Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

FTSE Down; Societe Generale Warns Of Q4 Fall; Primark Outperforms Peers

By City Index (Fiona Cincotta)Stock MarketsJan 17, 2019 10:29
uk.investing.com/analysis/ftse-down-as-uk-government-survives-vote-of-noconfidence-200205681
FTSE Down; Societe Generale Warns Of Q4 Fall; Primark Outperforms Peers
By City Index (Fiona Cincotta)   |  Jan 17, 2019 10:29
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The FTSE opened lower this morning and the pound weakened against the dollar and the euro as Britain emerged from yet another Brexit-induced political crisis after Theresa May’s government survived a no-confidence vote called by Labour last night.

Sterling rallied to $1.2896 in the immediate aftermath of the vote but following some sideways trading overnight it plunged in early London trade only to start regaining ground this morning. The rally was no surprise as the markets have been pricing in that the PM would survive the vote. The pound/euro moves followed the same trajectory as cable but were less volatile.

This morning’s FTSE chart reflects the same sense of bafflement that is dominating UK politics right now as it remains unclear what will happen next. The index opened lower only to surge up and then repeated the same sharp up and down move in the first half hour of trading. The result of the vote should mean marginally more stability over the next few days as the government pushes on with a Brexit proposal in some form.

Given that her Brexit proposal was soundly rejected on Tuesday Theresa May now has until Monday to come up with a Plan B. She is expected to meet with opposition leaders Thursday to try and find more middle ground before heading to Europe for further negotiations.

Asian stocks traded higher, taking their cue from a strong Wall Street close helped by strong results from major banks. However, Asian gains were muted by news that the US is planning a probe into China’s Huawei over alleged stealing of trade secrets from US companies.

Societe Generale (PA:SOGN) warns of fourth quarter fall

The French bank has warned that it expects its business to have declined 20% in the fourth quarter of 2018 and by 10% for the whole year because of the challenging environment in global capital markets. Soc Gen’s revenue decline mirrors similar results reported by US banks Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) earlier this week, all of their trading books hit by the roller coaster in the US markets in the pre-Christmas weeks.

The manic up and down in the markets had been sparked by the expectations that the Federal Reserve’s strict interest rate hiking plan for 2019 would unduly slow down the US economy. However, with the Fed changing tack before year end bond markets seem to have returned to a more sedate pace of trade. So far only Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) managed to defy expectations and post a higher-than-expected fourth quarter earnings statement. Morgan Stanley(NYSE:MS) (NYSE:MS) is due to report later today and the market is skewing towards stronger results.

In Europe, however, banks are more likely to replicate Soc Gen’s results, particularly major banks with large trading portfolios. Deutsche Bank's (LON:0H7D) investment bank unit has already reported one of the worst years since the financial crisis.

This is a sure and steady update from Experian (LON:EXPN) that shows it's very much on track to meet the top end of its full-year guidance.

Organic revenue growth is again evident in all regions and it's good to see a substantial improvement in the UK consumer services division.

Management had forecast UK consumer services revenue to start growing again in the second half, which still looks achievable now that the decline in the third quarter has narrowed to 1%, compared to the first half's 6% fall.

Businesses are still clearly looking to get an edge over their competitors by tapping Experian's vast data troves to analyse customer behaviour.

An ongoing economic recovery in the US is helping matters by allowing companies to shell out more on digital transformation strategies, for which big-data mining is often a centerpiece.

Regulatory risk will always hang over Experian as governments, particularly in Europe, pledge to clamp down on alleged misuses of people's personal information. So far, though Experian has successfully played the situation to its advantage, by assuring customers that it's better placed than competitors to navigate new rules and offer data that won't get them into hot water

Primark has deftly negotiated what was particularly perilous Christmas trading period

Like-for-like sales are only down slightly on the previous year, while a total sales rise of 4% has met the expectations of a market accustomed to seeing Primark outperform its peers.

One again it appears that economic uncertainty in Britain, at this stage centered largely on Brexit, has driven cautious consumers into the arms of discount retailers.

Associated British Foods's (LON:ABF) sugar business is struggling, as expected, but the steady performance at its other division, most notably Primark, has put the company on track to meets its annual guidance.

A small black spot in this result is the 10% cut to the forecast increase in Primark's net selling space this financial year, owing in part to a delayed store opening in New Jersey.

Crucially, though, Primark's US expansion appears to have gotten off to an otherwise excellent start. And that's the place where a lot of the company's future growth will have to come from.

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Original post

FTSE Down; Societe Generale Warns Of Q4 Fall; Primark Outperforms Peers
 

Related Articles

FTSE Down; Societe Generale Warns Of Q4 Fall; Primark Outperforms Peers

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email