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Currency winners and losers after Brexit
The second quarter has now closed and after some fairly volatile currency movements in the closing week, it is a good point to take stock of the potential impacts to company forecasts. As markets should be already aware, Sterling reporting groups will benefit from a not insignificant fx translation tailwind from the Q3 on […]
Continue readingRemember ‘Black Wednesday’? 3 stocks added to the GrowthRater model portfolio
‘Black Wednesday’ may have seemed pretty bleak at the time, but the over 12% decline in Sterling that accompanied our ejection from the ERM provided the stimulus to what subsequently became a boom that lasted to 2008. Looking at the carnage in the equity and fx markets immediately following the Brexit referendum result last Friday […]
Continue readingAuf Wiedersehen – pet (Brexit)
Amongst all the carnage of Brexit, something to lighten the mood. Rowan Atkinson singing the European Anthem. Like the real thing, it starts off well (once in the right key), but then descends into chaos.
Continue readingBrexit countdown – modelling a ‘what if’ using ITV as an example
Only four trading days to go before the Brexit vote, so if you believe the current polls are more accurate than for the Scottish referendum, you are probably already underweight or short Sterling, UK Banks and groups exposed to UK domestic consumption (advertising, retail, hotels & restaurants, property and even some German auto manufacturers etc) […]
Continue readingAnother US non-farm payroll report and probably another deferral of the interest rate increase
The Fed it seems is off the hook for an interest rate increase for at least another month after the May non-farm payroll number. At +38k of net additions for the month (+25k for private sector) and with March and April figures also restated down by -59k, this is hardly the escape velocity of a […]
Continue readingLooking beyond central bank interference in equity valuations
Behind the incessant background noise of Yellen’s ‘will she won’t she raise rates’ discussion, the closing of the Q1 results season provides a good opportunity to take stock of the broader earnings and more importantly OpFCF yield basis on which equities are priced. Relative to expectations at the start of the year, there have been […]
Continue readingAnother non-farm payroll and another missed opportunity to normalise rates
“Silence”. That is what I hear after yesterday’s March US non-farm payroll figures. Even a few months ago, these data points, while flawed were eagerly awaited as harbingers of revisions in US Fed monetary policy. Not any more. After February’s decision to hold rates in what looks like a clumsy attempt to goose oil prices […]
Continue readingYellen chickens out – again!
So much for the Yellen’s promise to be “data dependent” in its interest rate policy! With core inflation above the Fed’s forecast range, unemployment well within its longer term target range and private sector job and average wage growth offering no rational support for maintaining the near zero interest rate environment, Yellen’s decision to hold […]
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