Last month we published our season Santa Rally report, highlighting stocks which have a habit of doing well early November thorough year-end. No guarantees, but a statistical tendency that can help you make profitable trading/investment decisions. So how have are we doing?

Firstly the US indices have kept up their strong record with gains of 2-3% in-line with their average since 1995, extending their already strong year-to date gains on hopes of tax reform to boost corporate growth. European indices, on the other hand, are showing losses of 2-3% for the UK Index , DAX and CAC, rather than up their typical 2-4%.

UK blue-chips have been hindered by a stronger GBP fuelled by hopes of Brexit negotiation progress, hurting those London listed shares with international exposure. The recent USD rebound on fresh UX tax reform optimism has added to their woes by hindering the important commodities and their Miners. The across the channel, Paris and Frankfurt bourses are lower on account of EUR strength vs USD since we wrote early November, with the USD yet to recoup all it gave up amid much Trump and tax uncertainty.

In terms of individual stocks, the Brexit situation and currency moves have perhaps complicated things this year – remember, last year we hadn’t even triggered Article 50 to leave the EU and dear old Mr Trump hadn’t even taken up residence at 1 Pennsylvania Avenue, even if he was just as active on Twitter – with some of the usual favourites not quite living up to their statistical reputation. Perhaps we published too early, some preferring to wait until early, even mid-December.

That said, Tesco (+14.1%*) is set to make it 18 out of 24 years (75% hit rate for gains), bettering its average 2% seasonal gain by a factor of nearly seven as its Booker deal was approved and competitor Palmer & Harvey went bust. Some welcome Brexit clarity; a solid housing market and upgraded guidance have helped Berkeley Group (+13.9%) add to its 16yr tally, although it has work to do before bettering its 8.7% average seasonal rise. easyJet (+10.7%) just missed the cut in or publication, only up ten years out of 16, but has already double its 5.5% average year-end climb thanks to FY results, the purchasing parts of Air Berlin and collapse of Monarch.

Other notable gainers include ConvaTec (+14.6%), which only listed in October 2016, which has bounced twice from 182p. British Land (+8.6%) rallied on H1 results and fresh Brexit clarity. Pearson (+7.1%) found support at 688p, sold Wall St English for $300m and broke above 725p to trade 6-month highs. Whitbread (+7.8%) has delivered a major reversal on news of an activist fund staking a stake.

Sky (+5.0%) likes Disney buying a chunk of 21C Fox’s assets, which include Sky assets. Kingfisher (+5.3%) has broken to 6-month highs after a Q3 trading update and broker upgrades. BT (+5.8%) has bottomed out and reversed amid bargain hunting from 4.5yr lows. Lastly Barclays +8.2%, is the best performing banks, based on its international (read US) exposure.

In the spirit of fairness, and bucking their trend, notable disappointments from our list include ABF (-14.4%), dented by broker downgrades and a stronger GBP. Rolls Royce (-13.7%) has been on a downer ever since we wrote, due to legal issues, a poorly received trading update and negative momentum.

Compass (-10.8%) gapped lower after FY results, and GBP strength hampering its international earnings. CRH (-7.6%) should benefit from US tax reform, but doesn’t like the stronger EUR vs USD while Barratt Developments (-7%) has remains hostage to the UK housing market sentiment and thus Brexit.

Some big moves, from some big household names, proving the season remains a solid one for offering attractive share price rises (and falls) to capitalise upon. As always, the data we presented was no guarantee, merely support for you to make your own decisions. And even if some names disappointed, they will still help bolster the statistics for next year.

It’s been a very successful week working with our new trading platform, helping migrate existing clients and welcoming the new. It’s an exciting change for us and is already delivering an improved user experience and, importantly, lower costs.

But it’s time for me to start plugging the research again – an integral part of our offering designed to keep traders/investors informed about market movements, stimulate thought and help them identify profitable opportunities. If you’re not already receiving it, take a look for a couple of weeks and let us know what you think.

Have a great weekend,

Mike van Dulken, Head of Research, 8 Dec 2017

(*all price performance = intra-day, since 5 Nov)