The number of U.K. companies missing sales and earnings targets may increase as the government’s spending cuts to reduce the budget deficit hit the “fragile” recovery. While the number of companies issuing profit warnings fell to 45 in the second quarter, the lowest in seven years, from 54 in the previous three months, warnings may increase later this year. The crunch year is 2011. It is then that the first major wave of fiscal tightening will probably coincide with the first rises in interest rates. It’s then that we’ll find out how strong the recovery really is.
~~ Ernst & Young
Hedge funds slashed bets that oil would rise last week to the lowest level in more than a year just before crude began its biggest advance since May. So-called long positions on the New York Mercantile Exchange dropped 31 percent in the seven days ended July 6 to the lowest level since April 2009, according to the weekly Commitment of Traders report from the Commodity Futures Trading Commission.
~~ Bloomberg
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