Spreadex Market Update
Tesco sees astonishing £6.4 billion in losses
Tesco saw an almost unbelievable loss of $£6.4 billion in 2014, largely due to a £7 billion write-down. This loss far exceeded the worst-case scenario £5 billion floated yesterday; however the fact that this lower figure was leaked last night has prevented Tesco investors from going into cardiac arrest, as they likely would have if the figure was released blind this morning. Tesco’s CEO Dave Lewis, in perhaps the understatement of the year so far, claimed the market was ‘still challenging’. Luckily for Lewis, investors still believe in his ability to turn Tesco around, with the supermarket seeing mild gains after the bell.
The FTSE remains near 7100 without looking like it has the gumption to cross that threshold after it spent much of Tuesday tentatively, but indecisively, dancing around this level. Looking at the markets after the bell, it may be a case of the FTSE’s oil and mining stocks battling for dominance. After both spent Tuesday suffering at the hands of their respective falling commodities, the mining stocks have seen a slight upswing this morning, whilst the oil stocks largely remain in the red.
Brent Crude has slowly been slipping away from the $64 per barrel high it saw at the start of the week, and investors will be warily watching the latest US crude oil inventories figure this afternoon. Last week saw the lowest inventory figure since the start of the year, and spurred the commodity onto its latest rally. Another low figure could reinvigorate the flagging Brent Crude; a now-classic high figure, on the other hand, could put the final nail in the coffin of this latest run.
The Eurozone is managing to hold its Grexit fears at bay and sustain the growth it has seen since the start of the week, even if it is starting to look like a case of diminishing returns as the Greek situation slowly gains more and more prominence. With no chance of a deal at Friday’s Eurogroup meeting in Riga, Greece has missed its latest chance to show genuine intent in regards to reforms, leaving it friendless, penniless, and pretty much hopeless.
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