Morning Note: Market news and a positive update from Currys

Market News

Yesterday’s US JOLTS survey showed job openings fell by 176,000 to 7.18m, the lowest since September 2024 and below expectations of 7.4m. The 10-year Treasury yield eased back to 4.21%. Gold slipped to around $3,540 per ounce, taking a pause from its record-breaking rally as investors awaited further key labour reports. Ongoing concerns over Fed independence and rising debt pushed the yellow metal up to $3,578 an ounce yesterday.

President Trump asked the Supreme Court to uphold his global tariffs. The appeal seeks an expedited review, with arguments in early November.

US equities ended higher last night – S&P 500 (+0.5%); Nasdaq (+1.0%). Big tech was mostly higher (and the equal-weight S&P lagged), with Alphabet (Google) and Apple the Mag 7 standouts on the positive antitrust resolution. Brent Crude fell back to $66.70 a barrel, extending a 2% decline from the previous session amid concerns OPEC+ may increase supply. Reports indicate the cartel will discuss new production hikes at its meeting this weekend.

In Asia this morning, the Nikkei 225 rose (+1.5%) but the Hang Seng (-1.2%) and Shanghai Composite (-1.3%) both fell on news that China is weighing measures to cool stock market speculation as concerns about a rapid $1.2 trillion rally mount. Previous heavy-handed interventions from authorities were well intentioned but triggered a messy market fallout, according to MLIV.

The FTSE 100 is currently little changed at 9,178, while Sterling trades at $1.3435 and €1.1530. Gilts yields fell back from the highs seen earlier in the week – the 10-year currently yields 4.72%. Andrew Bailey cast doubt on a BOE rate cut this year, saying there’s “considerably more doubt” about when to ease further. The FT reported Lloyds Banking Group will put about 3,000 people deemed among the bottom 5% of performers at risk of dismissal, while Unilever is reported to be planning a review its top 200 roles for a 25% "refresh”.

Source: Bloomberg

Company News

Currys has released a trading update which highlights a good start to the year, with management comfortable with market consensus for the financial year to end-April 2026. The company has also announced a large reduction in its pension deficit and the launch of a new share buyback programme. In response, the shares have jumped 20% in early trading.

Currys is a leading multichannel retailer of technology products and services, operating online and through 708 stores in six countries. As a result, the group is well placed to supply the technology that has become ever more central to people’s lives. In the UK & Ireland, the group trades as Currys, and in the Nordics under the Elkjøp brand.

Over the longer term, the company is targetting at least 3% adjusted EBIT margin in both the UK & Ireland and the Nordics. The focus will be on free cash flow generation, with annual capital expenditure expected to remain below £100m.

Today’s statement highlights that in the 17 weeks to 30 August 2025, like-for-like (LFL) sales rose by 3%, in line with management expectations.

In UK & Ireland, the company has seen continued robust trading over the last 17 weeks, with LFL sales up 3%, driven by market share gains with double-digit growth in new categories and B2B. Strong sales were generated in gaming, AI computing, large appliances, coffee machines, and cooling products, offset by declines in TVs, tablets and air fryers. Recurring Services revenue grew strongly with credit adoption up 190bps to 23.3% and iD Mobile, the company’s own mobile virtual network, reaching over 2.3m subscribers, a 22% year-over-year increase. The gross margin was stable, with expected cost increases offset by operating leverage from higher sales.

In the Nordics, LFL revenue growth was 2%, driven by AI computing and success in new categories such as robotic lawnmowers and vacuums. The company saw gross profit growth in every country driven by its strategy of focusing on more profitable sales. Operating costs were tightly controlled, offsetting inflation and driving improved profitability.

Following the completion of a triennial pension review, the actuarial deficit has reduced from £403m to £134m over the three years to 31 March 2025. The company will pay £82m of contributions this year as planned, with future contributions of £13m p.a. over the five years to March 2031, well below the previous amount of £78m p.a. until December 2028.

In line with its capital allocation framework, the company will commence a new £50m share buyback programme. Alongside the previously announced cash dividend of £25m, cash returns to shareholders will total £75m this year. The company expects year-end net cash to total at least £100m post pension contributions and capital returns.

For the full year to 3 May 2026, the company is comfortable with market consensus of adjusted PBT of £170m.

Source: Bloomberg