Uk stcoks

Fundamental Highlights

• Barclays is offering shareholders to buy one new share at 185 pence for every four owned. It 

is raising capital to meet tougher rules on leverage introduced by UK regulators.

• "I'm buying my rights, I'm bullish on Barclays ... Barclays has become a better and stronger 

institution," Diamond said on CNBC television on Friday.

• The news that the UK housing market has been enjoying something of a mini-boom in 2013 is 

most welcome for banks such as Barclays (LSE: BARC) (NYSE: BCS.US).

• Barclays offers exciting growth opportunities over the next year. Indeed, earnings per share 

are forecast to grow by 21% in 2014 alone, making Barclays a true growth stock in the short 

to medium term.

• shares currently offer excellent value for money. They trade on a price-to-earnings ratio of just 

8.5 -- well below the FTSE 100 on 15 and the wider banking sector on 17.

• So, excellent growth prospects, a sound financial footing and attractively valued shares make 

me optimistic about the outlook for shareholders in Barclays.

KEY EVENTS:

Oct 30, 2013

Barclays PLC Q3 2013 Interim Management Statement - 7:00am GMT - 

Oct 8, 2013

Wolters Kluwer NV at Barclays Roadshow 

Oct 7, 2013

Wolters Kluwer NV at Barclays Roadshow-Chicago 

• HSBC Holdings (LSE: HSBA) (NYSE: HBC.US) recently earned itself a remarkable 

compliment. Top UK fund manager Neil Woodford -- whose High Income fund delivered a 

1,830% return between 1988 and 2012 -- described it as "an investable asset"

• HSBC currently trades on a historic P/E of 15 and a 2013 forecast P/E of 11.5. The equivalent 

figures for the FTSE 100 are 17.4 and 14.2, so HSBC looks attractively priced against the 

wider index.

• In his article, Mr Woodford also mentioned that HSBC's sizeable exposure to Asia is a 

potential risk. Last year, 60% of HSBC's pre-tax profits came from Hong Kong and the Asia-

Pacific region, compared to just 21% in Europe.

KEY EVENTS:

Nov 4, 2013

HSBC Holdings plc Q3 2013 Interim Management Statement

 Wolters Kluwer NV at Barclays Roadshow-Chicago

Fundamental Highlights

• Rio Tinto (LSE: RIO) (NYSE: RIO.US) reported declining earnings in its recent half-year 

results. Underlying earnings per share (EPS) fell by 18%, with lower metal prices and a higher 

effective tax rate only partially being offset by record iron ore shipments and cost savings 

momentum.

• Rio Tinto's prospects for the following three reasons: 

Firstly, it offers a prospective yield of 4%. Although growth is crucial, dividends are still important so, 

looking to 2014 forecasts, a yield of 4% is above-average and is a very attractive additional string to 

Rio Tinto's bow. It also helps me to beat inflation and easily trumps the best savings account rates on 

offer.

Secondly, shares are extremely cheap, trading on a price-to-earnings (P/E) ratio of just 10.2. This 

compares very favourably to the FTSE 100 on 15 and to the basic materials industry group on 11.5.

Thirdly, Rio Tinto offers high growth forecasts, with EPS expected to increase by 18% in 2014. 

Combining this growth rate with the P/E ratio gives a price-to-earnings growth (PEG) ratio of just 0.57. 

This is extremely attractive and, in my view, shows that shares are a bargain.

KEY EVENTS:

Oct 15, 2013

Rio Tinto PLC Q3 2013 Operations Review

• Tesco has been losing ground rather than winning in the trench warfare of UK grocery market 

shares. The four middle-ground supermarkets have been squeezed by top-end Waitrose and 

bottom-end Aldi and Lidl, with only Sainsbury's improving.

• Tesco controls 30% of the market, nearly double its nearest competitor.

• Tesco hasn't been much of a growth share, and through the recent recession the price has 

been a bit erratic and, overall, is down a bit. But that 4% dividend per year, compounded over 

the long term, will have provided a steady overall return for shareholders.

• Warren Buffett is a big long-term fan of Tesco, and he's not too bad at the old investing lark.

