Domino’s Fails To Take A Slice Of Europe

Tuesday, 29 January: With parliament set to vote this evening on PM May’s latest deal, the direction of equity markets early doors was swayed by fresh US/China uncertainty. Last night China’s Huawei Technologies received fresh criminal charges from the US with Huawei being accused of violating US sanctions on Iran as well as stealing trade secrets from a US business partner. The accusations come in a week where the US and China are set to meet to discuss ongoing trade talks. Many Asia stocks were sent lower amid the turbulence.

In London, the blue-chip index was pushed higher as sterling weakened ahead of this afternoon’s parliamentary debate and order of amendments. One such amendment that is to be voted on this evening is surrounding “alternative arrangements” on the Irish backstop, while another is an extension to Article 50. Unsurprisingly, defensive stocks sat at the top of London; British American Tobacco gaining more than 5%. The vote is set to commence at 7pm this evening, with May already vowing to go back to Europe to re-open negotiations over the Irish backstop. The new date for your diary is February 13, where a new “meaningful vote” will take place in parliament. March 29 is then just over 6 weeks away…

In more stock specific news today, Dominos Pizza issued a profit warning after its international businesses in Switzerland and Norway offset further growth in the UK. As a result, International performance is only set to break even, resulting in shares falling c.10% in early trade.

Housebuilder Crest Nicholson reported a fall in pretax profit, siting a difficult London and higher end price point market. In further caution, it added it expects the first half of 2019 to be difficult as Brexit uncertainty dampens consumer confidence. The group are set to close its London division and move away from the capital. However, it seems investors could have been expecting worse and shares actually rose over the day as the group reiterated its dividend policy. Shares closed +5.85%.

We all know Royal Mail for delivering our letters, but it seems less of them are being sent, according to the group’s latest trading update.  GDPR has reduced the amount of junk mail we receive, meaning Royal Mail aren’t paid as much by businesses, with corporate marketing activity favouring email over a hard paper format. Overall, letter volumes have fallen 8% in the 9 months to 23 December, resulting in a 6% fall in letter revenues. On the flip slide, parcel volumes rose 6% in the same time period. A 13.27% fall today leaves the group at its lowest level since privatisation in October 2013.

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