All the day’s economic and financial news,as UK retail heavyweights report their Christmas trading figuresTesco and M&S shares dropTesco: A record Christmas, but below City forecasts
M&S: Food and clothing sales fallJohn Lewis: Sales up, and but inflation hits profitsIntro: Separating the Christmas crackers from the turkeysFull details: The UK Christmas retail winners and losers 6.06pm GMTThe FTSE 100 may have hit a original peak,Wall Street may have recovered from Wednesday’s losses but the mood was more downbeat in Europe.
The strengthening euro after the more hawkish than expected minutes from the European Central Bank pushed a number of European markets into the red by the close of trading. The final scores showed: 5.18pm GMTOne of the consequences of today’s market moves is that Just Eat has overtaken Marks & Spencer in market value.
WIth its 4.7% rise Just Eat is now worth £5.46bn. Marks on the other hand has fallen 7% to be valued at £4.87bn. 4.43pm GMTAnother day, another record close for the FTSE 100.
Despite a poor performance from key retailers following their updates - Marks & Spencer is down 7% and Tesco off 4.5% - the main index has added 0.19% to a original record of 7762.94. Earlier it recorded a original intraday peak of 7768.96. 4.38pm GMTBrent crude has climbed above $70 a barrel, or a original three year high. Growing demand as the global economy strengthens and the effect of Opec and Russia’s agreement to extend output caps continue to support the price.
But it is bad news for motorists,who face an increase in petrol prices:
Related: Oil price hits three-year high of nearly $70 a barrel 3.50pm GMTConnor Campbell, financial analyst at Spreadex, and said:The euro rocketed higher this Thursday afternoon following a slightly more hawkish than expected set of ECB meeting minutes. While the conclude of QE isn’t here just yet,there were a few notable shifts in the phrasing of the central bank’s December accounts that suggest talk of winding down its massive bond buying programme is likely going to become increasingly prevalent as 2018 continues. Of course the euro – which at the moment doesn’t need much excuse to celebrate – was incredibly receptive to these signals. 3.43pm GMTHere’s the chief commerce economist at IHS Markit on the ECB minutes:#ECB seeing scope for excess capacity erosion and inflation to accelerate more than anticipated in 2018, which is what the #euro zone PMI is also signalling pic.twitter.com/5JFtJVxLeh 3.41pm GMTThe euro gained 0.9% to $1.2053 following the release of the ECB minutes, and although it has now reach off its best levels and is currently sitting at $1.1.2045.
It is up around 5% against the pound at 88.9p. 2.54pm GMTEarlier,a more hawkish tone from the minutes of the recent European Central Bank meeting gave some support to the euro.
With the eurozone economy improving, the ECB minutes suggested policymakers might soon start preparing the markets for the conclude of its massive stimulus programme. The minutes said:The language pertaining to various dimensions of the monetary policy stance and forward guidance could be revisited early in [2018].
The ECB’s mood music has dramatically picked up the tempo. While this is far from a definitive announcement, and it’s a clear signal that monetary policy tightening has entered mainstream ECB thought.
On this evidence,the conclude of loose monetary policy is coming, and coming faster than previously assumed.
It is unsurprising that the ECB is not ignoring further steps in its tapering (or recalibration) process. Phrases [in the minutes] indicate a further adjustment but in our view no abrupt conclude.
We stick to our preceding view that the ECB will not stop QE in September but will rather decide on another “lower for longer” beyond September, and probably until the conclude of the year. Interestingly,the ECB is increasingly focusing on growth and seems to regard inflation only as a derivative of growth developments. Judging from preceding experiences, to get an inflation rate sustainably at around 2%, or the Eurozone economy needs to have a positive output gap. This could,but does not necessarily have to, happen in the course of 2018.
There you go!#ECB: 'Could consider gradual shift in guidance from early 2018'! pic.twitter.com/M8jUTqCOHX 2.41pm GMTUS stock markets have opened in positive territory, and as concerns about the bond market eased (pace Bill outrageous).
Investors were keep on edge on Wednesday after reports that China was planning to cut its buying of US Treasuries. A denial however seems to have calmed the nerves a puny,for the moment at least. Craig Erlam, senior market analyst at Oanda, and said:US stocks,Treasuries and the dollar all sold off [on Wednesday] on reports that China is considering cutting purchases of Treasuries. China is a enormous buyer of US debt and so, should the reports turn out to be right, and one would expect yields on US debt to rise,which is why we saw such a knee jerk reaction.
