Investment ViewPoint themes

Asia

Equity Markets

Inflation & Deflation

Commodities

Equity Themes

Political Economics
Currencies

Europe
Emerging Markets

Fixed Income

Apple – a good job

Do you think we are about to enter another technology bubble? The revolutionary “cloud computing” is on the rise and is fast becoming a reality for consumers and businesses. As our lives become more mobile and move increasingly online, we need the technology to keep up – whether you are trading using your smart phone, telling your Sky+ box to record something remotely, or doing your weekly supermarket shop via an app. There can be no doubt that the technology sector will continue to provide interesting opportunities.

The apple of your eye

One of the world’s most famous stocks – Apple (NASDAQ: AAPL) – continues to dominate the news. This week Apple posted a record quarterly profit of $7.31 billion. As a result, on Wednesday 21 July 2011, the Apple share price reached a record level, just shy of $390. In spite of concerns that sales and parts supply might be impacted by the Japanese tsunami and earthquake, Apple sold more than 20m iPhones and 9.25m iPads during the last quarter.

Apple’s popularity is unquestionable; in fact, our clients recently chose it as the stock they would most like to hold in a dream portfolio. Furthermore, since the launch of our International Trader platform in January 2011, Apple has been the most popular purchase. But with questions around succession planning and competitors on the up, what does the future hold for Apple?

Rise to fame

The record Apple share price demonstrates a meteoric rise since launch at $22 in 1980.

During that time, Apple has cornered the smart phone market with its iPhone and enjoyed an explosive period of growth, which has been reflected in the share price. They seem to sell their products as fast as they can make them, sometimes faster.

However, the competition is getting their act together – and fast. Could this be bad news for Apple’s prospects?

The NASDAQ recently reduced the 20% weighting that Apple had in the Nasdaq 100 Index and boosted the representation of companies like Microsoft and Cisco Systems.

Steve Jobs

There are further questions around whether Apple is overly reliant on their enigmatic CEO Steve Jobs. Jobs has suffered from ongoing medical concerns, and has been on medical leave since January 2011.

What will happen to Apple’s share price when Jobs leaves, given how influential his leadership is? Is there a robust succession plan in place?

Keep an eye out

There are interesting times coming up – the eagerly anticipated launch of the iPhone 5 in September and a clearer picture of how the iPad2 has performed will begin to emerge.

If you are interested in investing in Apple, you can do so using our International Trader platform. login here to trade now.

Not only can you access Apple, but plenty of other technology stocks listed on exchanges around the world, including Microsoft (NASDAQ: MSFT), Cisco Systems (NASDQ: CSCO) and Google (NASDAQ: GOOG).

The week ahead – market diary

The end-quarter results season is fully in its stride, with trading updates expected from the high street banks, as well as reports from insurers and miners.

On top of that, there are some heavy-duty economic announcements, in the form of interest rate decisions from the Bank of England and the European Central Bank, while in the USA, all eyes will be on the first major economic indicator pertaining to July, the change in non-farm payrolls. Meanwhile, the saga of negotiations over the raising of the US debt ceiling is likely to end on 2 August, the day that the USA is set to start running out of money as it will no longer be able to ask its international buddies to spare it a dime.

Here is this week’s selection of companies reporting:

While all eyes are on the US and negotiations around the US debt ceiling this week the half-year results season gets underway with a flood of updates from heavyweights, including some big players from the energy (BG, BP and Shell) and pharmaceuticals (GlaxoSmithKline and Shire) sectors.
Here is this week’s selection of company results:

International markets - Weekly Movers

The top three performing international markets last week all hailed from Europe and were consistent in their association with the current concerns over sovereign debt default within the Eurozone.  Top performer was Italy, who posted a gain of 6.49%, followed by Portugal with a gain of 6.26% and Spain, up 6.23%. 

In contrast the markets experiencing the greatest falls across the seven days were from slightly further afield.  Propping up the table was Turkey, who posted a loss of 3.55%.  The UAE Large Cap index came next with a loss of 1.82%, followed by Israel, who were down 1.29%.

