Thursday, October 10: Indices in the UK and on the continent closed in the green as optimism took hold of markets on news of high level trade talks between the US and China. Sterling also saw a bounce as discussions between PM Johnson and Irish PM Varadkar indicated a possible Brexit agreement could be reached, albeit with more negotiation required.
Dunelm(-10.36%) posted strong LFLs, confounding the retail trend at large but did warn on adverse currency impacts eroding gross margins in H2. The homewares retailer reported total LFL sales growth of 6.4% in Q1, with a spread of growth across its omnichannel network. At the store level, LFLs were recorded at +2.9% as the online segment continued to see very strong LFLs online(+34.7%). Including the benefit of new stores, total Dunelm growth came in at 7.5%. The start of the quarter was particularly strong, due to continued market share gains and a weak comparator last year. Trading in September was more mixed, reflecting a softer homewares market.
August’s GDP read came in ahead of forecasts at -0.1%, stopping just short of delivering a pre-Brexit recession. GDP in the three months to August came in 0.3% higher than the prior three months, and above expectations set out in a Reuters poll of economists. The pace of growth quickened from 0.1% in the three months to July, but the stronger performance largely represented revisions to earlier months and the most recent figures were weak.
European equities were higher at the close, with the FTSE 100 +0.28%, the CAC 40 +1.27% and the DAX 30 +0.58%.