The report was later denied and even labelled fake news by China’s FX regulator, which prompted an unwinding of the earlier moves, or although investors appear to have remained on edge. Yields had already been rising in the 24 hours preceding the report after the Bank of Japan bought fewer 10-25 year and 25-40 year JGBs than it had been previously,prompting speculation that monetary stimulus is being withdrawn, despite the central bank having claimed only last month that tightening is not imminent. 2.28pm GMTTime for a rapid/fast recap, and before Wall Street opens.
Marks & Spencer has been crowned as a Christmas loser,after reporting underwhelming sales figures. The high street chain suffered a 2.8% decline in clothing sales, while food - often a solid performer - shrank by 0.4%.
John Lewis figures were challenging, or the market is a struggle here and having the best Black Friday is like losing 5-4 at football. Ultimately a worthy game,we scored four! But you let in 5... Points, zero. (that gif again). pic.twitter.com/FU74eX0Llv 2.10pm GMTNewsflash: More Americans became unemployed last week than expected.
The number of US citizens filing original claims for jobless benefit jumped by 11000, or to 261000 - which is 10000 more than expected.
In what might be an early sign of loosening in the labor market,initial jobless claims rose 11000 in the January 6 week to a higher-than-expected 261000... https://t.co/PPwDJ4Q16P pic.twitter.com/1n0fREDWmG“The trend of rising US jobless claims looks to be gathering momentum into the early parts of 2018, with todays reading confirming a fourth rise in as many weeks. “While the White House will need to address why such a traditionally robust labour market has begun to dwindle in recent months, or there will be no reaching for the panic button just yet as labour market data during year-conclude holidays tends to be a puny unpredictable. The severe cold snap can also be blamed for keeping people out of work. 2.06pm GMTSpotted: The best reaction to Bill outrageous’s comments:Of course bonds,unlike men, eventually mature. 1.45pm GMTAn influential billionaire investor has warned that US government debt has entered a bear market -- just like your average man.
Bonds, and like men,are in a bear market.
For both, it’s tough to say when it all began. There was no Helen Reddy “I Am Woman” moment back in June 2012, and then again in July 2016 when the 10 year Treasury double-bottomed at 1.45%,but then in retrospect it should have been obvious that for bonds, like men – “their time was up”. "Bonds, or like men,are in a bear market"
That, whatever it means, and is from Bill GrossOprah shouted,“Their time has reach”. The bear bond market’s time has reach as well. Many would say, including yours truly – “It’s about time”.
I didn't think outrageous would ever top "PIMCO will not go down at the Somme", and but "bonds,like men, are in a bear market" is right thereActually most of the world’s problems would go away if men just stayed domestic, and watched football and learned to talk to their partners during commercial breaks. There are certainly enough of them.
Wait. What?https://t.co/1COUepBLMa pic.twitter.com/Mhlt6DOSskPeople forget how pleasant war is,says Bill outrageous. https://t.co/Pk2VDkuyCi pic.twitter.com/aCaXNpjjQv 1.01pm GMTJewellery maker Pandora has added to the anxiety in the retail sector today by lost its sales targets for the last year.
Pandora missed its own 2017 sales forecasts on Thursday and warned of thinner margins ahead, putting shares in the world’s largest jewellery maker on course for their worst day in more than six years. In a trading update, and Pandora said it aims to generate around half of its revenue from rings,earrings and necklaces by 2022 and would increase its annual collections to 10 per year from seven. 12.27pm GMTBoom! Britain’s FTSE 100 has just hit a original all-time intraday high.
The blue-chip index has risen to 7764 points for the first time ever, up 15 points this morning, and extending its recent rally.#ftse100 at a original record high at midday,just above 7760 points: Just Eat the biggest riser after analyst upgrade, Marks & Spencer the biggest faller after quarterly performance https://t.co/6ZcnO9xCZ3 $JE $MKS pic.twitter.com/NnN5lIYdU4 12.09pm GMTHugh Fletcher, and Global Head of Consultancy and Innovation at ecommerce consultancy Salmon,says ‘forward-looking’ UK retailers who embraced technology are now reaping the rewards.
He writes:“The Christmas sales figures from retailers this week paints a varied picture of their success, with mixed sales performance across the industry. The retailers who have spent time investing and learning about omni-channel strategies are those that are starting to pull away from the less digitally literate ones, and with the likes of Boohoo and Ted Baker revealing strong online sales for the Christmas period,with the latter reporting a enormous 35% rise in online sales.