From an international stocks perspective, top performer of the week was US healthcare firm Medco Health Solutions Inc (NYSE: MHS), who posted a gain of 22.1% across the week.  US financial Services firm Morgan Stanley (NYSE: MS) followed this with a gain of 13.3%, with Germany’s Commerzbank (FWB: CBK) recovering some of the ground it lost last week with a rise of 12.8%.  Amongst the top fallers over the last seven days were Sweden’s telecommunications giant Ericsson (OMX: ERIC B; NASDAQ: ERIC) down 7%, US internet corporation Yahoo (NASDAQ: YHOO) down 4.8% and another Swedish firm, industrial engineers Atlas Copco (OMX: ATCO A, ATCO B), down 4.8%.

To trade in international equities or find out more about the latest international market news and movements, login to International Trader. If you do not yet have an International Trader account, find out more.

You should ensure that you are aware of all the potential risks and downsides before investing overseas. These investments can fall in value. You may get back less than you invested. You also need to bear in mind that international investing comes with a currency risk. Fluctuations in currency could have a negative impact on the value of your investment

The week ahead – market diary

There are some big names reporting this week. In the financial world, Goldman Sachs will report its second quarter results on Tuesday. There is discussion around whether the US giant will match the strong results reported by Citigroup and JP Morgan Chase last week.    

Ahead of Apple’s results on Tuesday, the market waits in anticipation of a good set of third quarter earnings, as iPad and iPhone sales remain strong. Philips, Yahoo, Yell, Vodafone and eBay will also report this week.

Here is this week’s selection of company results:

International markets - Weekly Movers

There was only one stand out market performance last week, with Peru well ahead of the pack after posting a return of +4.6%, one of the few markets to buck the trend of losses triggered by renewed fears over sovereign debt defaults in the Eurozone.  Indonesia was the next best performing market with a return of 1.9% last week, with Japan in third place, after a gain of 0.63%. 
The worst performing markets were unsurprisingly all European.  Portugal propped up the table with a loss of 9.68% across the week, Finland posted the second highest loss, down 9.3% with Ireland close behind at -8.74%.

From an international stocks perspective the top performer was a household name, as Google (NASDAQ: GOOG, FWB: GGQ1) the US internet search engine giant posted a return of 12.3%.  Behind Google was US Oil and Gas producer Chesapeake Energy (NYSE: CHK), up 7.8% on the week, followed by Canadian gold producer GoldCorp Inc (TSX: G, NYSE: GG), up 6.5%.
For the second week in a row, top losses were focussed on European financials.  Germany’s Commerzbank (FWB: CBK) was the top faller, down 15.7%, followed by France’s global insurance group AXA (Euronext: CS, Pink Sheets: AXAHY) down 10.7%, and France’s Credit Agricole (Euronext: ACA), down 10.5%.

To trade in international equities or find out more about the latest international market news and movements, login to International Trader. If you do not yet have an International Trader account, find out more.

You should ensure that you are aware of all the potential risks and downsides before investing overseas. These investments can fall in value. You may get back less than you invested. You also need to bear in mind that international investing comes with a currency risk. Fluctuations in currency could have a negative impact on the value of your investment.

The week ahead – market diary

Last week, the Bank of England Monetary Policy Committee decided to hold rates at 0.5%, for the 29th consecutive month, whereas the European Central Bank raised rates by 25 basis points.

This week, the story dominating the front pages in the UK is the closure of the News of the World, which has rocked the media world. As the phone hacking scandal continues to rage, there may be significant ramifications for BSkyB (LSE: BSY) and News Corporation (ASX: NWS; NASDAQ: NWS). Both have seen significant movement in their share price as a result of ongoing events.

It could also be a big week for the retail sector, as various influential companies report this week.

Here is this week’s selection of company results:

International markets - Weekly Comment

In a week when emerging markets led the way, there were still some notable performers in developed equity markets.

The best performing stock of the week was GoldCorp, up 10% and listed on both the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). Other notable performers were Kinross Gold (TSX / NYSE) and Teck Resources (TSX / NYSE). The biggest faller of the week was Monsanto (NYSE) the agriculture biotechnology firm, whose price fell 9.5% across the week. Monsanto was closely followed by Juniper Networks (NYSE), which fell 7.1% over the same period.

