Yahoo Finance What to Watch: Pound volatile, Mike Ashley's Debenhams offer, and Savills shares crash
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Pound volatile on Brexit votes
The pound spiked on Wednesday night before dropping on Thursday morning amid heightened Brexit uncertainty.
Sterling jumped as much as 2% against the dollar (GBPUSD=X) to rise above $1.33 on Wednesday evening after MPs voted to rule out leaving the EU without a deal. Sterling enjoyed a similar rally against the euro (GBPEUR=X).
The pound is still trading near last night’s highs on Thursday morning, but has come off slightly amid uncertainty over the next steps for Brexit.
“The pound’s movements continue to be driven by politics instead of economics,” Dean Turner, UK Economist at UBS Wealth Management, said in a statement. “Be in no doubt that the Brexit process remains extremely fluid, with many twists and turns ahead. Thus, we don’t advocate taking directional views at this time and advise continuing to hedge downside risks.”
Mike Ashley’s Debenhams loan offer
Sports Direct (SPD.L) and Mike Ashley have stepped up pressure to take control of Debenhams (DEB.L), offering a funding line and lodging a complaint against the current management.
Sports Direct said on Wednesday that it had made a £150m loan offer to Debenhams to help solve its funding crisis. Separately, the BBC reported that Sports Direct has complained to the Financial Conduct Authority about Debenhams management, alleging they mislead investors with a trading update in January.
Ashley, the founder and CEO of Sports Direct, is currently trying to oust the CEO and board of Debenhams and instal himself as the CEO of the struggling department store. He already owns a major stake in the business.
Debenhams said it will give “careful consideration” to Ashley’s 12-month loan proposal. The department store chain said any such loan would require the backing of existing lenders and “material amendments” to existing facilities.
Savills and RICS warn on property market
Upmarket estate agent Savills (SVS.L) and the Royal Institute of Chartered Surveyors (RICS) have both issued warnings on the state of the property market.
Shares in Savills fell by 9% after it reported a 3% fall in profits to £109.4m and warned of a tough year ahead due to economic and political uncertainty.
“The year ahead is overshadowed by macro-economic and political uncertainties across the world,” Savills chief executive Mark Ridley said. “It is difficult accurately to predict the impact of these issues on corporate expansionary activity and investor demand for real estate.
“At this stage, we expect to see declines in transaction volumes in a number of markets and growth in our less transactional business lines; accordingly we retain our expectations for the group’s performance in 2019.”
Separately, RICS said prolonged Brexit uncertainty will likely further damage the UK housing market as it reported the sixth consecutive month of new buyer enquiries, agreed sales, and new instructions.
The UK’s Office for Budget Responsibility (OBR) said on Wednesday that it expects to see house price growth turn negative at the end of this year and the start of 2020.
Facebook outage
Facebook (FB), Instagram, WhatApp, and other Facebook properties went down on Wednesday in one of the social media giant’s biggest outages ever.
Facebook said on Twitter on Wednesday evening that it was “focused on working to resolve the issue as soon as possible” and said the outage was not due to a DDoS attack. The exact causes of the outage are not clear. All Facebook properties appear to be back up and working on Thursday morning.
Separately, the New York Times reported that US federal prosecutors are conducting a criminal investigation into data deals struck by Facebook. The tech giant’s stock was down 1.6% in the pre-market.
Boeing grounds planes
Boeing (BA) has agreed to ground the entire global fleet of its 737 Max aircraft after the deadly crash of an Ethiopian Airlines flight last weekend.
All 371 of Boeing’s 737 Max aircraft have been grounded globally. It followed an emergency order from US President Donald Trump on Wednesday grounding all Boeing 737 Max 8 and Max 9 aircraft “effective immediately.”
Many nations had already barred the Boeing 737 Max from its airspace, but, until Trump’s announcement, the Federal Aviation Administration (FAA) had said it did not have any data to show that the jets are unsafe.
Trump cited “new information” that had come to light in the ongoing investigation into the Ethiopian Airlines incident. He did not elaborate.
European markets
European stock markets were higher after a solid session in the US on Wednesday and in spite of a mixed session for Asian markets.
Britain’s FTSE 100 (^FTSE) was up by 0.3%, Germany’s DAX (^GDAXI) was 0.5% higher, France’s CAC 40 (^FCHI) was up by 0.8%, and the Euronext 100 (^N100) was 0.8% higher.
Japan’s Nikkei 225 (^N225) closed down by 0.02%, Hong Kong’s Hang Seng index (^HSI) was 0.1% higher, and China’s benchmark Shanghai Composite (000001.SS) was down by 1.2%.
What to expect in the US
US stock futures are pointing to a higher open. S&P 500 futures (ES=F) were up by 0.1%, Dow Jones Industrial Average futures (YM=F) were up by 0.1%, and Nasdaq futures (NQ=F) were up by 0.2%.
Companies reporting later today in the US include:
