Spreadex Market Update
Big morning for UK earnings sees gains for Barclays, Next and TSB Banking
Barclays sets aside an extra £950 million for provisions (with £850m for forex and £150m for PPI); on top of this, the bank saw statutory profits fall 26%. However the fact that Barclays has cut costs by 7% alongside a reduction in its investment risk helped soften the blow, and the bank soon began to post gains following a brief foray into the red after the bell. Elsewhere in the banking sector, in its first announcement since it accepted a takeover bid from Sabadell, TSB Banking saw a 153.3% jump in pre-tax profits on a management basis between the fourth quarter of 2014 and now due to big increases in its lending, helping the bank to minor gains as the morning went on. However, it looks like investors aren’t willing to take TSB beyond the heights it was pushed to by the Sabadell take-over news.
Next looked like it was on track to be back at full health sooner rather than later, as the UK clothing company announced a 4.1% growth in total sales and importantly reaffirmed its full year outlook. The company was boosted by robust 7% growth in Directory sales and a warm-weather prompted early launch of its summer range, causing the stock to jump by nearly 3% after the open.
After someone let the bird out of the cage a bit early last night, the leaked Twitter figures saw a staggering 20% fall from $51.96 to $41.47 after it missed revenue forecasts and saw a worrying slowdown in user growth. Crucially, Twitter also lowered its full year forecasts, a rallying cry for sellers across the globe.
Over in the Eurozone, the news that progress, however glacial, is being made between Greece’s new negotiating team and its creditors is aiding the region’s bounce back after Tuesday afternoon’s sell-off. However, forecasts are showing a decline in German inflation, something that could cause wobbles later on this morning.
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