Highlights of the Day
Asian Markets
Asian shares rose as investors looked to a barrage of economic data around the world to confirm recent signs the global economy is in fine fettle with inflation staying well contained. |
U.S. Markets
U.S. equities slumped despite a strong performance for the month, spurred by healthy corporate results and growing optimism in the strength of the global economy. Treasuries slid and the dollar added to its biggest monthly retreat since January. |
Today's News
UK house prices increased at a slower pace in July, survey data from the Nationwide Building Society showed. House prices increased 2.9% year-on-year in July, weaker than June’s 3.1% increase. Nonetheless, the annual rate was bigger than the expected 2.7%. On a monthly basis, UK house prices advanced unexpectedly by 0.3% following a 1.1% rise in June. Economists had forecast a 0.1% fall.
Centrica reported a dive in its operating profit for the six months to 30th June to £252m, from £1.77bn in the same period in 2016. Centrica said the fall was due to higher exceptional charges of £268m, along with a £176m net loss from “certain re-measurements”, as opposed to a £704m net gain the prior year. Centrica’s adjusted operating profit dropped 4% to £816m from £853m year-on-year. Revenue grew 7% to £14.3bn from £13.4bn year-on-year.
BP reported a replacement cost profit of $1.97bn for the six months to 30th June, swinging from a $2.73bn replacement cost loss for the same period in 2016. This followed a $553m replacement cost profit in the second quarter. BP left its interim dividend unchanged at $0.1 per share.
Britain’s Serious Fraud Office has opened a formal investigation into possible historic misconduct by British American Tobacco in Africa. The company has been investigating allegations through its law firm and after informing the SFO it reported that the specialist prosecuting authority has now opened a formal investigation. “BAT intends to co-operate with that investigation,” the company said.
Cost cuts at Unilever could lead to up to 1,000 job cuts and possibly the closure of some of its eight factories in Germany. “The plants in Auerbach, Stavenhagen and Heilbronn are under review,” Michaela Rosenberger, head of food industry union NGG, said in a statement. Around 5,000 of Unilever’s 168,000 employees work at 11 sites in Germany, Austria and Switzerland, making, among other products, Knorr instant soup, Magnum ice cream and Rama margarine.
BHP Billiton has denied commentary in a Brazilian newspaper that it has agreed to sell its stake in the Samarco iron ore mine that is currently shut down to its partner Vale SA. A columnist in the O Globo newspaper reported on Sunday that BHP wants to sell its stake and Vale wants to buy it, Reuters said. The column said the decision has been made. “It is something that will take more than six months to close,” the column said. The Samarco mine has been shut since November 2015, when a dam burst, unleashing a deluge of mud that killed 19 people and destroyed nearby towns. BHP and Vale currently own 50% of the operation each.
Rolls-Royce announced profit before tax of £1,941m in the first half of 2017, up from a loss of £2,150m in 2016. Reported revenue up 12% at constant exchange rates; 17% at actual exchange rates. Underlying revenue up 6% at constant exchange rates, led by Civil Aerospace and Power Systems. Underlying profit before tax of £287m, up £183m (2016: £104m)
New research from Begbies Traynor shows that 329,834 UK companies were experiencing ‘significant’ financial distress at the end of Q2 2017, a 25% increase from Q2 2016. The group said this was the largest annual increase since Q2 2014 and was the largest number of corporates experiencing significant distress in at least 5 years. The Red Flag Alert research for Q2 2017, which monitors the financial health of UK companies, showed that SMEs made up the majority of this increase, with ‘significant’ distress rising 26% to 308,423 businesses, while large companies saw distress rise by just 12% year-on-year to 21,411 businesses at the end of Q2 2017.
Oil prices were higher settling above $50 a barrel for the first time in more than two months.
Gold prices held steady near seven-week highs, after registering their biggest monthly gain in five in July, supported by a slump in the U.S. dollar and political uncertainty.
Companies Reporting this week
Day |
Companies |
Today: |
Centrical * Rolls-Royce Holdings * Greggs * Direct Line * Fresnillo * Gocompare * Taylor Wimpey * BP |
Tomorrow: |
Aggreko * BAE Systems * William Hill * Rio Tinto * Smurfit Kappa * A.G. Barr |
Thursday: |
Serco Group * Randgold Resources * Shire * Cobham * Inmarsat * Centamin * London Stock Exchange Group * Aviva * Ferrexpo * Convatec * Next |
Friday: |
Merlin Entertainments * RBS * Pearson * Millennium & Copthorne Hotels |
Early Market Movements
Market |
Index |
Change |
% Change |
UK 100 |
7404.8 |
+32.8 |
+0.4% |
UK 250 |
19,828.3 |
+47.1 |
+0.2% |
GER 30 |
12,140.8 |
+22.6 |
+0.2% |
FRA 40 |
5,117.4 |
+23.7 |
+0.5% |
U.S. 30 |
21,891.12 |
+60.81 |
+0.3% |
U.S. 500 |
2,470.3 |
-1.8 |
-0.1% |
OIL (BRENT) |
52.74 |
+0.02 |
+0.0% |
GOLD |
1,269.29 |
-0.15 |
-0.0% |
UK Risers & Fallers (8:15am)
Company |
Price |
Change |
% Change |
Direct Line Group |
392.5 |
+17.9 |
+4.8% |
Intertek |
4491 |
+190 |
+4.4% |
CYBG |
278.4 |
+11.2 |
+4.2% |
British American Tobacco |
4664 |
-49.5 |
-1.1% |
Pearson |
653.5 |
-4.0 |
-0.6% |
CLS Holdings |
206 |
-6.7 |
-3.1% |
Latest Broker Views
Company |
Broker |
Recommendation |
Price |
Target |
Close Brothers |
RBC |
Sector Perform |
1553 |
1600 |
HSBC |
S&P Global |
Hold |
762.5 |
820 |
London Metric Property |
HSBC |
Buy |
169.7 |
179 |
National Grid |
Berenberg |
Buy |
940.7 |
1050 |
Forthcoming Economic Data
Time/Date |
Previous |
Forecast |
Outcome |
9:30am: U.K. Manufacturing PMI |
54.3 |
54.4 |
– |
1:30pm: U.S. Core PCE Price Index m/m |
0.1% |
0.1% |
– |
3:00pm: U.S. ISM Manufacturing PMI |
57.8 |
56.4 |
– |
Sources:
http://www.reuters.com/article/us-global-markets-idUSKBN1AH2QR?il=0
https://www.bloomberg.com/news/articles/2017-07-30/asia-stocks-set-for-gains-after-commodities-rally-markets-wrap
http://www.londonstockexchange.com/exchange/news/alliance-news/archive.html?&page=1
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1501568920880210400.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1501569339440255000.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1501567669030052000.html
http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1501566799969950800.html
http://www.stockmarketwire.com/article/5609196/Rolls-Royce-reports-pre-tax-profit-up-from-loss-in-2016.html
http://www.stockmarketwire.com/article/5606600/Begbies-Traynor-sees-big-rise-in-distress.html
https://www.digitallook.com/news/news-and-announcements/sfo-opens-investigation-into-british-american-tobacco–2796301.html
https://www.wsj.com/articles/oil-holds-gains-as-u-s-output-slows-1501495422
http://uk.reuters.com/article/global-precious-idUKL4N1KN1KR