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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Whitbread | 4027 | 134 | 3.4 | 0.7 |
| Carnival | 4479 | 132 | 3.0 | -8.4 |
| Croda International | 4849 | 107 | 2.3 | 9.6 |
| Intertek | 5676 | 106 | 1.9 | 9.4 |
| Paddy Power Betfair | 8325 | 105 | 1.3 | -5.7 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Just Eat | 755.2 | -57.8 | -7.1 | -3.3 |
| Next | 6068 | -38 | -0.6 | 34.1 |
| London Stock Exchange | 4459 | -34 | -0.8 | 17.6 |
| Bunzl | 2262 | -30 | -1.3 | 9.2 |
| Associated British Foods | 2811 | -24 | -0.9 | -0.3 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,621.7 | 83.8 | 1.11 | -0.9 |
| UK | 20,844.0 | 86.9 | 0.42 | 0.6 |
| FR CAC 40 | 5,327.2 | 45.9 | 0.87 | 0.3 |
| DE DAX 30 | 12,348.6 | 114.3 | 0.93 | -4.4 |
| US DJ Industrial Average 30 | 24,117.5 | -165.5 | -0.68 | -2.4 |
| US Nasdaq Composite | 7,445.1 | -116.5 | -1.54 | 7.9 |
| US S&P 500 | 2,699.6 | -23.4 | -0.86 | 1.0 |
| JP Nikkei 225 | 22,275.7 | 3.9 | 0.02 | -2.1 |
| HK Hang Seng Index 50 | 28,387.2 | 30.9 | 0.11 | -5.1 |
| AU S&P/ASX 200 | 6,217.2 | 21.3 | 0.34 | 2.5 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 72.47 | -0.15 | -0.2 | 20.5 |
| Crude Oil, Brent ($/barrel) | 77.46 | -0.37 | -0.48 | 16.3 |
| Gold ($/oz) | 1251.61 | -1.89 | -0.15 | -3.9 |
| Silver ($/oz) | 16.26 | -0.03 | -0.18 | -3.7 |
| GBP/USD – US$ per £ | 1.3085 | – | -0.27 | -3.1 |
| EUR/USD – US$ per € | 1.1553 | – | -0.09 | -3.7 |
| GBP/EUR – € per £ | 1.1327 | – | -0.17 | 0.6 |
Click graph to enlarge
UK 100 Index called to open -30pts at 7592 (ex-div -5.9pts), off yesterday’s oil/energy-induced 7639 high, though still in an uptrend towards 2-week falling highs resistance. Bulls need a break above yesterday’s 7639 high; Bears require a breach of 7572 overnight lows. Watch levels: Bullish 7600, Bearish 7572
Calls for a negative open are fuelled by losses on Wall St and most Asian bourses (Australia’s ASX the only bright spot), as Tech and Financials sold off amid confusion about President Trump’s on-again-off-again plans to enforce restrictions against Chinese investments (stance officially softened, but is it just Twitter diplomacy?). While pro-business members of Trump administration apparently carried the day, tough-sounding follow-on chatter from the White House is keeping investors cautious.
Oil prices are still creeping higher after the US inventories posted a much bigger than expected drawdown of nearly 10m barrels, giving some welcome resilience to UK Index Energy shares. Yet neither high oil, nor a weaker GBP (US Dollar firming against peers, in spite of dovish comments from the Fed’s Bullard) are proving sufficient - for now- to offset global trade worries. Gold flat amid preference for 10-year US Treasury bonds and the Japanese Yen, regarded as better quality assets for the risk-averse.
In corporate news this morning, Walt Disney has won US antitrust approval for its $71bn purchase of 21st Century Fox’s entertainment assets (owns 39% of Sky), raising hurdles for a potential rival bid from Comcast which is, according to the WSJ, exploring tie-ups with other companies or private-equity to provide additional cash.
The UK CMA has referred Rentokil Initial's acquisition of Cannon Hygiene for further review, citing risk of higher prices and lower quality. BP to buy electric vehicle charging company Chargemaster, the largest UK network of EV charging units. The CMA has cleared Sibanye-Stillwater’s offer for Lonmin.
Rolls-Royce says a subset of 20-30 Boeing 787 Dreamliner engines (Trent 1000-TEN) likely need a part replaced because of a component impurity issue. Additional work not expected to change recent £440m guidance on additional costs materially.
Mediclinic International’s capital markets day presentation reiterates guidance, trading in-line with expectations. Wood Group full year outlook unchanged; early signs of recovery in core oil & gas. Tullow Oil expects H1 revenue of $900m. gross profit £500m and generate $300m free cash flow, net debt lower; 2018 capex guidance unchanged at $460m. Hunting comfortable with FY consensus but cautious about second half.
JD Sports Fashion on track for in-line 2019 results. BCA Marketplace trading in-line, pre-tax profit +35%, dividend +37.3%. Stagecoach pre-tax profit rises five-fold but lowers dividend to more sustainable level; guidance reiterated (rail profit lower due to bidding costs).
Greene King FY revenues £2.177bn (-1.8%) upper end of consensus, adj. pre-tax profit £243m, -11.2%) in-line with expectations, albeit lower end of the range, dividend flat; Recent trading +2.2% helped by weather and sports fixtures; Expect £45-50m cost inflation; £30-35m cost savings.
McCarthy & Stone says that while replacement CEO found (Fenton said retiring), COO Tonkiss to be interim CEO from September and Chairman Lester to spend more time with the business.
In focus today, apart from this evening’s England-Belgium game, will be Eurozone Confidence (10am) figures, forecast to suggest limited change, but declines nonetheless, notably in both Industrial Economic and Confidence. Thereafter, Italian inflation (10am) is posting faster annual price growth in June (1.3% vs 1% prev.), while Germany (1pm) slows a little (2.1% vs 2.2% prev.)
Then it’s across the pond for the final US Q1 GDP (1.30pm) reading, with consensus expecting confirmation of slower growth (2.2% vs 2.9% in Q4) and slower price growth (1.9% vs 2.3% prev.; core 2.3% vs 2.5%) and in spite of Personal Consumption accelerating (2.2% vs 2% prev.).
The European Central Bank’s (ECB) Economic Bulletin (9am) will offer an updated assessment. A section pre-released yesterday suggested that, so far, solid domestic demand had prevented EUR strength from weighing on euro-area inflation. Good news for Draghi & Co. who’d like to hike rates from next summer, but far from a given, after years of struggling with lacklustre inflation.
Having switched camp at the latest Bank of England (BoE) Monetary Policy Committee (MPC) decision, joining the two perennial hawks, Chief Economist Andy Haldane (2.30pm) delivers the Academy of Social Sciences’ Annual Lecture in London.
The Fed’s Bullard (3.45pm; dovish, non-voter) talks on US Economy & Monetary Policy at the Ascension Health Management Annual Conference, with audience Q&A, while colleague Bostic (5pm; centrist, voter) meets with Fed-Up coalition in Atlanta.
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Prepared by Michael van Dulken, Head of Research