29th Oct 2024 07:51
(Alliance News) - London's FTSE 100 is called to open higher on Tuesday, with eyes on corporate earnings on both sides of the Atlantic, before focus turns to US employment data and Wednesday's UK government budget.
SPI Asset Management analyst Stephen Innes said investors are waiting to hear from "economic and corporate America".
"Where most of the market feels the squeeze, the mega-cap AI 'hyperscalers' like Microsoft, Amazon, Alphabet, and Meta seem well-prepared. Loaded with cash reserves that would make a central banker envious, they locked in long-term financing at rock-bottom rates. BofA Global Research reports that these giants are ramping up capital expenditures by 40% this year, while capex for the rest of the S&P 500 is projected to dip by 1% in 2024. These cash-heavy balance sheets even welcome higher rates, offering a rare layer of defence against broader market jitters," Innes added.
Over in New York, Google owner Alphabet reports after the closing bell on Tuesday.
Focus then turns to US jobs data and the UK government budget. Wednesday has the budget announcement as well the latest ADP employment report, before nonfarm payrolls on Friday.
ING analysts said: "Sterling is in full wait-and-see mode ahead of tomorrow's budget announcement by Chancellor Rachel Reeves."
In early UK corporate news, BP and HSBC both reported profit that topped consensus and announced buybacks. Aquis Exchange is teaming with Cboe Global Markets in a bid to be the EU's consolidated tape provider.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.4% at 8,317.62
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Hang Seng: up 0.3% at 20,667.17
Nikkei 225: up 0.8% at 38,903.68
S&P/ASX 200: up 0.3% at 8,249.20
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DJIA: closed up 273.17 points, 0.7%, at 42,387.57
S&P 500: closed 15.40 points, 0.3%, at 5,823.52
Nasdaq Composite: closed up 48.58 points, 0.3%, at 18,567.19
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EUR: flat at USD1.0815 (USD1.0815)
GBP: lower at USD1.2970 (USD1.2978)
USD: lower at JPY153.14 (JPY153.29)
GOLD: higher at USD2,754.03 per ounce (USD2,740.80)
OIL (Brent): flat at USD71.35 a barrel (USD71.38)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 GMT Ireland GDP
11:00 GMT Ireland retail sales
09:30 GMT UK money supply
12:30 GMT US trade balance
14:00 GMT US consumer confidence
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UK shop prices continued to ease in October amid warnings they remain vulnerable to ongoing geopolitical tensions, climate change and government regulation. Overall prices are now 0.8% cheaper than a year ago, the third consecutive monthly fall and a drop from September's 0.6% deflation, according to the British Retail Consortium-NielsenIQ shop price index. Prices of non-food items remained 2.1% cheaper overall than a year ago, unchanged from September, as discounting saw prices falling for electricals such as mobile phones, while DIY costs also fell as retailers capitalised on the recent pick-up in the housing market. However, fashion prices edged up slightly for the first time since January as retailers started to unwind the heavy discounting seen over the past year. Food inflation eased to 1.9%, down from last month's 2.3%, particularly for meat, fish and tea as well as chocolate and sweets amid Halloween deals.
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BROKER RATING CHANGES
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Jefferies cuts TI Fluid to 'hold' (buy) - price target 200 (215) pence
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COMPANIES - FTSE 100
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Oil major BP's third-quarter profit declined on weaker refining margins, but topped consensus. Replacement cost profit in the third-quarter weakened 70% to USD1.11 billion from USD3.65 billion a year prior. Underlying RC profit fell 31% to USD2.27 billion from USD3.29 billion. Underlying RC profit of USD2.05 billion was expected, however, according to company-compiled consensus. Pretax profit slumped 81% to USD1.40 billion from USD7.31 billion. Total revenue fell 11% to USD48.33 billion from USD54.02 billion. BP put its profit decline down to "weaker realized refining margins, a weak oil trading result and lower liquids realizations, partly offset by higher gas realizations". The average realised oil price per barrel was USD74.80 for the quarter, BP said, down from USD76.69 a year prior and USD79.92 in the second-quarter. Chief Executive Officer Murray Auchincloss said: "We have made significant progress since we laid out our six priorities earlier this year to make bp simpler, more focused and higher value. In oil and gas, we see the potential to grow through the decade with a focus on value over volume. We also have a deep belief in the opportunity afforded by the energy transition - we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business." BP raised its dividend by 10% on-year to 8.0 cents per share from 7.27 cents. In addition, it announced a USD1.75 billion share buyback for the quarter, as part of its commitment for USD3.5 billion for the second half of the year. Looking to the fourth-quarter, it expects Upstream output to be weaker than the third. It added: "In products, BP expects realized refining margins to remain low in the fourth quarter, albeit to continue to remain sensitive to relative movements in product cracks."