KEY EVENTS:

Dec 4, 2013

Q3 2013/2014 Tesco Plc Interim Management Statement 

Oct 2, 2013

Interim 2013/2014 Tesco Plc. Earnings Releas

Fundamental Highlights

• Vodafone (LSE: VOD) (NASDAQ: VOD.US) is currently experiencing after all the hype from 

the sale of its 45% stake in Verizon Wireless to Verizon Communications.

• Vodafone remains a stock that I am bearish on for the following three reasons:

Firstly, I have doubts about its strategy. Selling the best part of the business doesn't make sense 

at the best of times, but giving the proceeds back to shareholders and pursuing acquisitions in less 

attractive markets makes the sale look like a strange move.

Secondly, earnings per share (EPS) growth is faltering, with the market forecasting just a 1% 

increase this year. This is less than the UK economy is expected to grow by.

Thirdly, Vodafone's yield may be relatively high at 5.1% but it masks the problems in the rest of 

the business. Therefore, I feel it is just a matter of time before the market is able to see beyond a 

generous yield to uncover the strategy shortcomings, with investor sentiment taking a hit should this 

take place.

KEY EVENTS:

Nov 12, 2013

Interim 2013 Vodafone Group PLC Earnings Release

Majors Cac, Dax, Ftse100

2. Indexes to watch:

The solitary advance (a fractional 0.12%) belongs to Japan’s Nikkei 225(NYSEARCA:EWJ). The 

two eurozone indexes, Germany’s DAXK(NYSEARCA:EWG) and France’s CAC 40, finished second 

and third with modest declines of 0.16% and 0.40%, respectively. At the other end of the list, India’s 

SENSEX (NYSEARCA:EPI) dropped 2.65%, essentially cancelling its 2.69% gain as top performer 

the previous week. The Shanghai Composite remains the only index on the watch list in bear territory 

— the traditional designation for a 20% decline from an interim high. The index is down 37.78% from 

its interim high of August 2009. At the other end, the DAXK again traded places with the CAC 40 for 

smallest percent off high, with the S&P 500 1.96% off its all-time high set the previous week.

• CAC40

S&P500

A Closer Look at the Last Four Weeks

 The tables below provide a concise overview of performance comparisons over the past four weeks 

for these eight major indexes. I’ve also included the average for each week so that we can evaluate 

the performance of a specific index relative to the overall mean and better understand weekly 

volatility. The colors for each index name help us visualize the comparative performance over time.

Name: Jim Londos

Senior Portfolio Manager

Dollar based currency Update

Fundamental Highlights

Name: Jim Londos

Senior Portfolio Manager

USDindex

• Australian data released earlier today came out basically in-line with expectations Later 

Monday, traders will be monitoring the release of the Chicago PMI and the Dallas Fed 

Manufacturing Index out of the US.

• AUD/USD presents a bearish tone which support the notion of further weakness, with a break 

below 0.9280 signaling further slides for today, and eyeing first 0.9240, where the pair will fill 

one of the two weekly opening gaps left in the last month

• The AUD/USD cross is rebounding right along with most of the other risk tells out there – i.e. 

stock futures, EUR/USD, EUR/JPY and AUD/JPY. So far, it appears that this may be just a 

corrective bounce in risk in general and AUD/USD specifically.

• The AUD/USD cross is rallying modestly off the lows on a general rebound in risk assets 

several hours into the new week.

KEY EVENTS:

• Traders will be monitoring the release of the Chicago PMI and the Dallas Fed Manufacturing 

Index out of the US.

Fundamental Highlights

• NZD/USD opened the week on bearish gap falling below the 0.8270 zone despite improved 

building permits results released in New Zealand.

• NZD/USD traders to focus on geo-politics and US data later Monday

• NZD/USD traders were faced with trading around the release of New Zealand Business 

Confidence at 01:00 GMT. Surprisingly – given the tone of things today and the recent trend 

in news from New Zealand – the data was better-than-expected.

• The NZD/USD is trading right at the same level as it was prior to the release of the better-

than-expected New Zealand Business Confidence.

KEY EVENTS:

• Later Monday, in addition to government concerns in Italy and the US, NZD/USD traders will 

be reacting to Chicago PMI out of the US.

