UK retailers report declining sales in October, CBI says
Retailers in the U.K. reported a decline in sales volumes in October, with some saying consumers were being cautious about spending spending ahead of the U.K. budget due later this week, according to the Confederation of British Industry.
Retail sales fell at a “modest pace,” the body’s monthly retail sales survey showed, with the headline balance coming in at -6 in October, compared to the +4 reading in September.
Sales are expected to be broadly flat next month, the CBI also said.
— Sophie Kiderlin
VW targets layoffs and 10% pay cuts, union says
Volkswagen‘s works council said Monday that the auto giant is considering widespread pay cuts and layoffs as well as the closure or size reduction of its plants in Germany.
According to Daniela Cavallo, head of the works council, Volkswagen management recently presented plans to the council that included a 10% reduction in pay across the board, as well as wage freezes in 2025 and 2026. All factored in, the body estimates workers will suffer pay cuts of around 18% over the period.
The VW logo shines on the roof of the brand tower at Volkswagen’s main plant in the early morning behind a red traffic light.
Moritz Frankenberg | Picture Alliance | Getty Images
Cavallo said Volkswagen also intends to shut three factories and downsize all other plants in Germany.
“In concrete terms, this means taking out even more products, volumes, shifts and entire assembly lines far beyond to what we have already done,” she said in a statement released Monday. “All German VW plants are affected by this. None of them are safe,” Cavallo added.
Read the full story here. Shares were down around 1% in early afternoon deals.
-Sophie Kiderlin
Stocks turn negative
The pan-European Stoxx 600 was down 0.14% at 11 a.m. London time, reversing earlier gains with most regional bourses and sectors slipping into negative territory.
Stoxx 600 over last five days
Oil prices plunge 6% after Israel’s attack spares Iran’s energy facilities
Oil prices lost 6% on Monday after Iranian energy facilities were not damaged during an Israeli attack over the weekend.
Futures for global crude benchmark Brent slid 6.13% to $71.39 per barrel at 10:10 a.m. London time, while U.S. West Texas Intermediate futures dropped 6.35% to $67.22 per barrel.
The oil tanker ‘Devon’ prepares to transfer crude oil from Kharg Island oil terminal to India in the Persian Gulf, Iran, on March 23, 2018.
Ali Mohammadi | Bloomberg | Getty Images
France’s CAC 40 rises, buoyed by luxury stocks
The French CAC 40 index rose by more than 1% at one point on Monday and was last up 0.8% at 9:24 a.m. London time, as luxury stocks buoyed the index higher.
Gucci-owner Kering and Hermes were last around 2.6% and 2.1% higher respectively, recording the biggest gains of companies on the CAC 40 on Monday. LVMH meanwhile added close to 1.5%.
This comes amid a choppy time for luxury stocks, which have in recent weeks been reacting to a slew of news out of China — a key market for the sector — about the state of the country’s consumers and economy.
— Sophie Kiderlin
Philips shares tumble as much as 15%
Shares in Dutch health product giant Philips tumbled in Europe deals early on Monday, after the company cut its full year sales outlook on weak demand from China.
After initially failing to begin trading when markets opened, Europe-traded shares of Philips fell as much as 15% and were last down 14.55% at 8:26 a.m. London time.
— Sophie Kiderlin
European markets rise as trading kicks off
European markets were higher as trading began on Monday, with the pan-European Stoxx 600 last adding 0.24% at 8:15 a.m. London time.
Travel and leisure stocks were up around 1.1%, while oil and gas stocks lost 1.7%.
Regional bourses were also mostly higher with France’s CAC 40 adding 0.7% and Germany’s DAX rising 0.2%.
— Sophie Kiderlin
Philips needs to ‘adjust to a new speed of growth in China,’ CEO Roy Jakobs says
Health device maker Philips needs to “adjust to a new speed of growth in China,” its CEO Roy Jakobs told CNBC’s “Squawk Box Europe” on Monday.
The company had been expecting China to stabilize in the second half of the year, but instead saw deterioration, he said.
China however is still a key market for Philips, Jakobs said.
“We believe that China fundamentally remains an attractive growth market for us. So it’s a matter of when that comes back, not if it comes back,” he said.
Jakobs’ comments come after Philips on Monday said it was cutting its full-year sales outlook after demand in China “deteriorated.”
Speaking to CNBC, Jakobs attributed the issues in China to slowing consumer confidence and a resulting easing of sales, as well as the impact of anti-corruption measures on the health care side, which he said were keeping the market at a “low-point.”
— Sophie Kiderlin
Philips cuts sales outlook as China demand has ‘deteriorated’
Dutch medical devices giant Philips on Monday said it was cutting its full-year sales outlook due to weak demand from China.
Comparable sales growth is now expected to come in between 0.5% and 1.5% for full-year 2024, the company said. This is down from a previously expected sales growth range of 3% to 5%.
“In the [third] quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions. We have adjusted our full-year sales outlook to reflect the continued impact from China,” Philips CEO Roy Jakobs said in a statement.
Comparable sales growth was flat in the third quarter, Philips said in its earnings release on Monday. According to Reuters, analysts had been expecting 2.1% growth.
— Sophie Kiderlin
European markets: Here are the opening calls
European markets are expected to open in mixed territory Monday.
The U.K.’s FTSE 100 index is expected to open 8 points lower at 8,243, Germany’s DAX up 30 points at 19,747, France’s CAC up 12 points at 7,508 and Italy’s FTSE MIB up 108 points at 34,648, according to data from IG.
Earnings come from Philips Monday. There are no major data releases.
— Holly Ellyatt
Oil prices slide more than 4% after Israel’s ‘limited’ attack on Iran
Yen weakens to fresh 3-month low after Japan elections
The Japanese yen weakened to fresh three-month lows against the dollar on Monday, after the ruling LDP lost its majority in the country’s lower house following elections on Sunday.
The currency hit a low of 153.32 against the greenback, marking its weakest level since July 31.
CNBC Pro: Analysts give this Chinese tech stock 40% upside – but one CIO warns it could be a ‘one trick pony’
This Chinese tech company has garnered interest among investors following a drop in its share price – but one market watcher is unimpressed.
“I think you might have a short-term rally. But that’s not really about [the stock]- it’s about sort of the broad based rally,” Jason Hsu, founder and chief investment officer of Rayliant Global Advisors says.
Unlike Hsu, not everyone is so negative about the stock with 35 out 46 analysts having a buy or overweight rating and an average upside of 40.1%.
CNBC Pro subscribers can read more on the stock – and Hsu’s take – here.
— Amala Balakrishner
CNBC Pro: Buy this tech stock that’s quietly automating warehouses with robots, say Berenberg and Citi — giving it 50% upside
Investment banks are telling investors to buy shares in a warehouse automation company, with price targets suggesting potential gains of more than 50 percent over the next 12 months.
The use of these systems means warehouses can store items four times more densely than manually operated warehouses while retrieving products faster than human workers. The increased efficiency and lower operating costs for its customers have allowed the firm to command significant profit margins, making its shares more valuable.
CNBC Pro subscribers can read more here.
— Ganesh Rao
