9th Jul 2024 07:43
(Alliance News) - Stocks in London are called to open higher on Tuesday, after some underwhelming UK retail sales data, which showed that poor weather held back purchases.
The economic calendar for Tuesday looks pretty quiet.
Investors await comments from Federal Reserve officials, including Jerome Powell's testimony to Congress which may bring hints on the timing of rate cuts.
In early economic news, UK retail sales declined in June as the cooler weather held back purchases of clothing and footwear.
According to the BRC-KPMG retail sales monitor, UK total retail sales decreased by 0.2% in June from a year prior, against growth of 4.9% in June 2023. This was above the 3-month average decline of 1.1% and below the 12-month average growth of 1.5%.
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 17.01 points, 0.2%, 8,210.50
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Hang Seng: up 0.3% at 17,579.00
Nikkei 225: closed up 2.0% at 41,580.17
S&P/ASX 200: closed up 0.9% at 7,829.70
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DJIA: closed down 31.08 points, 0.1%, at 39,344.79
S&P 500: closed up 0.1% at 5,572.85
Nasdaq Composite: closed up 0.3% at 18,403.74
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EUR: down at USD1.0827 (USD1.0833)
GBP: down at USD1.2806 (USD1.2829)
USD: up at JPY160.97 (JPY160.71)
GOLD: lower at USD2,366.72 per ounce (USD2,370.69)
OIL (Brent): lower at USD85.75 a barrel (USD86.16)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
15:15 SAT US Federal Reserve Vice Chair Michael Barr speaks
16:00 SAT US Federal Reserve Chair Jerome Powell speaks
19:30 SAT US Federal Reserve Governor Michelle Bowman speaks
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Negotiations between junior doctors in England and the new government are expected to start today with a view to end the long-running dispute over pay. Medics from the British Medical Association are to meet with Department of Health & Social Care officials to try and hammer out a deal to see an end to strikes which have been causing widespread disruption across the health service. Officials from the union have previously said that they expect the conversation could be "tough". But the BMA's junior doctors committee has said Labour comments about pay rises being a "journey and not an event" align with their pay restoration goals.
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BROKER RATING CHANGES
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Berenberg starts Baltic Classifieds with 'buy' - price target 300 pence
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JPMorgan places ITM Power on 'negative catalyst watch'
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JPMorgan cuts ITM Power to 'neutral' (overweight) - price target 90 (130) pence
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COMPANIES - FTSE 100
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Vistry reported that in the first half of 2024 adjusted operating profit is expected to climb 10% on-year to GBP227 million from GBP206.7 million, with adjusted pretax profit up 6.9% to GBP186 million from GBP174.0 million. Total completions are up 8.5% annually to 7,750 units from 7,143 units. Looking ahead, Vistry said it is well positioned to deliver more than 18,000 completions in 2024, up from 16,118, as well as full year profit ahead of that recorded a year earlier. "The group has delivered a strong performance in the first half which underpins the board's confidence in its expectations for the full year," said Chief Executive Greg Fitzgerald. "We look forward to working with the new government to address the country's housing crisis and are extremely well placed to support its ambition of delivering the biggest boost to affordable housing in a generation."
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SSE, with its joint venture partner APG, has confirmed it is moving forward with the 2 gigawatts Alpha offshore wind tender site in the IJmuiden Ver Wind Farm Zone in the Netherlands. SSE holds a 50% stake in the site. Subject to reaching a final investment decision, expected by late 2025, the wind farm would be commissioned by the end of the decade. Stephen Wheeler, managing director at SSE Renewables, said: "We are pleased to be progressing development of the 2GW Alpha site in the IJmuiden Ver Wind Farm Zone in the Netherlands with our consortium partners APG and ABP. Our successful bid is testament to the work the consortium and its partners have undertaken to put forward a compelling set of proposals to sensitively develop our proposed offshore wind project in a manner which will positively contribute to the marine environment while delivering a cleaner and more secure energy system for the Netherlands."
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COMPANIES - FTSE 250
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PageGroup offered a profit warning, after weak second quarter trade. PageGroup noted that gross profit in the second quarter of 2024 fell 12% annually to GBP224.3 million. This was a result of "softening" in activity levels. Given the weaker than expected trading in June, recent increased geopolitical and macro-economic uncertainty and consequently a more cautious view for second half of the year, PageGroup now expects full year 2024 operating profit to be in the region of GBP60 million. CEO Nicholas Kirk commented: "We continued to see challenging market conditions throughout the group in Q2 and we experienced a softening in activity levels through the quarter, particularly in terms of new jobs registered and number of interviews. The conversion of interviews to accepted offers is the most significant area of challenge, as candidate and client confidence remains subdued, reflecting the macro-economic uncertainty in the majority of our markets."
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Hunting said its sales order book at June 30 was about USD700 million compared to USD565 million at December 31. Earnings before interest, tax, depreciation and amortisation for the first half of 2024 is likely to be in the range of USD59 million and USD61 million, which it said is ahead of management's expectations and 22% ahead annually. Looking ahead, Hunting said its outlook for 2024 and 2025 is "positive". It added that its performance in the second half of the year is anticipated to be ahead of the first half. Ebitda guidance for the full year is USD134 million and USD138 million.
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OTHER COMPANIES
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Capita said it has agreed to sell its standalone software business, via the sale of Capita One by Capita Business Services, to Orchard Information Systems. The deal values Capita One at GBP200 million. "Capita One provides local authorities, local education authorities and housing associations with revenues & benefits, social housing management and education management software. It helps local authorities drive efficiency, maximise revenue collection, and deliver essential public services as cost effectively as possible," Capita said. It explained that the sale follows an evaluation carried out by Capita, which noted which activities are not core to its future strategy. It is expected to complete towards the end of August.
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Loungers reported that revenue in the 53 weeks ended April 21 jumped 25% to GBP353.5 million from GBP283.5 million a year earlier. Pretax profit surged 56% to GBP11.4 million from GBP7.3 million. It noted that a record 36 new sites opened during the year, seven sites more than in the prior year. Looking ahead, Loungers said it continues to fell "very positive" about the outlook. It noted that over the 11 weeks since the year-end its like-for-like sales have been up 5.0%. "Our new site openings continue to perform exceptionally well, achieving record levels of sales, and our pipeline of new sites is as strong as ever," Loungers added.
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By Sophie Rose, Alliance News senior reporter
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