US Stock Market ends lower as geopolitical tension rises | Calamatta Cuschieri

Stock Markets in the US, Tesco beats annual profit expectations and cosmetic business news from L’Oréal

Adjusted operating profit for Tesco jumped 28% in the latest year
Adjusted operating profit for Tesco jumped 28% in the latest year

U.S. stocks closed lower on Wednesday as investors assessed rising geopolitical tensions

Major indexes came under pressure in early trade after tweets from President Donald Trump suggested he was preparing for a military strike in Syria and underlined a tense relationship with Russia.

Talk of a strike has been simmering since a suspected Assad-led chemical-weapons attack killed civilians in the rebel-held town of Douma over the weekend. But it could draw the U.S. into a conflict with Russia, in particular, which backs the Assad regime.

The Dow Jones fell 0.9%, to 24,189.45, with 26 of its 30 components finishing in negative territory.

The S&P 500 declined 0.6%, to 2,642.19, with nine of its 11 main sectors ending lower. Telecoms and financials led the losses, falling more than 1%. The Nasdaq Composite Index closed 25.27 points, or 0.4%, lower at 7,069.03.

Tesco beats annual profit expectations

Tesco Plc’s fresh food and prepared dishes helped the U.K.’s biggest retailer overcome a Brexit-fueled surge in costs, as the outlook brightens for the country’s grocers.

The supermarket operator’s profit rose in the latest financial year as it sold more ready meals from ranges like Hearty Food Co. and plant-based products from the new Wicked Kitchen line. That helped Tesco mitigate inflationary pressure stemming from the weak pound, which has prompted staff cuts and price increases by Britain’s grocers as they compete with German discounters Lidl and Aldi for market share.

The stable performance of the core domestic food business bolsters Tesco as it integrates the U.K.’s largest food wholesaler, Booker, which it acquired in March. After a year in which Britain’s grocers battled against a surge in costs for imported food, the economic backdrop is improving, with wage growth accelerating as inflation falls and unemployment nears a record low.

Chief Executive Officer Dave Lewis said: “Consumption patterns in food have been pretty robust and haven’t been affected by the interest-rate rise and the inflation we’ve seen” and he added that food inflation has slowed to 0.8% in the last four weeks and will likely continue at a lower level.

Since taking the helm in 2014, Lewis has cut tens of thousands of jobs as part of a plan to reduce costs by $2.1 billion. The most recent round of dismissals was in January, when Tesco scrapped 1,700 management positions.

Adjusted operating profit jumped 28% in the latest year. The company’s shares increased to 222 pence, their highest since July 2015. Shares rose as much as 5.6% early Wednesday.

L’Oréal is looking to innovate and cutting edge tech

For over 100 years, L’Oréal has been one of the world's leading cosmetic businesses. But while the company, headquartered in France, may be steeped in history, it is not standing still when it comes to innovation: it registered 498 patents in 2017.

As, increasingly, consumers use their computers, tablets and phones to search for and buy items online, L’Oréal, like many other big businesses, is having to adapt to this change in costumers habit. Facing this new reality, the company is looking to use digital technology, particularly in the manufacturing process.

Product design was one area that had been impacted by innovation. The way that consumers make decisions about what they are going to buy is also changing, with social media "influencers" often creating a buzz around products.

A range of technology, from smart sensors to magnetic conveyors and artificial intelligence, was being used to make sure that the business was resilient.

As said Stephane Lannuzel, operations chief digital officer at L’Oréal, “we are also working on the manufacturing part to make sure that we improve the agility, and we develop new manufacturing lines that are able to catch up with such volatile demands."

Disclaimer:

This article was issued by Linda De Luca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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