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London open
London stocks rose in early trade on Wednesday following a positive Asian session, as investors eyed a slew of PMI readings.
At 0835 BST, the FTSE 100 was up 0.4% at 7,300.74.
PMIs for the eurozone, the UK and the US are all due later in the day.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has sneaked into positive territory in early trade as risk sentiment has improved a little, but caution is set to dominate on financial markets as investors assess the prospects of high interest rates lingering for longer.
“Wariness has been rippling out ahead of the central bankers’ meet up at the Jackson Hole Economic Symposium in Wyoming this weekend. Investors will be eager for clues as to how long the fight against inflation will continue, where interest rates will end up and just how long they will stay at painful levels.
“Investors will also be keeping a close watch on PMI data out this morning, with the snapshot from purchasing managers across a raft of countries in Europe indicating to what extent demand across sectors is slowing, given the higher borrowing costs affecting company and consumer sentiment.”
Corporate news was thin on the ground, but Reckitt Benckiser gained as it announced the departure of chief financial officer and executive director Jeff Carr, who plans to retire at the end of March next year.
Shannon Eisenhardt – who currently serves as CFO of consumer, brand and marketplace at Nike – will join the consumer goods group on 17 October as CFO designate to succeed Carr.
JD Sports shot to the top of the FTSE 100, having slumped on Tuesday after a profit warning from Dick’s Sporting Goods in the US.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sse Plc | +2.66% | +42.00 | 1,618.50 |
| 2 |  |
Severn Trent Plc | +2.52% | +58.00 | 2,357.00 |
| 3 |  |
Taylor Wimpey Plc | +2.52% | +2.75 | 111.95 |
| 4 |  |
British Land Company Plc | +2.17% | +6.70 | 315.30 |
| 5 |  |
National Grid Plc | +2.12% | +20.00 | 962.80 |
| 6 |  |
Prudential Plc | +2.08% | +19.60 | 961.80 |
| 7 |  |
Segro Plc | +1.96% | +13.80 | 719.20 |
| 8 |  |
Anglo American Plc | +1.95% | +39.00 | 2,041.00 |
| 9 |  |
Land Securities Group Plc | +1.92% | +11.20 | 593.20 |
| 10 |  |
United Utilities Group Plc | +1.90% | +17.20 | 921.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tui Ag | -0.48% | -2.50 | 517.50 |
| 2 |  |
Associated British Foods Plc | -0.21% | -4.00 | 1,933.00 |
| 3 |  |
Standard Chartered Plc | -0.20% | -1.40 | 713.60 |
| 4 |  |
Spirax-sarco Engineering Plc | -0.16% | -16.00 | 9,718.00 |
| 5 |  |
Bp Plc | -0.12% | -0.55 | 477.35 |
| 6 |  |
Marks And Spencer Group Plc | -0.09% | -0.20 | 217.50 |
| 7 |  |
International Consolidated Airlines Group S.a. | -0.03% | -0.05 | 161.75 |
| 8 |  |
Nmc Health Plc | -0.00% | -0.00 | 938.40 |
| 9 |  |
Just Eat Plc | -0.00% | -0.00 | 861.00 |
| 10 |  |
Shell Plc | -0.00% | -0.00 | 1,894.60 |
US close: Stocks finish mixed as banks, retailers slip
Wall Street stocks showed a varied performance on Tuesday, with major indices ending the day on a split note as investors awaited an impending speech from Federal Reserve chair Jerome Powell later in the week.
The Dow Jones Industrial Average closed 0.51% lower at 34,288.83, while the S&P 500 also reported a slight decline, down by 0.28% to end the day at 4,387.55.
However, the technology-heavy Nasdaq Composite bucked the trend, ending Tuesday’s trading session 0.06% firmer to close at 13,505.87.
In the currency space, the dollar was last up 0.01% on sterling at 78.55p, while it was unchanged against the common currency to trade at 92.2 euro cents.
