Thursday, 23rd November: Centrica dominated the root of the main index in London, falling more than 16.5% in early trade, as investors fled amid dividend doubts in the midst of further competition. The parent owner of British Gas look set to miss profit expectations while full-year adjusted EPS look set to disappoint, reflecting the impact of a one-off non-cash charge in the North American business. Shares plunged the most in 20 years as 823,000 customers left the UK’s biggest energy supplier, closing the day -15.49%.
Before our American companions signed off for Thanksgiving yesterday, the minutes from the FOMC were digested, confirming the likelihood of a December rate rise in what will be Fed Chair Janet Yellen’s penultimate meeting. Probability today stands at 91.5% of a rate rise although the outlook for 2018 looks to be slightly more dovish, warning that further rate rises while inflation in the US remains under 2% could depress inflation expectations.
Despite the heavy falls of Centrica the FTSE 100 reclaimed early day falls to close slightly in the red at -0.02%. With the US being off in both equity and bond markets it was a relatively quiet day. Equity markets across Europe were mixed with the CAC 40 in France closing +0.5%; the DAX in Germany -0.07% and IBEX 35 in Spain -0.32%. At the time of writing GBP is down against the major currencies, now at €1.1224 and $1.224.
Retailers on both sides of the Atlantic will be gearing up for “Black Friday”, the last Friday of November, although many retailers seem to be stretching the event out for the weekend, 5 days or as much as 2 weeks. Black Friday has been regarded as the start of America’s Christmas shopping season, going back to 1952, with the name being thought to mean when retailers began to make a profit, thus turning from in the red to being in the black.