Commodity crunch
Glencore mangled
Chinese economic data continues to have a crushing effect on commodity markets. Further downbeat figures from China this week prompted analysts in the City to get out their red pens, with the likes of Glencore (GLEN) and Anglo American (AAL) among those targeted for swingeing downgrades. Investec's scribblers even went as far as to suggest that, should the trough in commodity prices continue, the two companies in question could see little value left in their equity, such are their debt burdens. Glencore in particular saw its shares slump on Monday to a new all-time low, more than 80 per cent below its 2011 float price of 530p.
At Liberty
Vodafone deal off
Telecoms giant Vodafone (VOD) is back on the prowl after talks with cable giant Liberty Global ended this week. The two companies had been in talks since June over a potential tie-up, framed as a likely asset swap rather than a combination of the two businesses. A deal, which would have likely married Liberty's strength in European markets and cable with Vodafone's mobile might, seemed to make sense given the increasing prevalence of telecoms giants with a joined-up quad-play offering and leaves Vodafone potentially seeking solace elsewhere.
Consumer boom
Housing hots up
Signs are growing that the consumer boom that the UK government has been trying to stoke may finally be kicking in. The latest Confederation of British Industry distributive trades survey suggested that high-street sales volumes grew at the fastest rate since before the financial crisis in the year to September and orders placed with suppliers are running at their strongest in five years, both boosted by low inflation and rising wage growth. Meanwhile, the UK housing market continues to thrive and the latest figure for mortgage approvals, which hit 71,030 in August, was the highest in 19 months, with net mortgage lending up £3.4bn in the month - the greatest monthly rise since May 2008.
Fight back
VW acts
The new chief executive of embattled carmaker Volkswagen (de:VOW3) is not exaggerating when he says the company faces "the biggest test in our history". Matthias Müller this week said the company would tell regulators in October what it intends to do in its attempt to address the emissions rigging software scandal which has wracked the company. Up to 11m vehicles worldwide have been fitted with 'defeat device' software to game emissions tests, but only a portion of these saw the software activated so not all will need to be recalled or refitted. VW said this week that 1.19m cars fitted with the software had been sold in the UK.
Digital threat
Banks warned
The established banking sector is facing its most serious threat yet from alternative lenders. That's the verdict of consultancy McKinsey which this week warned lenders that they are facing a "high stakes struggle" to protect some areas of their business from digital disrupters. Many areas of their businesses face challenges including credit cards, car loans and personal lending, where profits could be slashed by up to 60 per cent in the next decade while areas such as payment processing and wealth management are also likely to come under pressure to a lesser extent.
Crisis coming
IMF warning
The start of interest rate tightening in the US could trigger chaos in emerging market economies, according to the International Monetary Fund. In an echo of the 1990s, the IMF warned that some emerging market economies are staring into the abyss after a debt boom in recent years, which has seen corporate debt more than quadruple from $4 trillion (£2.63 trillion) to $18 trillion since 2004. With much of the borrowing denominated in dollars there is a growing concern that any strengthening in the dollar prompted by US interest rate tightening could cause chaos in economies already compromised by slowing growth rates and commodity price falls.
Times remain tough for the ‘big four’ supermarkets. The chart shows that in the 12 weeks to 13 September only Sainsbury recorded growth in sales, and that was only marginal. The other majors continued to bleed sales, with the discounters continuing to hoover up business at a rapid rate, albeit coming from a more modest base their accelerated growth rates are no surprise.
With Christmas round the corner and UK retail sales reported to be picking up along with wage growth, is respite on its way for the supertankers of the industry, or will there be more blood in the aisles?
