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Stocks

Edison - UK Sparks: Next Unveils Sales Growth of 3.8%


Next has done it again, outperforming chief executive Lord Woodson’s cautious forecasts to unveil interim revenue growth of 3.8% to £1.99bn and up its expectations for full-year pre-tax profits by £10m to £727m – a fraction above last year’s performance.

Pre-tax profits increased by just 0.5% to £311m in the six months but Next survived the turmoil in the High Street, with a 6.9% fall in retail store sales offset by a 16.8% improvement online.

Profits in the stores fell by 23% to £73.2m but online profits increased 21.2% to £163m.

Total first-half full-price sales were up 4.5% on the same period of last year - ahead of the 1% guidance given in January and the 2.2% proffered in May.

In August, the retailer said there was a high risk that the sales gained in July would be offset by losses in August.

As it turned out, however, Next did not experience any material loss of sales in August or early September.

Wolfson remains cautious, saying the UK retail is still “volatile” and subject to “powerful structural and cyclical changes”.

Many of these headwinds have not abated, he adds, saying that the over-performance in the first half was flattered by the unusually warm summer and that sales in the company’s stores, which now account for just under half of its turnover, continue to be “challenging”.

White smoke at British American Tobacco, which has announced its next chief executive in the shape of 54-year-old Jack Bowles.

The company’s chief operating officer is its choice to succeed Nicandro Durante, who announced earlier this month that he will retire next April.

Bowles, who has been at BAT since 2004, will become chief executive designate on November  and join the board on in January.

Chairman Richard Burrows says Bowles is an “experienced and dynamic successor” who has demonstrated “excellent strategic leadership; growing businesses, driving productivity improvements and building strong management teams” throughout his career at BAT,

Bowles says he takes the job at an “exciting time for BAT with “great opportunities” to accelerate its transformation into a “stronger multi category tobacco and nicotine products company.”

McCarthy & Stone, the retirement home developer which warned in June that full-year pre-tax profits would be lower than expected, has announced John Tonkiss as its permanent chief executive.

Tonkiss moved up from chief operating officer to interim chief executive after Clive Fenton stood down following the profit warning.

The company has also announced a “business transformation strategy,” setting out a plan to focus on cost-cutting, looking to save £40m a year by 2021.

It says it will produce about 2,100 new homes a year, while looking to improve margins, with return on capital employed set to be greater than 15% by 2021 and more than 20% by 2023.

Soft drinks group AG Barr has ridden the controversy over the sugar reduction in its famous Irn Bru to post a 4% increase in interim pre-tax profits to £18.2m on revenues 5.5% higher at £137m.

And banking, securities trading and asset management group Close Brothers Group has reported a 4% rise in full-year adjusted operating profits to £279m.

The company’s loan book grew by 6.6% to £7.3bn, while its market-making business Winterflood brought in flat operating profits of £28.1m.

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.


20542




Macro

Eurex: China Laments Insincerity Of U.S. In Trade Talks


Morning Briefing September 25th 2018


Tuesday data calendar commences at 0600GMT with the German construction orders and wholesale prices. Previously, construction orders declined 4.3% m/m and wholesale prices were flat on the month and up 3.5% on a y/y basis.

At 0645GMT is the business climate indicator, manufacturing sentiment and services sentiment in France are due for release. Previous readings were 105, 110 and 104 respectively. Next up at 0700GMT is the producer price index in Spain. The prior m/m and y/y growth rates were 0.4% and 4.6% respectively.

ECB Executive Board member Peter Praet speaks in London at 0810GMT and 1330GMT.

The US index of consumer confidence is expected to fall back to a reading of 131.7 in September after surging further in August. Stable gas prices and rising stocks prices are positive factors for another gain. The Michigan Sentiment Index surged to 100.8 in early-September from 96.2 in August.

The ECB have been busy Tuesday with speeches and at 1440GMT, ECB Executive Board member Benoit Coeure speaks in Frankfurt, Germany. He also speaks again in Frankfurt at 1600GMT.

Global Economic Trading Calendar


Markets


US TSYS: It has been a relatively headline light session, with Hong Kong observing a market holiday. T-Notes have softened a touch, with the contract testing Monday's lows at writing. The only headline of note has come from China's Vice Commerce Minister who suggested that China is open to talks with the U.S. re: trade, although the remainder of his address maintained the broader themes of recent policymaker rhetoric. - The belly of the cash curve has experienced some modest underperformance, with conventional 5-Year & 2-Year FRN supply due later today. This comes on the heels of a 2-Year auction which saw the cover ratio slide, as the auction tailed by 0.4bp. Dealer participation ticked higher, moving above the recent auction average.