To trade in international equities or find out more about the latest international market news and movements, login to International Trader. If you do not yet have an International Trader account, find out more.

You should ensure that you are aware of all the potential risks and downsides before investing overseas. These investments can fall in value. You may get back less than you invested. You also need to bear in mind that international investing comes with a currency risk. Fluctuations in currency could have a negative impact on the value of your investment.

The coming week

After five solid weeks of decline, last week saw a rally across developed equity markets, as investor confidence was buoyed by progress with the Greek relief package.

The FTSE 100 Index rose by 5.1% over the course of the week (gaining £76bn in value). Following strong manufacturing data, the US S&P 500 Index posted growth of 4.6%. For both UK and US equity markets, last week was the strongest in almost a year. Visa, Mastercard, EBay and Nike were strong performers. See our International Weekly Movers (4 July) above for more information.

On Monday 4 July this week, the US celebrated their 235th Independence Day, which means the US markets will not open until Tuesday.

On Tuesday, Christine Lagarde will begin her work as the new Chief Executive of the IMF.

Closer to home, the Bank of England will meet this week to debate a rise in interest rates – they are expected to continue to hold steady at 0.5% when they announce their decision on Thursday.

Here are some company results that might attract your attention this week:

New research out now: the July issue of Compass

The July issue of Compass is out now, entitled “Summertime blues: a setback, not a reversal”. The headline sets the tone. Since the last issue, further weak economic data and a continuing deadlock from political decision-makers in both Europe and the US have left the equity markets a little bruised.

Barclays Wealth economists predict a summer of ongoing “continued downside volatility in the global equity markets” – likened to a damp British summer. Although they do not anticipate that global politics or economics will clear up any time soon, they do conclude that the “cost of trying to dodge what might be a bumpy road in early July won’t have been worth paying when viewed in retrospect from late September”.

Compass provides a three to twelve month view and maintains that the global economic recovery is on track, even if it is moving more slowly than expected. Things may stay bad before they get better, but the overriding sentiment is optimistic – things will get better.

The challenges remain broadly similar to those discussed in the last issue of Compass: lofty oil prices, fiscal difficulty in Europe and the US, the threat of overheating in emerging markets (particularly China), Japan’s recovery from the March earthquake and tsunami and questions around corporate growth and earnings.

So what does this mean for asset allocation and your portfolio? Although Compass recommends reducing risk a little, Barclays Wealth remains reluctant to slim any exposure to developed equities. The research argues that developed markets are still “inexpensive” and forecasts a market rally later on this year – “the best for stocks is yet to come”.

To read Compass in full, login here.

International markets - Weekly Comment

In a week that saw global markets take a much needed confidence boost from the Greek governments approval of its austerity package, the market winners over the last 7 days were all close to home.  Top performing market of the week was Ireland, with the country posting a return of 11.37%.  Sweden followed close behind with a gain of 9.84%, with France in third place, up 7.63%.  Propping up the table this week was Egypt, with a loss of 1.79%, Pakistan followed, down 1.23% and the UAE Large Cap index was the third biggest faller, down 0.7%.

Stocks across international markets had a buoyant week, with the US companies the prominent winners.  Best performer across the 7 days was payments technology and credit card firm Visa Inc (NYSE: V) who posted a gain of 19.9%.  Their rival firm MasterCard (NYSE: MA) also had a strong week with a rise of 14.7% and sandwiched between the two was internet auction and shopping firm eBay Inc. (NASDAQ: EBAY).

Amongst the biggest fallers for the week were China CITIC Bank (SEHK: 0998), down 4.9%, Australian property giant Westfield (ASX: WDC), down 3.4% and China Minsheng Bank (SEHK: 1998), down 3%.

You should ensure that you are aware of all the potential risks and downsides before investing overseas. These investments can fall in value. You may get back less than you invested. You also need to bear in mind that international investing comes with a currency risk. Fluctuations in currency could have a negative impact on the value of your investment.

To trade in international equities or find out more about the latest international market news and movements, login to International Trader. If you do not yet have an International Trader account, find out more.