Proactive Investors -
- FTSE 100 makes strong start to the week
- Oil price gains after Saudi production cut
- Mixed start expected on Wall Street
Mixed start expected in the US after strong gains Friday
US stocks are likely to open mixed as investors look ahead to the Federal Reserve’s upcoming interest rate decision on June 14 after an employment report on Friday painted a mixed picture of the US labor market.
Futures for the Dow Jones Industrial Average rose 0.1% in Monday pre-market trading, while those for the broader S&P 500 index were two points higher and contracts for the Nasdaq-100 declined 0.2%.
The main indices ended higher on Friday following the jobs report and after US Congress passed a bill to raise the country’s debt ceiling. The DJIA gained 2.1% to finish at 33,763 for its best session since January, while the S&P 500 rose 1.5% to 4,282 and the Nasdaq added 1.1% to 13,241.
“With the US debt-ceiling crisis averted, attention now turns to the interest rate outlook, which remains uncertain across major economies such as the US, Eurozone, and UK,” commented TickMill Group market analyst Patrick Munnelly.
“The upcoming monetary policy updates from the US Federal Reserve, European Central Bank (ECB), and Bank of England (BoE) scheduled for the 14th, 15th, and 22nd, respectively, will be closely watched by the markets," he said.
"Following a mixed US employment report on Friday, which showed higher-than-expected job growth but also an increase in the unemployment rate and a slight moderation in wage growth, the US interest rate outlook has become even more uncertain."
The services ISM reading for May, due out today, will provide another "timely update" on what is happening to activity ahead of the Fed’s policy announcement, Munnelly added, noting that it showed growth still running at a solid pace in April, albeit slower than in the first couple of months of the year.
TUI on the buiy list at Deutsche, shares rise
Tui AG (LON:TUIT) shares have jumped 1.5% after Deutsche Bank (ETR:DBKGn) put the travel operator on its buy list.
The German investment bank upgraded its rating to buy from hold with an 843p per share price target.
Analyst Andre Juillard thinks the period of decline from the the Covid crisis finally seems to be over, with the group has been witnessing a strong operating recovery throughout the past few months – which is expected to continue.
After a decent first half, Easter weekend was especially strong, with seemingly solid summer bookings, Juillard pointed out.
“Therefore, we expect TUI to beat its pre-Covid revenues in FY23e, supported by almost all business lines”, the analyst continued.
Considering the current trend in the sector in general, Deutsche has slightly increased operating expectations and come out 3- 4% higher than initial top-line expectations.
EBIT expectations for financial 2023 are more or less unchanged but up by 2-3% for the following two years.
Juillard said the new expectations are 2-4% higher than consensus, in general.
The FTSE is holding steady, up 36 points at 7,644.
CVC enters race for Center Parcs - reports
CVC Capital Partners (LON:CVCG) has entered the race to buy Center Parcs, the popular chain of family holiday villages, according to Sky.
Sky reported that the private equity backer of the Six Nations rugby championship is among the suitors of Center Parcs and is expected to table an indicative proposal to buy the six sites in the UK and Ireland ahead of a bid deadline later this month.
City sources said that a number of infrastructure funds, including French-based Antin, were also exploring whether to make offers for the company.
If CVC does table a bid, it would be through its long-term Strategic Opportunities fund, the sources added.
Industry sources suggest Centre Parcs could fetch £4bn to £5bn.
Center Parcs has been owned by Brookfield Property Partners, the Canadian property giant, since 2015.
City of London still bringing in the money
Despite concerns that London's standing in financial markets may be on the wane, the City of London is still managing to attract overseas investment.
The UK remains Europe’s most attractive destination for financial services investment, attracting a quarter of new projects last year, according to new data from EY.
EY reported that the UK attracted 76 financial services projects in 2022 – an increase of 13 projects from 2021. That helped Britain extend its lead over France, which secured 45 projects last year, a drop of 15.
Overall, there were 292 financial services foreign direct investment (FDI) projects across Europe last year, up 5%.
Germany and Spain were tied third with 31 projects each.
Anna Anthony, UK financial services managing partner at EY, commented: "The strength of the UK financial market has meant that – even through challenging times – investors see it as the most attractive European financial services market."
"Our research shows that investors recognise the strength, gold-standard governance and resilience of the UK’s financial system and see it as the preferred destination for growth, innovation and access to top talent."