This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Throughout June and July the markets were entranced almost exclusively by Greece. Evidently there’ll be no Grexit this time round, although snap elections could come at any time. Nonetheless, markets have largely moved on to other drivers – notably a slowing China and the prospect of a possible first US interest rate hike in September.
The Chinese government’s desperate attempts to kick start an economic rebound in the world’s number one consumer of commodities has put immense pressure on raw materials producers, notably the UK miners. The fact is that affected companies need to adapt to a new environment. Which of these traditional market giants will leverage today’s high technology and big data resources first to cut costs and weather the storm?
Companies have again (and continue to do so through August) been updating us on their recent performance. Share prices are reacting, as they always do, with bigger than expected moves both up and down based on the sales and profits growth reported. What’s more, the outlook can often be more important than the reported figures, as was the case with Apple (AAPL) in July when $50bn was wiped of its market cap.
UK Banks have been in the spotlight with provisions made for yet more regulatory wrist slapping (will they ever be free of it?) while the Government is busy selling off its stakes in Lloyds (LLOY) and RBS (RBS). We’re also starting to see high valuations and increased competition in the tech sector – what does this mean for chip designer ARM Holdings (ARM), which licences its blueprints to most of the world’s smartphone, tablet and PC manufacturers?
There’s never been a better time to ride short term volatility around results, but we’re also excited to see what will emerge from the other side of challenging macro–economic times. Are sinking oil prices finally starting to bite the oil majors? Will they benefit the airlines?
Are we due some difficult yet gutsy decision-making from the UK Index miners? Are UK defensives set to become more volatile? Read on for our stock-specific musings on all these questions and more.
Top picks for the quarter include:
ARM Holdings, Barclays, BP, BT, GlaxoSmithKline, ITV,
International Consolidated Airlines, Lloyds Banking Group,
Rio Tinto & Vodafone.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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