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.

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.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

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".

Advertisement

Recommended

Visit/investments/commodities/600639/commodities-look-cheap
Commodities

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/517688/the-british-equity-market-is-shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Visit/516758/beyond-the-brexit-talk-the-british-economy-isnt-doing-too-badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019

Most Popular

Visit/investments/property/601081/three-things-matter-for-the-uk-housing-market-now-and
Property

Three things matter for the UK housing market now – and “location” isn’t one of them

The UK housing market is frozen. And when it does eventually thaw out, the traditional factors that drive prices will no longer apply. The day of reck…
1 Apr 2020
Visit/investments/property/601065/what-does-the-coronavirus-crisis-mean-for-uk-house-prices
Property

What does the coronavirus crisis mean for UK house prices?

With the whole country in lockdown, the UK property market is closed for business. John Stepek looks at what that means for UK house prices, housebuil…
27 Mar 2020
Visit/investments/commodities/energy/oil/601107/oil-shoots-higher-have-we-seen-the-bottom-for-the-big-oil
Oil

Oil shoots higher – have we seen the bottom for the big oil companies?

Just a few days ago everyone was worried about negative oil prices. Now, the market has turned upwards. John Stepek explains what’s behind the rise an…
3 Apr 2020
Visit/economy/uk-economy/601079/how-the-coronavirus-pandemic-is-killing-cash
UK Economy

How the coronavirus pandemic is killing cash

Covid-19 is making a huge difference to the way we live, work and do business. One of its less obvious effects, says Merryn Somerset Webb, is to accel…
31 Mar 2020