The FTSE 100 carved out minor gains on Monday as markets awaited a raft of economic data this week. Global markets are bracing for the next update of inflation data from the United States and United Kingdom, as well as Eurozone GDP.

The FTSE 100 was 0.3% at 7,910 at the time of writing on Tuesday. S&P 500 futures were pointing to a fractionally higher open in the United States.

The inflation readings from the US and UK will have major implications for the respective central bank’s next moves on interest rates and promise to be market moving events.

“The FTSE 100 defied weak markets in Asia overnight and selling on Wall Street on Friday to trade higher on Monday morning as investors await key US and UK inflation data later this week,” said AJ Bell investment director Russ Mould.

“Back above the 7,900 mark and within striking distance of its recent all-time highs the index continues to build on its gains of recent months, but the confidence that remains is about as fragile as a fine china cup.”

CPI Inflation

The Bank of England recently predicted UK inflation would fall to 4% by the end of the year – a scenario which would permit longed-for easier monetary policy. Markets have began pricing in a slowing of hikes this year – if there are signs to the contrary, one would expect a period of market volatility.

Economists estimate UK CPI will fall to 10.2% from 10.5% previously when the data is reported by the ONS on Wednesday.

Before then, we will receive US CPI tomorrow which is expected to fall to 6.2% – dramatically lower than the 9.1% peak recorded last year.

UK Housebuilders

Deutsche Bank analysts have cut five UK housebuilders as they feel the recent strong rally in sector has sufficiently priced in improvement in the UK housing market outlook. Persimmon was cut to a sell and fell 2.7% in Monday’s trade.

Barratt Developments and Taylor Wimpey were cut to a hold and fell 1.6% and 2.4% respectively.

The engineering sector caught investors attention on Monday with Weir Group rising 2.6% with Spirax-Sarco and BAE Systems also among the top risers.

Deutsche Bank have downgraded a swathe of UK housebuilders as it suggests a lot of the positive news around the UK property market is priced into shares.

Enjoying mildly improving sentiment around the UK property market, London-listed housebuilders have staged a remarkable rally from last year’s lows.

However, analysts at Deutsche Bank now feel most of the good news is priced into the sector and have downgraded Barratt Developments, Redrow, Taylor Wimpey, Crest Nicholson Holdings and Persimmon.

All were cut to a hold from buy, apart from Persimmon which was cut to a sell.

Persimmon shares were down 2.8% at the time of writing on Monday.

Housebuilding shares fell heavily during the early stages of 2022 before bargain hunters stepped in to pick up the beaten down stocks on hopes the UK economic doomsday scenario would fail to transpire.

Barrett’s recently reported results for 2022 and said forward sales were dramatically lower than at the same point last year.

DX Group shares were falling on Monday after the logistics group responded to a Sunday Times article alluding to a corporate espionage case involving rival Tuffnell Parcel Express.

This morning, DX Group confirmed they had received a claim 10th February and would ‘defend its position robustly. It is alleged DX Group staff attempted to obtain commercially sensitive information from delivery drivers.

DX Group shares were down 7.5% at the time of writing.

DX Group Corporate Governance

The media reports over the weekend and claim from Tuffnells comes after DX Group conducted internal investigations last year and made sweeping changes to their management structure and took disciplinary action against employees.

“Industrial espionage has rarely sounded more prosaic although the consequences for delivery and logistics firm DX, if the claims from Sheffield-based rival Tuffnells are proven at the High Court, could be anything but,” said AJ Bell investment director Russ Mould.

“According to newspaper reports DX employees, formerly of Tuffnells, conspired to obtain customer service receipts from the latter. The £50 payments offered to ‘Pat’ the delivery driver in exchange for the confidential corporate information make it sound like an off-the-wall episode in the life of Greendale’s favourite postie.”

“DX has put out the expected robust defence and the company has already conducted a corporate governance investigation into the matter which resulted in a shake-up of its senior management and a long suspension for the shares.”

“The company desperately needs to move on from the scandal and continue to capitalise on the progress it made during the pandemic when there was a sizeable increase in demand for parcel deliveries. Previously the company had a chequered history as a listed firm, littered with profit warnings and dividend cuts, so it is important to clean up this mess as soon as it can.”   

The company is set to release interim results 27th February.

Panther Metals shares fell on Friday despite announcing the completion of the disposal of their Big Bear project through the IPO of Fulcrum Metals.

Panther Metals shares were trading at 4.25p at the time of writing, down 1%.

Under the terms of the deal, Panther Metals will retain a 2% smelter royalty for the Big Bear project and will receive £200,000 in cash from Fulcrum. 

“Over the past three years since we listed, over a challenging market and over a period of global turmoil, Panther Metals have accomplished much in the relatively short space of time. We have built-up and divested assets in Canada and Australia to allow us to create value and broaden our reach whilst not destroying our capital structure,” said Darren Hazelwood, Chief Executive Officer at Panther Metals.

Panther Metals will have a 20% interest in Fulcrum Metals, worth £1.745m at the placing price.

Fulcrum Metals will begin trading on London’s AIM next week with the admission price set at 17.5p.