Monday 9 December
– Senior Managers and Certification Regime begins for solo regulated firms
– Schroder European Real Estate Investment Trust final results
Tuesday 10 December
– UK manufacturing and construction output and industrial production data
– Chinese inflation figures
– Ashtead first half results
AJ Bell investment director Russ Mould said: “Shares in Ashtead have soared over the past year, despite concerns over a US and global economic slowdown, helped perhaps by hopes that US interest rate cuts and a trade deal between Washington and Beijing will provide fresh impetus in 2020.”
Wednesday 11 December
– US Federal Open Market Committee (FOMC) meeting
Canaccord Genuity Wealth Management head of MPS and passive Jordan Sriharan said the Fed has been very clear that the three rate cuts we have seen this year are all that investors should expect, describing the recent short burst of cuts as an “insurance policy”.
“The Fed is not expected to lower rates at this week’s meeting but a huge amount of attention will be focused on messaging in the post-meeting press conference. The Fed has used a lot of spare ammunition in pulling the market this far up in 2019, illustrated by the swift rebound in equity markets following last year’s turmoil. It will be a very difficult balancing act to keep investors happy going into 2020.”
– US inflation (CPI)
Sriharan said inflation in the US has disappointed expectations for the better part of the last decade and there’s no obvious sign of this changing soon. Despite this, the immediate picture is relatively unclear.
“The Personal Consumption Expenditure Index (PCE) is a measure of inflation utilised by the Federal Reserve, which has been on or below 2% in nearly 90% of observations since 2012 when this target was adopted. On the other hand, the Cleveland Fed’s inflation measure recently moved above 3%. The more widely followed US CPI measure has been in the 1.5% to 2% corridor for much of 2019.
“The September reading was 1.8% and surveys suggest that October’s release will hit 2%. Anything higher might push government bond prices materially lower after their spectacular run in 2019.”
– British American Tobacco trading statement
Thursday 12 December
– UK General Election
Mould noted the opinion polls are giving the Conservatives a fairly consistent lead and in theory, one big enough to give them a majority in Parliament.
“On the basis of the results of the 2015 and 2017 polls, which threw up coalition governments, it might not pay to take too much for granted but the calm reaction of the UK’s financial markets so far suggests that they are indeed pricing in a victory for Prime Minister Boris Johnson, rather than another coalition or a triumph for Labour’s Jeremy Corbyn.”
Mould said history suggests the FTSE All-Share has performed, on average, better under the Conservatives than Labour. “Four of the benchmark’s five best performances by prime minister’s tenure have come under Tory PMs and four of the five worst under Labour, even if wider economic, market and global events will have also exerted an influence at the time,” he said.
– European Central Bank meeting
Sriharan said Christine Lagarde’s inaugural meeting as the new ECB president will be a keenly watched event. He noted she may be more vocal on the need for European governments to adopt a more aggressive fiscal policy.
“In appointing a more politically-savvy figure in Lagarde, the European Council knew that her ability to coerce heads of euro member states to work in coordination would be vital in this new era of monetary policy making for the ECB,” he said. “Keep an ear out for any mention of green – or ESG – focused initiatives, there is clear momentum in this area and it would prove significant if she chose to raise the topic in this particular forum.”
– Polar Capital Technology Trust interim results
Friday 13 December
– FCA Investment Platforms Market Study policy statement
– Trading statement from Balfour Beatty
– US retail sales data
