What to Watch: Confidence hits 6-year low, Shoe Zone profit warning, and management shakeup at Premier Foods
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Consumer confidence hits six-year low
UK consumer confidence hit a six-year low in August, according to a new survey by GfK.
A survey of consumers found overall confidence of -14 in August, the lowest reading since 2013. The GfK survey of 2,000 people takes into account views on the economy, personal finance, and savings.
“Until Brexit leaves the front pages – whenever that will be – consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation,” said Joe Staton, client strategy director at GfK.
"That’s an important distinction because a significant development in August is the sudden drop in views on personal finances ‘over the next 12 months’ after the encouraging jump in this measure last month.
"For a long time, the downward momentum in the Overall Index Score has been associated with our views on economy. But reduced confidence is now affecting how we see our personal finances.”
Shoe Zone profit warning
Shares in Shoe Zone (SHOE.L) have crashed 35% after the discount shoe retailer put out a profit warning and announced its CEO is unexpectedly quitting.
Nick Davis, who has been with the company since 2003, has left to “pursue other business interests” and will depart with immediate effect.
Anthony Smith, Shoe Zone’s executive chairman, will now become chief executive on a permanent basis. He said he would focus on online and out of town larger stores due to the “challenging environment” on the high street.
The company also said the challenging nature of the high street will hit profits. A revaluation of its freehold properties means the company will take a £3.1m hit, as the 17 buildings Shoe Zone owns fall in value from £8.4m to £5.3m.
Premier Foods names new CEO
Premier Foods (PFD.L) has overhauled its executive team, appointing a new CEO and executive chairman, while saying goodbye to its CFO.
Alex Whitehouse has been promoted from UK Managing Director to CEO. Former Reckitt Benckiser chief financial officer Colin Day has also been appointed non-executive chairman. Chief financial officer Alastair Murray is leaving the business and Duncan Leggett has been promoted to acting CFO in the meantime.
Colin Day said: "I am very much looking forward to joining Premier Foods at this key juncture as we look to deliver value for Premier Foods' shareholders.
“It is the intention to further strengthen the Board with the appointment of an additional two independent non-executive directors as soon as possible.”
Saudi Aramco snubs London
Impending Brexit for Britain has apparently hurt the chances of London raking in potentially $1bn (£821m) in fees from state-owned oil titan Saudi Aramco, which is looking to list on a foreign stock exchange.
According to a report by The Wall Street Journal, Aramco is allegedly looking to list in Tokyo, Japan instead of the initial front-runner cities for its IPO — New York, London, or Hong Kong. Mass protests in Hong Kong was also cited in the report as a reason for Aramco shunning it for a listing.
Both Aramco and Japan’s relevant authorities have not commented on the WSJ report.
Hedge fund Winton’s tough year
The hedge fund boss who made the biggest ever single donation to a UK university at the start of this year suffered a tough 2018, newly published accounts show.
Winton Group, the hedge fund group run by billionaire David Harding, saw a drop in all key metrics last year. Assets under management, revenue, and profits all fell sharply and the hedge fund axed nearly 20% of its staff.
“2018 proved to be a year of change for Winton,” Harding wrote in the accounts. He said a “sharp reversal of equity markets in February” provoked the firm to reassess its investment strategy “take more risk in non-trend following quantitative strategies.” The course change proved to be costly and complex, and prompted some clients to pull funds.
House prices flatline
House price growth ground to a halt in August across the UK amid signs of a “slowdown” in activity in the property market, according to the latest figures from Nationwide.
Average prices were unchanged between July and August when analysts factored out seasonal variation in the latest house price index from the building society.
The average home in Britain sold for just over £216,000 ($263,000) in August, no higher than a month earlier but up 0.6% on a year earlier.
It marks the ninth month in a row of muted price growth below 1% or even declines on an annual basis.
European markets rally
Renewed optimism about the US-China trade war spurred European stocks on Friday morning.
“The trade-war seesaw has certainly moved back in favour of riskier assets for now, with Trump and China supposedly holding a call yesterday, at least according to Trump earlier in the day,” Jim Reid, a senior macro strategist at Deutsche Bank, said in a morning email to clients.
“Meanwhile, risk assets were already getting a boost from the news that China doesn’t intend to immediately retaliate on tariffs, following comments out of the Ministry of Commerce just as European markets were opening.”
Britain’s FTSE 100 (^FTSE) was up 0.3%, France’s CAC 40 (^FCHI) was up 0.5%, Germany’s DAX (^GDAXI) was up by 0.6%, and the Euronext 100 (^N100) was up by 0.5%.
Overnight in Asia, Japan’s Nikkei (^N225) closed up by 1.1%, the Hong Kong Hang Seng Index (^HSI) was flat, and China’s Shanghai Composite (000001.SS) closed down by 0.1%.
What to expect in the US
US stocks future are pointing to higher open later today. S&P500 futures (ES=F) were up by 0.2%, Dow Jones futures (YM=F) were up by 0.2%, and Nasdaq futures (NQ=F) were up by 0.2%.
Companies reporting later today include:
Campbell’s Soup (CPB)
