UK consumers ‘cool’ their spending in July

Calls for a positive open are supported by positive trading on Wall St and in Asia (Australia the lone laggard, in the red, dual-listed Miners posting losses). Oil prices are higher, which may help FTSE Energy after the US re-imposed “snap-back” sanctions on Iran’s oil industry.

UK consumers ‘cool’ their spending in July

FTSE 100 Index called to open +20pts at 7685, after an overnight break beyond falling highs resistance at 7665 which extends last week’s rebound from 7540 and forms a new rising channel towards end-July highs. Bulls need a break above the 7685 highs of mid-yesterday. Bears require a breach of  7655 overnight lows. Watch levels: Bullish 7685, Bearish 7655

 

Calls for a positive open are supported by positive trading on Wall St and in Asia (Australia the lone laggard, in the red, dual-listed Miners posting losses). Oil prices are higher, which may help FTSE Energy, after the US re-imposed “snap-back” sanctions on Iran’s oil industry.

 

Despite expectations of a World Cup and sunny weather-inspired UK spending bonanza in July, BRC retail sales disappointed, +0.5%, missing expectations of 1.5% and slower than the 1.1% in June, targeting their spending on food, drink and keeping themselves cool. WatchFTSE Retailers and Supermarkets.

 

GBP is flat, but close to 11-month lows amid persistent Brexit uncertainty, helping buoy the FTSE. Gold has rebounded from 13-month lows as traders become more interested, in spite of USD strength.

 

In corporate news this morning FTSE Banks may be sensitive to news that Italy’s UniCredit beat expectations and Commerzbank swung back to a net profit, beating expectations.

 

InterContinental Hotels H1 underlying revenues +4%, RevPAR +3.7% (Americas +3.2%, US +2.7%, EMEA +3%, China +10%) on capacity +4.1%, underlying operating profit +8%, net debt -12%, dividend +10%, confident in FY outlook, $350m CAPEX guidance unchanged.

 

Intertek H1 adj. group revenues -1.8% (-2.3% Organic), FX cut growth by 5.7%, op profit +0.8%, div +35.7%; expects FY organic revenue growth, moderate margin growth, strong cash conversion.

 

Hargreaves Lansdown FY net rev. +16% YoY (top of estimate range), pre-tax profit +10%, net new business +10% YoY, but only 3.1% QoQ (from £88.8bn to £91.6bn), total AUM +16% (expectations miss), market share +1.3% to 39.1%, dividend +38% to 40p.

 

Meggitt H1 orders +24% organic, revenues +9%, underlying EBITDA +3%, pre-tax -1%,, free cash flow +19%, net debt -7%, dividend +5%, reiterates recently revised guidance. Rotork H1 orders +13.3%, revenues +14.8%, adj. pre-tax profit +28.9%, div +7.3%; market outlook remains positive.

Standard Life Aberdeen H1 profits, AUM and fund inflows reports lower on a pro-forma basis for merger, accelerating share buyback programme (first tranche, next few days), dividend +4.2%; Market conditions remain challenging due to macro and political uncertainties.

 

TP ICAP H1 underlying revenue -3% YoY, underlying op. profit +8%, op. margin +140bp, FY revenue guidance reiterated for low single-digit growth. Chosen Paris for its post-Brexit EU HQ. Domino’s Pizza  H1 revenues +12.8% (UK & ROI +8.1%),UK +5.9% like-for-like, underlying pre-tax profit +2.5%, net debt triples, dividend +8%; expects FY profits in line with market expectations.

 

Fevertree Drinks’ founders sell around 2m shares, leaving them with stakes of 8% and 4.7%. GlaxoSmithKline appoints Iain Mackay as CFO and board member, joins from HSBC after 8 years as group finance director (previously at GE, Schlumberger, PWC).

 

In focus today, another quiet one for macro-economic data, will be UK Halifax House Prices (8.30am), with July expected to show a slower rate of monthly growth (0.2% MoM vs 0.3% in June) but the three-month rate (to have accelerated to 2.6% YoY (from 1.8%), potentially good news for housebuilders and/or estate agents.

 

Thereafter, we have only US JOLTS Job Openings (3pm), seen largely unchanged for August, while US IBD TIPP Economic Optimism (3pm) is forecast stronger, before US API Oil Inventories (9.30pm) which could move oil prices overnight, with a bearing on energy sensitive names. US corporates scheduled to report today include Match, Snap and Walt Disney.

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