Stocks hold last week’s gains as bulls weigh early start to Christmas rally
With high street stores seemingly intent on starting the Christmas shopping period earlier each year, equity traders too seem to be weighing an early start to festivities as we approach ‘santa rally’ season.
With many major indices making fresh highs last week and barriers to further upside apparently reduced, the potential for record-breaking gains by year end is strong – though the prospect of another round of political wrangling in the US in early 2014 may be enough to prevent a full bear capitulation…
Top of the bluechip leader board early on are security group G4S, up over 3% on speculation that Charterhouse are considering a £1bn approach for their underperforming cash solutions business. JP Morgan reiterated its overweight rating on the stock this morning, citing ambitious revenue growth targets.
Suffering contrasting fortunes are RBS, who see their stock offered 5% lower on news that a decision over the proposed break-up of the bank is imminent. Chancellor George Osborne stated in a weekend interview with the Daily Telegraph newspaper that plans to divide the firm into a ‘good’ and ‘bad’ bank will have his full attention over the coming fortnight, with full details of the deal to follow shortly.
The unwinding of the backlog of US data announcements begins in earnest this week, with Non-Farm Payrolls scheduled for tomorrow afternoon. Whilst in the short term these announcements may spark intraday volatility, it’s unlikely we’ll see significant money flows on the numbers given that we’re now looking at historic data. It’s also worth noting that all but the most hawkish commentators have almost entirely priced out any prospect of fed tapering in 2013, taking the edge off US data announcements to an extent.
Home Sales numbers and Crude Inventories mark the highlights of this afternoon’s card, with investors keen to see whether US markets carry their positive momentum into this week’s trade.
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