Fundamental Highlights

• GBP/USD opened the week trading strong against the dollar after breaking immediate 

resistance at 1.6116 at runaway gap on US government shutdown risk.

• The pair is offered at 1.6162 ahead housing market data in the UK and oscillates between 

supports aligned at 1.6116 (September 17th highs), 1.6066 (September 20th highs) ahead 

of 1.5976 (September 18th highs) and the resistances set at 1.6163 (September 18th highs), 

1.62 (December 17th 2012 highs) followed by 1.6240 (December 20th 2012 lows).

• The pair has climbed .65% on the basis that US yields are down while BoE Governor Carney 

suggested that there was “no case” for more QE in the UK, pushing the GBP higher.

KEY EVENTS:

• In the next several hours traders will get to trade off of German retail sales, EU consumer 

prices and British mortgage approvals.

Fundamental Highlights

Senior Portfolio Manager

• Australian data released earlier today came out basically in-line with expectations Later 

Monday, traders will be monitoring the release of the Chicago PMI and the Dallas Fed 

Manufacturing Index out of the US.

• AUD/USD presents a bearish tone which support the notion of further weakness, with a break 

below 0.9280 signaling further slides for today, and eyeing first 0.9240, where the pair will fill 

one of the two weekly opening gaps left in the last month

• The AUD/USD cross is rebounding right along with most of the other risk tells out there – i.e. 

stock futures, EUR/USD, EUR/JPY and AUD/JPY. So far, it appears that this may be just a 

corrective bounce in risk in general and AUD/USD specifically.

• The AUD/USD cross is rallying modestly off the lows on a general rebound in risk assets 

several hours into the new week.

KEY EVENTS:

• Traders will be monitoring the release of the Chicago PMI and the Dallas Fed Manufacturing 

Index out of the US.

Fundamental Highlights

• NZD/USD opened the week on bearish gap falling below the 0.8270 zone despite improved 

building permits results released in New Zealand.

• NZD/USD traders to focus on geo-politics and US data later Monday

• NZD/USD traders were faced with trading around the release of New Zealand Business 

Confidence at 01:00 GMT. Surprisingly – given the tone of things today and the recent trend 

in news from New Zealand – the data was better-than-expected.

• The NZD/USD is trading right at the same level as it was prior to the release of the better-

than-expected New Zealand Business Confidence.

KEY EVENTS:

• Later Monday, in addition to government concerns in Italy and the US, NZD/USD traders will 

be reacting to Chicago PMI out of the US.

Fundamental Highlights

• USD/JPY traders are once again starting to give the Yen the edge in the battle of the safety 

currencies after a post-gap consolidation.

• USD/JPY traders pushed the cross in different directions for a while following the release of 

worse-than-expected Japanese industrial production numbers. In a short while, Japanese 

housing data will also be released.

• Due to the US potential government shutdown, high volatility is expected and rumors spread 

stating the yen may be the best trade this week as uncertainty will trigger market panic and 

rush buying of safe-haven currencies with a dumped dollar.

• Real government concerns in Italy and the last minute posturing going on in the US political 

arena have global investors sticking with the Yen as THE safe-haven currency heading into 

the new week.

• The USD/JPY has gapped lower on Washington-induced DXY weakness and an appetite for 

the perceived safety of the Yen.

KEY EVENTS:

Later today, the Chicago PMI will be released in the US.

