WH Smith (LON:SMWH) falls on high street headache
After a couple of politically-driven sessions the European markets get to sink their teeth into some high quality data this Wednesday.
The (temporary) end of the US government shutdown was the latest thing not to give the dollar a boost, with the greenback dropping 0.3% against the euro and 0.4% against both the pound and the yen. That means cable has lifted above $1.405, building on the post-Brexit referendum result highs struck in the last week or so while preventing the FTSE from regaining its recently lost momentum (the UK index slipped back towards 7710 after falling 0.2%).
Sterling may have something of a workout this Wednesday, however, dependant on the state of the UK jobs report. With inflation pulling back to – an admittedly still high – 3.0% in December, it would be handy if the wage growth reading for the 3 months to the end of November beats the unchanged 2.5% forecast by analysts, therefore providing a slither of hope for those whose wages have been severely squeezed in the last few months. As for the other figures, the unemployment rate is expected to remain at 4.3%, with the claimant count change for falling from 5.9k in November to 2.3k in December.
As for the euro, which has pared its dollar-gains with a 0.2% dip against the pound, its main focus this morning will be on the Eurozone flash manufacturing and services PMIs. The region-wide readings are forecast to slip oh so slightly, with manufacturing down from 60.6 to 60.4 and services falling from 56.6 to 56.5 respectively – not bad given the all-time and 80-month highs of November’s numbers. Of course, if the euro does get the rub from these readings that doesn’t bode well for the DAX and CAC, both of which started the day pretty flat.
Investors weren’t impressed with what they read in WH Smith’s Christmas update, with the retailer falling 5% after the bell. The main issue was its high street performance, where a lack of new publishing trends failed to lift the division over the festive period; however, things didn’t get any worse, at least, with the high street sales and like-for-likes down 5% and 4% respectively, the same as they were in October’s full year report. In that regard the travel division’s numbers were a tad disappointing, with overall and comparable sales up 7% and 3% compared to the 9% and 4% full year increase.
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