Several chunks of foul-smelling retail news dominated trading sentiment today. First, Carpetright’s grim 7am profits warning almost decapitated its share price. Carpetright shares crashed close to -50% at one point; at 4pm they were trading at 94.00p, down -43%.
Several other high street retailers sounded the footfall alarm, including Bonmarché. Away from retailers, funeral group Dignity saw its shares plummet close to -50% on worries of a price war.
UK consumer inflation data was also a shocker, dipping -1.5% in December compared to November, claimed the Office for National Statistics. The drop was almost double that expected by City analysts, who had estimated the fall to come in closer to -0.8%. “The longer-term picture is one of slowing growth, with increased prices squeezing people’s spending,” Rhian Murphy of the ONS said.
Later in the afternoon the pound was down -0.26% against the dollar at 1.3855 and -0.19% weaker against the euro. Despite several truck loads of retail negativity the FTSE 100 managed to haul itself +0.39% higher tonight to 7,730 with easyJet shares surging more than +4.7% to 1,584.60p while InterContinental Hotels Group was up more than +2.5%.
- UK FTSE 100 7,730.79 +0.39%
- DAX 13,429.10 +1.12%
- CAC 40 5,526.61 +0.58%
- Euro Stoxx 600 400.79 +0.52%
- Dow 25,993.29 -0.14%
- S&P 500 2,802.16 +0.15%
- Nasdaq 7,310.86 +0.20%
- Nikkei 225 23,808.06 +0.19%
- Gold 1,334.60 +0.56%
- Oil WTI 63.28 -1.05%
UK retail sales – the canary in the coal mine?
The UK retail sales figures this morning were far more dismaying than expected. That -1.5% slump though would not have surprised a rash of iconic high street names, including M&S, House of Fraser and Mothercare, all who have seen sales slide decisively over the Christmas trading period.
But the extreme confidence fall for Carpetright this morning extends well beyond flooring, beds and vinyl tiles. It also reaches the housing market. Many housebuilders have enjoyed soaring stock market lifts. Most housebuilder stocks stood solid today however.
The root problem of the confidence fall-off is wages. They’re not rising fast enough. "The data add to signs that rising prices and stubbornly weak pay growth continue to erode consumer spending power and will act as a drag on the economy in 2018," IHS Markit boss Chris Williamson said.
Fever-Tree shares rise on buy talk
Fever-Tree shares soared +10% today on market rumours that the prestige tonic water maker could be targeted by Diageo or Unilever.
Investors had plenty of reason to be cheerful before the news with the company’s share price rising more than +1,500% since its 2014 listing. Adding to the mix was an upbeat assessment from broker Jefferies. Fever-Tree supplies a trading update on 24 January.
Breaking news: Carillion workers on Network Rail projects have their salaries guaranteed to mid-April according to PwC, Network Rail and The Official Receiver.