Mood Sours Sending FTSE Southwards
The optimism surrounding a US fiscal stimulus deal has been faded, with the mood souring amid a slew of disappointing corporate releases.
Share this:
Monday’s upbeat mood has been replaced with a sense of caution, sending European bourses lower. The optimism surrounding a US fiscal stimulus deal has been faded, with the mood souring amid a slew of disappointing corporate releases.
Greggs Rolls Lower
Greggs reported like for like sales of 71% of 2019 levels in the 12 weeks to September, this rose to 76.1% over the last four weeks of the period. We always knew this was going to be a tough period for Greggs, office workers which make up a large percentage of Greggs customer base have only just started to return to work and even then, the number of office workers was very depressed compared to pre-covid. Obviously, the fact that it wasn’t included in Rishi Sunak’s Eat Out To Help Out scheme was also a kick in the teeth. On the plus side a click and collet service and the ability to order using Just Eat in several cities could help Greggs pull through.
Greggs reported like for like sales of 71% of 2019 levels in the 12 weeks to September, this rose to 76.1% over the last four weeks of the period. We always knew this was going to be a tough period for Greggs, office workers which make up a large percentage of Greggs customer base have only just started to return to work and even then, the number of office workers was very depressed compared to pre-covid. Obviously, the fact that it wasn’t included in Rishi Sunak’s Eat Out To Help Out scheme was also a kick in the teeth. On the plus side a click and collet service and the ability to order using Just Eat in several cities could help Greggs pull through.
Greggs warned over an uncertain trading outlook, which is hardly surprising given that work from home looks set to be a way of life at least for the next 6 months if not longer. Job losses and reduced hours are coming. The bottom line with Greggs is that the headwinds are outweighing the positives. The stock trades -4% in early trade.
Hotel Chocolat -14% revenue decline
Closure over the crucial Easter period hit revenues hard at Hotel Chocolat, which reported -14% drop in revenues in the second half, despite a 3% rise overall to £136.3 million. The Chocolat specialist posted a pre-tax loss of £6.5 million compared to a £10.9 million profit last year. These figures highlight the impact of the covid closures on high street stores. Looking for the silver lining, an acceleration of digital and subscription sales is offering some supported to the chocolate specialist, particularly in Japan and America where the business is just taken off and shop openings are being delayed.
Closure over the crucial Easter period hit revenues hard at Hotel Chocolat, which reported -14% drop in revenues in the second half, despite a 3% rise overall to £136.3 million. The Chocolat specialist posted a pre-tax loss of £6.5 million compared to a £10.9 million profit last year. These figures highlight the impact of the covid closures on high street stores. Looking for the silver lining, an acceleration of digital and subscription sales is offering some supported to the chocolate specialist, particularly in Japan and America where the business is just taken off and shop openings are being delayed.
Brexit talks
The Pound is a top performer as Brexit talks are due to kick off. Reports are mixed and paint a confused picture as to whether a trade deal is as good as done or not. Some reports are suggesting that the EU are indicating that they are ready to work out the legal text for a deal – meaning that the end is in sight. Other reports suggest that there is still a great deal of distance between the two sides. Still the fact that he Pound is on the front foot suggests that Pound traders are optimistic a deal will be achieved. The BoE’s Ramsden, pushing back on negative rate talk also continues to underpin the Pound.
The Pound is a top performer as Brexit talks are due to kick off. Reports are mixed and paint a confused picture as to whether a trade deal is as good as done or not. Some reports are suggesting that the EU are indicating that they are ready to work out the legal text for a deal – meaning that the end is in sight. Other reports suggest that there is still a great deal of distance between the two sides. Still the fact that he Pound is on the front foot suggests that Pound traders are optimistic a deal will be achieved. The BoE’s Ramsden, pushing back on negative rate talk also continues to underpin the Pound.
Trump – Biden debate
Looking ahead all eyes are on the US Presidential debate. This debate is expected to be more closely watched than other first debates, given the limited visibility of particularly Joe Biden in the run up. So far the markets have been more focused on covid and additional fiscal stimulus. This debate could bring the election race straight into the foreground. Broadly speaking a win for Biden is considered stock negative and US Dollar negative, although the fact is many unknowns remain.
Monday’s upbeat mood has been replaced with a sense of caution, sending European bourses lower. The optimism surrounding a US fiscal stimulus deal has been faded, with the mood souring amid a slew of disappointing corporate releases.
