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The Zacks Analyst Blog Highlights: Barclays, Lloyds Banking, Next plc, Marks & Spencer and Amazon.com

Zacks Equity Research

For Immediate Release

Chicago, IL – October 15, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Barclays plc BCS, Lloyds Banking Group plc LYG, Next plc NXGPY, Marks & Spencer Group plc MAKSY and Amazon.com, Inc. AMZN.

Here are highlights from Monday’s Analyst Blog:

British Stock Winners on "Divorce Deal" Optimism

Investors have grown optimistic about the U.K. reaching a divorce deal with the European Union (EU) in the near term. U.K. Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar discussed ways of reaching a solution to Brexit negotiations following a diplomatic standoff over dodging a hard border appearing on the island of Ireland after Brexit.

Johnson said recently that “getting Brexit done by 31 October is absolutely crucial, and we are continuing to work on an exit deal so we can move on to negotiating a future relationship based on free trade and friendly cooperation with our European friends.”

In fact, European Council President Donald Tusk has confirmed that for the first time he believes that there is a “pathway to a deal.” Thus, a Brexit deal is widely expected to be passed by the Parliament since Eurosceptic lawmakers now believe that Johnson will have a better understanding with the EU than his predecessor Theresa May.

EU officials, by the way, have confirmed that Johnson was prepared to make a lot of concessions to initiate elaborate discussions. In fact, teams from both the sides have started to explore ways to arrive at an accord ahead of the EU summit that begins on Oct 17.

The divorce-deal optimism has helped the pound scale northward. The currency registered its biggest two-day gain on Oct 11 since December 2008, having jumped 3.6%. Lest we forget, the currency had declined nearly 15% since 2016’s EU referendum vote, while the greenback had strengthened.

However, the pound strength against the U.S. dollar hasn’t gone down well with U.K.’s large caps, like oil majors and pharmaceutical bigwigs, as it makes their exports more expensive. But, there are some sectors and stocks in the U.K. that are gaining from the divorce-deal optimism —

Shares of U.K. Banks Advance

U.K. banks, in particular, saw their shares collectively increase more than 10% on hopes that a Brexit deal could avert further weakening in the British economy. International players like Barclays plc saw its shares rose 6.8%.

Meanwhile, domestically-focused institutions like Lloyds Banking Group plc should now breathe a sigh of relief. After all, such banks would have been affected the most in case of any economic downturn owing to a no-Brexit deal.

Other domestic players including Royal Bank of Scotland Group plc, Lloyds Banking Group plc and CYBG plc have all seen their shares gain traction.

Home Builders Gain

Rumors about a no-Brexit deal had been weighing on homebuilder stocks for quite some time now. But, now firms that build houses are among the best performers in the U.K., predominantly due to the expected Brexit deal.

This has surely helped outweigh concerns that have been plaguing homebuilders like the lack of affordability. Notably, shares of homebuilder Persimmon plc and Taylor-Wimpey plc as well as construction-materials firm Travis Perkins have rallied. In fact, HSBC Holdings plc Brijesh Siya had said earlier that “we believe Taylor Wimpey in particular is best-placed amongst U.K. housebuilders to gain from a post-Brexit market bounce back.”

Retailers Rev Up

The prospect of the U.K. exiting the EU without a deal and a subsequent drop in pound may have resulted in higher inflation. This, in turn, could have affected purchasing power and consumer spending, something that doesn’t bode well for retailers. A weaker pound, by the way, leads to higher import cost for retailers.

Thus, an expected Brexit deal helped retailers like Next plc and Marks & Spencer Group plc gain ground at a time when they are grappling with the encroachment of big e-commerce players like Amazon.com, Inc. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Barclays PLC (BCS) : Free Stock Analysis Report
 
Lloyds Banking Group PLC (LYG) : Free Stock Analysis Report
 
Marks and Spencer Group PLC (MAKSY) : Free Stock Analysis Report
 
Next PLC (NXGPY) : Free Stock Analysis Report
 
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