Yahoo Finance What to watch: Asos profit warning, Slug & Lettuce pub deal, and no-deal Brexit recession fears
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and the rest of the world:
Asos shares plunge after profit warning
Shares in Asos (ASC.L) have recovered only slightly after dropping by more than 20% on Thursday after the online fashion retailer said profits would be lower than forecast.
Asos blamed “operational issues” linked to upgrading its warehouses, saying they hit sales in the US and Europe.
Because of the teething problems, Asos said on Thursday that profits were likely to be between £30m and £35m this year.
It had previously predicted profits would be £55m. Asos also cut its full-year sales growth forecast from 15% to 12%. It is the company’s third profit warning in less than a year.
Slug & Lettuce owner buys UK’s biggest pub group
Slug and Lettuce owner Stonegate Pub Company has announced an agreement to buy Britain's largest pub owner Ei for £11.27bn ($1.58bn), according to Reuters.
The company is reported to be planning to take over more than 4,000 of Ei’s pubs, sending Ei shares rising more than 40% to a decade-high as the deal was recommended by Ei’s board.
The announcement also helped other pub chains Mitchells & Butlers, Greene King, and Marston's rise between 1.1% and 2.9%, Reuters reports.
Ei, which traces its roots back to 1991, has become Britain's largest pub owner through several acquisitions, including buying former Whitbread pubs. It employs more than 1,800 people.
Watchdog: no-deal Brexit could spark recession
A UK government budget watchdog warned a no-deal Brexit will throw the economy into recession, with a “squeeze” on real household incomes as the pound’s falling value forces up prices.
The value of sterling and house prices could dip “sharply,” with imported food and other goods becoming far more expensive, government borrowing spiralling, foreign investment sliding, and firms that sell to Europe battered by new trade barriers.
The Office for Budget Responsiblity (OBR) said on Thursday that the British economy could contract by 2% in real terms by the end of 2020. This would take the UK into recession and leave real GDP 4% smaller than its previous forecast.
European and Asian markets
European markets were all lower on Thursday. The pan-European STOXX 600 index (^STOXX) and Euronext 100 (^N100) were both down 0.5%, while the Euro Stoxx 50 (STOXX50E) was down 0.7% in early trading.
Britain's FTSE 100 (^FTSE) was down 0.4%, Germany's DAX (^GDAXI) was down 0.9%, and France's CAC 40 (^FCHI) was down 0.6%.
Asian markets also fell overnight, with Japan's Nikkei 225 (^N225) down 2%, Hong Kong's Hang Seng index (^HSI) down 0.5%, and China's benchmark Shanghai Composite (000001.SS) down 1%.
What to expect in the US
US stock futures were also pointing to a slightly lower open later Tuesday.
S&P 500 futures (ES=F) was down 0.1%, while Dow Jones Industrial Average futures (YM=F) and Nasdaq futures (NQ=F) were both down 0.2%.