24 May 2019
The FTSE 100 fell 1.4% to 7,230.95 on Thursday amid a sell-off in stocks around the world. Investors feared the US/China trade war could get more complicated after the US blacklisted Chinese tech giant Huawei.
There is a slow start to next week with markets in the US and UK closed for Memorial Day and the Spring Bank Holiday respectively. Next Tuesday (28 May) Bank of England Governor Mark Carney and his colleagues are scheduled to appear before MPs after inflation came in ahead of the Bank of England’s 2% target. On Wednesday (29 May) German unemployment figures are released. Next Thursday (30 May) the second official estimate of US first quarter GDP is out (see Economic update). On Friday (31 May) investors attention may be drawn to German inflation figures.
The retail sector was back in the headlines this week as high street stalwarts WH Smith (SMWH) and Marks & Spencer (MKS) both updated the market and niche operator Pets at Home (PETS) got in on the act. Investors already knew about the dividend cut and £600m rights issue at Marks & Spencer as the company invests in a joint venture with Ocado (OCDO) which it hopes can make it more relevant to today’s shoppers. On Wednesday (22 May) the company also reported a near 10% fall in headline pre-tax profits (at £523.2 million) for the year to 30 March as like-for-like sales, which strip out the impact of new stores, slid 2.9%. Also on Wednesday pet care outfit Pets at Home got a good reception as its underlying profit rose by more than 6%, a better-than-expected showing boosted by improving like-for-like sales. A trading update from WH Smith on Tuesday (21 May) repeated the recent trend of a strong contribution from its travel concessions in airports, motorway service stations and train stations and a weak performance from its high street operation adding up to a 15% increase in sales for the 11 weeks to 18 May. The company announced chief executive Stephen Clarke will step down from his role at the end of October after six years with the firm, to be replaced by Carl Cowling.
Amid the worsening trade relations between the US and China, the markets will be keeping a close eye on the latest estimate of US GDP for the first quarter released next Thursday (30 May). The first reading of 3.2% represented the best start to a year since 2015 and was substantially ahead of the 2.5% growth which was expected. Investors will be alive to any upward or downward revisions to that number.
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28 May – Full year numbers from guarantor loans company Amigo Loans (AMGO) will be scrutinised over its response to recent concerns over the wider space expressed by regulator the Financial Conduct Authority. A third quarter trading update in February showed strong growth in revenue and profit.
29 May – Housebuilder Telford Homes (TEF) focuses on the London market and with these full year results in mind, investors will be wary of how it will have fared given the recent softness in the capital’s property prices. There will be focus on the guidance for build cost inflation and average asking prices as well the company’s plans for further expansion in the build-to-rent space.
Narendra Modi and the BJP look set for victory in what has been a gargantuan undertaking for India and stock markets have surged to record highs on early results.
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