Spreadex Market Update
Big morning for European earnings, as BT, Lloyds, Next and Volkswagen wall report
Starting the day barely changed, it was a big morning for FTSE 100 results. Next fell by around 1% at the open, despite a 6% increase in third quarter sales and slightly improved full year guidance. Things were even worse for Lloyds; the bank’s rising pre-tax profits, from £751 million to £958 million year on year, couldn’t outshine the fact that the bank has set aside another £500 million (granted down from £900 million in Q3 2014) for the PPI mis-selling scandal, sending it over 4% lower in the process.
On the other side of the red/green divide was BT; though the UK telecoms giant doesn’t report until tomorrow, news that CMA has approved its EE merger is likely sweeter than anything the company can produce with its Q2 2016 results. This sent the stock over 4.5% higher as investors salivate at the latest step in BT’s plan for UK media-dominance.
The Eurozone saw its own mega-earnings release this morning, as Volkswagen revealed to investors the cost (or at least, part of the cost) of its emissions-scandal. Whilst not pretty reading, a slightly worse than expected €3.48 billion loss in its third quarter (its first for 15 years) alongside slashed forecasts for its full year profits wasn’t shocking enough to cause any further mass-exodus from the already beleaguered stock, allowing Volkswagen to post some healthy gains in the aftermath. This helped the DAX to a 20 point jump, the best performance out of the European indices, and especially remarkable given that VW’s report was almost-objectively the worst earnings release of the morning.
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