Optimism surrounding the signing of the US – China trade deal quickly faded, and the FTSE was pretty much on the back foot from the start of trading. The FTSE is heading into the close hovering around support at 7600 following a disappointing day for corporate updates, with Pearson, Whitbread and Hays among the laggards. The stronger above $1.3050 is adding the FTSE’s woes.
Pearson’s Plummets
Pearson’s slumped to a 10-year low shedding over 8% following yet another profit warning from the troubled educational resource provider and publisher and the announcement if the departure of the CFO Coram Williams. With the stock down an eye watering 60% so far this year and we are unlikely to have seen the end of the selloff here. The departure of Coram Williams so soon after CEO John Fallon stepped aside will no doubt complicate the turnaround plans at the struggling firm, pushing any recovery further into the distance.
Pearson’s slumped to a 10-year low shedding over 8% following yet another profit warning from the troubled educational resource provider and publisher and the announcement if the departure of the CFO Coram Williams. With the stock down an eye watering 60% so far this year and we are unlikely to have seen the end of the selloff here. The departure of Coram Williams so soon after CEO John Fallon stepped aside will no doubt complicate the turnaround plans at the struggling firm, pushing any recovery further into the distance.
Whitbread Disappoints
Whitbread disappointed with its update, as room sales fell 2.1% in the three months to November. Impacted by weaker business and consumer confidence, business and leisure bookings took a hit. This update was prior to the UK general election, and whilst the share price has jumped 20% since December on improved political and Brexit clarity, the reality is any improvement in confidence will take time to filter through into improved UK investment spend and sales.
Pound holds gains
The pound has managed to remain in positive territory for a third straight session. The pound pushed above $1.3050 despite growing concerns of an imminent rate cut from the BoE and despite a solid increase in US retail sales. US retails increased 0.3% month on month, with core retail sales beating forecast at 0.5%; a good sign for the US economy. With strong job creation, 2.9% wage growth and consumer confidence at the highest level since May, households have been spending in the festive period.
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