British profit warnings at post-crisis high

A headwind for British equities may be gathering strength: corporate profit warnings have reached their highest level since the financial crisis, according to figures from the consultancy EY. A total of 312 listed firms warned analysts to lower their forecasts in the 12 months to the end of March, up from 302 in the previous year and the highest 12-month total since 2008.

In the first quarter of 2016, 76 firms issued warnings, compared to 100 in the last three months of 2015. The travails of the commodities and oil sectors are partly responsible, but it hardly helps that "the global economy is still struggling to build momentum", as the EY report notes. Uncertainty over China's slowdown is also lingering.

China's new obsession

An apparent pick-up indemand for many rawmaterials has encouragedinvestors, while the days ofeasy money have returnednow that the governmenthas stimulated lending. Sothey are making leveragedbets again, adding to thefrenzy. On Thursday 21April contracts on 223million metric tonnes ofrebar changed hands,more than China's fullyearproduction, saysBloomberg.com. This isbound to end in tears,reckons Tiger Shi of BandsFinancial. Last week "feltjust like the stockmarketbefore the crash".