Stocks are a little lower this morning as traders look ahead to the update from Jerome Powell, the head of the Federal Reserve. The central banker will testify before the US House Committee on Financial Services at 3pm (UK time), and the update is likely to greatly shape equity traders views. Throughout June there was a growing belief that the Fed would cut rates in July, and later this year, but given the solid non-farm payrolls report last Friday, dealers are less convinced the Fed will lurch to a very dovish stance.
Superdry (LON:SDRY) have gone from bad to worse. In May, the fashion house posted its third profit warning in one year, and today the group confirmed that full-year revenue was largely flat, and that underlying full-year profit before tax fell by 56.8%. The company warned the retail market is ‘highly competitive’ and the outlook remains ‘uncertain’. Revenue for next year is likely to decline slightly, and the firm cautioned the business risks won’t be ‘resolved overnight’. The fashion house maintained its dividend policy, and that has reassured investors somewhat. The stock is slightly lower this morning.
J D Wetherspoon (LON:JDW) shares are higher after the group confirmed that like-for-like (LFL) sales for the 10 weeks until early July jumped by 6.9%, and total sales only increased by 6.6%, but that was because the group closed more pubs than it opened since the start of the financial year. The company is shrewdly focusing on pubs that are performing well as the wider industry is finding trading tough. The net debt is going to be higher than previously expected, as the firm is buying up freeholds and upgrading existing sites.
Dunelm (LON:DNLM) continue to perform well as total fourth-quarter LFL sales increased by 15.4%. The online division performed well as revenue jumped by 37%. The outlook is upbeat also, as it expects full-year profit to be at the upper end of the guidance of between £124 million and £126 million. Last month the stock hit a three year high, and today’s update vindicates the bullish view that investors hold.
GBP/USD was nudged higher by the latest UK growth figures. On an annual basis, the UK economy grew by 1.5% in May, which topped the 1.3% forecast, and the April reading was revised higher to 1.6% from 1.3%. The numbers show the UK economy is in decent shape, and it encouraged traders to snap up a relatively cheap pound.
EUR/USD has been helped by the dip in the US dollar. The European Commission have kept their 2019 growth forecast unchanged at 1.2%, but the CPI prediction was lowered to 1.3% from 1.4%.
Levi Strauss (NYSE:LEVI) shares will be in paly today after the group revealed mixed second-quarter figures last night. EPS came in at 7 cents, and the consensus estimate was 8 cents. The cost of listing the company on the stock market, and an increase in advertising hit the bottom line. The group predicts that revenue will be at the ‘high end’ of the ‘mid-single digit range’.
We are expecting the Dow Jones to open 38 points lower at 26,745 and we are calling the S&P 500 down 6 points at 2,973.
DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.