The Market Close - Poor manufacturing data leaves U.K. GDP struggling to build - Collins Sarri Statham Investments

Today's Closing Update

U.S. Shares set a round of records as traders welcomed another batch of upbeat earnings reports from heavyweights Boeing Co. and AT&T Inc.

European and U.K. Shares moved higher, as investors sifted through the latest round of corporate earnings reports ahead of the Federal Reserve’s policy decision.

GlaxoSmithKline cut its full year guidance for earnings per share to 3-5% at constant exchange rates from the previous 5-7% after sales growth slowed in the second quarter, while a new strategic rejig will see a flat dividend next year. After taking £1.2bn of accounting charges due to increases in the valuations of liabilities for the HIV and consumer businesses, GSK reported a second-quarter loss per share of 3.7p compared with a 9p loss in the same quarter last year, up 59% or 29% at CER. The pharmaceutical behemoth generated second-quarter sales of £7.3bn, which was up 12% on last year or 3% at CER thanks to strength in key pharma franchises, respiratory and HIV, taking first-half sales to £14.7bn, a 4% CER increase on the same period last year.

Unite Group reported a “strong” financial performance in its first half, with EPRA earnings up 12% to £40.4m, or 18p per share. The firm said profit before tax in the six months to 30 June was down to £83.9m from £122.8m, with basic earnings per share falling to 36.7p from 48.3p year-on-year, which it put down to a lower level of revaluation surplus as a result of yield compression in 2016. It still declared a 22% increase in the interim dividend to 7.3p per share, maintaining its policy of distributing 75% of full-year recurring EPRA earnings by way of dividends each year.

The UK economy grew by 0.3% in the three months to June, driven in part by a booming film industry, said the Office for National Statistics (ONS). The initial estimate showed growth picking up from the first quarter of the year, when it was 0.2%. The ONS said the growth was driven by services, particularly retail, which more than offset falls in output in the manufacturing and construction sectors. It added there had been a “notable slowdown” in growth from last year. “While services such as retail, and film production and distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth,” said Darren Morgan, ONS head of national accounts.

Sports Direct boss Mike Ashley has won a High Court battle with an investment banker over a £15m deal allegedly made in a pub. Jeffrey Blue told the court Newcastle United’s owner reneged on a promise to pay him a multimillion-pound sum if he increased the firm’s share price. The court heard about “drink-fuelled” meetings in pubs, including one where Mr Ashley “vomited into a fireplace”. Mr Ashley’s lawyers said he had won a “comprehensive” victory. The hearing was told that four years ago Mr Ashley met Mr Blue and three other finance specialists at the Horse and Groom in London and “consumed a lot of alcohol”. Mr Ashley said: “I can’t remember the details of the conversations that we had in the pub as it was a heavy night of drinking. “If I did say to Mr Blue that I would pay him £15m if he could increase [Sports Direct’s] share price to £8, it would be obvious to everyone, including Mr Blue, that I wasn’t being serious.”

Supervisory boards at two big German carmakers are to hold emergency meetings later after they were accused of breaching EU cartel rules. Volkswagen and Daimler have declined to comment on the allegations that they and other German car giants colluded to fix the price of diesel emissions treatment systems. The claims first surfaced on Friday in a report by Der Spiegel magazine. The issue is under investigation by EU and German anti-trust regulators. Companies found to have infringed EU cartel rules are liable to pay fines of up to 10% of their global revenue. Other firms under investigation are BMW, Porsche and Audi.

A US judge has ordered Apple to pay more than half a billion dollars to a university after the tech firm failed to abide by an earlier court ruling. Apple was sued in 2014 for allegedly using a technology developed by a professor and his students in its iPhone chips without the University of Wisconsin-Madison’s permission. Apple was ordered to pay about $234m (£179m) when it lost the patent case. That sum has now been more than doubled because it continued to use the tech. The judge said that additional damages and interest brought the sum owed to $506m. However, Apple still hopes to overthrow the fine by appealing against the original jury verdict. The penalty is still less than the $862m the university had originally sought in damages.

WPP said it has made a strategic investment in Within Unlimited Inc, a US-based virtual reality entertainment and technology company. The size of the stake acquired in Within Unlimited was not disclosed by WPP. WPP said Within Unlimited is based in Los Angeles, employing over 35 people, with partners and content collaborators including Apple, The New York Times, NBC Universal and Alphabet Inc. The investment is part of WPP’s strategy of focusing on three key areas that differentiate the group’s offering to clients, being technology, data and content.

Oil Prices rose to session highs after government data showed U.S. crude and fuel inventories fell more than expected.

Gold prices fell, tracking a third-straight decline and pulling further away from the one-month peak hit just a few sessions ago as traders readied for a Federal Reserve update on interest-rate policy.

Market Close

Market	Index	Change	% Change
UK 100	7452.3	+17.5	+0.2%
UK 250	19,762.7	+121.4	+0.6%
GER 30	12,302.1	+37.8	+0.3%
FRA 40	5,186.4	+25.3	+0.5%
U.S. 30	21,719.28	+105.85	+0.5%
U.S. 500	2,479.3	+2.2	+0.1%
OIL (BRENT)	50.67	+0.47	+0.9%
GOLD	1,248.19	-1.87	-0.2%

UK Risers & Fallers

Company	Price	Change	% Change
Tullow Oil	165.75	+12.2	+7.9%
Anglo American	1200	+28.5	+2.4%
ITV	180.1	+4.2	+2.4%
Petra Diamonds	101.1	-7.5	-6.9%
GlaxoSmithKline	1540.5	-45.5	-2.9%
Paddy Power Betfair	7430	-205	-2.7%

Reported Economic Data

Time/Date	Previous	Forecast	Outcome
9:30am: U.K. Prelim GDP q/q	0.2%	0.3%	0.3%
3:30pm: U.S. Crude Oil Inventories	-4.7m	-3.3m	-7.2m
3:00pm: U.S. New Home Sales	610k	615k	610k
7:00pm: U.S. FOMC Statement	–	–	–