Just like Tesco yesterday, Sainsbury’s looks set to announce wide-ranging job cuts in an effort to shave costs (more below). Struggling to throw off the US government closure the dollar sank -0.3% lower this afternoon to 90.10. However a dollar slide helped sterling across the 1.40 handle.
Since late 2016 the pound is now up more than +18%. Somewhat confusingly, there is no main driver for the pound’s recent recovery. The Brexit bounce is supported by very few facts or harder sentiment. In other words, think weak dollar, not strong pound.
In the US most indices were broadly up today with the Nasdaq (again) looking strong, up +0.65%. Both Apple (up +1%) and Facebook (up +1.4%) picked up strong gains. Tonight the FTSE 100 closed at 7,731, up +0.21% with easyJet shares gaining more than +5% following an upbeat numbers release this morning. However miners, including Fresnillo and Evraz, were all heavily down tonight.
- UK FTSE 100 7,731 +0.21%
- DAX 13,549.54 +0.63%
- CAC 40 5,530.59 -0.21%
- Euro Stoxx 600 402.52 +0.10%
- Dow 26,196.57 -0.07%
- S&P 500 2,834.98 +0.07%
- Nasdaq 7,441.90 +0.45%
- Nikkei 225 24,124.15 +1.29%
- Gold 1,335.40 +0.24%
- Oil WTI 64.20 +0.99%
Elon Musk tied to Tesla for 10 years – and a possible $55bn prize
Would you work unpaid for 10 years? If you’re a multi-billionaire the sting is somewhat mitigated. Tesla boss Elon Musk says he’s willing to take on a decade of hard labour with the prize of a $55bn bonus should he turn Tesla into a $650bn operation by the end.
“We like setting challenging, hard-to-achieve goals for ourselves, and then focusing our efforts to make them happen,” Tesla explained in a letter to shareholders.
“This is why we based,” it went on, “this new award on stretch goals and why we gave Elon the ability to share in the upside in a way that is commensurate with the difficulty of achieving them.”
One offshoot of the agreement is that it tethers Musk to Tesla. He is going nowhere – and many shareholders will be reassured. Despite anxiousness about Q4 deliveries Tesla is up almost +15% since the start of the year. However Tesla has always missed production targets. Musk will not want to miss this one.
Sainsbury's prepares to wield the jobs knife
As mentioned, Sainsbury’s, like Tesco, is looking to ‘let go’ of a chunk – numbers not known – of staff. “The proposals," Simon Roberts, retail and operations director said, “will introduce a more efficient and effective structure, designed to meet the challenges of today’s retail environment.”
The Big Four grocers - Sainsbury's, Tesco, Morrisons and Asda – are under immense pressure to increase margins. While Morrisons and Tesco have reported good sales numbers recently, Lidl and Aldi are taking increasingly bigger bites of market share, the consequence of a long and painful recession. Loyalty lasts.
Some warning about current stock market valuations: Barclays boss Jes Staley, speaking from Davos, says the surging stock market valuations look like a spooky reminder of the last financial crisis – the run-up to it, specifically.
"I do feel like that it is a little bit like 2006," Staley said, quoted by the BBC. "When we were all talking about whether we had solved the riddle of economic crises."
Breaking news: Kimberly-Clark is to shed 12% of its workforce, the Texas company and maker of Kleenex has confirmed.