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Stocks

Edison - UK Sparks: Marks & Spencer Profits Fall 9.9%


Marks & Spencer has announced a 9.9% fall in full-year pre-tax profits before adjusting items to £523m on revenues down 3% at £10.4bn. Adjusting items of £439m include £222m for the “acceleration and extension” of the company’s UK store closure programme. Statutory pre-tax profits increased by 27% to £84m, while a final dividend of 7.1p reduces the total dividend by 26% to 13.9p. Separately, the group announced a £571m rights issue at 185p per share to fund its new joint venture with Ocado Group. Chief executive Steve Rowe says: “Whilst there are green shoots, we have not been consistent in our delivery in a number of areas of the business.  M&S is changing faster than at any time in my career.” He adds that the company remains “on track” with its transformation programme.

Royal Mail has revealed a fall in full-year adjusted pre-tax profits from £565m to £398m on revenues up from £10.2bn to £10.6bn. Statutory pre-tax profits increased from £212m to £241m. The results announcement includes “ambitions” to deliver an adjusted operating profit margin of more than 4% in 2021-22, increasing to more than 5% in 2023-24. The group says it will invest £1.8bn in its UK postal business over the next five years.

As part of the “turnaround and grow” programme, the dividend will be “rebased” and the dividend policy changed. The 2018-19 total dividend increases by 1p to 25p. However, from 2019-20, the policy will be for a full year “dividend underpin” of 15p, which may be supplemented by additional payouts in years with substantial excess cashflow.

Energy group SSE suffered a 38% fall in full-year adjusted pre-tax profits to £726m after a £285m operating loss at its energy trading business. The group warns that the energy sector is under a “huge degree of uncertainty,” amidst Labour Party  plans to nationalise utilities. Separately, it has named Katie Bickerstaffe as executive chair of SSE Energy Services, with a mandate to “deliver a future outside the SSE group”.

Aerospace and defence group Babcock International has unveiled a slight rise in full-year “headline profits” from £513m to £518m on revenues down from £5.36bn to £5.16bn.

Finally, Trainline Investments Holdings, the internet travel tickets company, has confirmed plans for a stock market flotation. Chief executive Clare Gilmartin says: “Trainline is the clear leader in the online rail ticket market in the United Kingdom and we believe that we are therefore well positioned to capitalise on mobile and e-ticketing, which are changing the way consumers plan and purchase travel.”

Andrew Cave

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Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.  Visit www.edisoninvestmentresearch.com for more information.

Edison is authorised and regulated by the Financial Conduct Authority. Our research is a marketing communication as defined by the FCA, this communication only contains information that is an acceptable minor non-monetary benefit as defined under COBS2.3A19(5).

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Edison and is being posted with Edison’s permission. The views expressed in this material are solely those of the author and/or Edison and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Stocks

Benzinga - A Peek Into The Markets: US Stock Futures Point To A Higher Open - By Lisa Levin


Pre-open movers

U.S. stock futures traded higher in early pre-market trade. Data on existing home sales for April will be released at 10:00 a.m. ET. Atlanta Federal Reserve Bank President Raphael Bostic is set to speak in Amelia Island, Florida at 7:50 a.m. ET, while Chicago Federal Reserve Bank President Charles Evans will speak at 10:45 a.m. ET. Boston Federal Reserve Bank President Eric Rosengren is set to speak in New York at 12:00 p.m. ET.

 

Futures for the Dow Jones Industrial Average climbed 129 points to 25,825.00, while the Standard & Poor’s 500 index futures rose 15.6 points to 2,859.50. Futures for the Nasdaq 100 index rose 61.25 points to 7,452.75.

Oil prices traded higher as Brent crude futures rose 0.5 percent to trade at $72.32 per barrel, while US WTI crude futures rose 0.7 percent to trade at $63.52 a barrel.

 

A Peek Into Global Markets

European markets were higher today, with the Spanish Ibex Index rising 0.4 percent, STOXX Europe 600 Index climbed 0.6 percent and German DAX 30 index gained 1 percent. The UK's FTSE index was trading higher by 0.7 percent, while French CAC 40 Index rose 0.6 percent.

