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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/feb/28/markets-await-us-growth-and-trade-data-as-trump-boom-continues-business-live
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| Version 1 | Version 2 |
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| Markets await US growth and trade data as Trump boom continues - business live | Markets await US growth and trade data as Trump boom continues - business live |
| (35 minutes later) | |
| 9.08am GMT | |
| 09:08 | |
| Greggs shares slip after results | |
| Improving its product range - away from just sausage rolls and pasties and on to healthier items - has helped food retailer Greggs beat expectations with its full year figures. | |
| But signs of a slowdown in like-for-like sales so far in the current year have knocked its shares back more than 3% to 980p - albeit they have risen 10% in the past three months. | |
| Overall, profits for 2016 rose 105 to £80.3m, compared to forecasts of around £79m. Like for like sales climbed 4.2%, and while the company said trading in the current year was in line with expectations, like for like sales slowed in the eight weeks to February 25, up 2%. Analyst Darren Shirley at Shore Capital said: | |
| Current like for like trading in the 8 weeks of the year-to-date has been subdued relative to recent years, with company managed like for like sales up 2.0% (said to be 2.9% excluding the New Year trading pattern), which is said to be inline in-line with management expectations. However, total sales are reported up 5.8% which is ahead of our full year expectation of 4.8%, so Greggs are a little ahead of our expectations at this still early stage of the year. | |
| 8.28am GMT | 8.28am GMT |
| 08:28 | 08:28 |
| Another big faller in Moneysupermarket.com, down 11% after its final results. | Another big faller in Moneysupermarket.com, down 11% after its final results. |
| It reported a 16% rise in profits but warned revenues in the current year were below those in 2016, partly due to low interest rates weakening savings and current account switching, and falling trade in the energy business. Liberum analysts said: | It reported a 16% rise in profits but warned revenues in the current year were below those in 2016, partly due to low interest rates weakening savings and current account switching, and falling trade in the energy business. Liberum analysts said: |
| MoneySupermarket has reported 2016 results this morning and given the full year trading update in January there were no surprises with regards to headline numbers. Our concern with Moneysupermarket has always been that revenue growth is linked to marketing spend and therefore margins could come under pressure going forward as competition in the price comparison website space intensifies. These results have realised our concerns, increased marketing spend drove the majority of the 520 basis point decline in gross margins to 74.8%. Trading for 2017 is behind 2016.... management has also guided gross margins to be 73% for 2017 which is 300 basis points below Liberum estimates of 76%. | MoneySupermarket has reported 2016 results this morning and given the full year trading update in January there were no surprises with regards to headline numbers. Our concern with Moneysupermarket has always been that revenue growth is linked to marketing spend and therefore margins could come under pressure going forward as competition in the price comparison website space intensifies. These results have realised our concerns, increased marketing spend drove the majority of the 520 basis point decline in gross margins to 74.8%. Trading for 2017 is behind 2016.... management has also guided gross margins to be 73% for 2017 which is 300 basis points below Liberum estimates of 76%. |
| 8.20am GMT | 8.20am GMT |
| 08:20 | 08:20 |
| Southern Rail operator Go-Ahead slumps 14% after results | Southern Rail operator Go-Ahead slumps 14% after results |
| Bus and train operator Go-Ahead has warned on its outlook, mainly due to the continuing strike actions on Southern Rail. | Bus and train operator Go-Ahead has warned on its outlook, mainly due to the continuing strike actions on Southern Rail. |
| It said its full year expectations were lowered due to “challenges in GTR [which runs the Thameslink, Great Northern, Southern and Gatwick Express rail franchises] and a slowdown in passenger numbers in regional bus.” On the strike, which has inconvenienced and angered commuters for months, it said: | It said its full year expectations were lowered due to “challenges in GTR [which runs the Thameslink, Great Northern, Southern and Gatwick Express rail franchises] and a slowdown in passenger numbers in regional bus.” On the strike, which has inconvenienced and angered commuters for months, it said: |
