The FTSE 100 closed slightly higher on Thursday (5 July), up 0.4% to 7,603.22 amid strength in the mining sector.
In the early hours of next Tuesday morning. (9 July) Chinese inflation figures are published (see Economic update). UK monthly manufacturing data follows at a more sociable hour. The last figures showed a 1.4% drop in output against expectations for a 0.3% build. Next Thursday (12 July) inflation figures are published in the US as well as a report on the latest policy meeting of the European Central Bank.
Clothing retailers were in the spotlight this week as several names updated the market. On Tuesday (3 July) online fashion specialist ASOS (ASC:AIM) announced the appointment of former ITV chief executive Adam Crozier as chairman. Crozier is well liked by the market thanks to his turnaround efforts as CEO at broadcaster ITV. Declining advertising revenue meant the last part of his tenure was more mixed but across the seven-and-a-bit-years he led the business, its share price went up three-fold while cash generation ramped up and the balance sheet was fixed.
Fashion chain Superdry (SDRY) on Thursday (5 July) posted double-digit growth in full year revenue and underlying pre-tax profit, helped by its wholesale segment. The company also declared a special dividend worth 25p per share. Reported pre-tax profit fell to £65.3m, from £84.8m in the previous year due to currency movements and costs related to the closure of a store in Berlin. Superdry's global revenue, which it describes as ‘the key measure of brand health’, was up 22.1% to £1.6bn. The owner of budget brand Primark, Associated British Foods (ABF) disappointed the market on Thursday. The performance of Primark wasn’t the problem at the conglomerate which is seeing its sugar division hit by weaker pricing.
The tension on trade provoked by a more belligerent and protectionist administration in the White House is proving to be a dominant theme for investors in early 2018. While this has led to some volatility in Western markets the impact has been more pronounced in Asia. The Hang Seng index in Hong Kong and the Shanghai Composite Index are close to their lowest levels in months and even years in the case of the latter and the Chinese yuan has been on a downward spiral since mid-June.
The markets were getting particularly jittery ahead of this Friday’s (6 July) deadline when the US is set to impose tariffs on $34bn worth of Chinese goods, with Beijing responding in kind. This matters to investors around the world. Two of the biggest global stock market sell-offs in the last decade have resulted from creeping concern about China. It happened first in August 2015 and then in early 2016 as the value of shares and other riskier assets like commodities crashed. It is against this backdrop that Chinese inflation numbers are published in the early hours of next Tuesday (10 July).
Investors looking to gain exposure to the debt of some of the UK’s largest companies could consider exchange-traded fund iShares Core £ Corporate Bond (SLXX) which has an ongoing charge of 0.2%.
10 July – First half results from online groceries business Ocado (OCDO) will offer an opportunity for the company to demonstrate the benefits of signing up several international retailers to its Ocado Smart Platform. Analysts’ forecasts suggest the company is unlikely to be profitable until at least the November 2020 financial year of years so investors may have to be patient.
11 July – Software firm Micro Focus (MCRO) will look to continue the repair job from its damaging profit warning in March. The company helps organisations from around the globe drag their legacy systems into the 21st Century digital age. Think banks, for example, which simply cannot rip out old IT systems and start again. Recent problems relate to its $8.8bn mega-merger with HPE Software.
Rebecca O'Connor explains how investing can provide you with a better return than keeping your savings in cash.
Access a wide range of global investments in this flexible, unrestricted account.
Take advantage of tax free investing with our Stocks and Shares ISA today.
Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.
The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.