Ignoring the fact the yuan has hit a one-year low against the dollar – once again flagging up the trade war concerns that have so far been put on the back burner this week – the markets got off to an incredibly slow start on Thursday.
The FTSE opened unchanged at 7680, unable to return to 7700 just yet. This despite the pound’s continued softness, with sterling dipping 0.3% against the Gdollar, taking it the wrong side of $1.303 and leaving it at a 10 month low. The pound did rise 0.1% against the euro, but even then that just above helped it cross €1.122, leaving it at an effective 19 week nadir against its single currency rival.
Sterling faces another test on Thursday in the form of June’s UK retail sales reading, which is expected to fall from 1.3% to 0.1% month-on-month. Those forecasts tend to be way off base, however, so it’ll be interesting to see whether or not the World Cup and the sunny weather helped things out a bit. The pound may also be a bit spent following the double dovish blow of Tuesday’s wage growth miss and Wednesday’s inflation stagnation, meaning the retail sales data may not garner too much of a reaction if it disappoints.
Mike Ashley’s quest to turn Sports Direct (LON:SPD) into the ‘Selfridges’ of the sector fell flat on its face on Thursday, with the high street staple reporting a huge drop in full year pre-tax profit, from £281.6 million in 2017 to £77.5 million in 2018. That decline is all the more ignominious because £85.4 million of the drop came from the company’s stake in Debenhams (LON:DEB), Ashley’s habit of hoovering up an ostensible bargain biting him in the backside. Add onto this news of a 2% slide in UK sales – it still posted a 3.5% rise in total revenue thanks to its international arm – and investors were not happy, dragging Sports Direct from its recent 28 months highs with a near 11% plunge.
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