JGBS: JGB futures finished the morning session flirting with Friday's session low (150.00), after a brief look below. A break would open up a move to the August 03 low (149.95), with bears looking to the recent cycle low (149.75). - There has been little in the way of headline flow to drag the space lower, with the minutes from the BOJ's July meeting & the latest BOJ Rinban operations yielding no surprises, so the move is probably a function of the concession observed in the longer end of the cash curve ahead of tomorrow's 40-Year supply. There is perhaps an element of catch up to the global bond space on the back of the long weekend as well. - The BOJ left the size of its Rinban operations unchanged today, with the offer to cover ratios available below: - 5-10 Year: 1.96 (prev. 2.50) - JGBis: 5.89 (prev. 5.02)

AUSSIE BONDS: It has been a relatively limited start for the space, although outright Bond futures have made fresh lows after they tracked global paper lower on SYCOM, aided by comments from ECB President Draghi. - The domestic curve has steepened a touch as the long end underperforms, with 10-Year yields hitting the highest level observed since June, allowing the domestic 3-/10-Year yield differential to trade at ~61.5bp last, back from the early highs, while the AU/U.S. 10-Year yield spread has come back in to ~-34.5bp. XMZ8 has registered a contract low on the move. - 3-Month BBSW fixed some 0.9bp higher today, with funding markets generating interest heading into quarter end. The Bill strip last deals unchanged to 4 ticks lower. - Traders have spoken about a ~10.5K buyer of IBF9 in the overnight session. Most traders have suggested that this is merely a hedge, but some traders have suggested that this is a cheap play on the possibility of the RBA delivering a rate cut in December.

STOCKS: The Nikkei 225 was supported by the softer JPY which allowed the index to buck the broader trend on the back of the elongated holiday weekend, adding 0.2% in the morning session. - Hong Kong was closed for a market holiday, dampening liquidity in the region. - The CSI 300 fell afoul of the negative from Wall St. & the latest barbs from the U.S. trade war as the market returned from an extended weekend. Traders also highlighted property developers, which came under pressure on the back of reports that China is discussing a plan to end the pre-sale system which has been a critical funding source for the space. - Wall St.'s negative lead also weighed on the ASX 200, which shed 0.1%, in spite of a strong showing for the energy sector, as financial and consumer related stocks led the index lower.

OIL: Oil held firm early Tuesday, consolidating Monday's gains which came as OPEC failed to introduce fresh production quotas at the OPEC+ JMMC meeting held in Algiers over the weekend.

FOREX: Modest USD strength against the remaining majors was apparent overnight, during a session underscored by diminished liquidity as Hong Kong & South Korea observed market holidays. - There was little in the way of headline flow apparent. The only headline of note has come from China's Vice Commerce Minister who suggested that China is open to talks with the U.S. re: trade, dependent on the attitude of the U.S., although the remainder of his address maintained the broader themes of recent policymaker rhetoric. He went on to note that "talks are hard to proceed with gun to our head." - The JPY crosses turned bid into the Tokyo fix, with traders citing Gotobi demand & extra buying interest on the back of the Japanese holiday, Y113.00 ultimately capped USD/JPY.

Technical Analysis


BUND TECHS: (Z18) New Cycle Lows Keeps Focus Lower

Friday's rally was unable to continue into the start of this week as the failure to overcome the 100-dma saw a downside reversal to new cycle lows. The next downside target is the May 15 low on the continuation chart, below which lies the ytd low of 156.66. Below here confirms a major bearish reversal. Bulls need to overcome the 100-dma at 159.16 which is now acting as resistance ahead of a potential return to the Sep 12 high at 159.78.

EUROSTOXX50: No Higher Highs Yet
 

Eurostoxx50 was unable to close above its 55-dma yesterday as the trend of lower highs remains intact despite the strong rally from the Sep 7 lows. Bulls need to overcome the 55-dma to target the Aug 28 high of 3426.81. A break above here would bring key down trendline resistance from the Jan high into play. Bears look for a close back below the Sep 18 low at 3337.37 to return the focus to the March 26 low at 3261.86.

Eurex Futures Market Close


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MNI

MNI subscribers make critical decisions with deeper insight and greater confidence. Pinpoint information and market-moving interviews let them react instantly to market changes and more importantly, anticipate future market moves. MNI reporters are market professionals in the news business. They work like journalists but think like traders. When interviewing Fed officials, our reporters ask the same questions you would ask. They cover the angles you would cover. Write the way you read.

MNI’s news services are now available via the IB Trader platform. Please click here to view our provider page or contact MNI directly on sales@mni-news.com or +1 212 669 6400 for our Americas sales team and +44 207 862 7408 for our EMEA sales team.

This article is from Eurex Exchange and is being posted with Eurex Exchange’s permission. The views expressed in this article are solely those of the author and/or Eurex Exchange and IB is not endorsing or recommending any investment or trading discussed in the article. 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.


20541




Options

Cboe - Vol 411: Traders Rolling Into November


Host Jamie Tyrrell discusses the October and November spread as well as other trading activity.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies are available from your broker, or at www.theocc.com. The information in this program is provided solely for general education and information purposes. No statement within the program should be construed as a recommendation to buy or sell a security or to provide investment advice. The opinions expressed in this program are solely the opinions of the participants, and do not necessarily reflect the opinions of Cboe or any of its subsidiaries or affiliates. You agree that under no circumstances will Cboe or its affiliates, or their respective directors, officers, trading permit holders, employees, and agents, be liable for any loss or damage caused by your reliance on information obtained from the program.

Copyright © 2018 Chicago Board Options Exchange, Incorporated.   All rights reserved.

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 Cboe and is being posted with Cboe’s permission. The views expressed in this material are solely those of the author and/or Cboe 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.


20537




Securities Lending

Interactive Brokers - ETF Shorts vs Non-Shorts


The analysis in this material is provided 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 investments. 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.


20536




Securities Lending

Interactive Brokers - SLB Update: Hardest to Borrow


The following table shows the 15 hardest to borrow securities during the week of 9/17/18-9/21/18.

The analysis in this material is provided 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 investments. 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.


20535




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