moneysupermarket Q1 revenues +19% (+12% excl. Decision Technologies). Divisionally, Insurance +3%, Money +9%, Home Services +70% (but will moderate). Strong first quarter. Outlook unchanged. Confirms £40m/ 7.46p special dividend.

Ratings agency Moody's cuts Next by one notch to Baa2 (outlook maintained stable); £250m 6-8yr debt bond issue gives headroom, but also creates structural subordination for any creditors.

Funding Circle Q1 revenues +40%, driven by rising loans under management (+44%) and originations (+23%). Returns across all geographies on a net basis expected up 5-8.5% in 2019. Reiterates guidance/expectations.

Smith & Nephew acquires Leaf Healthcare for an undisclosed price after a two-year partnership in which it acted as distributor for Leaf's monitoring system for patients susceptible to pressure ulcers.

PZ Cussons says expectations remain in line with guidance given in January (adj. pre-tax -13%). Segro to redeem £250m of 5.625% bonds due 2020 on 3 May.

Aveva says 9M trends continued into Q4; FY revenues grew low double digits, operating margins improved even with higher sales costs.

Inmarsat publishes scheme document for acquisition by Apax/Warburg Pincus/Canada Pension. De La Rue starts JV with Kenyan Government (60/40 split).

In focus today:


It’s PMI day in Europe (9am), with France and Germany reporting manufacturing, services and composite figures. Slight growth is expected for the Eurozone with Manufacturing rising to 47.9, albeit still in contraction. Services, on the other hand, is expected to post slight contraction to 53.2.


Manufacturing in Germany (8.30am) is projected at 45, still struggling after last month’s plunge. Just like the Eurozone, Services is expected to show a slight pullback to 55.1, albeit still well into growth territory.


UK Consumer stocks may get a boost from UK Retail Sales (9.30am) if they deliver on consumes expectations for an acceleration in growth to 4% from last month’s 3.8%. Similarly, across the pond, US Retail Sales (1.30pm) are expected to show growth of 2% YoY, even if the monthly figure shows a 0.2% decline.



The Mueller Report press conference could also spice things up in terms of US politics.

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