| Lengthy and significant industrial relations issues at GTR related to the modernisation of working practices, required by the contract, have caused months of disrupted travel. We are working towards a resolution so we can provide a reliable service for customers. | Lengthy and significant industrial relations issues at GTR related to the modernisation of working practices, required by the contract, have caused months of disrupted travel. We are working towards a resolution so we can provide a reliable service for customers. |
| Rail profits for the half year fell by 35% due to the Southern dispute, and the company’s overall profits dropped 11.7% to £67m. | Rail profits for the half year fell by 35% due to the Southern dispute, and the company’s overall profits dropped 11.7% to £67m. |
| Even so, the company has raised its dividend to shareholders by 6.5%, justfied by “stable bus profits.” | Even so, the company has raised its dividend to shareholders by 6.5%, justfied by “stable bus profits.” |
| That has failed to save its share price, however, which is down 14% at £19.66. Analysts at Investec said: | That has failed to save its share price, however, which is down 14% at £19.66. Analysts at Investec said: |
| Go-Ahead has reported half year results broadly in line with our forecasts at the divisional level, with the exception of GTR which was weaker due to industrial action. However, expectations for the full year have been lowered given the slowdown in passenger volumes in Regional Bus, higher insurance costs and additional costs and delays to expected efficiencies for GTR as the industrial action is ongoing. We therefore reduce our forecasts, cut our target price to 2300p and lower our recommendation to add. | Go-Ahead has reported half year results broadly in line with our forecasts at the divisional level, with the exception of GTR which was weaker due to industrial action. However, expectations for the full year have been lowered given the slowdown in passenger volumes in Regional Bus, higher insurance costs and additional costs and delays to expected efficiencies for GTR as the industrial action is ongoing. We therefore reduce our forecasts, cut our target price to 2300p and lower our recommendation to add. |
| Jefferies, which remains a buyer of the shares, has cut its 2017 profit forecast by 4% and its 2018 prediction by 7%. | Jefferies, which remains a buyer of the shares, has cut its 2017 profit forecast by 4% and its 2018 prediction by 7%. |
| 8.07am GMT | 8.07am GMT |
| 08:07 | 08:07 |
| European markets edge higher | European markets edge higher |
| As expected, the record close on Wall Street has given a lift - albeit a slight one - to European shares. | As expected, the record close on Wall Street has given a lift - albeit a slight one - to European shares. |
| The FTSE 100 is up 0.06% in early trading, Germany’s Dax has opened 0.2% higher, France’s Cac has climbed 0.4%, Spain’s Ibex 0.5% and Italy’s FTSE MIB 0.3%. | The FTSE 100 is up 0.06% in early trading, Germany’s Dax has opened 0.2% higher, France’s Cac has climbed 0.4%, Spain’s Ibex 0.5% and Italy’s FTSE MIB 0.3%. |
| 7.57am GMT | 7.57am GMT |
| 07:57 | 07:57 |
| Over in France, and the country’s economy grew by 0.4% in the final quarter last year, in line with initial estimates. | Over in France, and the country’s economy grew by 0.4% in the final quarter last year, in line with initial estimates. |
| So overall for 2016, it grew by 1.1%, also unchanged from the first estimates. | So overall for 2016, it grew by 1.1%, also unchanged from the first estimates. |
| Elsewhere: | Elsewhere: |
| French Consumer Spending (MoM) Jan: 0.60% (est 0.60%; rev prev -1.00%)-(YoY) Jan: 1.40% (est 1.60%; rev prev 1.30%) | French Consumer Spending (MoM) Jan: 0.60% (est 0.60%; rev prev -1.00%)-(YoY) Jan: 1.40% (est 1.60%; rev prev 1.30%) |
| Updated | Updated |
| at 7.59am GMT | at 7.59am GMT |
| 7.46am GMT | 7.46am GMT |
| 07:46 | 07:46 |
| A positive start is expected in Europe after yet another record breaking run in the US: | A positive start is expected in Europe after yet another record breaking run in the US: |
| Our European opening calls:$FTSE 7269 up 16$DAX 11841 up 19$CAC 4855 up 10$IBEX 9485 up 21$MIB 18967 up 53 | Our European opening calls:$FTSE 7269 up 16$DAX 11841 up 19$CAC 4855 up 10$IBEX 9485 up 21$MIB 18967 up 53 |
| 7.45am GMT | 7.45am GMT |
| 07:45 | 07:45 |
| Agenda: US data due, Osborne at BCC conference, Hogg at Treasury Committee | Agenda: US data due, Osborne at BCC conference, Hogg at Treasury Committee |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The US is in focus today, with trade figures for January and the final reading for fourth quarter GDP. The trade deficit is expected to widen to $66bn from $65bn in December, something which is likely to exercise President Trump with his protectionist tendencies. As for GDP, analysts expect an annualised rate of 2.1% for the quarter, up from 1.9%. Overall the US economy is forecast to have grown at 1.6% in 2016, a growth rate Trump’s team have consistenty criticised as too slow. | The US is in focus today, with trade figures for January and the final reading for fourth quarter GDP. The trade deficit is expected to widen to $66bn from $65bn in December, something which is likely to exercise President Trump with his protectionist tendencies. As for GDP, analysts expect an annualised rate of 2.1% for the quarter, up from 1.9%. Overall the US economy is forecast to have grown at 1.6% in 2016, a growth rate Trump’s team have consistenty criticised as too slow. |