FTSE 100 & S&P 500

FTSE 100

                             S&P 500

Other Idea's

At a glance: Political exchanges

The currently only steady factor is the permanent change on a day to day basis as markets are once more in the grip of political events, whether it is the aftermath of the German elections or the upcoming showdown in the US parliament concerning the budget. The latter seems to pressure the USD which has lost ground across the board yesterday. That said we keep a close eye on key-support between 80.053 and 79.58 (int. 76.4 %/weekly trend) in the USD Index as only a break below would open the door for a deeper USD setback. The same applies for EUR/USD and Cable where it would take breaks above the 1.3600 handle or above 1.6115 (minor 76.4 %) to support an extension of the latest USD decline. As long as these USD supports are not broken decisively though, we see the start window for a broader USD up-swing as open. A weekly close above 1.3600 would on the other hand favour a potential extension to 1.3923 (monthly Ichimoku-lagging), to monthly trend line resistance at 1.4041 and possibly to the 76.4 % retracement on higher scale at 1.4259. To get the USD out of the danger zone it would take breaks below pivotal support at 1.3452 in EUR/USD or below internal 38.2 % retracements on different scale at 1.5883 and at 1.5758 in Cable. Above the latter, an extension to the upper triangle resistance at 1.6325/37 (weekly.-monthly) can’t be excluded yet. No news on the JPY front where USD/JPY and JPY crosses traded in fairly tight ranges yesterday. The start window for a broader JPY recovery is therefore still open but in order to receive first evidence that the latter is indeed materialising it takes breaks below pivotal support at 132.16 in EUR/JPY, below 156.43/37 (pivot/minor 38.2 %) in GBP/JPYand below 97.64/61 (minor 61.8 %/daily trend) in USD/JPY. Above these key-supports, an extension to higher targets at 138.35/139.14 (Fib.-projection/2009 high) in EUR/JPY and at 162.30/163.11 (Fib.-projection/2009 high) in GBP/JPY can’t be excluded yet.

·         Short 2 units EUR/MXN from 17.4495 avg., targets 16.50/15.40, stop at 18.40

·         Long 1 unit CAD/JPY from 82.22, target 103.50, stop at 91.15 (2013 outlook trade)

EUR/USD daily – A range breakout between 1.3600 & 1.3452 is needed for directions

·         Having defended key-pivotal support at 1.3452 yesterday we still haven’t received any clarity whether this market is going to extend to the upside or whether it is just taking a break before breaking lower.

·         That said, it probably takes a break above the 1.3600 handle to put the odds in favor of a straight extension to 1.3923 (monthly Ichimoku-lagging), to 1.4041 or to 1.4259 (monthly trend/76.4 %) whereas a break below 1.3452 (pivot) would at least challenge key-support between 1.3218/10 (minor 76.4 %/daily trend) and 1.3170 (200 DMA).

GBP/USD daily – No confirmed top in place yet

·         The big picture remains blurry for the moment as a major game change would only be confirmed above 1.6337 (monthly triangle) and a top in place would only be indicated via a break below 1.5883 (minor 38.2 %).

·         That said and particularly as long as the latter is not taken out, we still see the possibility of extending the upside for a proper test of 1.6337 which would be indicated via a decisive hourly close above 1.6115 (i.e. above 1.6150). A break below 1.5883 would on the other hand have to be confirmed via a break below 1.5758 (int. 38.2 %).

EUR/GBP daily– A range breakout between 0.8354/52 & 0.8504 is needed for directions

·         Having exactly reached the projected target for a potential C-wave down at 0.8354 (C= A) the decision is due whether we have just seen an intermediate setback in an intact, long-term up-trend or whether we are dealing with a broader downtrend.

·         The latest bounce from 0.8355/54 (daily trend channel/C = A) did in every which case not surprise but in order to start favoring the bullish green scenario it would now take breaks above 0.8467 and 0.8504 (minor 38.2 %/pivot).

·         A failure to clear the latter and/or a break below 0.8355/54 would play in the hands of the bears (blue scenario) who would most likely not hesitate to push for an extension towards 0.8285 (50 %) and to 0.8219 (internal wave 3 projection). These would however only be interim targets on the way to a test of the lower T-junction at 0.8005 (int. 76.4 %).

EUR/MXN daily –The latest rebound looks to be a counter  trend rally only

·         The big picture in the monthly chart from the 2009 top down shows a huge triangle formation of which we believe the D-wave high has been marked at 17.8874 last month.

·         That said we expect the upside to be capped at 17.6903 (minor 76.4 %) and the E-wave down to its classical target at 16.4646 to unfold shortly.

·         For the latter to receive first support it would now take a break below 17.4774/4723 (pivot/minor 38.2 %) whereas only breaks below 17.3178 (minor 76.4 %) and below 17.2223 (pivot) would provide the final confirmation.

·         A decisive break above 17.6903 would on the other hand challenge monthly.-weekly trend line resistance at 18.0598/18.0714 if not the 76.4 % retracement on higher scale at 18.2175.