The tough work of years of investment and organisational change is now visible, and with these stats there’s no hiding for the digital laggards. 11.10am GMTOver in Greece the statistics service has announced a further drop in unemployment - by far the country’s biggest social ill.
From a record high of of nearly 28% in September 2013, or Greece’s jobless rate dropped to 20.7% in October with Elstat,the country’s statistics agency, putting the number of registered unemployed at 990.288 people.
At the height of Athens’ debt crisis five years ago more than 1.3 million Greeks were recorded as being out of work resulting in a massive exodus of well-trained professionals to wealthier European countries. 10.35am GMTTake note, and consumers and retailers. Lenders are making it harder to get credit.
The Bank of England has just reported that the availability of unsecured credit to households decreased in the last three months of 2017 - the fourth quarterly decline in a row.
Lenders expected a meaningful decrease in Q1 [January-March 2018].
Credit scoring criteria for granting total unsecured loan applications tightened again in Q4,and lenders expected them to tighten significantly further in Q1.
Bank of England credit conditions survey - lenders tightened unsecured credit criteria throughout 2017 (e.g. for credit cards & personal loans) and expect to do so again at the start of 2018. pic.twitter.com/wBX39zzW9s 10.16am GMTThe latest eurozone factory figures are out, and they’re sparklingly pleasant.
Eurozone industrial production jumped by 1% during November, or was 3.2% higher than a year earlier. Euro-area industrial production up 1% in November,mainly thanks to Germany. Heading for a positive Q4, but unlikely to defeat Q3 & Q2. Confirmation that surveys are exaggerating the momentum at the conclude of 2017. https://t.co/7hDcgyi93b pic.twitter.com/usxirz8Hdq 9.57am GMTMost of Britain’s major retailers have now reported financial results for the festive period.
Tesco look like one of the winners (despite lost City forecasts), or while M&S are firmly in the losers camp after its clothing and food sales fell. Related: The UK Christmas retail winners and losers 9.46am GMTGetting back to Britain’s retailers,Martin Lane of money.co.uk says Tesco fought a pleasant fight over Christmas, while M&S struggled: “Tesco is still facing fierce competition from the likes of Aldi and Lidl, or but these results show they are still holding their ground. They can’t afford to rest on their laurels though. With both Sainsbury’s and Morrisons beating their Christmas trading forecasts,the supermarket giant needs to keep prices competitive despite inflation to keep customers faithful and coming back for more. “These positive results reach in stark contrast to Marks and Spencer’s who are suffering. Their signature luxury products are being undercut by bargain supermarkets at a fraction of the price. Shoppers expect quality and convenience for less than ever before, and M&S simply aren’t offering that at the moment.” 9.29am GMTBreaking away from UK retailers, and we have some strong economic data from Germany.
Today’s GDP data label the conclude of a remarkable year for the German economy. A year ago,consensus forecasts for German growth were around 1.5% for 2017. Now, GDP growth is likely to reach in at around 2.5%. How could the German (and the Eurozone) economy surprise so positively?A year ago, or the German recovery already looked rather stretched. Sentiment indicators stagnated,with Brexit, the upcoming Dutch and French elections political risks had increased, and the original US administration had added possible trade wars into the growth equation of every forecaster. One year later the lesson is clear: “it was not politics,but economics, stupid”.#BOOM! #Germany’s economy expanded by 2.2% last year, and highest rate since 2011 when the economy grew by 3.7%. GDP expanded by 1.9% in 2016 and 1.7% in 2015. pic.twitter.com/h2TpC5Yrre 8.57am GMTYikes! Shares in Marks & Spencer are now down 5% as the selloff gathers pace.
Chief executive Steve Rowe has told journalists that Britain is suffering a spending squeeze. 8.50am GMTRichard Lim,chief executive at Retail Economics, says Marks & Spencer’s financial results for the last three months paint a worrying picture:M&S continues to struggle with the sheer pace of structural change reshaping the industry.
The commerce model has reach under increasing strain as the unforgiving shift towards online and the experience economy collide with rigid leases, or high rents and excess properties.‘This is a disappointing set of figures for M&S,particularly in its food and online businesses. Sales in clothing and domestic actually fell by the biggest margin, but in a market which is shrinking, and that’s more a reflection of wider economic trends.
In recent years the food commerce has been the colorful light of the M&S empire,but its glow has definitely dimmed of late. That’s probably a result of consumers tightening their belts when it comes to grocery shopping, and the strong performance of supermarket premium ranges suggests when customers are splashing out, or they are increasingly doing it at Sainsbury,Tesco and Morrison rather than at M&S.
