This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Dow component Proctor &Gamble today revised its sales and earnings guidance lower for 2014, as a result of the weakening of various emerging market currencies.
P&G is the world’s largest producer of packaged household goods with its products sold in literally hundreds of countries; the currencies from so many developing territories having devalued sharply recently means that the profits in those currencies now have lower dollar-values.
The company now forecasts core earnings growing at a pace of 3 to 5% compared with previous guidance of 5 to 7%. This has seen its share price drop 1.4% today, which has weighed on the Dow more than the other leading US stock index benchmarks.
The slides in emerging-market currencies were sparked by concerns over Chinese economic growth after a report last month showed a contraction in Chinese manufacturing levels, but some reassurance came today with the news that Chia’s trade surplus climbed to $31.9bn in January, helped by a 10.6% year-on-year increase in exports, which was higher than expected and will raise hopes that global demand remains strong.