US stocks ended down yesterday after the Federal Reserve cut its forecast for GDP growth with financial stocks and the Dollar selling off in late trading as the prospect of further interest rate rises receded.
Typically as the Dollar falls, commodity prices get a boost and this is feeding through into strength in miners and energy producers in the UK this morning with BHP (BHP), Rio Tinto (RIO) and Royal Dutch Shell (RDSB) supporting the FTSE 100.
Total sales were up 2.5% to £4.2bn with online up 14.7% to £1.92bn and retail down 7.9% to £1.96bn meaning the two strategies made almost the same sales contribution for the first time.
The higher margin on online sales also rescued earnings, leaving operating income flat at £762m despite a 21% drop in profits from the retail arm.
Next shares have had a good run since the start of the year so some investors are booking gains here, sending the shares 3% lower to £50.28.
However margins have fared less well with the firm blaming discounting by competitors and ‘unseasonable weather’ – both fairly routine issues for retailers, surely – for a 26% drop in pre-tax profits to £50.9m.
Investors are unimpressed and the shares are marked down by 5% to £16.16.
Faring better in the retail sector is Game Digital (GMD) which reports first half pre-tax profits up by 20% to £14.8m despite a 5% dip in sales to £493m.
The console market may have slowed ahead of the launch of the new Playstation next year but sales of games and accessories are supporting revenues.
Investors like what they see and mark the shares up 4% to 27p.
New orders are above revenues with strong growth in the UK and the US while demand from continental Europe and Asia is ‘more moderate’.
Shares were unusually weak yesterday but are more or less flat at £16.50 today.
Not so fortunate is industrial automation firm Renishaw (RSW) which cuts its full year targets for sales and earnings due to a slowdown in Asian demand from ‘large end-user manufacturers of consumer electronic products’.
Sales are now seen at £595m to £620m against a previous forecast of £635m to £665m while pre-tax profits are seen at £123m to £141m against £140m to £160m previously.
Unsurprisingly shares are down 12% to £37.08, a new low for 2019.
Therefore while it is sticking to its full year forecasts it now expects 'a more significant second-half weighting to revenue, underlying operating profit and cash'. Shares drop 4% to 148p in response.
On a happier note, intellectual property rights fund Hipgnosis Songs (SONG) announces it has acquired 3 catalogues of songs including Billboard Magazine's most successful R&B/Hip-Hop Song of all time. Shares mark time at 108p.
Stocks going ex-dividend today include British American Tobacco (BATS), Brooks Macdonald (BRK), Close Brothers (CBG), Crest Nicholson (CRST), Domino's Pizza (DOM), Hammerson (HMSO), Meggitt (MGGT), Royal Bank of Scotland (RBS) and Segro (SGRO).