Mike van Dulken and Artjom Hatsaturjants at Accendo Markets, commented to clients this morning:
FTSE 100 Index called to open -7pts at 7500, still holding this week’s breakout and bullish reversal. Bulls need a break above yesterday’s 7516 highs, to build on the reversal from 5-month lows. Bears require a breach of overnight 7478 lows to confirm a breach of the current up trend. Watch levels: Bullish 7520, Bearish 7475
Calls for a negative open come after another mixed session on Wall St, the S&P and Dow dragged lower following President Trump’s pugnacious “America First” address at the UN. That said, the Tech-heavy Nasdaq held its ground. Sentiment improved in Asia overnight, with China recouping much of Tuesday’s losses while dual-listed Miners advanced down under (BHP, RIO +1%).
Energy names may be sensitive to Oil off its highs following a downbeat US API weekly inventory report, albeit on the back of a run of increases. Copper off its highs, but Miners unperturbed.
In corporate news this morning William Hill forms strategic partnership with IGT Global Solutions to offer US lotteries a full service solution for sports betting. Comcast now owns 36.95% of Sky.
Fitch cuts Ocado outlook to negative (affirms BB- rating) saying business risk transformation to logistics and tech provider increases execution risks as technology and manufacturing capabilities need to scale up over medium term.
Boohoo H1 revenue +50% YoY (UK +43%, intl. +62%), adj. pre-tax profit +43%. Ups FY revenue guidance to 38-43% (from 35-40% prev.). Medium-term sales growth guidance reiterated at 25% p.a. PZ Cussons trading in line with expectations, good trading in Europe and Asia offsetting challenges to volumes and margins in Nigeria.
AA H1 revenues +2% (members -2%, avg. income +2%), trading EBITDA -17%, on-track to meet FY19 guidance despite extreme weather and return to growth thereafter; cash conversion up, refinanced, reduced pension deficit, but interim div -83%. Elementis chromium production halted due to Hurricane Florence flooding; should resume in October with modest impact on 2018 profits.
SSP Q4 in-line, like-for like sales growth similar to Q3; FY like-for-like sales growth guidance unchanged still at 2-3%, driven by air while rail remains soft. Net contract gains seen at top-end of 4.5-5% range, driven by N. America. Expects 2% FX hit from weak GBP.
Mitie Group expects H1 revenue growth +2-3% YoY, with op. profit “flat to slightly down” due to weakness in Social Housing and Cleaning, in-line with expectations. Majority of businesses performing well, FY expectations unchanged.
NCC makes solid start to year, continues to trade in-line with Board’s July expectations for full year adjusted operating profit. James Halstead FY revenues +3.6%, pre-tax profits +0.2% due to investment in new products, div +4.3%, remains vigilant on lack of Brexit clarity.
In focus today: this evening’s US Fed monetary policy update (7pm; interest rate hike expected), along with updated economic projections and a press conference (7.30pm) with Chair Powell. President Trump also chairs the UN Security Council meeting on Iran where he is expected to raise calls to isolate the Middle Eastern nation, while Europe/Russia/China try to circumvent sanctions.
In terms of data, this morning’s UK Mortgage Approvals (9.30am) will be looked to for their read-across to FTSE Housebuilders and Banks. After that, US New Home Sales (3pm) for August should rebound while oil prices may be sensitive to US EIA Oil Inventories (3.30pm).