Oil Fights Back | ||
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The price of oil is rising slightly this morning, reducing some of its losses from one of the worst collapses of the year. Yesterday oil crashed to its lowest level since 2009. This morning crude is trading in positive territory, gaining 0.06 (+0.10%) and is valued $63.11 a barrel at about 9am GMT.
At 9.30am, Brent is also in green, gaining 0.12 (+0.18%) and more importantly surging back above the $66 threshold.
Of course, these are only minor improvements. It's expected that after a very bad fall prices might surge a little the following day. The long-term scenario still looks pretty bleak for oil producers. This chart shows the oil price from the beginning of the year:
The crash has multiple consequences around the world:
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Big Miss For UK Manufacturing As Output Crumbles In October | ||
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UK industrial output dropped 0.1% in October from September, and manufacturing production slumped 0.7% in the same period, according to figures just out. Analysts had expected a 0.2% increase in industrial production from September, and a similar increase from manufacturing, which would have left industrial and manufacturing output up 1.8% and 3.2% respectively. Instead, the drop leaves industrial production up just 1.1% year-on-year, and manufacturing up only 1.7%. This is one of the earliest signs of how the economy is performing in the fourth quarter of the year, and it's not good so far. Join the conversation about this story »  | ||
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The 10 Things You Need To Know In Advertising Today | ||
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Good morning. Here's everything you need to know in adland to set you up for the day. 1. PepsiCo’s CEO Indra Nooyi has conceded that cola has lost some of its “cool factor.” Nooyi said that craft soda, like its Caleb’s Kola product, may be the key to restoring some of cola’s allure. 2. People are complaining that a cute fluffy animal ad from a UK biscuit brand could encourage people to buy — and then abandon — pets at Christmas. McVitie’s has already been forced to edit the popular ad to take out a scene featuring a rabbit, after people complained that it looked as though the animal was in a state of “tonic immobility” and could encourage people to place rabbits on their back, which causes them stress. 3. A TGI Friday’s #Togethermas “mistletoe drone” marketing gimmick has gone horribly wrong. A woman had her face "nearly destroyed" when one of the drones got caught in her hair and cut her chin with its blades. 4. General Mills relaunching French Toast Crunch after customers had been begging the company to bring it back. It originally appeared on shelves in 1995 but was pulled in 2006. 5. Gérard Depardieu says he is “proud to be Russian” in this slightly terrifying luxury watch ad. The French actor, who was recently granted Russian citizenship, is the face of luxury watch brand CVSTOS. 6. Video advertising has a major bot fraud problem, according to an ANA/White Ops study reported by AdExchanger. The study — which reviewed 5.5 billion impressions over a 60-day period— found that bots are responsible for 23% of all video impressions and 11% of display ads. 7. KFC has released a cute John Lewis-esque Christmas ad called “The Boy Who Learnt To Share,” Agency Spy reports. The campaign, created by BBH London, tells the story of a selfish boy who hogs the arm rests at the cinema and writes his name on all the Christmas presents, but finally learns that sharing is the better option for everyone when he sees the rest of his family tucking into a KFC bucket together. 8. EBay is to run an ad trading experiment next year that will see it cease all regular ad deals to focus on programmatic only for one week, The Drum reports. The e-commerce site will launch the experiment in February to help understand the extent to which programmatic advertising offers efficiency savings and insights. 9. The UK Marketing Agencies Association has called for more agencies to speak up about unethical, anti-competitive business terms being demanded by clients, Digiday reports. The MAA wants to present a case to competition authorities to have laws changed around practices such as asking for upfront roster payments, asking agencies for payment to be considered to take part in pitches or having payment terms of 100 days or more. 10. Facebook has rolled out a new feature that allows users to search for specific posts they and their friends have made. Facebook has not yet announced search advertising options, but one would imagine they are on their way. Join the conversation about this story »  | ||
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Tesco shares plunge over 14% on profits-warning | ||