USD Dollar Majors and oil Weekly Update

usdindex

Dollar Frozen on S&P 500’s Longest Tumble in 16 Months

Activity for the Dow Jones FXCM Dollar Index – measured by the Average True Range – has dropped 

sharply from last week’s post-FOMC volatility swell. In fact, the benchmark currency is just off its 

lowest levels of activity in five months. This lack of performance may strike some as unusual given 

the S&P 500 has extended a five-day drop – its most consistent tumble since May of last year. Yet, 

as persistent as the slide for the benchmark of risk appetite has been, there is little conviction behind 

the move. We can measure that in both implied and realized volatility measures. The VIX Index (often 

referred to as the ‘fear’ gauge) has trended towards six year lows for some time. Yet the measure 

of actual or realized volatility has itself collapsed to similar lows this week. While a trend in a market 

index like the S&P 500 can run astray of fundamentals for an extended period due to stimulus and 

other factors, risk conditions can only remain submerged for only so long.

GBPUSD

British Pound Advances Despite BoE’s Yield Reassurance, Yield Drop

An improved yield forecast has been a key catalyst in the sterling’s recover over recent weeks and 

months. However, policy officials have done everything they can to curb speculation that an improved 

growth forecast and distaste for QE expansion would translate into earlier rate hikes. The Bank 

of England (BoE) has reiterated its vow to keep rates at their exceptionally low level until 2016. It 

seemed the central bank did the same with the Financial Policy Committee meeting minutes that 

were released this past session – even though that deviates somewhat from its focus. The report 

attempted to play down higher rates as a reaction to growth and Fed Taper fears. Nevertheless, yield 

forecasts are still seeing a hike in 2015 with a probability of 2014. That said, a lot of hawkishness 

has been priced into the sterling. Where the BoE may not be able to shake the market’s convictions, 

disappointing data could. The 10-year Gilt yield has recently dropped to its lowest level (2.75 percent) 

in a month. Further retracement may evolve into a serious selling point for a yield-hopeful currency.

GBP/USD daily – No confirmed top in place yet

·         The big picture remains blurry for the moment as a major game change would only be confirmed above 1.6337 (monthly triangle) and a top in place would only be indicated via a break below 1.5883 (minor 38.2 %).

·         That said and particularly as long as the latter is not taken out, we still see the possibility of extending the upside for a proper test of 1.6337 which would be indicated via a decisive hourly close above 1.6115 (i.e. above 1.6150). A break below 1.5883 would on the other hand have to be confirmed via a break below 1.5758 (int. 38.2 %).

EURUSD

Euro Unconvinced of Greece’s Assurances No Third Bailout Necessary

According to Greece’s Deputy Prime Minister (and Foreign Minister) Evangelos Venizelos, Greece 

will not need a third bailout. This has been a point of considerable speculation – though not active 

positioning – in the FX market as EU officials, Germany Finance Minister Scheauble and others have 

speculated such an outcome was essentially inevitable. Yet, in an interview with Reuters, Venizelos 

said the country could avoid asking for a third round of aid with better terms for its existing program 

and a return to the capital markets. This is exceptionally optimistic for a country that has proven 

consistently over-reaching with its forecasts. As it happens, another report made the wires quoting 

Troika sources that suggested officials were sceptical of Greece’s ability to hit a primary surplus – a 

prerequisite to altering terms on its bailout.

USDJPY

Japanese Yen Drops Sharply on Confirmation of Impending Stimulus

In the early Tokyo hours, the Japanese was flat-lining when the Nikkei 225 opened to a sharp 1.4 

percent tumble below 14,500 – a closely watched, even figure. This break leveraged the potential 

for an Asia-session risk shift that could generate momentum in an otherwise aimless market and in 

turn spark a sell off on the carry-backed yen crosses along the way. Yet, that drive was reversed 

abruptly a few hours into active trade as news roused speculators to optimism. A few headlines hit 

the newswires, but two stood out. According to the chief of the LDP tax panel, Prime Minister Abe will 

produce his stimulus plans with his tax policies on October 1. Add to this, a Kyodo report suggested 

the stimulus announcement would include plans to explore lower effective corporate tax rates to 

encourage growth. Both are encouraging, however, they are not particularly original. We have heard 

similar conjecture before. As such, yen crosses will struggle to rise on this news alone.

