Auf Wiedersehen European Union

Tuesday, 28 March: European bourses began the day clawing back some of yesterday’s losses, Asian markets displayed a similar trend during their session as the Nikkei closed 1.14% higher after Monday’s 1.44% decline. In early trade the FTSE sat around 0.25% higher, lagging its European peers, most likely ahead of Article 50’s debut tomorrow. The FTSE 100 closed 0.68% higher.

At home we start with Tesco, who have agreed to pay a £129m fine relating to their 2014 accounting scandal.  For most remembering last weekend is a struggle so we can give a quick refresh; In early 2014 Tesco basically gave a false impression of their performance, after a ‘bright’ update at the end of August they gave investors a cheeky update around a month later to say that actually, we’ve done the math, and our profits were overstated by £250m. Then someone else did the math and found an extra £76m overstatement after this. Investors were miffed, similar to the feeling when you try and go self-checkout to save time and end up placing your digestives back in the bag about 14 times. The share price tumbled, internal investigations ensued and Tesco still remain in the uphill turnaround battle from the incident. Having said that, the supermarket has come a long way under Dave Lewis who timed his arrival just as this was uncovered, welcome to the team Dave.  Tesco shares closed the day +0.66 (this still leaves them approximately 17% lower than the August 2014 statement).

Wolseley was the biggest winner on Tuesday, shares lingering around 7% higher for most of the morning before finishing 5% up on the day. Their first half update pleasing investors after a dividend rise however net profit fell from increasing operating costs. In a beefy update, they’re also going to change their name and exit Nordic operations. Thomas Cook have seen a 10% lift in summer bookings for this year, after strong growth in Greece and smaller European destinations, re-affirming its full year guidance. Moss Bros have reported higher annual profit and lifted the dividend, but cite that a later Easter is delaying hire revenue (+1.5%). Card Factory whom you may be familiar with from a last minute Mother’s Day card at the weekend have posted a modest decline in 2017 pre-tax profit and they are to implement several cost saving strategies to combat currency and NMW headwinds. Insurance provider Aviva is looking to off-load Friends Provident for up to $750m. The unit serves high net worth customers across Asia and the Middle East. Aviva shares closed a modest 1.91% higher.

Over in America the Dow looks to avoid its 9th straight loss, which if it was to happen, would be the longest losing streak since 1978. After hitting record highs this year, including a 12-day win streak of its own.  As we leave the Dow looks on track to defy this, currently up 0.5%.

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