After days of declines the FTSE is back in the black with London miners and insurers leading the pack.
The index is moving very gingerly – up only 0.05% with the recovery hampered by the IMF cutting its growth forecast for the global economy. With the trade wars between China and the US not looking likely to abate any time soon, the IMF is not the only institution cutting its global growth expectations. Though the US-China trade tit-for-tat is currently everybody’s favourite culprit for everything related to global growth, separately from this conflict a number of emerging markets are struggling to maintain their rate of expansion.
Aviva (LON:AV) shares perks up as CEO departs
The way Aviva phrased its explanation of its CEO’s surprise departure Tuesday was designed to not give away very much. “It is time for new leadership.” But one criticism that Wilson faced was that during the six years of his leadership at the company a broad restructuring programme failed to achieve results. Granted, this was happening against the background of an overall decline in the UK markets where the broader index fell 6% on the year against Aviva’s 8%. But there were also public relations fiascos like the one earlier this year when the company tried to cancel preference shares at face value rather than the much higher market value. The project initiated during Wilson’s stay at the helm ended up provoking shareholder ire, drawing scrutiny from the Financial Conduct Authority and costing the company £14 million in compensation.
Pound sliding again
Sterling is just about holding its ground against the euro but is sliding against the greenback as a spending survey shows yet more signs of softening consumer spending and more caution ahead of Brexit.
After a good summer consumers spent less time and money shopping in September and spending grew at its slowest pace in a year except during the slump last April caused by a shift in Easter dates. It is too early for outright panic because spending is still increasing rather than shrinking, but against the background of a no Brexit deal scenario it is enough to keep the markets on their toes.
Greggs expecting flat profits this year
Greggs (LON:GRG) is still expecting to post flat profits this year but at least it's gotten through the hot summer without things getting worse. Management had been warning the warm weather might hurt demand for things like sausage roles, while inspiring more people to avoid its shops and entertain at home instead. Gregg's increasingly popular breakfast offering, along with pizza products, has helped save the day. Margins did take a hit during the summer months, but like-for-like sales grew pretty solidly, and it looks like margins have started recovering in September. Greggs has been spending millions of pounds improving its manufacturing capabilities and administration systems in recent years. So the ingredients are there to get profits rising again next year.
YouGov’s profits rising as demands for polling in US remain high
YouGov has posted another impressive set of figures as it benefits from a nicely timed expansion into the booming US economy. Demand for political polling remains high in the US, as the mid-term elections loom as a report card on the Trump administration. YouGov lifted its US profile with some accurate polling during the 2016 presidential election and its partnership with CBS continues to provide a strong source of brand recognition. The company's data services offering is also going from strength-to-strength, as executives come under more pressure to tap big pools of information to evaluate performance and identify new market opportunities. YouGov shares have had a decent run-up of late so it's not surprising to see a bit of profit taking place today.
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