10th Jul 2019 07:33
(Alliance News) - Stocks in London are set to open flat on Wednesday as investors await remarks from the head of the US central bank in front of Congress later in the day.In early UK company news, housebuilder Barratt Developments said it expects to beat market profit forecasts, while recruitment firm PageGroup expects an outturn towards the lower end of consensus.IG says futures indicate the FTSE 100 index of large-caps to open 3.07 points lower at 7,533.40 on Wednesday. The FTSE 100 index closed down 12.80 points, or 0.2%, at 7,536.47 on Tuesday.Stocks are called for a flat start ahead of US Federal Reserve Chair Jerome Powell's testimony before the House Financial Services Committee."He is expected to keep the possibility of an interest rate cut on the table despite the latest rebound in US nonfarm payrolls data," said Ipek Ozkardeskaya, senior market analyst at London Capital Group."US policymakers will likely question the Fed's action plan beyond its July meeting, when it is expected to lower the interest rates by 25 basis points," Ozkardeskaya continued. "Powell may well leave the door open for further rate cuts, without however precising when and by how much. This is the beauty of the 'act as appropriate' formula."Powell appears in front of Congress starting at 1500 BST. Later, at 1900 BST, minutes from the latest Federal Open Market Committee meeting are released.In the US on Tuesday, Wall Street ended mostly in the green, with the Dow Jones Industrial Average ending down 0.1% but the S&P 500 and Nasdaq Composite closing up 0.1% and 0.5% respectively.In early UK company news, housebuilder Barratt Developments said it expects annual profit ahead of market expectations.For the financial year ended June 30, the company said it completed 17,856 homes including joint ventures, versus 17,579 the year before, at an operating margin of 18.9%, up from 17.7%. The sales rate for the year was 0.70 net private reservations per active outlet per week versus 0.72 the year before.Pretax profit is expected at around GBP910 million, which the company said is ahead of market forecasts as well as the prior year's GBP835.5 million.'We begin the new financial year with a strong forward order book and cash position, continued focus on the delivery of operational improvements across our business, and an ongoing commitment to deliver the highest quality homes across the country," said Chief Executive David Thomas.Pub operator JD Wetherspoon reported strong growth in sales as it backed its annual outlook.Like-for-like sales were up 6.9% in the 10 weeks to July 7, with total sales up 6.6%. In the year-to-date, like-for-like sales are up 6.7% and total sales up 7.4%. Chair Tim Martin said the pub's expectations for the full-year - which ends on July 28 - remain unchanged. Home furnishings retailer Dunelm reported strong growth in the final quarter of its financial year.Like-for-like sales growth in the fourth quarter was up 15%, which the company ascribed to strong underlying sales both in stores and online. Store comparable revenue was up 12% in the final quarter of the financial year, while online revenue soared 37%. Total revenue in the 13 weeks to June 29 was GBP264.1 million, up 12% on a year ago. In the 52 weeks to June 29, revenue was up 4.8% to GBP1.10 billion.The company said it expects annual pretax profit to be towards the upper end of its GBP124 million to GBP126 million forecast range. "In the short-term, we remain cautious about the uncertain political climate and the impact it may have on consumer spending, but expect to make further progress in the year ahead and are confident about the group's longer-term prospects," said Chief Executive Nick Wilkinson.In contrast, recruitment firm PageGroup said it expects annual profit to be towards the lower end of market forecasts given macro-economic difficulties. Gross profit grew 7.9% in the second quarter to GBP224.6 million, boosted by 19% growth in the Americas. Asia Pacific grew 6.4%, despite Greater China slipping 1%, while profit from the UK fell 2.4%."It is clear that macro-economic conditions in a number of our regions are becoming more challenging, and, as such, we currently expect 2019 operating profit to be towards the lower end of the range of current market forecasts," the company observed, noting that consensus for 2019 sees operating profit of GBP161.1 million, with a range of GBP156.5 million to GBP168.0 million.Struggling retailer Superdry turned to an annual loss as it warned the year ahead is to be one of "reset".Total revenue was flat at GBP871.7 million in the year to April 27, which the company said was down to a stronger first half performance followed by a poor six months across all channels.The company turned to a pretax loss of GBP85.4 million from a profit of GBP65.3 million the year before, and slashed its final dividend by 90% to just 2.2 pence from 21.3p.Given the scale of the "trading downturn" in the recently ended financial year, management views the coming year as one of "reset". Superdry said it expects the 2020 financial year to reflect market conditions and the "historical issues" inherited by the business. Despite early, small positive results from new initiatives, Superdry expects revenue to show a "slight decline" in the year ahead."The issues in the business will not be resolved overnight. My first priority on returning to Superdry has been to steady the ship and get the culture of the business back to the one which drove its original success," said Founder & Interim Chief Executive Julian Dunkerton, who won his battle to return to the board in April.In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.2%. In China, the Shanghai Composite is 0.2% lower, while the Hang Seng index in Hong Kong is up 0.3%.China's consumer price index rose 2.7% for June on the year before, the same level of growth registered year-on-year in May. Food prices climbed 6.1%, led by a 21% jump in the price of pork, as China grapples with an African swine fever epidemic.China's producer price index was flat in June year-on-year, the weakest print since August 2016. In May, factory prices climbed 0.6% year-on-year.To come in the economic calendar, UK manufacturing and industrial production, alongside a GDP reading for May, is due at at 0930 BST. Irish inflation is at 1100 BST.Last night in the UK, Boris Johnson was forced to defend his plans to cut taxes for high earners in a fractious TV debate with rival Jeremy Hunt.The Foreign Secretary accused Johnson, the favourite in the battle for the Tory leadership, of sending out a signal that the Conservatives were a "party of the rich".The ITV debate was the public's first chance to see the two men fighting to become the next prime minister go head-to-head. However, Tory members have already received their postal ballots and Hunt had pleaded with them not to vote until after a chance to see the two candidates in action in the TV debate.They have until July 22 to cast their vote, with the new Tory leader announced the following day. Either Johnson or Hunt will take over from Theresa May as prime minister on July 24.
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Wetherspoon (J.D)Barratt DevelopmentsDunelmPageGroupSDRY.L