Tuesday, 19 June: Investor woes amid US and China tensions continued over night as the Chinese equity market reopened following an extended weekend. The Shanghai Composite Index fell by 3.8% while other Asian indices followed peers in to the red. European markets didn’t take long to follow Asian counterparts, the FTSE falling more than 1% minutes after the opening bell. It made up ground over the course of the day (-0.36% at the close) as sterling weakened as the day wore on. S&P futures signalled to a weaker open, ringing true as the index falls 7/10ths lower at the time of writing. The dollar gained traction, rising to its highest level against a basket of (16) currencies in nearly a year, up 0.57% against the pound at $1.31 at the time of writing.
Names in UK retail haven’t had the best of years with several names set to disappear from our high street/retail parks. Although not one of those who have announced closures, Debenhams today released its third profit warning of the year with trading in May and June missing targets due to market weakness. Pre-tax profit for 2018 is set to fall short of market consensus, with the shares giving up a further 11% today, resulting in c.50% falls year to date.
Retirement builder McCarthy and Stone fell more than 17% at the close after announcing its own profit warning as economic uncertainty weighed on reservations. Legal completions are now expected to be between 2,100 – 2,300 for the year, against 2,302 completed in 2018 fiscal year. A review of the business is expected after the summer while the current CEO is set to step down.
Temperatures may have dipped slightly in Newcastle but it’s still rather unlikely that the heating has been switched on for some time. However, from 16 August, dual energy customers of E.On will be looking at a 4.8% price rise. Electricity-only customers (on a standard variable rate) will see rises of 6.2%; gas-only customers’ bills will be rising 3.3%. E.On claim wholesale costs have risen since 22% since March, adding it is the fourth cheapest of the big six suppliers.