Yahoo Finance What to Watch: UK economy stutters, Sports Direct boost, and Cineworld deal
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Manufacturing slump hits UK economy
The UK economy is continuing to struggle, a closely watched private sector survey of business activity shows.
IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS) on Monday published flash estimates of UK economic growth in December. The data pointed to a 41-month low for growth, sparked by the fastest downturn in manufacturing output since 2012.
IHS Markit and CIPS’s composite UK economic purchasing managers index (PMI), which reflects output across the private sector, came in at 48.5.
PMIs are a survey of private-sector views on economic activity and register on a scale of 1 to 100. Anything above 50 signals growth, while anything below signals contraction.
Manufacturing output hit its lowest level since 2012 in December. Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said an unwinding of Brexit stockpiles was partly to blame.
Sports Direct reports 160% rise in profits
Sports Direct (SPD.L), owned by billionaire Mike Ashley, was the biggest riser on the FTSE on Monday as surging pre-tax profits lifted shares by 20%.
It reported an eye-catching 160% rise in pre-tax profits to £193.4m ($258.8m) for the six months to 27 October.
In its interim results statement, the retailing giant said that the huge pre-tax profits rise was significantly helped by the sale and leaseback of the Shirebrook distribution centre. It also said an improvement in its premium House of Fraser unit and its European retail business pushed results up further.
Meanwhile, its outlook appeared to have improved as the retailer said it was working on a resolution to a €674m bill from Belgium's tax authority. It shocked investors by revealing the hit in July amid controversy over its auditing, but it said on Monday the bill would ultimately not lead to "material liabilities."
Cineworld to become biggest cinema group in North America
London-based Cineworld (CINE.L) on Monday said that it was acquiring Canada’s Cineplex chain for $2.1bn (£1.6bn), in a move that will make it the largest cinema group in North America.
Cineworld, which is already the world’s second-largest cinema company by number of screens, will gain 165 cinemas and nearly 1,700 screens in the country.
The price being paid by Cineworld, which includes debt, represents a 42% premium on Friday’s closing price.
The acquisition is set to be financed by the raising of debt, Cineworld said.
Water firms ordered to cut bills
Customers in England and Wales will see an average reduction of £50 in their water bills before inflation by 2025, according to regulator Ofwat.
Ofwat says the reduction will come about in part because it demanded greater efficiency from water companies and promoted innovation in the sector.
The reduction in bills will coincide with a £51bn spending package over the next five years.
Around a quarter of this — roughly £13bn — will be invested in “providing resilient services and a better environment in the face of a growing population and climate change”, Ofwat said on Monday.
European stocks rise
European stocks have continued to rise after US trade representative Robert Lighthizer said a deal with China was “totally done.”
The Euro Stoxx 50 (^STOXX50E) was up 0.7% and the French CAC 40 (^FCHI) was up 0.9%.
The FTSE (FTSE) soared 1.9%, boosted by the UK election result, while the German DAX (^GDAXI) was up 0.6% in mid-morning trading.
Overnight in Asia, the Hong Kong Hang Seng Index (^HSI) slid 0.7% and the Nikkei (^N225) dropped 0.3%, but China’s Shanghai Composite index (000001.SS) was 0.6% higher.
What to expect in the US
US stocks looked set to rise on the latest hopes over trade, with Dow Jones futures (YM=F) up 0.1% and S&P 500 futures (ES=F) and Nasdaq futures (NQ=F) both 0.3% higher.