In Asian markets, Japan’s Nikkei Stock Average fell 0.14 percent, Hong Kong’s Hang Seng Index dropped 0.47 percent, China’s Shanghai Composite Index rose 1.23 percent and India’s BSE Sensex slipped 0.97 percent.

 

Broker Recommendation

Analysts at Bernstein upgraded Kroger Co (KR) from Market Perform to Outperform.

Kroger shares rose 1.7 percent to $24.48 in pre-market trading.

 

Breaking News

  • Home Depot Inc (HD) reported better-than-expected earnings for its first quarter.
  • Nordson Corporation (NDSN) reported weaker-than-expected results for its second quarter.
  • Dycom Industries, Inc. (DY) reported upbeat earnings for its first quarter.
  • Crane Co. (CR) reported a $45 per share cash bid for CIRCOR International, Inc. (CIR).

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© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Benzinga is a fast-growing financial media outlet that empowers investors with market-moving content. The site also manages Benzinga Pro, a streaming platform with real-time headlines, data and actionable alerts. Sign up for a free trial and profit with faster news now.

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Benzinga and is being posted with Benzinga's permission. The views expressed in this material are solely those of the author and/or Benzinga and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Stocks

Singapore Exchange - Performance Highlights of Fixed Income ETFs


  • 10-Year US Treasury yields declined from 2.70% at the end of 2018, to 2.40% at present. With more normalised interest rates in the United States and the region compared to past years, more traditional rotations between fixed income and equities have been observed recently.
     
  • Asia market fixed income ETF produced solid returns in the past year with the iShares J.P.Morgan USD Asia Credit Bond ETF achieving + 10.4% in total returns over 12-months. The strong performance in the Asian bond market was driven by a pause in Fed’s interest rate hike and China bond inclusion into Bloomberg Barclays Global Aggregate Bond Index.
     
  • ABF Singapore Bond Index Fund ETF exceeds S$800million in fund size and provided investors with + 4.7%  12-months total return.  AAA-rated Singapore bonds remains an attractive safe haven asset to investors during market distress.

Rotation into fixed income has seen the yields on 10-Year US Treasury yields declined from 2.70% at the end of 2018, to 2.40% at present. While the Fed Reserve’s patient view on interest rates in the year thus far has contributed to the lower yields, modest declines in global equities over the past two weeks have corresponded with converse gains in US Treasuries.  With more normalised interest rates in the United States and the region compared to past years, more traditional rotations between fixed income and equities have been observed recently. This has also extended to Exchange Traded Funds (“ETFs”) that track fixed income markets.

Asia market fixed income ETFs produced solid returns over past 12-months

There are five fixed income ETFs listed on SGX that seek to replicate major bond market indices return across Asia and Singapore markets. Total fund size across the fixed income ETFs recorded S$1.4 billion in April 2019. Fixed income ETFs are a type of listed fund designed to track the performance of a specific bond market index.

iShares J.P.Morgan USD Asia Credit Bond recorded 12-month return of 8.5% for its USD counter (N6M) and 10.4% for its SGD counter (QL2) while iShares Barclays USD Asia High Yield Bond recorded 12-month return of 7.1% for its USD counter (O9P) and 9.7% for its SGD counter (QL3).

 

The strong performance of Asian bond markets is partly driven by investors looking beyond the U.S. for opportunities amid a pause in the Fed’s interest rate hike. The inclusion of China bonds into the Bloomberg Barclays Global Aggregate Bond Index has also contributed to the demand for Asian bonds by global investors. iShares Barclays USD Asia High Yield Bond has over 60% allocation into China bond market.

 

iShares J.P.Morgan USD Asia Credit Bond offers investors diversified exposure to debt instruments issued by sovereigns, quasi-sovereigns and corporates in Asia ex Japan region with over 75% of its underlying debt instruments rated BBB and above while iShares J.P.Morgan USD Asia Credit Bond offer investors diversified exposure to high yield bonds issued by governments and corporates in Asia ex Japan region.