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London (AFP) - Britain's biggest retailer Tesco on Tuesday issued a major profits-warning, sending its share price crashing, as the supermarket group undergoes changes to its business triggered by a fraud probe. Tesco said its trading profit "will not exceed £1.4 billion" ($2.2 billion, 1.8 billion euros) in its financial year to February 2015. Analysts' consensus had been for £1.94 billion. "Whilst the steps we are taking to achieve this (turnaround) are impacting short-term profitability, they are essential to restoring the health of our business," Tesco chief executive Dave Lewis said in a company statement. Shares in the group tumbled 14.31 percent to stand at 160.4 pence shortly after the start of trading on London's benchmark FTSE 100 index, which was down 0.96 percent overall. "Tesco is no longer a viable investment," said Marc Kimsey, senior trader at Accendo Markets. "A fire-sale of assets is almost nailed on and a rights issue cannot be ruled out. Traders are clearing the decks of what remaining stock they had." British authorities recently launched a criminal investigation into Tesco after the retailer in October revealed that it had overstated its profits by £263 million as a result of accounting errors stretching back to before 2013. Tesco is the world's third-biggest supermarket group after France's Carrefour and global leader and US giant Wal-Mart. While Tesco has been forced to massively adjust its reported earnings owing to an overstatement of income and an understatement of costs, the supermarket has in any case seen profits hit in recent times by increased competition in main market Britain. Tesco's net profit dropped to just £6.0 million in its first half from £820 million one year earlier. In a bid to turn around its fortunes, the group in July appointed outsider and former Unilever executive Lewis to replace long-standing chief executive Philip Clarke. But markets appear in no mood to be patient. “The trading update may be brief and patchy on detail, but it has provided more ammunition for the snipers," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. "If there had been hope that the market would be immune to yet another profit warning, this quickly evaporated as Tesco has provided profit guidance which is nearly 30 percent shy of an already lowered estimate. "The company partially attributed the lower figure to increased investment in the business, but amidst the accounting mishap, the revolving door in the boardroom and an unforgiving attack from the discount retailers, investors have simply lost interest in waiting for a recovery story which still seems some way off." Tesco shares have plunged by almost half in value over the past year, according to Hunter, while the FTSE 100 has risen about 2.0 percent. Amid the fallout, Richard Broadbent resigned as chairman of Tesco in October and the company has suspended a number of executives. The Serious Fraud Office (SFO), the government department responsible for investigating and prosecuting serious and complex fraud and corruption, has meanwhile launched a criminal investigation into the company. Join the conversation about this story »  | ||
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Snap Election Fears Are Tanking The Greek Stock Market | ||
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After the announcement that Greece's presidential elections are being pushed ahead to December 17, stocks are sinking in Athens. Bond yields, which measure the cost of issuing debt for the government, are spiking once again. Sovereign yields are breaking out of the region they've been in for the past few days, up from 7.2% to nearly 7.7%. Yields saw a recent peak just below 9% in October, when far-left anti-austerity party Syriza took a polling lead, and the government was planning to exit its bailout early. Equities on the Athens stock exchange dropped by nearly 7%, with investors reacting pretty badly to the news. They're now down by 5.76%. The presidential election is conducted by Greece's legislators, not its population. But the government needs a super-majority to install a president, which it doesn't have. Deutsche Bank's Jim Reid explains the situation here:
Deutsche's George Saravelos also says there's a 60/40 chance of a Greek parliamentary election. With Syriza in the lead, that's a big risk for bondholders. The insurgent party wants Greece's creditors to take a major haircut (drastically cutting the value of their investment), and for existing bailout programmes to be cancelled. Join the conversation about this story »  | ||
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Shanghai Stocks Just Went Into A Major Sell-Off | ||
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Chinese stocks just saw a colossal sell-off late in trading, sending the Shanghai Composite index from a small increase to a 5.43% crash. Here's how it looked:
That's not done much to dent the meteoric rise of Shanghai's stock market, which is still up by 39.47% since January. But such rapid slumps will likely be raising a few eyebrows. Only yesterday, Shanghai stocks were being sent through the roof by some abysmal trade numbers. The stock exchange is setting record trading volumes at the moment, and it's extremely choppy. So it's no surprise at all that Chinese regulators are already warning investors about the sharp rally. Join the conversation about this story »  | ||
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