wuyanzhu2011
03-26-2011, 08:59 AM
The picture for the UK economy looks as confused as ever.
Manufacturers are still doing well. Britain's factories churned out 1% more in January than in December, which completely reversed that month's slight output drop. And over the last year, our manufacturing production has climbed an impressive near - 7%.
But the high street is telling a very different story. And with this set to get even worse, it's a time to be wary about where you're invested.
However, there are still some opportunities in the sector. I'll tell you about one I particularly like in a moment…
A manufacturing recovery isn't enough
After years of Britain's prospects being dominated by what's happening in the City and in estate agents' windows, signs that other parts of the economy are now doing far better are very welcome.
Recent strong manufacturing figures prove that Britain still has some great companies left, like Rolls Royce, which we wrote about last month in the magazine's new Shares in Focus column. Subscribers can read about here: Rolls Royce: A quality British engineer – if you'd like to become one, just click this link to get your first three issues free.
But as Samuel Tombs at Capital Economic points out, manufacturing now accounts for just 13% of UK GDP. So it can "only make a modest contribution at the best of times". In other words, it can't save the UK economy alone.
Consumer spending, in contrast, accounts for around two thirds of the overall economy. So it's clearly still the key factor in GDP growth. That's why the latest statement from Home Retail Group is such a jolter.
What the bad news from Argos means for you
Home Retail owns the Argos and Homebase chains, which together are a useful barometer of the strength UK consumer spending. The bad news is that Argos sales fell by 4.6% in the eight weeks to February 26, quite a bit worse than anticipated. And, HR boss Terry Duddy is distinctly downbeat about the outlook.
"There's been a clear reining in of consumer spending and lower footfall overall", he tells the FT. "Even where we're promoting we're not seeing the uplift we normally would see. [Sales] should have been better than this, and that gives us some concerns". Looking forward, he sees "clear signs" that spending will drop further.
The key word here is "promoting". It's another way of saying that even when the retailer is cutting selling prices – i.e. slashing profit margins - to clear stock from its shelves, it's still not shifting as much as it would like. And with a "low-to-middle single digit decline" in like-for-like sales now expected by the firm, that's very bad news for profits.
We've been warning for a while about how tough a year 2011 is likely to be on the high street. Most recently my colleague John Stepek spotlighted a sales warning by cheap(cheap handbags (http://www.handbags-key.com)) clothes chain Primark two weeks ago: 2011 will be a tough year for British consumers.
But what does this add up to for investors now?
First,金属周转箱 (http://www.njlxt.cn/zhouzhuanxiang.html), it's no wonder the UK general retail sector is currently standing on a more than-two year relative low compared with the rest of the stock market. Quite often, that degree of underperformance would be a signal to contrarian investors that now might be a good time to start snapping up shares in the sector.
But as John pointed out, with a mix of soaring food and fuel prices hitting their wallets and purses, consumers will have less and less spare cash to spend. Throw in tax rises and more job losses from the government's austerity programme and there'll be yet smaller amounts of 'disposable' money around.
Home owners are more vulnerable than ever before
What's more, if you think the outlook couldn't get much worse, check out the latest scary warning from Legal & General Investment Management suggests it might. Because nine out of 10 home loans are now 'variable rate' – ie repayments go up and down with market interest rates - LGIM says that UK households are now more at risk of an 'interest rate shock' than ever before.
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And while the Bank of England kept bank rate on hold last week, with inflation well above its 2% target, rises are likely later in the year. This, says LGIM's Tim Drayson, would likely mean "many homeowners will quickly experience an impact on their cash flows". In short, the money available to spend in the shops on non-essential items will be still more restricted.
If any more evidence is needed, fashion retailer New Look provided it. New Look had hoped - once again - to float on the stock market this year. But chairman John Gildersleeve has just explained to The Daily Telegraph why it won't now do so.
"The market is not going to improve in the near term because fashion retailing is going to have a difficult year", he says. "A combination of a consumer who's more challenged than they've been for many years, and cost increases that the industry has no real experience of."
That just about sums it up. So the bottom line stays the same as before. We're likely to hear plenty more sales and profit warnings from general retailers over 2011. Broadly, it's still a sector to keep clear of.
Is there any glimmer of light? Actually, maybe yes. Last week grocer Wm Morrison (LSE: MRW) warned of a "challenging" time ahead. It seems to be the 'in' word these days. But both sales and profits were up last year. And the real bright spark is the dividend – up a very tasty 17%.
It's our sort of defensive stock - we all need to eat. On a p/e of sub-11, forecast to drop to under 10 next year, and a 4% prospective yield, Morrison already looks a good bet. And with the firm committing to double-digit dividend growth for the next three years, the shares could soon be even better value.
Our recommended article for today
A clampdown on inflation is the least worst option for the ECB
Like the UK, the eurozone is facing a serious issue of rising prices. But while the Bank of England can live with moderate inflation, the European Central Bank can't. It must crack down hard on inflation now, says Matthew Lynn – even if it has a catastrophic impact on Europe's peripheral countries.
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Manufacturers are still doing well. Britain's factories churned out 1% more in January than in December, which completely reversed that month's slight output drop. And over the last year, our manufacturing production has climbed an impressive near - 7%.
But the high street is telling a very different story. And with this set to get even worse, it's a time to be wary about where you're invested.