Oil 

US Oil at Risk of Major Bear Shift Should $102 Break

With Wednesday’s close, US oil has fallen for five consecutive trading days. That matches the longest 

series of losses for the commodity since May 2012. Unlike many other assets with a risk sensitivity, 

oil has made a concerted drive that can press for further trend development. Standing in the way of a 

full-scale bear trend is $102. This level is technically-heavy with a confluence of a multi-month range 

floor, 100-day moving average and other cues. If the fundamental backdrop were allowing a simple 

focus on the balanced risk backdrop, a ‘normalizing’ bounce would be in order. However, there is 

another line of premium that can still be worked off through supply-and-demand. In the past week, 

we have seen the Syrian crisis deflate and US-Iranian relations warm – easing Middle East supply 

disruption concerns. Meanwhile, DoE oil inventories reported the second biggest jump (2.635 million 

barrels) in three months while implied demand set an equivalent low (15.33 million barrels).

oil Zoom

USOIL

USOIL

USD MAJORS WEEKLY OUTLOOK

EURUSD

EUR/USD

Merkel’s third successive win boosted risk sentiment and therefore the single currency (while the greenback lost ground) but mostly, it seems that the re-emerging debt ceiling issue hurts again the dollar.The disappointing results from the manufacturing sectors in France, Germany and the bloc as a whole surprised investors on Monday morning, pushing the pair to the area of 1.3510 where seems to have found decent support so far. Short-term (2-year) Eurozone-US rate spreads remain within recent ranges, EUR/USD is likely to struggle to improve on the February high around 1.37. Spot looks to have overshot “fair value” based on spreads by a margin (two big figures or so) already. Either spot has to drop back or spreads need to contract more sharply to sustain the EUR rally. All eyes on Draghi's speech at 2pm so might see some choppy moves.

GBPUSD

GBP/USD
The pair looks set to remain under pressure in the upcoming sessions via the greenback, as much is happening across the pond after last week’s FOMC meeting. Key manufacturing gauges and significant Fedspeak will be in the spotlight today, amidst increasing chatter regarding the US debt ceiling. The UK current account deficit is still likely to be close to 4% of GDP in 2013 while the budget deficit will be around 7% of GDP according to the IMF. Structurally, a weaker exchange rate would help rebalance the economy while cushioning the impact of fiscal tightening. This trade-off between cyclical strength and structural weakness will likely be resolved by how successful the BoE's new forward guidance is in keeping interest rates low”.

AUDUSD

AUD/USD

We noted that an improvement in Chinese news-flow will probably help arrest the slide in economic growth expectations for the East Asian giant. China is Australia’s largest trading partner and a critical source of demand for the country’s pivotal mining sector. That meant that stabilization in China was likely to translate into an improved the outlook for Australian exports and the business cycle overall. This in turn would prompt a supportive shift in RBA monetary policy expectations and lay the groundwork for an Aussie recovery. The case for an upside scenario seemed all the more compelling against a backdrop of highly over-extended speculative net-short positioning and we proceeded to enter long AUD/USD after an attractive technical setup presented itself.

USDJPY

USD/JPY is heading dow nwards ahead of a new US political drama of “debt-ceiling”

While Fed’s Saint Louis Fed president Bullard, mentioned that the U.S. central bank might move next month to reduce stimulus spending (i.e. we could guess that the American dollar could move higher today), things are entirely different, it seems that the re-emerging debt ceiling issue hurts again the dollar. Funding for the US government’s daily operations expires on 30 Sep, with a government shut-down possible due mostly to bitter divisions within Republicans. In addition, it is plausible that there also harsh divisions between Republicans and Democrats as well, but what traders should keep mostly in mind is that the last time the issues of debt ceiling resurfaced (August,2011) it led markets to a massive risk-aversion environment.

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Kind regards and happy trading!

USDINDEX

EXPECTING ANOTHER FINIAL PUSH DOWN

AUDUSD

             Expecting the Aussie to Consolidate  over the next day or so before the next Push