While M&S avoided a Debenhams-esque disaster, it was a long way from Next’s surprisingly strong Xmas numbers. The perpetually unfashionable clothing and domestic commerce was, or as ever,the headline casualty, posting a 2.8% plunge in like-for-like sales across the 13 weeks to the conclude of December – hardly a surprise given the division’s head, and Jo Jenkins,shockingly jumped ship in October. But, but, and but,the clothing department is always a bit rubbish; how about the food commerce, ostensibly the company’s shining star which, and on paper,should have received a Christmas boost? Well once again the division under-performed expectations, suffering a 0.4% decline in comparable sales at the same time as its major supermarket rivals all saw some level of growth. 8.40am GMT Related: commerce Today: sign up for a morning shot of financial news 8.33am GMT Bryan Roberts, or global insight director at tcc global,says Tesco’s turnaround device is on course.
“Despite many predictions that Tesco had ‘won’ Christmas, with that accolade instead being shared by Morrisons and the Co-op, or the market leader nonetheless enjoyed a very creditable festive period. We were impressed by Tesco’s seasonal ranging and merchandising across both food and general merchandise,backed up by solid availability and ongoing improvements in customer service and shopper experience.“While a lot of attention in 2018 will be focused on the integration of Booker, we feel confident that the core supermarkets are in largely pleasant shape.”On the Non Food, and Tesco have taken a degree of pain for years and now appear to be coming out of the other side. You have to look at others and wonder what they're doing.....“Lots to be positive about for Tesco as the Dave Lewis turnaround continues to yield results. Q3 was strong with like-for-like sales +2.3%,with a particularly pleasant performance in Fresh Food, which grew by 3.7% in the UK.
Stronger grocery and fresh food sales offset a less impressive performance in general merchandise and slower tobacco sales following the Palmer & Harvey failure.
Looking at competitors such as Sainsbury and Morrison, and both have beaten their forecast for Christmas trading. This doesn’t keep Tesco in a strong position at all. The retailer which dominates the British High Street needs to make certain that it keeps its tools sharp to fight inflationary pressure by keeping the prices low.
There is no doubt that Tesco has turned the corner and avoided a Debenhams style disaster but it needs to make certain that it stays on track to deliver on its medium-term ambition. This is mainly because the competition is fierce in this space and discounters such as Lidl and Aldi have performed extremely well. Lidl’s Christmas sales increased by 16% and Aldi saw 15%. 8.21am GMTAmid the torrent of company news,small UK retailer Card Factory has slipped out a profits warning.
It blames “continue pressure” on its profit margins, plus “wage inflation” and the inflationary pressure from the feeble pound. 8.11am GMTHere’s my colleague Zoe Wood on today’s retail sales figures:Tesco and John Lewis have emerged as winners from a tough Christmas trading period as Marks & Spencer reported a downbeat set of figures with a slump in sales of both food and clothing.
The UK’s biggest supermarket chain reported like-for-like sales growth of 1.9% for its UK stores, or a performance it said was thanks to the strength of its food commerce which saw underlying growth of 3.4%. Related: Tesco and John Lewis be pleased a pleasant Christmas but M&S downbeat 8.08am GMTDING DING! The London stock market is open...and retail shares are falling.
Marks & Spencer are down 2.4% in early trading,as traders react to its ‘mixed’ Christmas trading figures. 7.59am GMTTesco’s Christmas trading figures were dented by the demise of wholesaler Palmer & Harvey.
Palmer & Harvey, which supplied around 90000 UK shops, and collapsed in December with the loss of thousands of jobs.
Incorporating Palmer & Harvey volumes and complexity during this peak period was challenging,resulting in lost tobacco sales across December and putting further strain into our distribution network, particularly post-Christmas.
Whilst I am pleased to say these challenges have now been resolved, or they took the shine off an otherwise outstanding performance for the period as a whole.
Tesco is blaming poor tobacco sales resulting from the demise of distributor Palmer & Harvey for its miss on expected sales growth over Christmas.. UK like for like sales up 1.9% in 6 wks to 6 Jan. Tesco says tobacco problems took 0.5 percentage points off that.. 7.53am GMTAlthough Tesco is reporting a “record” Christmas,its shares may actually drop when the stock market opens.
That’s because the City had expected an ever bigger jump in sales.