 

The difference in return between the SGD and USD counter is due to fluctuation of exchange rate between the two currencies. Dual currency trading is available for selected securities counters, offering investors an option to trade in two different currencies (e.g. USD and SGD), for a listed security. Investors will know the exact traded price in the respective currency when they trade the dual counter directly. Click here for more information.

 

ABF Singapore Bond Index Fund ETF exceeds S$800million in fund size and provided investors with + 4.7% 12-months total return

 

ABF Singapore Bond Index Fund ETF (stock code: A35) that tracks the Singapore Government and quasi-Singapore government entities AAA-rated bonds has grown its asset size from S$322M at the end of 2011 to S$802M in April 2019.

 

 

Over the past 12 months, ABF Singapore Bond Index Fund ETF recorded total return of 4.7% while its 5-year return annualized at 2.2%. Its underlying iBoxx ABF Singapore Bond Index generally perform well during periods of difficult market conditions. Due to its AAA credit rating and the strength of the Singapore Dollar, Singapore government bonds are perceived as a safe haven asset during market distress.

Investing in ETFs

ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets.

Each ETF gives investors access to the performance of the asset that comprises the underlying index. Investing in the ETF is also less costly if one was to build a similar portfolio by buying the individual stocks. It also provides exposure to international markets and asset classes that may be inaccessible to individual investors.

Investors can also invest in the STI ETFs using a Regular Shares Saving Plan (RSS). Click here to find out more.

To find out more about ETFs, visit www.sgx.com/etf

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Originally Posted on May 17, 2019

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Singapore Exchange and is being posted with Singapore Exchange’s permission. The views expressed in this material are solely those of the author and/or Singapore Exchange and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Stocks

Edison - UK Sparks: Tesco Pulls Out Of Mortgage Market


Tesco has withdrawn from mortgage lending amid increasing competition and tough market conditions. The supermarkets group says in a statement that Tesco Bank had ended all new mortgage lending and is looking to sell its existing portfolio of home loans. The business serves 23,000 mortgage customers with total lending balances of £3.7bn. Tesco Bank chief executive Gerry Mallon says “challenging market conditions” have “limited profitable growth opportunities” in the mortgage business in recent years.

WHSmith chief executive Steve Clarke is to step down at the end of October after six years in the job and 15 years with the company. Carl Cowling, managing director of the group’s high street business, is to succeed Mr Clarke as chief executive.

Separately, the retailer has issued a trading statement showing a 15% rise in sales for the 11 weeks to March 1, boosted by its acquisition in October of electrical retailer Inmotion and new outlets opening at airports and hospitals. The group’s travel business saw like-for-like sales increase by 3%, while sales in the high street retail division fell by 1%.

Water group Severn Trent has reported a 6.8% rise in full-year pre-tax profits to £563m on revenues 4.2% higher at £1.78bn. Underlying profits increased by 6.3% to £574m. Distribution company Electrocomponents saw full-year pre-tax profits advance by 15.8% to £195m on revenues up 8.3% at £1.88bn.

Entertainment One, the films and television company behind Peppa Pig cartoons, has reported a 20% increase in full-year adjusted pre-tax profits to £156m. Statutory pre-tax profits fell from £64.9m to £36.8m after £68m of exceptional charges. Revenues dropped from £1.03bn to £941m, partly due to changes in the group’s films strategy.

Finally, housebuilding, regeneration and construction group Galliford Try has shed 350 UK jobs in its construction operations as it focuses on its core business of building, water and highways. The move will cause a writedown of about £40m in the full-year accounts.

Andrew Cave

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Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.  Visit www.edisoninvestmentresearch.com for more information.

Edison is authorised and regulated by the Financial Conduct Authority. Our research is a marketing communication as defined by the FCA, this communication only contains information that is an acceptable minor non-monetary benefit as defined under COBS2.3A19(5).

