Next’s Summer Feeling

Tuesday, 25th September: A relatively muted tone in Asia overnight, with major Hong Kong and South Korean indices closed, set the directional tone in London at the open as global trade woes continued to weigh on investor sentiment. The FTSE 100 forged a positive drive over the course of the day, led by retailer Next (+7.69%) while corporate activity in miners Randgold Resources and Glencore added to gains. Next has reported strong sales in the first half of the year, buoyed by the warm weather, but continued to add caution with Brexit related risks. UK retail has been hit with many CVAs, store closures and job losses, but today’s half year announcement gifted a raised annual pre-tax profit for the group’s 2018 financial year. A proposed merger between Randgold and Barrick Gold (of Canadian origin) and Glencore pledged to increase its share buyback programme by another £1bn to February 2019. Shares rose 4.60% and 3.48% respectively.

Michael Kors is set for a rebrand following the Versace acquisition which was leaked last night. The US handbag maker is set to acquire Italian fashion house Versace for $2.1bn. The combined entity is to be renamed Capri Holdings. Donatella Versace, who has run her name-sake company since 1997 (and her brother’s murder), will continue to lead the “creation vision”, with the number of Versace outlets set to rise from 200 to 300. Michael Kors shares fell >8% as the news was leaked yesterday, with less heavy falls recorded on the New York Stock Exchange at the time of writing.

Political noise, AKA Brexit rumours continue to swirl, although Labour’s plan to vote against PM May’s Brexit deal did little to dampen sterling’s fourth day of gains against the dollar. Speaking at the party’s conference in Liverpool, Sir Keir Starmer, the shadow Brexit secretary has once again highlighted Labour’s fight for a second referendum, further adding another election (because we didn’t just have one last year) call in order for Labour to guide the UK out of Europe. GBP/USD is +0.31% at $1.3156 while slight gains for GBP/EUR leaves it at €1.1178 at the time of writing.

Indices in London were missed with the FTSE ending +0.66% while the domestic orientated FTSE 250 fell 0.13%, grounded by c.5% fall in Wizz Air; mixed rumours over UK-EU flights post Brexit forced many airlines lower, Jet2 owner Dart Group falling the most; down 8.13%. Oil reached nearly 4 year highs following OPEC, as well as non-OPEC regions maintaining current production targets, ignoring President Trump’s calls for an increase in production in order to cap prices. Brent Oil sits +1.15% higher at $81.75.5 as we write.

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