Greggs Rolls Lower
Greggs reported like for like sales of 71% of 2019 levels in the 12 weeks to September, this rose to 76.1% over the last four weeks of the period. We always knew this was going to be a tough period for Greggs, office workers which make up a large percentage of Greggs customer base have only just started to return to work and even then, the number of office workers was very depressed compared to pre-covid. Obviously, the fact that it wasn’t included in Rishi Sunak’s Eat Out To Help Out scheme was also a kick in the teeth. On the plus side a click and collet service and the ability to order using Just Eat in several cities could help Greggs pull through.
Greggs reported like for like sales of 71% of 2019 levels in the 12 weeks to September, this rose to 76.1% over the last four weeks of the period. We always knew this was going to be a tough period for Greggs, office workers which make up a large percentage of Greggs customer base have only just started to return to work and even then, the number of office workers was very depressed compared to pre-covid. Obviously, the fact that it wasn’t included in Rishi Sunak’s Eat Out To Help Out scheme was also a kick in the teeth. On the plus side a click and collet service and the ability to order using Just Eat in several cities could help Greggs pull through.
Greggs warned over an uncertain trading outlook, which is hardly surprising given that work from home looks set to be a way of life at least for the next 6 months if not longer. Job losses and reduced hours are coming. The bottom line with Greggs is that the headwinds are outweighing the positives. The stock trades -4% in early trade.
Hotel Chocolat -14% revenue decline
Closure over the crucial Easter period hit revenues hard at Hotel Chocolat, which reported -14% drop in revenues in the second half, despite a 3% rise overall to £136.3 million. The Chocolat specialist posted a pre-tax loss of £6.5 million compared to a £10.9 million profit last year. These figures highlight the impact of the covid closures on high street stores. Looking for the silver lining, an acceleration of digital and subscription sales is offering some supported to the chocolate specialist, particularly in Japan and America where the business is just taken off and shop openings are being delayed.
Closure over the crucial Easter period hit revenues hard at Hotel Chocolat, which reported -14% drop in revenues in the second half, despite a 3% rise overall to £136.3 million. The Chocolat specialist posted a pre-tax loss of £6.5 million compared to a £10.9 million profit last year. These figures highlight the impact of the covid closures on high street stores. Looking for the silver lining, an acceleration of digital and subscription sales is offering some supported to the chocolate specialist, particularly in Japan and America where the business is just taken off and shop openings are being delayed.
Brexit talks
The Pound is a top performer as Brexit talks are due to kick off. Reports are mixed and paint a confused picture as to whether a trade deal is as good as done or not. Some reports are suggesting that the EU are indicating that they are ready to work out the legal text for a deal – meaning that the end is in sight. Other reports suggest that there is still a great deal of distance between the two sides. Still the fact that he Pound is on the front foot suggests that Pound traders are optimistic a deal will be achieved. The BoE’s Ramsden, pushing back on negative rate talk also continues to underpin the Pound.
The Pound is a top performer as Brexit talks are due to kick off. Reports are mixed and paint a confused picture as to whether a trade deal is as good as done or not. Some reports are suggesting that the EU are indicating that they are ready to work out the legal text for a deal – meaning that the end is in sight. Other reports suggest that there is still a great deal of distance between the two sides. Still the fact that he Pound is on the front foot suggests that Pound traders are optimistic a deal will be achieved. The BoE’s Ramsden, pushing back on negative rate talk also continues to underpin the Pound.
Trump – Biden debate
Looking ahead all eyes are on the US Presidential debate. This debate is expected to be more closely watched than other first debates, given the limited visibility of particularly Joe Biden in the run up. So far the markets have been more focused on covid and additional fiscal stimulus. This debate could bring the election race straight into the foreground. Broadly speaking a win for Biden is considered stock negative and US Dollar negative, although the fact is many unknowns remain.
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD, FTSE 100 Forecast: Two trades to watch 1507
EUR/USD rises after weaker US CPI, PPI up next. FTSE 100 falls as weak China GDP data hits miners.
FTSE 100, USD/JPY Forecast: Two trades to watch
FTSE eases modestly despite inflation unexpectedly holding steady. USD/JPY drifts lower ahead of the FOMC rate decision.
EUR/USD, FTSE 100 Forecast: Two trades to watch 21-05-26
EUR/USD slips below 1.16 as weak eurozone data weighs on sentiment. FTSE 100 slips as oil prices rebound and caution returns.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.