CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider (Saxo Bank). You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

January 2019 Newsletter

Themes from January

US Federal Reserve signaled a “patient stance” in respect of further interest rate hikes in 2019, a clear shift in emphasis from December 2018.

PM Theresa May lost a key House of Commons vote on the EU Withdrawal Bill by a record 230 votes. The PM is now attempting to re-enter negotiations with the EU aimed at changes to the Irish backstop.

RPC the plastics manufacturer agreed to be acquired by Apollo Management for £3.32bn or 782p in cash plus 8.1p dividend. Post the announcement Berry Global said it was considering a cash offer for RPC.

Apple Inc reported revenues of $84.3bn with solid growth in wearables and services divisions. The board said it would consider reducing iPhone prices in key emerging markets to restore unit volume growth.

Royal Dutch Shell reported 2018 income of $23.35bn up 80% with record $53bn cash from operations. It has resumed its share buyback of $2.5bn.

Barclays is preparing to shift €190bn of assets to its Irish division as it “cannot wait any longer” amid continuing political uncertainty.

PZ Cussons reported revenues fell 10% due to weak Nigerian operations. It revised pre-tax profit guidance for 2019 to £70m around £10m below 2018 levels.

Forthcoming UK Events

1 February Markit / CIPS Manufacturing PMI
4 February Construction PMI
5 February UK New Car Sales/ Markit/ CIPS UK Services PMI
7 February Halifax House Price Index/ BoE Rate Decision/ BoE Inflation Report
11 February UK Balance of Trade/ UK Construction Output/ GDP Growth Rate
13 February UK Core Inflation/ PPI Core Output/ Retail Price Index
14 February 10 Year Treasury Gilt Auction
15 February January UK Retail Sales
19 February UK Unemployment Rate/ UK Average Earnings/ CBI Business Optimism
20 February CBI Industrial Trends Orders
26 February UK Mortgage Finance Mortgage Approvals

Performance of World Markets (31/1/2019)

North America Value Change +/-(1M)% +/-(1YR)%
DOW JONES (Close) 24,999.67 1,672.18 7.20 -4.50
S&P 500 (Close) 2,704.10 197.25 7.90 -4.20
NASDAQ (Close) 7,281.74 646.46 9.70 -1.40
Europe/UK Value Change +/-(1M)% +/-(1YR)%
UK 100 INDEX (Close) 6,968.85 234.88 3.50 -7.00
CAC 40 INDEX (Close) 4,992.72 262.03 5.50 -8.50
EUROSTOXX 50 (Close) 3,149.21 147.79 4.90 -12.00
Asia/Far East Value Change +/-(1M)% +/-(1YR)%
SHANGHAI COMPOSITE (Close) 2,584.57 89.30 3.60 -25.30
NIKKEI-225 (Close) 20,773.49 758.72 3.70 -10.70
HANG SENG (Close) 27,942.47 2,096.77 8.10 -14.30

United Kingdom

UK blue chips started January 2019 in a nice place, with low valuations and low expectations. Not even the normal Brexit grind got in the way over January 2019 as investors concluded that regardless of the Brexit outcome, it would not result in a change in government.

A further support has been a more confident local currency with sterling actually holding onto gains against both the US Dollar and Euro.

The UK telecoms giants were weak after reporting declining revenues, Vodafone, BT and Talk Talk all reported revenue declines. Concerns remain over the sector’s debt levels in particular for Vodafone, whose new CEO appears to not want to address the considerable investor discomfort caused by his M&A strategy and uncovered dividend.

Metro Bank came unstuck seeing the biggest drop in a UK bank share price since 2008. The board reported that it had wrongly categorized some of its residential buy to let loans. The shares have halved to 1088p from month highs of 2202p on concern over its capital requirements.


Japanese investors have marked up Tokyo equities over 2019 joining in the more optimistic global tone.

China expanded by 6.6% in 2018 with a Q4 2018 growth rate of 6.4% but a number of companies, from automakers to luxury goods have reported a considerable reduction in Chinese retail activity.

Attention is focused on the next round of the Sino-US trade talks. US Commerce Secretary Wilbur Ross claimed the sides remain far apart. It is unclear if China will admit to IP theft and how far precisely the two sides will go to conclude the talks. A complete unknown as to timing and resolution in our view.


2019 is off to a soft start, the German government reduced its 2019 GDP growth forecast to 1% from 1.8% due to slower economic growth in the EU and emerging markets and the “Brexit” impact.

