22nd Jan 2025 07:55
(Alliance News) - Stocks were called to open slightly lower on Wednesday, as the threat of tariffs continues to loom over various countries.
Also, the ONS reported that UK public sector net borrowing for December far outstripped the consensus forecast.
In corporate news, easyJet expects a narrowed loss for the first quarter.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 3.6 points at 8,544.69
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Hang Seng: down 1.6% at 19,777.48
Nikkei 225: up 1.6% at 39,646.25
S&P/ASX 200: up 0.3% at 8,429.80
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DJIA: closed up 537.98 points, 1.2%, at 44,025.81
S&P 500: closed up 0.9% at 6,049.24
Nasdaq Composite: closed up 0.6% at 19,756.78
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EUR: lower at USD1.0414 (USD1.0417)
GBP: lower at USD1.2313 (USD1.2319)
USD: higher at JPY155.93 (JPY155.43)
GOLD: higher at USD2,749.13 per ounce (USD2,740.35)
OIL (Brent): lower at USD78.90 a barrel (USD79.51)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:30 EST Canada PPI
11:00 GMT Ireland wholesale prices
08:55 EST US Redbook index
10:00 EST US Conference Board leading index
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The Office for National Statistics released public sector finance data. It said borrowing – the difference between public sector spending and income – was GBP17.81 billion in December 2024; this was GBP10.1 billion more than in December 2023 and the highest December borrowing for four years. It was also far above the FXStreet consensus estimate of GBP13.4 billion. Also the ONS said the current budget deficit – borrowing to fund day-to-day public sector activities – was GBP10.0 billion in December 2024; this was GBP7.3 billion more than in December 2023 and the highest December current budget deficit for two years.
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Micheal Martin is poised to become Ireland's next premier, as the country's parliament meets to nominate a new taoiseach on Wednesday. Martin's Fianna Fail emerged as the largest party following the Irish general election at the end of November. After weeks of government formation talks, Fianna Fail has agreed to re-enter into a coalition with Fine Gael, led by outgoing Taoiseach Simon Harris. The two parties combined are just shy of a majority in the Dail parliament and will be supported by several independent TDs [MPs] for the five-year government term, following lengthy negotiations. The Dail parliament will meet from 11am on Wednesday where Martin will be formally nominated as taoiseach. Later on Wednesday evening, the new taoiseach will nominate members of the next government. The final make-up of that cabinet will be closely watched with selected departments expected to be reshaped as some portfolios swap between Fine Gael and Fianna Fail.
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German Chancellor Olaf Scholz plans to travel to Paris on Wednesday to meet President Emmanuel Macron two days after the inauguration of US President Donald Trump. The French head of state is expected to receive the German chancellor at the Elysee Palace around midday. In addition to the future positioning of the EU concerning the US, the talks are also likely to focus on the war in Ukraine and the Middle East conflict. Anke Rehlinger, president of the upper house of parliament, the Bundesrat, is in Paris from Tuesday to Thursday and is scheduled to meet the presidents of the two houses of the French parliament, the National Assembly and the Senate. Defence Minister Boris Pistorius is due to meet his counterpart Sebastien Lecornu in Paris on Thursday.
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Permits issued by the German government for the export of arms and military equipment have reached a new record in 2024, according to figures made available to dpa. Last year, the German government approved exports of weapons and military equipment worth a record EUR13.33 billion , the Economy Ministry said. The information is based on a response to a parliamentary inquiry submitted by a lawmaker from the left-wing populist Sahra Wagenknecht Alliance. The record can largely be attributed to exports to Ukraine, with EUR8.15 billion approved for Kyiv. This was followed by Singapore with EUR1.21 billion, Algeria with EUR558.7 million, the US with EUR319.9 million, and Turkey with EUR230.8 million.
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US immigration and border officials will be able to arrest undocumented immigrants at "sensitive" locations again, after the Trump administration overturned policies limiting where such arrests could happen. Officers will now be able to make arrests at houses of worship, schools and hospitals. Officials have been prohibited from doing this since 2011. Later, the Biden administration expanded the regulation, further restricting the authority's powers. A second directive reinstates the ability for the US to quickly deport any undocumented person arrested who is unable to prove they have been in the country for more than two years.
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BROKER RATING CHANGES
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Citigroup cuts JD Sports Fashion to 'neutral' - price target 95 pence
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Berenberg raises Halma to 'buy' (hold) - price target 3,250 (2,700) pence
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Goldman Sachs raises AIB price target to 5.70 (5.60) EUR - 'neutral'
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COMPANIES - FTSE 100
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Intermediate Capital Group reports "strong fundraising" totalling USD7.2 billion in the third quarter ended December 31, with USD22 billion raised in calendar 2024 - more than double the amount raised the prior year. Assets under management totalled USD107 billion as of December 31, of which USD71 billion was fee-earning, up 28% and 8.1% on-year respectively. "We remain confident our balance sheet will continue to deliver in line with our guidance," ICG said, noting that at December's end it was valued at GBP3.07 billion, up from GBP2.96 billion.
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easyJet for the first quarter ended December 31 expects a headline pretax loss of GBP61 million, an improvement on the prior year's GBP65 million. It said passenger growth is up 7.0% on-year, to 21.2 million from 19.8 million, and easyJet holidays delivered GBP43 million in profit, GBP12 million more than the prior year. Revenue rose 13% in the first quarter on-year to GBP2.04 billion from GBP1.80 billion. For the first half, it expects underlying winter losses "to reduce when adjusted for the timing of Easter and a prior year release of aged balances". For financial 2025 its outlook is positive, "consistent with consensus", with easyJet holidays expecting around 25% in on-year customer growth. The company cites its company-compiled consensus with an expected headline pretax profit of GBP709 million for financial 2025, up 16% from GBP610 million it had reported for financial 2024. The group also believes itself "on track to achieve [its] medium-term target" of over GBP1 billion in pretax profit.
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COMPANIES - FTSE 250
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JD Wetherspoon in a trading update said total sales have grown 4.0% in the year to date, with like for like sales up 5.1% on-year in the 25 weeks to January 19. Bar sales increased 4.5% and food by 5.6%, but hotel room sales decreased 6.5%. For the "main Christmas period, the three weeks from 16th December 2024 to 5th January 2025", LFL sales rose 6.1%. Chair Tim Martin, regarding the firm's outlook, said labour costs will rise by around GBP60 million per year from April 1 - blaming "government-mandated wage increases" - and said: "The company is confident of a reasonable outcome for the year, although forecasting is more difficult, given the extent of the increased costs."
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OTHER COMPANIES
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Transense Technologies said it continues to trade in-line with market expectations for the full year ending June 30. "Strong revenue growth for the period provided opportunities to invest in operational capabilities in anticipation of further growth whilst protecting prospects for current year earnings," it said. Total revenue was GBP2.4 million in the six months to December 31, which the company says is an increase of 37% on-year from GBP1.8 million. Gross profit margin was maintained at more than 87% of revenue, and operating expenditure has increased due to planned investments in the business. Looking ahead, Transense believes all three of its business segments "have increased the level of new business opportunities during the period, and are well placed to continue expanding in line with the expected growth trajectory".
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By Emma Curzon, Alliance News reporter
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