Morning Note: Market news and an update from Pernod Ricard.
Market News
US equities tumbled last night – S&P 500 (-2.2%); Nasdaq (-3.1%) – amid a notable drag from big tech, particularly Nvidia. In Asia this morning, Japanese shares gained slightly (Nikkei 225, +1.2%) after President Donald Trump said there was “big progress” in talks to strike a deal for Japan to avoid higher levies. The yen weakened after the country’s chief trade negotiator said currencies weren’t discussed, allaying concerns a stronger exchange rate would be part of the US demands. Equities also made gains elsewhere in Asia: Hang Seng (+1.4%); Shanghai Composite (+0.1%).
Jerome Powell signalled a wait-and-see approach to President Trump’s tariff offensive, pushing back on hopes for quick action. He said the Fed’s focus is to prevent tariff-driven price hikes from triggering persistent inflation.
Gold hit a record ($3,340 an ounce) in demand for safe havens while Treasury yields and a gauge of the dollar inched up. The yield on Germany’s 10-year Bund fell to 2.5%, the lowest level since early March, as investors sought refuge in German debt, Europe’s benchmark safe-haven asset.
The FTSE 100 is currently 0.5% lower at 8,230. Companies trading ex-dividend today include BAE Systems (1.18%), Dowlais (5.15%), Fresnillo (4.86%), LSE (0.78%), Rolls Royce (0.82%), Travis Perkins (1.68%), Weir Group (1.01%). Sterling trades at $1.3235 and €1.1640.
Brent Crude rose to $65.60 a barrel as Scott Bessent said the US is prepared to get Iranian energy exports “down to zero.” Chinese refiners are importing record amount of Canadian crude after reducing purchases from the US by roughly 90%.
Source: Bloomberg
Company News
This morning Pernod Ricard has released results for the third quarter of its financial year to 30 June 2025 which were slightly below market expectations, due in part to some phasing technicalities. The company has reiterated its guidance for the full year and in response the shares are little changed in early trading.
Pernod Ricard is the global number wine and two spirits group, operating a decentralised structure comprised of a global flagship in France, autonomous affiliates, brand companies, and market companies throughout the world. The company owns a portfolio of over 240 premium brands available in over 160 countries, leaving it well placed to benefit from the trend towards premiumisation. Key brands include Ricard, Pernod, Chivas Regal, Jameson, Glenlivet, Martell, Perrier-Jouet, Absolut, Malibu, Beefeater, Havana Club, and Plymouth Gin.
In the three months to 31 March 2025, the group continued to operate in a global macroeconomic and geopolitical environment which remains challenging and very fluid with regards to tariffs. Reported sales fell by 3% to €2,278m. Stripping out the benefit of negative currency movements, sales also fell by 3% organically. This was a larger decline that the -2% market forecast.
However, the quarter was impacted by some phasing technicalities that will reverse in the current quarter: namely in India, the impact of new customs clearance procedures and temporary production interruption in one major state, which is now resolved; in Global Travel Retail, a very high comparison base; and in some markets, the impact of the later Easter.
The Americas generated organic growth of 3%. Within the mix, the US grew by 2%, with net sales ahead of sell-out supported by wholesalers’ orders ahead of tariff announcements. Brazil and Canada achieved continued positive momentum. Europe fell by 7%, held back by Spain and Germany, with the latter lapping a high comparable basis. Asia-ROW fell by 6% as growth in India (+1%) was more than offset by declines in China (-6%) and Korea. Travel Retail fell by 31%, driven as expected by the suspension of the duty-free regime on Cognac in China Travel Retail, compounded with a high comparison basis in the quarter.
By brand category, Strategic International Brands saw good growth for Jameson, Chivas Regal, Ballantine’s and Absolut, offset by declines on Martell and Royal Salute. Strategic Local Brands enjoyed solid momentum in Seagram’s whiskies, Olmeca, and Kahlúa. Specialty Brands generated double-digit growth of Bumbu, good growth on Skrewball, and a soft performance for Aberlour.
For the full year to June 2025, although the backdrop remain very volatile, the group still expects a low-single-digit decline in organic net sales while sustaining its organic operating margin, supported by a programme of continuous operational efficiencies. This outlook incorporates the impact of expected tariffs in China and in the US based on current information.
Source: Bloomberg