Q4 2018 saw Italy enter a technical recession with GDP of -0.2% after a -0.1% decline in Q3 2018 as a strong export sector was not sufficient to offset weak agriculture, fishing and forestry. The Italian government agreed to revise its 2019 budget after the European Commission raised concerns over Italy’s debt load.

However France grew a respectable 0.3% in Q4 2018 whilst Spain grew 0.8%. The ECB provided grounds for optimism that 2019 will see continued negative real interest rates.

United States

January 2019 started with Tim Cook, CEO of Apple guiding investors’ expectations lower in respect of group revenues ($84bn) but it ended with a Q1 result that largely restored Wall Street’s faith in Apple’s growth engine re-pivoting onto services and wearables and Apple reporting results that largely beat revised expectations (revenues $84.3bn).

It helped that Cook addressed the sacred cow of iPhone pricing, in emerging markets iPhone prices would be lowered (though he did not quantify by how much!).

The change in the Fed’s tone on rate rises over 2019 has been very helpful for US and global equities. The central bank also reassured on its quantitative tightening plan, after concerns were raised over the possible oversupply of bonds into depressed markets.

Subscribe to our Award-winning Newsletter

We provide daily market data in the form of our award-winning newsletter, The Morning Call and The Market Close.
You can subscribe to this information at any time to help you make the most of your investment.

Quick Sign-up

Important Information

Key to Material Interests:

Please be aware that the following disclosures of Material Interests are relevant to this research note:


  1. The analyst has a personal holding in the securities issued by the company or of derivatives linked to the price of the company’s securities.
  2. Collins Sarri Statham Investments Ltd has clients who hold either shares or CFD positions in this security.

Analyst Certification:

The report’s author certifies that this research report accurately states his personal views about the subject securities, which is reflected in the ratings as well as the substance of the reports.


Collins Sarri Statham Investments Ltd (CSS) does not in any of its publications take into account any particular recipient's investment objectives, financial situation, and specific needs and demands. Therefore, all CSS publications are, unless otherwise specifically stated, intended for informational and/or marketing purposes only.CSS shall not be responsible for any loss arising from any investment based on a perceived recommendation.

No publication (including recommendations) shall be construed as a representation or warranty that the recipient will profit, nor avoid sustaining losses, from trading in accordance with a trading strategy set forth in a publication.

This research is non-independent and is classified as a Marketing Communication under FCA rules detailed in their Conduct of Business Rulebook (COBS). As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition of dealing ahead of the dissemination of investment research outlined in COBS 12.2.18.

Risk Warning:

Trading in the products and services offered by Collins Sarri Statham Investments Ltd (CSS) may, result in losses as well as profits as the value of investments may go down as well as up. You may not get back the full amount you have invested. Any reference to past performance should not be viewed as an indication of any future performance. Investments held in overseas markets are subject to the effects of changes in exchange rates which will impact on the value of the underlying investment. Investments made in AIM and penny shares carry an increased risk due to the difficulty in creating a market in these shares. There may be a substantial difference in the buy and sell price. Leveraged products such as Contracts for Difference (CFDs), derivatives, commodities & Foreign Exchange (FX), carry a higher risk to your capital and they can lose their value rapidly.

Speculative Trading is not Suitable for all Investors

The information contained herein is based on materials and sources that we believe to be reliable however we make no representation or warranty, either express or implied, in relation to the accuracy, completeness or reliability of the information contained herein. Please note that the figures shown may, in some instances, be rounded to the nearest penny. Prices can move sharply from those quoted in this document. Current prices can be verified by calling one of our brokers. CSS is under no obligation to update the information contained herein. Neither CSS, nor its affiliates, nor its employees shall have any liability whatsoever for any indirect or consequential loss or damage arising from the use of this document.

Get Started with CSS

Open an Account

Subscribe to our award winning daily newsletter

Voted "Best Market Newsletter" in 2012, 2014, 2015 and 2017 by the City of London Wealth Management Awards

Subscribe to our newsletter (Popup)

By signing up to our free email, you are consenting to receive these promotions. The newsletter is sent up to three time per day during the week and up to once per day over the weekend. The newsletter contains company news, market movements, CSS research and promotions and breaking economic news. Occasionally our newsletter will contain advertisements from trusted partners. However, we will never give, sell or rent your email address to any other companies. If you want to stop receiving our free emails you can unsubscribe at any time by clicking on the link at the bottom of each email. You can read our privacy policy here.

No, thank you I am already subscribed