It’s the start of November, and with it begins an absurdly busy 3 days, flush with manufacturing and services PMIs, Fed and BoE meetings and a potentially blockbuster non-farm Friday.
The entire market was looking pretty perky this Wednesday morning. Firmly focused on Thursday’s Bank of England rate vote the pound rose 0.2% against both the dollar and the euro; against the former that leaves sterling above $1.33 for the first time since mid-October, while against the latter it has crossed €1.14 to extend its one month-plus peak.
Despite all this the FTSE also pushed higher this Wednesday. A positive set of commodity stocks, fuelled by a 1.1% rise for Brent Crude and a 1.3% jump from copper, allowed the UK index to climb 0.3%, hitting its best price in around a week.
Now the FTSE and the pound just need to withstand the morning’s UK manufacturing PMI. After smashing forecasts in July and August, September saw the PMI post fairly sizeable miss; it’s expected to have continued to cool in October, with analysts forecasting a slight dip from 55.9 to 55.8 month-on-month (though estimates haven’t been anywhere near accurate for a while).
Elsewhere it was an ugly, ugly morning for Next (LON:NXT). The clothing retailer had seen a remarkable resurgence in the last few months, rocketing more than 35% from its sub-£36 lows in mid-July to at one point hit £53. That’s because the company had been gradually revising its full year sales forecasts, with the usually bearish Lord Wolfson claiming he was ‘more confident’ in the firm’s outlook.
Well, that (admittedly mild) positivity came back to haunt next this Wednesday. While Q3 total sales grew 1.3%, an improvement on the 2.2% decline seen in the first half of the year, that was lower than the 2.9% growth expected as the firm warned on the ‘extremely volatile’ sector landscape. Similarly, though Directory sales rocketed 13.2% higher, retail (i.e. high street) sales plunged a far worse than estimated 7.7%, leading Next to revise its annual pre-tax profit forecasts from £687m-£747m to £692m-£742m. None of these were particularly bad figures; but the expectation created by the past few updates meant these Q3 results couldn’t help but disappoint, causing the stock to sink 7.5% to a 7 week nadir.
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