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Lender HSBC reported an increase in third-quarter profit and announced a buyback. Pretax profit rose 9.9% on-year to USD8.48 billion from USD7.71 billion. Pretax profit beat consensus of USD7.60 billion. Revenue improved 5.2% to USD17.00 billion from USD16.16 billion. HSBC said it intends to kick off a new USD3 billion share buyback, after wrapping up one of the same size last week. It plans to complete this new buyback by the time it announces annual results. HSBC left guidance it gave in its July second-quarter results unchanged. At the time, it predicted banking net interest income of around USD43 billion for the whole of 2024. It maintained a USD0.10 per share third-quarter dividend. Earlier this month, it announced an organisational revamp. From the start of next year, it will operate through four business lines, it explained. They will be the Hong Kong division, the UK arm, Corporate & Institutional Banking and International Wealth & Premier Banking. Chief Executive Georges Elhedery said on Tuesday: We will begin to implement these plans immediately and will share further details as part of a business update alongside our full-year results in February."
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COMPANIES - FTSE 250
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C&C Group reported half-year results in like with expectations, shaking off "poor summer weather and subdued market conditions". The beer, cider, wine, spirits, and soft drinks maker said net revenue in the half-year to August 31 fell 2.1% on-year to EUR861.4 million from a restated EUR879.1 million. Pretax profit weakened 1.0% to EUR28.6 million from EUR28.9 million. Results from the prior year had been restated due to accounting errors. "I am pleased to report earnings in-line with expectations in HY2025 as we rebuild performance and momentum within the business. Despite unfavourable summer weather, our brands demonstrated inherent appeal and resilience with both Tennent's and Bulmers growing market share and Menabrea and Orchard Pig achieving double digit revenue growth," Chair and CEO Ralph Findlay said. "As we enter the busy Christmas and New Year trading period, we are committed to delivering outstanding service, winning customers, continuing to simplify the business and to further improve operating efficiency." C&C lifted its interim dividend to 2.00 euro cents, from 1.89 cents.
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Centamin shareholders approved a deal that will see AngloGold Ashanti acquire the operator of Sukari gold mine in Egypt. At the court and general meetings on Monday, the requisite majority of shareholders voted in favour of the takeover offer, Centamin said on Monday. Under the terms of the proposed deal, Centamin shareholders will receive 0.06983 of a new AngloGold share and USD0.125 in cash for each Centamin share. AngloGold shareholders will own 83.6%, and Centamin shareholders 16.4% of the merged company. Centamin shareholders also would be entitled to receive Centamin's interim dividend of USD0.0225 per share. Earlier this month, the Egyptian Competition Authority endorsed the proposed acquisition. Centamin said on Monday the deal is subject to the sanction by the Jersey Court at the hearing expected to take place on November 20. The transaction is likely to become effective on November 22.
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OTHER COMPANIES
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Aquis Exchange said it is planning to team with derivatives and securities exchange network Cboe Global Markets, with the duo looking to be the "EU's equity consolidated tape provider". A tape provider collates data, prices and volumes of trades in financial markets. "The selection process for the EU equity CT is expected to begin in June 2025, with a successful applicant chosen by the end of 2025," Aquis said. "Aquis and Cboe, operators of pan-European equity exchanges, technology and reporting services that collectively process over half of daily European equity trades, plan to establish and co-own a new company named SimpliCT which will be based in the Netherlands and seek to leverage the expertise of its founders to develop a best-of-breed equity CT." Aquis and Cboe will be equal shareholders of SimpliCT, the firm said.
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By Eric Cunha, Alliance News news editor
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