| But Republican financial John Bogle, who founded the world’s second largest investment group Vanguard, told the BBC’s Wake up to Money that Trump’s plans to grow the US economy at 4% annually were unlikely to succeed. He said: | But Republican financial John Bogle, who founded the world’s second largest investment group Vanguard, told the BBC’s Wake up to Money that Trump’s plans to grow the US economy at 4% annually were unlikely to succeed. He said: |
| There are certain limits, irrespective of whoever sits in the White House. | There are certain limits, irrespective of whoever sits in the White House. |
| He added that building trade barriers would be madness and reducing immigration would harm the US economy. | He added that building trade barriers would be madness and reducing immigration would harm the US economy. |
| Meanwhile, after the US markets close - at 9pm Washington time, 2am GMT - Trump will be making his long awaited address to Congress with the promise of spelling out some of his plans in detail. We already had a flavour on Monday, with Trump’s talk of increased defence and infrastructure spending, probably at the expense of the environment and foreign aid. | Meanwhile, after the US markets close - at 9pm Washington time, 2am GMT - Trump will be making his long awaited address to Congress with the promise of spelling out some of his plans in detail. We already had a flavour on Monday, with Trump’s talk of increased defence and infrastructure spending, probably at the expense of the environment and foreign aid. |
| But it seems that Trump’s “phenomenal” tax reforms might have to wait. Naeem Aslam, chief market analyst at Think Markets UK, said: | But it seems that Trump’s “phenomenal” tax reforms might have to wait. Naeem Aslam, chief market analyst at Think Markets UK, said: |
| Was there any disappointment yesterday when some details were released ahead of Mr Trump’s most anticipated speech? Well, yes. It turns out that we are not going to receive any details about the anticipated tax plan and the timeframe for said plan is also vague. All we know is that it will happen sometime after a new healthcare bill replacing Obamacare has been introduced, again, something we have yet to receive a date for. | Was there any disappointment yesterday when some details were released ahead of Mr Trump’s most anticipated speech? Well, yes. It turns out that we are not going to receive any details about the anticipated tax plan and the timeframe for said plan is also vague. All we know is that it will happen sometime after a new healthcare bill replacing Obamacare has been introduced, again, something we have yet to receive a date for. |
| This was not something the markets were expecting especially after rousing the rally by describing his tax plans as “phenomenal”. What we saw last night was disappointment across the board when the news hit. But it would be wrong to write off Mr Trump yet, as he is never short of surprises. Despite his lack of information, the market rallied, recording another record high. | This was not something the markets were expecting especially after rousing the rally by describing his tax plans as “phenomenal”. What we saw last night was disappointment across the board when the news hit. But it would be wrong to write off Mr Trump yet, as he is never short of surprises. Despite his lack of information, the market rallied, recording another record high. |
| Indeed, the Dow Jones Industrial Average closed at a record high for the twelfth day in a row, and European markets are expected to open higher as a result. | Indeed, the Dow Jones Industrial Average closed at a record high for the twelfth day in a row, and European markets are expected to open higher as a result. |
| Also on the agenda, the British Chambers of Commerce holds its annual conference in London, with regional development and Brexit on the agenda and appearances scheduled from former chancellor George Osborne, mayoral hopefuls Andy Street and Andy Burnham and shadow chancellor John McDonnell. | Also on the agenda, the British Chambers of Commerce holds its annual conference in London, with regional development and Brexit on the agenda and appearances scheduled from former chancellor George Osborne, mayoral hopefuls Andy Street and Andy Burnham and shadow chancellor John McDonnell. |
| Elsewhere Charlotte Hogg will be at a Treasury committee hearing to discuss her appointment as the Bank of England’s Deputy Governor for Markets and Banking. | Elsewhere Charlotte Hogg will be at a Treasury committee hearing to discuss her appointment as the Bank of England’s Deputy Governor for Markets and Banking. |
| And there are results from Go-Ahead and Greggs. | And there are results from Go-Ahead and Greggs. |
| Updated | Updated |
| at 8.03am GMT | at 8.03am GMT |