The greenback saw a negligible dip of 0.02% against the yen, changing hands at JPY 145.86.
“After yesterday’s rebound, and the follow through in European markets today, US markets initially opened higher with earnings once again taking centre stage, while yields have taken a step back from their recent highs,” said CMC Markets chief market analyst Michael Hewson earlier.
“Sentiment also got a bit of a lift by chatter that a discussion on the Fed’s inflation target being reset to 3% might take place at Jackson Hole this weekend.
“If this were to happen, then it would mean that the central bank need not be as aggressive in returning inflation to target if the target were raised from 2% to 3%.”
July sees decline in existing home sales, falling short of predictions
In economic news, the housing market was in focus as fresh data showed a 2.2% monthly decline in existing home sales for July, settling at 4.07 million.
The figure slightly missed the previously-anticipated consensus, which had pegged sales at 4.15 million.
“The key on sales continues to be a lack of supply; the number of existing homes for sale at the end of July was equal to just 2.9 months of sales, up trivially from June but unchanged, net, since February,” said Kieran Clancy, senior US economist at Pantheon Macroeconomics.
“This, in turn, reflects the disconnect between the current mortgage rate and the much lower average rate on outstanding mortgages.
“The gridlock will only be broken once the Fed starts signalling rate cuts next year, but existing home sales will continue to bounce along the floor in the meantime.”
Bank shares tumble following S&P downgrades; retailers in focus
In equity markets, several banking institutions took hits following downgrades from S&P Global.
The move from S&P came closely on the heels of a Fitch Ratings decision to adjust the operating environment score for US banks to aa- from aa, due to uncertainties surrounding interest rate hikes and impending regulatory alterations.
Moody’s also ruffled feathers a fortnight ago by downgrading certain lenders and announcing a review of ratings for larger banks.
Among the casualties of S&P‘s downgrades on Tuesday were Associated Banc-Corp, which saw a decline of 4.23%, Comerica at 4.12%, KeyCorp at 4.13%, UMB Financial dipping 3.14%, and Valley National Bancorp dropping by 4.47%.
Elsewhere, graphics chip giant Nvidia fell 2.77% as the market took a cautious stance ahead of its second-quarter results scheduled for Wednesday.
Retail stocks were also in focus, with both Dick’s Sporting Goods and Macy’s reporting underwhelming earnings, causing their stocks to plummet by 24.15% and 14.05% respectively.
On the upside, Lowe’s Companies jumped 3.75% after it presented mixed results, but reiterated its full-year guidance.
Wednesday newspaper round-up: PwC, house prices, JLR
More than 1,000 partners at the UK division of the “big four” accounting firm PwC will be paid £906,000 this year, a slight fall on last year’s record payout as profits fell despite rising revenues. Unaudited accounts released by the company showed that PwC’s UK profit fell from £1.5bn to £1.3bn in 2022, although last year’s figure was boosted by a £139m gain from the sale of its global mobility business. – Guardian
PwC has been a significant beneficiary of Saudi Arabia’s global spending spree as the Gulf state looks to grow its economy beyond oil and gas. Strong demand for its advice from Middle Eastern clients helped drive a 30pc jump in the “Big Four” company’s consulting revenues last year, new accounts show. – Telegraph
High interest rates are putting indebted businesses under the most pressure since 2009, the Bank of England has warned. Half of all businesses with borrowings will be struggling to meet debt payments by the end of this year, the Bank said, up from 45pc last year. – Telegraph
Falling house prices and record wage growth has meant houses have become more affordable on paper, but the rising cost of borrowing has cancelled out any benefit. The cost of a typical UK home is 6.7 times average earnings, down from a peak of 7.3 last summer, according to analysis from the country’s biggest mortgage lender, Halifax. – Sky News
The UK’s largest carmaker has announced plans to use old car batteries to store energy the national grid can’t use and return it to the network at peak times. Jaguar Land Rover (JLR) is turning its used car batteries into what it says will be one of the largest energy storage systems in the UK. – Sky News
