Spreadex Market Update
Contracting Chinese PMIs start manufacturing Tuesday with an ominous whimper, whilst Barclays joins banking bros with worrisome full year report
With Brent Crude approaching $37 per barrel thanks to yesterday’s ‘co-operative’ Saudi comments and the rate cut from the PBOC the FTSE just about ignored that troublesome China data to start Tuesday up by around 0.2%. Of course, like the rest of the continent, the UK still has its own manufacturing data to come, the latest PMI expected to slip slightly from 52.9 to 52.3, something that may take the edge off the index as the morning continues.
Weighing the FTSE down this Tuesday was Barclays, fresh off a full year report far more in the vein of RBS’ ugly figures than Lloyds’ dividend-lifted performance, causing the company to fall nearly 4% after the bell. Chopping its own dividend in half to 3p for 2016 and 2017 Barclays posted an 8% fall in profits to £2.1 billion, announced it was reducing its stake in its African business (as expected) and revealed a further £1.45 billion in PPI provision, that ever present blight on the badly behaved banking sector.
In stark contrast to Barclays it was a perfectly baked set of full year results for Greggs this morning; with a near 7% jump in total sales (to £835.7 million) leading to a 46.9% rise in pre-tax profit (to £73 million) the high street staple had a rather tasty 2015. So tasty, in fact, that Greggs decided to reward its investors with an extra treat, plumping up its dividend by 30% to 28.6p. Not only that, but the company is cannily trying to move into the healthy food sector (well ish, it is Greggs after all), intending to bolster the presence of its ‘Balanced Choice’ range going forwards. Investors were sufficiently hungry for Greggs after all that news, sending the stock 4% higher as the day got underway.
The Eurozone is set to see its own wave of manufacturing mayhem this morning; declines are forecast for the Spanish and Italian PMIs, whilst the final readings for the latest French and German figures are expected unchanged at 50.3 and 50.2 respectively, the latter a 15 month low. That leaves the region-wide number are a likely 51.0, itself a 12 month nadir. It looks like investors are hopeful, however, the DAX rising around 0.9% after the bell with the CAC posting a milder 0.3% increase.
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