Dixons shares crash on profits anxiety

Higher handset prices – blame the continuing pound weakness – and lower EU roaming fees saw shares of Dixons Carphone plunge almost 19% today. At 3.50pm Dixons shares were down to 184.10p. Dixons anticipates profits will slump to £360-£440m compared to more than £500m last year.

However the dismal retail news didn’t overwhelm the FTSE 100 which closed tonight at 7,420, up 38 points. Provident Financial shares, previously heavily shorted, climbed 12% to 744.50p while CRH shares gained 3.87% following strong financials this morning including a sell-off of its US business for $2.6bn. The biggest sell-off was with easyJet, down -4.33% and Whitbread, down -2.53%.  

Elsewhere sterling manfully made a modest advance from its ten-month low before retreating again. At 4pm the pound was up just 0.02% at $1.2798 while the euro was incrementally down against the dollar at $1.1805. Oil was also down heavily with WTI crude down -2.17%  at $47.36. 

• UK FTSE 100 7,420 +0.51%
• Dow 21,833.72 +0.10%
• S&P 500 2,445.70 +0.07%
• Nasdaq 6,281.32 +0.05%
• Nikkei 225 19,353.77 -0.42%
• DAX 12,218.70 +0.36%
• CAC 40 5,130.16 +0.29%
• Gold 1,290.80 -0.29%
• Oil WTI 47.36 -2.17% 

A rash of FTSE 100 profit warnings

The Dixons shares crash was worse earlier in the day with shares sinking 30% at one point. The retailer, which also owns Currys and PC World, now trudges behind other recent big FTSE 100 names who’ve issued recent profit warnings, notably WPP yesterday and Provident Financial earlier in the week.  

Dixons hasn’t been helped by a slowing rate of ‘must have’ technology from ‘phone makers. Though manufacturers like Apple and Samsung make regular impressive technology claims, there has been relatively little innovation that has captured the public’s imagination.

UK spending growth retreats again

Earlier the Office of National Statistics confirmed that second quarter GDP growth came in at 0.3%, as expected. However UK spending growth slipped to just 0.1%. That’s the slowest pace of growth since the end of 2014.

A long trudge for a pay rise for some: Shutterstock

Much of that spending squeeze is down to the frailer pound but also wage drift and rising inflation. 

“Consumer spending is likely to be pressurised through the latter months of the year by an ongoing appreciable squeeze on purchasing power,” said Howard Archer from the EY Item Club. “Indeed, real incomes growth is likely to remain negative for some months to come.”

Breaking news: Qantas says it could offer 20-hour non-stop flights London-Sydney by 2022. However much depends on whether Boeing or Airbus can deliver. London-Perth non-top flights are expected near year. France's President Macron, speaking in Bucharest, says labour forces in richer countries are being undermined by recruits from lower wage economies.