The FTSE 100 is higher this morning as the energy and mining sectors have boosted the British equity benchmark.
Underlying commodities like oil, copper, palladium and platinum are all higher today and that has lifted commodity related stocks. The dovish update from the Federal Reserve last night combined with the reduced growth outlook has put pressure on eurozone stocks. The US central bank now expects the economy to grow by 2.1% in 2019, and that compares with the 2.3% growth forecast issued in December. The downward revision echoes the lowered growth forecast from the European Central Bank that was issued earlier this month.
Renishawshares sold-off sharply this morning after the company cut its full-year forecast. The group cited weaker demand in Asia for the drop in guidance. The group now expects full-year pre-tax profit to be between £117 million and £135 million, while the previous guidance was £140 million to £160 million. The engineering group derives a sizeable portion of its revenue in Asia, and the update rocked investor confidence. The stock dropped to a level not seen since July 2017 this morning, and if there is a sizeable break below the 3,600p mark, the stock might target 3,361p.
Ted Baker said that full-year group revenue increased by 4.4%, but profit before tax dropped by 26.1% to £50.9 million. It was the first yearly fall in profit since the credit crisis. Discounting and a fragile consumer spending were blamed for the fall in earnings. E-commerce sales jumped by an impressive 20%. Even though the online department is registering strong gains, the company is still opening a few stores. The clothing company knows that e-commerce is the future, so it is selective in its store opening.
Next declared that full-year group sales was £4.2 billion, and group profit before tax slipped by 0.4% to £722.9 million, while analysts were expecting £724 million. It was the third consecutive annual decline in profit. The clothing company expects full-year profit for 2019-2020 to be £715 million. The company continues to feel pain on the high street, but the online division is performing well. Annual Store sales fell by 7.9%, while e-commerce revenue jumped by 14.7%.
GBP/USD is in the red this morning, but the pound was given a lift by the 0.4% rise in UK retail sales that was registered in February, and the announcement topped the forecast of -0.4%.
Nike will be in focus today as the company is expected to release its third-quarter numbers after the closing bell. The company received some negative publicity recently as two athletes received injuries their Nike footwear. The stock hit an all-time high yesterday so the image wasn’t hurt that much, and investors clearly have high hopes for the announcement.
We are expecting the Dow Jones to open 80 points lower at 25,660 and we are calling the S&P 500 down 5 points at 2,819.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.