Shop shares in focus ahead of Christmas trading update — and a “conspiracy” at THG

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Market Report: A Look at Retailers and Bonds

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HOPS and bonds were being closely watched today ahead of a crucial week for retailers and inflation watchers.

On Wednesday we’ll find out how prices are moving in both the US and China, data that will drive interest rate expectations and bond prices going forward.

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Today the UK five-year gilt yield rose two basis points to 1.01%, the first time it has exceeded 1% since March 2019.

This week there will be Christmas trading updates from Sainsbury’s, Tesco, Marks & Spencer and Assos, among others.

The market was betting today that Sainsbury’s could be a festive winner – the stock rose 4p to 279p. Primark’s owner ABF also got a jump from 17p to 2068p.

M&S shares are up more than 80% in the past year and added another 6p to 263p this morning.

This gives it a market cap of over £5 billion, meaning a return to the FTSE 100 is possible this year.

The LEED Index was down 27 points today at 7458, but has had a strong couple of weeks.

Other retailers of interest include Asos, which was once considered to have eclipsed M&S, but is now sites of small-sellers betting against retail. The Retail Gazette believes there are short positions worth £1 billion against Asos and others – with Ocado also a target.

Shares of Asos fell from 13p to 2184p, reducing their own market value by £2.2 billion.

Hut Group has gone so far as to complain to a city’s regulators that it is “plotting” its shares down. THG’s stock, led by Matt Molding, has had a bad time in a market where it probably isn’t.

Today those alleged conspirators sent shares down another 8p to 186.5p. Molding likely wouldn’t object to city plots that would send distressed stocks up.

Tesco shares were rather weak today, basically flat at 289p ahead of its own trading update on Thursday.

Some in the city fear it is struggling to live up to the value promises made by German giants Aldi and Lidl.

Today Aldi claimed it had its “best ever” Christmas, with sales up 0.4% in December compared to the same month a year ago. Analysts say the cost of living crisis may help the discounters this year.

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