10th Sep 2024 07:54
(Alliance News) - Stocks in London are called to open lower on Tuesday, returning some of Monday's solid advance, with events in the US in focus as the week progresses.
A US inflation reading, and what it could mean for next week's Federal Reserve interest rate decision, will be the focus on Wednesday.
Late Tuesday, meanwhile, will see the first debate between US presidential challengers Donald Trump and Kamala Harris.
"Market's attention will shift to politics as Donald Trump and Kamala Harris will face off in a debate today. We already mentioned that a Trump win would benefit big oil companies, small domestic businesses and cryptocurrencies.
"If we do the same exercise for Kamala Harris, a Harris win would support the ESG and green focused companies, healthcare, infrastructure and technology as she puts a particular emphasis on sustainable and inclusive growth," Swissquote analyst Ipek Ozkardeskaya commented.
In the UK, unemployment fell in the three months to July. Wage growth also cooled.
In early UK corporate news Centamin backed a takeover from a larger Johannesburg-listed gold miner. Schroders made its finance chief its new chief executive.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 0.6% at 8,222.64
----------
Hang Seng: up 0.5% at 17,274.64
Nikkei 225: down 0.2% at 36,159.16
S&P/ASX 200: up 0.3% at 8,011.90
----------
DJIA: closed up 484.18 points, 1.2%, at 40,829.69
S&P 500: closed up 1.2% at 5,471.05
Nasdaq Composite: closed up 1.2% at 16,884.60
----------
EUR: higher at USD1.1042 (USD1.1039)
GBP: higher at USD1.3095 (USD1.3075)
USD: higher at JPY143.36 (JPY142.93)
GOLD: higher at USD2,504.36 per ounce (USD2,497.50)
(Brent): higher at USD71.43 a barrel (USD71.25)
(changes since previous London equities close)
----------
ECONOMICS
----------
Tuesday's key economic events still to come:
13:55 BST US Redbook index
15:00 BST US Federal Reserve Vice Chair Michael Barr speaks
----------
The UK unemployment rate edged lower in the three months to July, but wage growth abated, numbers showed. According to the Office for National Statistics, the jobless rate faded to 4.1% in the three months to July, from 4.2% in the three months to June. The latest figure landed in line with FXStreet cited consensus. Wage growth eased. Averages earnings excluding bonuses rose 5.1% in the three month, cooling from 5.4% in the three months to June. The figure for July was in line with expectations. "Growth was last lower than this in April to June 2022, when it was 4.7%," the ONS said. Annual growth in total earnings, so including bonuses, was 4.0%, a figure the ONS said was skewed by NHS and civil service one-off payments made in June and July of 2023. Growth in earnings including bonuses eased from 4.6% in three months to June. The latest figure fell short of an FXStreet-cited forecast of a 4.1% rise.
----------
Britain's national debt is at risk of becoming "unsustainable" unless the government chooses between tax rises and the state doing less and changes its fiscal rules, peers have warned. Keir Starmer's administration must make "painful" decisions on spending and taxation within this Parliament and "muddling through is not an option", the Lords Economic Affairs Committee said. In a report published on Tuesday, the influential group of peers concluded the UK has a "flawed" fiscal rule – that debt as a share of gross domestic product should fall over a five-year period. This rolling target can be easily "gamed", with the possibility of debt rising for four years and success being claimed if it falls in year five even if it is higher than in year one, the committee concluded. The rule, created by the former government and adopted by the new administration in a similar form, should be replaced by one with a fixed date in the fifth year in order to properly hold ministers to account, it said. The conclusions come as the government faces mounting pressure over its tax and spend plans, including plans to scrap the winter fuel allowance for all but the country's poorest pensioners. Ministers insist the cut is necessary to fill a GBP22 billion "black hole" in the public finances left by the Conservatives and Chancellor Rachel Reeves has hinted at the prospect of some tax rises on the horizon in the autumn budget.
----------
BROKER RATING CHANGES
----------
Goldman Sachs cuts Big Yellow Group to 'neutral' (buy) - price target 1,450 (1,520) pence
----------
Barclays cuts Asos to 'underweight' - price target 290 pence
----------
COMPANIES - FTSE 100
----------
Schroders promoted Chief Financial Officer Richard Oldfield to chief executive, succeeding Peter Harrison. Oldfield will take on the role from November 8, the London-based asset and wealth manager said. Oldfield was appointed CFO in October 2023. "Since joining Schroders as chief financial officer, Richard has made an immediate and significant contribution, providing a fresh perspective on capital management, driving new initiatives such as the inaugural bond issue earlier this year and embedding commercial discipline across the group," Schroders said. Harrison had in April announced plans to retire next year. He joined Schroders in March 2013 and became CEO in April 2016.
----------
COMPANIES - FTSE 250
----------
Centamin agreed to a GBP1.9 billion takeover by Johannesburg-listed gold miner Anglogold Ashanti. The operator of the Sukari gold mine in Egypt said coming under the AngloGold Ashanti umbrella will boost its assets, given the buyer's "track record of responsibly developing and operating large-scale open pit and underground mines in Africa". AngloGold Ashanti has assets in a number of nations across the globe, including Tanzania, the Democratic Republic of the Congo and Argentina. Centamin shareholders will be entitled to receive 0.06983 of a new AngloGold share and USD0.0125 in cash. The deal values each Centamin share at 163 pence, and the whole issued share capital at GBP1.9 billion. Following completion of the deal, AngloGold shareholders will own just under 84% of the combined business, and Centamin investors just over 16%. AngloGold has a market capitalisation of around ZAR215.83 billion, roughly GBP9.25 billion.
----------
Edinburgh-based investment firm abrdn named Jason Windsor, its interim chief executive officer, as the firm's permanent boss. The move ends a search which kicked off in May, after abrdn announced that Stephen Bird would step down as CEO. Bird left the post at the end of June. Windsor, at the time chief financial officer, was made interim CEO. abrdn Chair Douglas Flint said: "I am delighted that Jason emerged from what was a very thorough process as the unanimous choice of the board to lead abrdn in its next phase. He has made a huge impression both internally and externally since he joined abrdn, particularly as someone whose actions evidence he cares deeply about our clients and customers and our people. I very much look forward to working with him as our new CEO." Ian Jenkins remains abrdn's interim chief financial officer. "A search process for a permanent appointment into the group chief financial officer role will now be commenced," the company added.
----------
OTHER COMPANIES
----------
DIY products retailer Wickes said trading early in the third-quarter "has seen an improved trend". It said half-year revenue declined, but profit rose. Its bottom line was helped by "planned management action taken to mitigate impact of inflation". Revenue in the 26 weeks to June 29 fell 3.4% on-year to GBP799.9 million from GBP827.7 million. Pretax profit rose 8.5% to GBP22.9 million from GBP21.1 million a year prior. "This first half performance is testament to the hard work of all our colleagues and demonstrates the strength of our balanced business model. We achieved further volume growth and record market share gains in retail, with TradePro remaining a key differentiator. The market for design and installation remained tough during the half and Wickes was not immune; nonetheless, we have seen a positive response to our value-led Wickes Lifestyle Kitchen range, which is growing strongly," CEO David Wood said. Wickes maintained its interim dividend at 3.6 pence per share. The firm added: "Trading in Q3 so far has seen an improved trend; in retail, LFL sales growth has strengthened and design & installation is stabilising."
----------
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.