There has been muted reaction by currency markets to the UK’s hiked terror threat level. Earlier this morning the pound recovered slightly to 1.2973 while the euro was at 1.1180 though the EUR/USD pair was down to 1.1170 at points during overnight Asian trading.
London shares closed a mite down last night: the FTSE 100 slipped -0.15% to 7,485.29. The main fallers were Kingfisher, Shire and WPP, down -2.42%, -2.35% and -2.16% respectively. There were also some dips for Randgold and Glencore.
Much of today’s focus will be on Mario Draghi’s ECB speech which should give some direction on future monetary policy and interest rate direction. There’s also the release of the Fed FOMC minutes from 3 May. US house prices are out at 2pm plus crude oil inventories at 3.30pm.
- UK FTSE 100 7,485.29 -0.15%
- Dow 20,937.91 +0.21%
- S&P 500 2,398.42 +0.18%
- Nasdaq 6,138.71 +0.08%
- DAX 12,659.15 +0.31%
- CAC 40 5,348.16 +0.47%
- Gold 1,252.10 -0.27%
- Oil WTI 51.53 +0.12%
Profits plunge for M&S
M&S full-year profits are out slipping by nearly two thirds to £176.4m due to an expected slip in clothing & home sales plus costs of new space, M&S claims. Pension costs also impacted.
Closely watched clothing and home gross margins are up 105 basis points with full price sales growth of 2.7%. But revenues were down 2.8% due to a cut in promotions and clearance sales says the high street retailer. Like-for-like homeware sales for the last quarter were also poor, down 5.9%.
There was Food revenue growth of 4.2% driven by new stores. Gross margin for Food was down 25bps due to cost inflation and higher than anticipated waste says M&S.
Fiat Chrysler to avoid 'dieselgate'?
We move onto Fiat Chrysler and news the US government intends to sue the car conglomerate for emissions violations. A suit has been filed. However the lawsuit does not accuse the company of intentional cheating.
Fiat Chrysler has denied any deliberate move to deceive. Fiat Chrysler potentially face fines of more than $45,000 for each vehicle sold in late 2015, with a smaller fine for vehicles sold before this date.
These fines though are the maximum. The charges have hung around since the start of the year. Shares in Fiat Chrysler, which also owns Alfa Romeo, Dodge and Jeep brands, have fallen sharply in the last week. It’s anticipated that the car group will issue a software update for affected vehicles.
Uber shorts drivers
Staying with transport, Uber has admitted underpaying New York City cab drivers. Up to 50,000 drivers will be eligible for compensation after Uber admitted it over-claimed on commission for more than two years.
It’s thought the average compensation package will be close to $900 and will cost the company around $45m in total. Uber calculated its commission on the gross sum rather than a net breakdown of other costs and taxes including a fee to benefit injured drivers.
“We made a mistake,” said the company in a statement, “and we are committed to making it right by paying every driver every penny they are owed—plus interest—as quickly as possible.”
Breaking news: Credit rating agency Moody’s downgrades China to A1 from Aa3 over worries about its economy.