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Top 5 stories of the week: Sell-offs, CEO splits and sausage rolls

Ben Weiss, Friday, 4 October 2019

Lightening

It wasn’t quite Black Monday, but the stormy weather seemed to bring with it stormy market conditions. Indices suffered substantial losses across the board on Wednesday, as the global economic outlook seemed rather bleak. Elsewhere, a number of high-level departures were announced this week and don’t worry, our sausage rolls are safe thanks to one firm! Here are the top five stories from the week courtesy of our weekly review.

Not-so-much-black-more-Grey Wednesday

It was nowhere near as devastating as the 1987 stock market crash, but damaging nonetheless. This week indices fully felt the brunt of global economic slowdowns.

In 48 hours, the FTSE was down circa 320 points, the Dow 1,000 points, DAX 550 poins, Nikkei 700 points, I could go on. Indices were suffering from a combination of the US-Sino trade war, Brexit talks coming to their culmination and general weak economic data being released by economies across the world. Another factor that almost certainly will continue to affect indices going forward is the new tariffs Trump has now been permitted to impose on European goods – as mentioned below.

As Brexit’s deadline draws closer, this situation will be key to monitor in order to try to predict how which way markets will go. Talks between China and the US are set to commence as well, so a turn around in fortunes on this front could easily be the solution needed for global economies to be boosted.

Grey Wednesday Indices

Trump opens front with Europe

Not satisfied with taking on the world’s second largest economy (after the US itself), Trump has now added Europe to his economic hitlist. He has his critics, but it seems the US is benefitting from having a businessman as President, with the introduction of these new tariffs on EU goods said to recoup billion for the American economy.

The row, surprisingly, has been going on between the EU and US since 2004, sparked by European loans for Airbus. The US filed against the EU and the World Trade Organisation sided with them, but what was deemed as non-compliance has led to the imposition of tariffs.

The goods affected range from axes, olive oil and whey protein concentrate, to the more commonly used coffees and whiskey.

It’s tough to understand the general impact this has/will have on the global economy, with so many other major factors dictating performance at present. But Airbus’ chief executive has said that hitting aircraft (another type of good affected) with import duties would disrupt the aviation industry.

Ted Baker down 40%

Fashion firm Ted Baker was an early casualty as it released its earnings report for Q3. Ted Baker’s share price opened over 200 points down on Thursday morning, before quickly falling to 35% lower than the previous close. It’s since fallen even further down to 40% of its former price in the space of less than 24 hours.

Ted Baker has had a turbulent few months, with founder Ray Kelvin leaving in March and a profit alert being issued in June. Tough trading conditions have been attributed to the downturn in sales this term, but the substantial drop is still extremely worrying for investors.

Ted Baker drop

Tesco and Metro Bank bosses to leave

A spate of departures from the very top bosses have occurred this week, with Tesco, Metro Bank, BP and Aberdeen Standard Investments all suffering key losses. Tesco’s is perhaps the most surprising, with Dave Lewis largely considered a very competent and highly successful CEO.

The CEO and founder of Metro Bank, Vernon Hill, has departed after an accounting error at the start of the year misclassified millions of pounds worth of loans.

BP announced today that Bernard Looney will replace outgoing chief Bob Dudley on 5 February. Although each with specific, differing reasons for leaving, it must be said that the current tough economic times, the severe decline of the classic highstreet store and Brexit pressures surely would have all contributed somewhat towards the departures. More may be to come as other equities release their earnings reports over the next few days.

SOS – Save our sausage rolls

Fear not! Amidst talk of medicine and food shortages, one firm has heroically taken it upon itself to save one of Britain’s most famous and popular delicacies – the sausage roll.

So let Brexit cause shortages of pork, because thanks to Greggs taking initiative the people of this country will not have to suffer without their beloved pastry-meat combo. The firm has anticipated potential shortages and stockpiled pork with Brexit less than a month away. Smart move or a case of over-paranoia?

 

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