The US–China trade talks seem to be on the brink of collapse and the next round in which the US more than doubles the tariffs on already taxed imports could start as early as Friday. China has already promised to respond in kind, which will be particularly bad news for US car makers, Apple (NASDAQ:AAPL) and luxury goods producers. There is still a small window of opportunity to avoid the head-on collision with a round of talks between the two sides which is due to start in Washington on Thursday, but that seems unlikely as comments from President Trump are becoming increasingly hostile towards China.
European markets are sliding across the board at the prospect of an intensifying trade clash, the FTSE has already dropped over 0.6% and the Euro Stoxx 50 Index is trading 1.4% lower. Asian stocks also performed uniformly badly, declining to a two-month low, and out of hours trading suggests that Wall Street will also open lower, building on Wednesday’s decline.
Centrica (LON:CNA) crashes on ex-dividend trading
Centrica’s shares are crashing this morning, down 7.5% on ex-dividend buying and ahead of the company’s annual general meeting on Monday, where shareholders are expected to challenge the CEO’s high pay. Miners, resources companies and China-oriented firms are particularly under pressure but UK utilities and services companies are providing some counterbalance.
Pound lower as Brexit talks stop and start
The on-again off-again cross party talks on Brexit are keeping sterling trade in a narrow range and under pressure. The pound is back below the $1.3 marker which used to be broken every time the likelihood of hard Brexit came into play, and below EUR1.61. For the moment there seems to still be a chance of a resolution and possibly even a fourth parliamentary vote on a Brexit deal before the European elections on 23 May, but nobody is holding their breath.
The rest of the forex market is in risk-off mode with safe haven currencies like the yen and the Swiss franc attracting more buying amid increased trade threats. The dollar is mostly weaker but is holding firm against the euro and the pound.
Morrisons (LON:MRW) sales weather around ongoing Brexit circus
This disappointing rate of sales growth will stoke fears that Morrisons' impressive recovery could be starting to run out of puff.
Most concerning is the rate of retail sales growth, which at 0.2%, is the lowest we've seen recorded by the company since 2016.
Morrisons is of course a more well-rounded business these days and its growing wholesale division has taken up retail's slack, helping overall like-for-like sales grow 2.3%.
That still compares reasonably well to recent sales updates posted by Tesco (LON:TSCO) and Sainsbury's, though the momentum is certainly waning at Morrisons.
Like other UK retailers, the company is weathering a particularly challenging trading environmental, as the ongoing Brexit circus saps consumer confidence and German discounters keeping pinching market share.
The fire at Ocado (LON:OCDO)'s distribution centre in Andover could have come at a better time, though the agreement announced with Ocado today will at least allow Morrisons to save on costs and seek out other partners.
Dunkerton's spectacular return to Superdry (LON:SDRY)?
The silver lining for Julian Dunkerton from these poor sales figures is that they help support the notion that a change at the top was necessary.
The Superdry co-founder was only named interim chief executive on 2 April, so previous management can shoulder much of the blame for this latest shambles.
The big question is whether Dunkerton's spectacular return to Superdry will reap spectacular results.
Plans announced today to release hundreds of new products, reduce discounting and raise the number of options sold online all sound well and good, but they will come at a cost.
Crucially, Dunkerton needs to assemble his new board and management team fast and we've yet to see that happen.
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