Oil prices won't top $100 in the next decade, OPEC predicts

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Crude will stay below the $100-a-barrel (bbl) level for at least the next 10 years, according to the Organization of Petroleum Exporting Countries (OPEC). Read More

Market buzz: FTSE starts higher on 'Super Thursday', Goldman upgrades IT stocks
Thursday 21 Jun 2018

(Sharecast News) - 0917: Goldman Sachs expects a modest 3% rise in the S&P 500 to a year-end target of 2850 followed by a 5% gain in 2019 to 3000. "The US economy is growing, corporate profits are rising, and stock prices should continue to climb through 2019. However, the appreciation potential will be constrained by tightening monetary policy, a flattening yield curve, rising trade tensions, and the upcoming mid-term Congressional elections." Goldman has raised its S&P 500 earnings estimates for each of the next three years, seeing EPS surging 19% to $159 this year, with profit growth of 7% to $170 in 2019 followed by 5% growth to $178 in 2020. "Cyclicals should continue to outperform," Goldman says, reiterate its 'overweight' recommendation on Financials, with Banks expected to boost capital returned to shareholders via buybacks and dividends by 21%; the Information Technology sector is hiked to 'overweight' from 'neutral', with technology post among the fastest sales and earnings growth through 2019 and the sector seen benefiting in the current late cycle environment; Industrials are downgraded to 'neutral' from 'overweight' given decelerating economic growth and rising input costs. 0821: The FTSE 100 has started higher, as expected, rising 0.5% to 7,667.2. Here's Lee Wild, head of equity strategy at broker Interactive Investor, on the BoE meeting later: "Today's Bank of England policy meeting is a non-event. There's no way the MPC will raise interest rates at lunchtime, and even August is looker doubtful now. Hot money's shifting to a November hike, or even later. "Alongside receding inflation concerns, political mismanagement of the Brexit process and dollar buying, it's no wonder sterling remains glued to a seven-month low. That may change if Donald Trump continues his game of brinkmanship with the Chinese over trade tariffs. It's a dangerous policy not just for China and the US, but for Europe, Canada and America's other trading partners. There's still a good chance this is just more Trump chest-beating and not a situation that will spiral out of control, which explains why we're seeing buying on any dips in equity markets." 0814: Pearson's rival Barnes & Noble Education delivered an unexpected positive fourth-quarter earnings number. "However, what they said on the call was not positive for Pearson," says Liberum analyst Ian Whittaker, highlighting three things: price deflation rearing its head, guidance suggesting a very weak market and further weakness in Community College enrolments that looks like a structural trend. Pearson is down a few pennies today so far. 0749: The market decided to take a breather from being afraid of Trade Wars yesterday, with Rabobank analysts suggesting its was "perhaps because like Star Wars, there's now too much of them, or because our friends the algorithms that nowadays drive so much equity trading didn't pick up on any new headlines actively saying 'trade war', and so decided it was time to buy again". Rabobank notes reports in the Wall Street Journal that Germany is already preparing to wave the white flag, with auto-makers lobbying for the removal of EU (10%) and US (2.5%) auto tariffs in tandem to prevent the threat of the very lucrative US market being closed off to them, as President Trump has warned. "The US might not be big on Germany's lack of spine when it comes to NATO, but they will be thrilled with that kind of economic surrender... That's good news. Except that it will probably fire up the Trump administration to think that it won't be long until China cracks too." 0744: The FTSE 100 is set to gain 37 points at the open on Thursday, traders reckon, as investors eyed the latest policy announcement form the Bank of England. The London pre-open report has some comment from CMC Markets analyst Michael Hewson: "The pound got a lift yesterday after the UK government avoided a defeat in Parliament on a key Brexit vote, and will remain in the spotlight today with the latest instalment in the will they, won't they, saga from the Bank of England in to when the MPC will finally throw off the shackles of indecision and policy paralysis and finally deliver on an often broken pledge to raise interest rates away from where they have been for nearly all of the last 9 years." 0741: New Zealand's PM Jacinda Ardern has given birth to a baby girl, it has been reported. The NZD is down 0.57% against its US counterpart, with markets perhaps wanting a boy. 0734: Barclays currency heads are upping their US dollar forecasts across the board, "as economic divergence between the US economy and others has exceeded our expectations". Disappointing growth in the rest of the world as the US continues to power ahead has "turned a pause in economic convergence into outright divergence", which is felt likely to support longer and greater USD strength than previously anticipated.

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