ADVFN Morning London Market Report: Thursday 4 August 2022

London Hours of Operation: Stocks Flatten Before BoE Rate Announcement


London shares were firm in early trading on Thursday as investors refrained from betting big anyway ahead of the latest policy announcement by the Bank of England.

At 0850 BST, the FTSE 100 was flat at 7,446.00.

Neil Wilson, Chief Market Analyst“The Bank of England is expected to raise interest rates by 50bps today, in a dovish way of issuing a big warning about the outlook. I don’t want to be considered hawkish.

“A more hawkish tone could push the sterling higher, but a ‘dovish’ 50bps rate hike base case could sell sterling on the facts. There are a few things to keep in mind: This will be the biggest rate hike since 1995. But inflation hit 9.4% in June and is expected to rise further this year. You don’t even have to.

“The BoE has been raising rates incrementally, but it has had no effect on either inflation or the GBP because they were concerned about the economic outlook (because, understand this, inflation!). It needs a stronger message, and we won’t.” Andrew Bailey is getting out of his depth today when it comes to communicating policy. “

In the stock market, Hikuma Pharmaceutical It was placed under Cosh after lowering revenue guidance for its generics business from $710 million to $750 million to $650 million to $675 million.

rolls royce It was still in the red after engine makers reported a decline in underlying assets in the first half, but supported full-year guidance amid hopes of an improvement in the commercial aerospace sector.

Mondi The paper and packaging group fell despite reporting a surge in mid-term profits on the back of higher prices due to reduced wood supplies.

Commodity trading and mining companies glencore Shares tumbled despite pledging to return $4.5 billion to shareholders, with interim core earnings soaring to $10.3 billion on the back of record coal and gas prices.

As an advantage, phoenix group After announcing it would buy closed-book British life insurer Sun Life for £248m.

Next The company was at the forefront after retailers raised their full-year profit guidance by £10m to £860m.

outsourcer Sarco It rose after raising its full-year guidance slightly to reflect May and June transactions, as it said strong growth across its business offset contraction in its test and trace business.

Top 10 FTSE 100 Risers

Top 10 FTSE 100 Fallers

US Close: Stocks Rise Following Better Than Expected Data

Wall Street stocks closed higher on Wednesday. Better-than-expected macro data and comments from senior Fed officials boosted sentiment.

At close, the Dow Jones Industrial Average rose 1.29% to 32,812.50, the S&P 500 rose 1.56% to 4,155.17 and the Nasdaq Composite rose 2.59% to 12,668.16.

The Dow Jones Industrial Average closed 416.33 points higher on Wednesday, recouping losses recorded in the previous session amid heightened US-China tensions as House Speaker Nancy Pelosi arrived in Taiwan.

One of the main focuses of the session was the news of an unexpected acceleration in US services sector activity in July. The Institute for Supply Management’s Service Sector Purchasing Managers Index improved from 55.3 in June to 56.7 in July. Economists drew a drop to 53.9 in the main index.

St. Louis Fed President James Bullard also said that thanks to the trust central banks have won since the 1970s, central banks may be able to reduce inflation in an orderly manner while achieving a relatively soft landing. After that, it boosted sentiment.

Bullard underscored the Fed’s commitment to its price stability mandate, noting how the Fed raised the discount rate “sharply” and embarked on quantitative tightening.

And on the macro side, US mortgage applications rose 1.2% in the last week of July. Mortgage Bankers AssociationIt was the first gain in five weeks, with the refinancing and purchasing indices up 1.5% and 1.0% respectively.

Elsewhere, U.S. service sector activity fell last month, with output falling at its fastest pace since May 2020, revealing revised data from a survey on the state of the sector. S&P Globalservices sector purchasing managers’ index fell to 47.3 in July from a reading of 52.7 in June (preliminary 47.0). Meanwhile, new orders have picked up growth after a slight decline in June, but at a much slower pace than seen earlier in the year.

finally, Supply Management LaboratoryThe US non-manufacturing PMI unexpectedly rose to 56.7 in July from 55.3 in June, according to the OECD, while factory orders rose 2% month-on-month in June. Census Bureauextended its upwardly revised May gain of 1.8% and well above market expectations of a 1.1% rise.

Thursday’s News Roundup: Telecom Costs, Dyson, Ocado, Elon Musk

Some 6 million households in the UK are struggling to pay their mobile, landline and broadband bills, and pressure on the cost of living has led many to cut back on essentials such as food and clothing, or cancel or change services. or failing to pay to stay connected. Consumer group Which? reports that in April he estimated that 5.7 million households experienced at least one “affordability problem.” – Guardian

Tech company Dyson has been fined more than £1 million after one of its employees was injured when a giant milling machine fell on him. Dyson was ordered by Swindon Magistrates’ Court to pay £1.2m for failing to properly train staff in handling the kit. The company pleaded guilty to violating health and safety laws. – Guardian

A senior city attorney who told a client to “burn” a chat log to prevent evidence from reaching Ocado could face a prison sentence for contempt of court. Former Jones Day partner Raymond McKeeve, the company created by Ocado co-founder Jonathan Faiman, intentionally destroyed documents to stop searches for data found by a High Court judge it was done. A search order was issued after Ocado accused his Faiman company of stealing corporate information. – Telegram

The Serious Fraud Bureau has convicted a fraudster who encouraged thousands to invest in Caribbean real estate that was never built. He was convicted of two counts of fraud for abuse of position because of his role in the annual plan. Mr. Ames persuaded his 8,000 investors to pay his 30 percent deposit for the unfinished villa or hotel room, taking half of it as company and salesman fees. – Telegram

Elon Musk has asked Goldman Sachs and JP Morgan Chase for more details about how the two banks advised Twitter when Tesla’s boss was looking to buy the social media company for $44 billion. . Twitter said he was trying to coerce Musk into completing the acquisition, but the billionaire said in July that he would back down on claims that the business violated the terms of the deal. – Times

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ADVFN Morning London Market Report: Thursday 4 August 2022

Source link ADVFN Morning London Market Report: Thursday 4 August 2022

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