Weekly Investment Update
17 October 2017

Pay TV giant Sky has announced revenues for Q1 of its financial year grew 5% to £3.3bnfrom last year. It added 160,000 new customers which helped earnings rise by 11% to £582m.

Profits at US bank JP Morgan Chase climbed 7% to £5.1bn in Q3 as its revenues rose 3% to £19.8bn, despite trading revenues falling 21% year-on-year. Meanwhile, rival Citiroup saw revenues climb 2% to £13.8bn as profits rose 8% to £3.1bn from last year.

Results for Q3 at banking giant Wells Fargo were hit by a £759m charge over its mortgage underwriting during the 2008 financial crisis; leading to an 18% fall in profits to £3.5bn with revenues of £16.6bn. Elsewhere, Bank of America’s profits in Q3 grew 13% to £4.3bn.

Streaming service Netflix reported its best Q3 subscriber growth as it added 5.3 million new viewers in the quarter. Revenues rose 30% to £2.3bn from last year and net profits doubled to £99m.

Food services company Aramark is to buy Avendra, the hospitality supplies firm, and AmeriPride, a linen services business, for a combined £1.8bn. Asos, the online fashion retailer, revealed record
annual pre-tax profits of £80m, up 145%, with sales of £1.9bn over the year.

Economic News
The UK’s inflation rate, as measured by CPI, reached 3% in September, up by 0.1% from August; its highest since April 2012. Inflation is now 0.9% above wage growth. The state pension will see a boost as it grows by either 2.5%, earnings or the September CPI rate whichever is greatest.

Germany’s DAX stock market climbed above 13,000 points last week for the first time in its 30-year history to set a new record high.

In its latest World Economic Outlook, the International Monetary Fund has raised its predication for global growth to 3.6% for 2017 and 3.7% in 2018. Its forecast for the UK remains unchanged at 1.7% this year, falling to 1.5% for 2018.

Oil prices have grown by 1.2% to $57.80 a barrel for Brent crude over concerns about supplies from Iraq, the second largest supplier in the OPEC cartel.

In Japan the Nikkei 225 stock market hit a 21-year high last week closing at 20,881.2 its highest since 1996.

The Marketplace

  • Oil rose 2.8% on the week with Brent at USD 57.8
  • Gold rose 2.2% to $1305
  • Miners led a six month high in commodities
  • Global stock indices rise

Market Focus

  • The S&P 500 Index closed at 2553 (up 0.2%) in yet another record breaking week
  • 10 year Treasury yields remained steady on the previous week at 2.3%
  • Another record broken with The Dow Jones index ended the week at 22872, up 0.4%
  • The Nasdaq was up 0.5% at 6092, another record
  • September core inflation rose below expectations (1.34 vs 0.2 month-on-month) meaning expectations have been missed on six out of the last seven months
  • Donald Trump equivocates over the Iran nuclear deal. Talk of scrapping it all together toned down to a strengthening of existing restrictions


  • British economy has dropped to the bottom of the group of seven growth league
  • Consumer price index is likely to show inflation running at 3%, throwing doubt on an expected rate rise in November
  • The FTSE was up 0.2% on the week, closing at 7535
  • Contingency planning for no deal in Brexit talks underway. Theresa May due to fly to Brussels on an unannounced visit to attempt to break the deadlock over the exit bill


  • ECB consider halving QE next year
  • The Eurostoxx has been at its calmest since 1991 based on 30-day historic volatility. Finished the week +0.2% at 3609
  • Austria’s far-right Freedom party set to join a coalition government
  • The Dax increased 0.3% to 12992
  • Catalonia declared independence but immediately suspended it. A market friendly move that sent the Ibex surging and tightening the spread between Spanish and German bonds


  • The Nikkei was up 2.7% at 21256
  • The Hang Seng finished the week up 0.8% at 28692
  • Japanese steelmaker Kobe’s shares declined by 40% over the week after it emerged the company has been falsifying quality statements for possibly more than a decade. One in of long line of corporate scandals to hit Japan recently
  • China’s CPI for September was in line with expectations at 1.6% year on year

Courtesy of Legal & General
Source: Bloomberg.
Returns in local currency unless otherwise stated.

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