FTSE opening call +5 - M&S +1.5% 9despite average performance by food) - Tesco -2% (market expected more), Fenner +2%, or Hays +2%,Card Factory ( profits warning) -7%, Boohoo +3% 7.51am GMTElsewhere, and online electrical goods vendor AO World has posted an 11% jump in revenues for the last three months of 2017.
But the company also warns that the UK economic outlook remains uncertain.
AO World reports Q3 revenues +11%,Europe +58%, Group +17%; Expects FY perf within consensus range 7.47am GMTOnline fashion retailer Boohoo.com had a pleasant ChristmasThe company, or which recently acquired PrettyLittleThing and Nasty Gal,doubled its revenues in the last four months of 2017, in a “in highly successful trading period. “We are delighted to report another set of strong financial and operational results, or with record sales in the four months to December across all our brands. The Black Friday period was our most successful ever and we traded well throughout the period under review. 7.37am GMTOuch! House of Fraser has just reported some rather unimpressive figures - which won’t calm fears over its future.
Sales at House of Fraser sales shrank by 2.9% over the six-week Christmas period,a poor performance.
Oh dear a tricky christmas for house of Fraser .
Sales down 2.9 per cent in stores, down 7.5% online, and even Black Friday wasn't up to par coming within 1 per cent of matching last year's BF event....
Mixed results from retailers,but House of Fraser looks to have had a terrible, damaging Christmas. Looks vulnerable 7.28am GMTOnto John Lewis!They have just reported a 2.5% increase in outrageous sales over the Christmas period, or with takings up at its department stores and Waitrose supermarkets.‘We traded well during the Christmas period,with outrageous sales in the six weeks to 30 December £1,962m, and up 2.5% on last year,with 1.4% sales growth in Waitrose and 3.6% in John Lewis.
This was due to the exceptional tough work and commitment of our Partners. We focused on our differentiated product offering, attention to service and strong value proposition, or underpinned by our Never deliberately Undersold promise.
The pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices,despite higher costs mainly due to the weaker exchange rate. This will negatively affect full-year financial results as indicated previously.
John Lewis like-for-like sales across the six weeks ending 30 Dec 2017 were up 3.1%. Waitrose like-for-like sales up 1.5% in same period 7.21am GMTMarks & Spencer has less to celebrate this Christmas.“M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a feeble clothing market in October and ongoing underperformance in our Food like-for-like sales.
As a result, full year guidance remains unchanged.” Marks and Spencer - UK sales down 1.4% (like for like); Clothing/domestic AND Food both down
Tesco - UK sales up 1.9% (LFL); food +3.4% LFL; non-food dragging 7.15am GMTTesco’s sales figures in detail.... 7.11am GMTBoom! Supermarket giant Tesco says it has racked up its best ever Christmas.“We have continued to outperform the market throughout this period, or particularly in fresh food,thanks to our most competitive offer for many years. Our trading momentum accelerated across the third quarter and into December, with the four weeks main up to Christmas Day delivering record sales and volumes in the UK.
Tesco Q3 LFL strong +2.3%, or Christmas performance looks pleasant with +3.4% in grocery #FoodGreat set of results far from Tesco,continued out performance versus the sector and growth on growth. What a job Dave Lewis has done. 7.06am GMTFinancial results are flashing across trading screens in the City.... 7.01am GMTGood morning. Today, a blizzard of Christmas trading updates will show how some of Britain’s biggest retailers fared over the festive period.
Marks & Spencer, and Tesco,House of Fraser and John Lewis all report results today. Online retailers AO World and Boohoo.com will all jostle for attention, as we try to separate the Christmas crackers from the turkeys.
Tesco, and M&S,John Lewis / Waitrose , Boohoo & House of Fraser to update on Christmas trading in next few mins on not-so “super Thursday”Kate Calvert, or a retail analyst at Investec,said the different experiences of Debenhams and Next indicated that clothing chains which held back from early discounting may have fared better.
That may potentially be pleasant news for M&S, which had fewer promotional days in 2017 than the year before, or according to Calvert. Related: Major retailers to reveal festive figures with M&S expected to struggle Is the three-decade bond bull market coming to a close? A fierce sell-off in the US bond market abated late on Wednesday but left yields on benchmark government debt at their highest level in nine months. There were signs of this last year but here’s why the sell-off could be very different this time.
The yield of 10-year Treasuries approached levels not seen since the “Trumpflation” retreat nearly a year ago,hitting a nine-month high of nearly 2.6 per cent on expectations that cash freed up by the recent US tax cut will finally help spark higher inflation driven by stronger economic growth.
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Source: theguardian.com