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Edison and is being posted with Edison’s permission. The views expressed in this material are solely those of the author and/or Edison and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


24011




Stocks

Bullseye Brief - Trader Talk


Cleaning House 

This week I stopped out three losing positions in companies I really like, and it was hard… kinda like breaking up. True, ego is inevitably part of the equation and I hate being wrong, but in this case all three stocks were trading at single digit P/Es, and I really hate walking away from low valuation. The problem is that cheap stocks can always get cheaper… the classic value trap… as opposed to catalyst-driven companies with runway for growth. I love finding businesses changing how we operate, interact and evolve. As a firm believer in the transformative impact of American Ingenuity, this is where I’m concentrating my firepower. I hope the next three stocks I sell are great growth picks accelerating through price targets. Selling a winner isn’t a break-up, it’s a Graduation.  

 

Our Week Ahead 

 

 

Monday  

  • No Change - Four Federal Reserve Governors make speeches around the country… “We’re not budging.”
  • Asian Data Dump - Unemployment, GDP and export data from Hong Kong, Japan and Taiwan.
  • Call the Duke Brothers - The EU issues is monthly crops report.
  • Earnings - None

 

Tuesday

  • Adult in the Room - BoE Governor Mark Carney address Parliament on current economic conditions in the UK.
  • No Joke - Spain allows five jailed Catalan separatists to be sworn in as new members of Parliament.
  • No Bid - Notoriously volatile home sales are expected to rise 2.7% (vs -4.9% in March and +11.2% in February).
  • Earnings - AZO, HD, JWN, KSS, TJX, TOL, URBN

 

Wednesday

  • What’d They Say? - FOMC minutes are expected to confirm the Fed has no intention of doing anything. Ever.
  • Full Court Press - Five more speeches from Fed Governors… that’s nine this week.
  • Tariffs Shmariff - US-based CB Richard Ellis holds its annual real estate conference in Shanghai.
  • Earnings - ADI, LB, LOW, NTAP, SNPS, TGT

 

Thursday

  • Election #1 - The EU holds Parliamentary elections.
  • Election #2 - India votes on whether to re-elect PM Narendra Modi to a second term.
  • But Wait - Three more Fed speeches… now we are at 12.
  • When it Rains - It Pours… NOAA issues its Atlantic Hurricane forecast for the upcoming season.
  • Earnings - BBY, HPQ

 

Friday

  • Steady On - US PMI data is likely to show services and manufacturing output held steady from April to May
  • 30 Yrs - Democracy activists march in Hong Kong on the 30th anniversary of the Tiananmen Square massacre.
  • Early Close - Bonds stop trading at 2pm ahead of the Memorial Day Holiday. Stocks close at the regular time (4pm).
  • Earnings - None

 

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The author holds long positions in ALB,AMLP,BABA,MO,AMAT,APTV,AVEO,BAC,OZK,BWA,CVNA,FXI,CMTA,CVS,DE,FB,FOX,F,FTAI,FCX,3606 HK, IBKR, DXJ,GDXJ,LNR CN,MSI,NOK,OBSV,QRVO,KRE,CRM, 005930 KS,SFTBY,TDOC,TOCA,TIP,WIW,TLT short, UNH,WB,WTW,ZYNE

Bullseye publishes three new, actionable stock ideas every two weeks. On the off-weeks there’s a Sunday night Roadmap for the Week Ahead and Wednesday podcast.

Founder & Author Adam Johnson traded equities and oil for 20 years at Merrill Lynch, Louis Dreyfus and ING. He also anchored two shows daily at Bloomberg Television during the financial crisis.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Bullseye and is being posted with Bullseye’s permission. The views expressed in this material are solely those of Bullseye, and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. 


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The material (including articles and commentary) provided on IB Traders' Insight is offered for informational purposes only. The posted material is NOT a recommendation by Interactive Brokers (IB) that you or your clients should contract for the services of or invest with any of the independent advisors or hedge funds or others who may post on IB Traders' Insight or invest with any advisors or hedge funds. The advisors, hedge funds and other analysts who may post on IB Traders' Insight are independent of IB and IB does not make any representations or warranties concerning the past or future performance of these advisors, hedge funds and others or the accuracy of the information they provide. Interactive Brokers does not conduct a "suitability review" to make sure the trading of any advisor or hedge fund or other party is suitable for you.

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