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Stock Picks Page 1

After yet another year of political intrigue, economic surprise and corporate confoundment, 2017 is hurtling to a climactic conclusion.

With three months of the year left, a host of market-moving events in the fourth quarter will shape the landscape heading into the new year and beyond. Are you sufficiently prepared for the home straight?


Central Banks: Who’s next?

Coming into 2017, investors knew of the US Federal Reserve’s hawkish intentions. Chair Janet Yellen and the FOMC forecast, economic strength permitting, that interest rates would be hiked three times during the year, and have stuck to their word so far.

The Fed even introduced quantitative tightening (QT), the process of reducing their balance sheet – and now markets are hoping they will finish the job with a final rate hike, widely expected in December.

But it’s not just the Fed that are ending the year on a hawkish note. The European Central Bank is expected to reveal its own long-awaited tapering programme to reduce quantitative easing, while the Bank of England is now expected to raise interest for the first time in a decade before the end of the year.


Negotiating Brexit

Amongst a host of major surprises in 2016, the first political upset was the UK’s vote to leave the European Union in June. The vote paved the way for the triggering of Article 50 – the start of the irreversible 2-year leaving process – in March 2017.

Now, over 6 months on, Brexit negotiations between the UK and EU are in full swing. Or so we are told.

September’s German election concluded a plethora of scheduled and unscheduled European elections in 2017 that have strengthened the EU’s standpoint, while weakening the UK’s. Both French and German contests were won by the market-favoured candidates, the results doing little to rattle markets.

No agreement has yet been made on the eventual Bill that the UK will pay upon leaving, nor has a definitive agreement been reached on the rights of UK and EU citizens abroad. Both are vital precursors for the all-important trade deal talks between the two to begin.


Trump searching for first victory

The most unexpected global event of 2016, the election of Donald Trump, prompted the most impressive stock market rally in recent memory, sending global equity markets to record levels.

However, since his February inauguration, the President has been unable to boast of legislative success to back up stock market gains, failing to pass healthcare reform to repeal Obamacare. In fact, Trump’s only real success has been in riling up the unpredictable North Korean dictator, Kim Jong-un.

That looks set to change with proposed tax reforms. The Republican House leader Paul Ryan is set to bring the plan before Congress before the end of the year, and, if the plan is approved, it may even influence the Fed’s tightening plans over the course of 2018. But how big of an ‘if’ will that end up being?


Which Housebuilder is a top UK 100 performer while a major UK bank languishes in the bottom ten?

Over the page we analyse the top and bottom UK 100 performers over the course of 2017 so far.

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

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