Nick Batsford, CEO of Tip TV, was joined by Richard Hunter, Head of Equities for Hargreaves Lansdown (LONDON:HRGV), to open the Finance Show on Tip TV and they discussed views on Lloyds and HSBC, as well as the weak non-farm payroll numbers, China, uncertainty in the global economy and the FTSE 100.
HSBA and LLOY both receive buy calls
Hunter noted the broker forecasts, with Deutsche Bank (XETRA:DBKGn) giving HSBC Holdings (LONDON:HSBA) PLC a hold call, which he believed to be a buy, meanwhile, the same broker awarded Lloyds Banking Group (LONDON:LLOY) a buy. Hunter commented that there is concern around HSBA dividend with Standard Chartered (LONDON:STAN) cutting theirs, however, he added that concerns can be muted with only 41% of loans are in Asia compared with 71% of Standard Chartered loans.
Non-Farm Payrolls disappoint – 2015 rate hike bets evaporate
Batsford noted FX Street, who outlined that the weak NFP’s released in the US on Friday saw rate hike bets after the numbers were released fall across the board for October through to March 2016 falling from before the figures came out. They continued that the delay in the Federal Reserve lift off equals a further delay in the Bank of England hike, and therefore the closer the ECB comes to initiating more QE in Europe.
China worries dissipating?
Hunter briefly highlighted that concerns over China’s growth rate may be overdone, and he believed that the worries surrounding China might be starting to dissipate slightly.
Economic uncertainty above normal levels
Batsford commented on Elliot, who noted that research published by Deloitte today sows that 73% of finance directors feel that economic uncertainty is currently above the normal, high or very high – against just 55% only 3 months ago. Due to this, they said it was impacting investment plans with 47% instead of 59% believing now was a good time to take on new risk. Top of their list of fears was the possibility of a rate rise by the BoE followed by a China slowdown.
FTSE 100 still a long way away from 7000
Batsford commented on the 26% bullish view on the FTSE 100 whilst it remains around the 6250 level. Hunter added that overnight strength in the energy and materials sector caused this increase in bulls, however, he concluded that the Index is still down year to date and a long way off 7000.