Tuesday, 16 July: As earnings season slowly gets underway we can see more intraday moves for global bourses, with Wall St. announcements dictating play later in the session. There has been little in the way of trade tensions cooling and mixed macro data across the globe continues to pose headaches for investors and central banks alike. This morning the FTSE began slightly higher, performing better than most other European bourses but this is probably due to the continued weakness in sterling.
Shares in focus included Burberry, who issued their Q1 update to a warm reception from the market. They sat at the top of the index for practically the whole session, eventually closing 14.4% higher. The fashion brand has seen retail revenue climb 4% to begin the new fiscal year, benefitting from their new collection and increased availability. Shares are now nearly £5 higher since the end of April, beginning of May this year. Pearson also shared their latest update today and finished behind Burberry as the second-highest climber son the day, albeit with modest gains of 3.4%. They look to phase out print education publishing in favour of electronic versions. Some analysts believe this turnaround strategy is perhaps being undervalued by the market, but it is very early stages of the long road to a sustainable long-term recovery.
Ryanair announced that due to delays in deliveries of the Boeing 737 MAX they are expecting lower growth next summer, as schedules will be adjusted accordingly, meaning routes will be cut and they will likely have to make cuts and closures at some of their bases this winter. Shares ended the day 3% higher.
AG Barr shares, the Irn-Bru owner, suffered heavy losses today after a profit warning was announced. They expect revenue for the first half of fiscal 2020 to be 9.6% lower due in part to brand challenges with Rockstar Energy and Rubicon, but also cite tough comparatives from last summer. The grim start to the summer for Northern areas has affected trading too. Shares finished over 28% lower.
As mentioned earlier, weak sterling provided some protection to domestic bourses today, with further falls prompted from renewed Brexit fears after debates between the Brexit Party and EU signalled more fears of an abrupt Brexit. We also saw wage data come out today, showing wage acceleration was at its fastest rate in more than a decade during the three months through to May. Contradictory signs of health in the labour market given Brexit trials and tribulations.
As we write Wall St. bourses have begun Tuesday flat/ edging lower as they digest results from listed companies themselves. In focus were a raft of large banks, delivering mixed results from the likes of Goldman Sachs, the sector currently sitting down 0.2%.