However, there are still some opportunities in the sector. I'll tell you about one I particularly like in a moment…
A manufacturing recovery isn't enough
After years of Britain's prospects being dominated by what's happening in the City and in estate agents' windows, signs that other parts of the economy are now doing far better are very welcome.
Recent strong manufacturing figures prove that Britain still has some great companies left, like Rolls Royce, which we wrote about last month in the magazine's new Shares in Focus column. Subscribers can read about here: Rolls Royce: A quality British engineer – if you'd like to become one, just click this link to get your first three issues free.
But as Samuel Tombs at Capital Economic points out, manufacturing now accounts for just 13% of UK GDP. So it can "only make a modest contribution at the best of times". In other words, it can't save the UK economy alone.
Consumer spending, in contrast, accounts for around two thirds of the overall economy. So it's clearly still the key factor in GDP growth. That's why the latest statement from Home Retail Group is such a jolter.
What the bad news from Argos means for you
Home Retail owns the Argos and Homebase chains, which together are a useful barometer of the strength UK consumer spending. The bad news is that Argos sales fell by 4.6% in the eight weeks to February 26, quite a bit worse than anticipated. And, HR boss Terry Duddy is distinctly downbeat about the outlook.
"There's been a clear reining in of consumer spending and lower footfall overall", he tells the FT. "Even where we're promoting we're not seeing the uplift we normally would see. [Sales] should have been better than this, and that gives us some concerns". Looking forward, he sees "clear signs" that spending will drop further.
The key word here is "promoting". It's another way of saying that even when the retailer is cutting selling prices – i.e. slashing profit margins - to clear stock from its shelves, it's still not shifting as much as it would like. And with a "low-to-middle single digit decline" in like-for-like sales now expected by the firm, that's very bad news for profits.
We've been warning for a while about how tough a year 2011 is likely to be on the high street. Most recently my colleague John Stepek spotlighted a sales warning by cheap(cheap handbags (http://www.handbags-key.com)) clothes chain Primark two weeks ago: 2011 will be a tough year for British consumers.
But what does this add up to for investors now?
First,金属周转箱 (http://www.njlxt.cn/zhouzhuanxiang.html), it's no wonder the UK general retail sector is currently standing on a more than-two year relative low compared with the rest of the stock market. Quite often, that degree of underperformance would be a signal to contrarian investors that now might be a good time to start snapping up shares in the sector.
But as John pointed out, with a mix of soaring food and fuel prices hitting their wallets and purses, consumers will have less and less spare cash to spend. Throw in tax rises and more job losses from the government's austerity programme and there'll be yet smaller amounts of 'disposable' money around.
Home owners are more vulnerable than ever before
What's more, if you think the outlook couldn't get much worse, check out the latest scary warning from Legal & General Investment Management suggests it might. Because nine out of 10 home loans are now 'variable rate' – ie repayments go up and down with market interest rates - LGIM says that UK households are now more at risk of an 'interest rate shock' than ever before.
--------------------------------------------------------------------------------
Claim your FREE report: The 6-step game-plan for
spread betting profits
--------------------------------------------------------------------------------
And while the Bank of England kept bank rate on hold last week, with inflation well above its 2% target, rises are likely later in the year. This, says LGIM's Tim Drayson, would likely mean "many homeowners will quickly experience an impact on their cash flows". In short, the money available to spend in the shops on non-essential items will be still more restricted.
If any more evidence is needed, fashion retailer New Look provided it. New Look had hoped - once again - to float on the stock market this year. But chairman John Gildersleeve has just explained to The Daily Telegraph why it won't now do so.
"The market is not going to improve in the near term because fashion retailing is going to have a difficult year", he says. "A combination of a consumer who's more challenged than they've been for many years, and cost increases that the industry has no real experience of."
That just about sums it up. So the bottom line stays the same as before. We're likely to hear plenty more sales and profit warnings from general retailers over 2011. Broadly, it's still a sector to keep clear of.
Is there any glimmer of light? Actually, maybe yes. Last week grocer Wm Morrison (LSE: MRW) warned of a "challenging" time ahead. It seems to be the 'in' word these days. But both sales and profits were up last year. And the real bright spark is the dividend – up a very tasty 17%.
It's our sort of defensive stock - we all need to eat. On a p/e of sub-11, forecast to drop to under 10 next year, and a 4% prospective yield, Morrison already looks a good bet. And with the firm committing to double-digit dividend growth for the next three years, the shares could soon be even better value.
Our recommended article for today
A clampdown on inflation is the least worst option for the ECB
Like the UK, the eurozone is facing a serious issue of rising prices. But while the Bank of England can live with moderate inflation, the European Central Bank can't. It must crack down hard on inflation now, says Matthew Lynn – even if it has a catastrophic impact on Europe's peripheral countries.
相关的主题文章：
鸽、鸽肉网上山特ups报价 (http://www.innovationsforlearning.org/ifl_blog/2010/03/teachermates-in-palestine.html#comments)
涉縣全力創建國傢園林縣城 (http://www.jirowangzfamily.com/viewthread.php?tid=27636&extra=page%3D1)
深圳傲鹰网络公司女总裁何开秀8日在中院过堂 (http://www.ssrcn.com/plus/view.php?aid=28009)
风云际会 厨卫家电大佬齐聚国美论坛 (http://www.gzdmw.com/view.php?id=80408)