The keenly anticipated half yearly report from Tesco's hit the market on Thursday morning. The losses announced by the recent audit were confirmed slightly higher than had previously been reported, but not materially so. The Chairman, Richard Broadbent, confirmed he will be stepping down from his role, it will be interesting to hear who will want to take over this task. Incoming Chairmen often desire to appoint their own chief executive, the new chairman's first big decision may be to decide if he will entrust the newly recruited Chief Executive to drive forward the recovery. The shares reacted positively at first but soon waned, how the mighty fall.
Initially on Thursday equity markets paused for breath as the US dollar rallied overnight and the oil price once again tested its lows. Quickly markets recovered their poise as encouraging macro and corporate news drip fed into the market.
One of the many reasons cited recently for the selloff in equities were concerns that the eurozone and in particular the German economy was heading back into recession. Thursday gave some encouragement that perhaps the picture is not as bleak as was painted. To paraphrase Mark Twain, the death of the German economy may be exaggerated as the latest release of Germany's purchasing managers indices, manufacturing, services and the composite, suggested the economy continues to expand. The composite data for the eurozone region overall came in slightly above forecasts. This news was on top of slightly better than anticipated economic data from China overnight.
Later in the day bell weather companies such as MMM, General Motors and Microsoft beat expectations as did Caterpillar, whose share price had been hit hard ahead of what was anticipated to be a disappointing report.
It never ceases to amaze how quickly sentiment can change in the world of equity markets. A week ago dark clouds were appearing all in directions, as this week concludes Ray bans are the order of the day. The path ahead may well remain rocky but one can only hope it remains on a gentle incline.