Mike van Dulken & Vlad Totia at Accendo Markets, commented to clients this morning:
FTSE 100 called to open -37pts at 7260 (ex-dividends -23pts), back from overnight highs of 7311. Bulls require a break above 7280 to challenge the highs. Bears require a breach of 7245 overnight lows for a further retrace towards 7129. Watch levels: Bullish 7315, Bearish 7240
Calls for a negative open come as 3 of the top 5 companies in the FTSE 100 by market capitalization pay dividends today and PM May faces another call for resignation as well as a deadlock in Brexit negotiations with the opposition.
Asian markets mixed after Donald Trump announced banning Huawei telecom equipment but delaying implementation of auto tariffs on the EU and Japan for 6 months. US Markets up slightly as trade worries make room for optimism.
Gold ($1296) moving within a 0.6% descending range as trade tensions ease. Brent Crude Oil ($72.4) keeps pointed to the upside as Middle East tensions persist, stoking supply fears. Copper ($2.73) benefiting from trade war fears easing and a weaker USD. GBP ($1.28) at Feb lows due to political infighting and a strengthening USD.
In corporate news this morning;
Lloyds to pay quarterly dividends from 2020; Q1-3 = 20% of prior year; Q4 = 80% announced with FY results; will continue to consider ways to return excess capital.
National Grid FY operating profit -18% (underlying -2%), pre-tax profit -31% (underlying -3%), EPS -57% (underlying +5%); final dividend +2.7%; RoE -50bp; Cadent sale expected by June with £2bn proceeds; Asset growth on track for top end of 5-7% range in med-term.
Scottish Mortgage Inv Trust reports full year NAV +14.6% (fair value; book value +14.4%), outperforming its FTSE All-World index benchmark (+10.7%).
3i Group FY total return -12.1% YoY (18% return vs 24% prev.), NAV +12.5%, Operating expenses +4.1%, operating cash profit +318%, Gross Investment return 21% vs 27% prev., dividend -9% YoY. 2020 started like 2019, much uncertainty, remain cautious.
Micro Focus expects interim results in -line, on a constant FX basis, with guidance given on 14 Feb (revenues -4 to +6%); collection of aged trade receivables has continued in line with expectations.
Burberry FY revenues flat (-1% at constant FX), in-line; revenues +2% ex-Beauty Wholesale; adj. operating profit -6%, bottom end of consensus range; Adj. EPS flat just above consensus. Confirms guidance for broadly stable revenue and adj. operating margin at CER in FY 2020; H2-weighted.
Balfour Beatty on track to deliver performance in line with full year expectations.
Countryside Properties says H1 pre-tax profit slips 2.8% on higher costs on revenues +27%, but well placed to deliver on full year expectations. Order book +44%; interim div +42%;
Grainger H1 net rental income +33%, like-for-like rental growth +3.7%, pre-tax profit +7%; interim dividend +10%. Market portfolio +0.6%; in a strong position to deliver a good performance in H2 and a positive overall result
Premier Oil YTD production +14% to 85.1K boepd, increases FY guidance to 75-80K boepd. 2019 operating costs and capex guidance unchanged; Net debt reduced to $2.25B; forecast 2019 net debt reduction at upper end of $250-350m guidance, at current oil prices.
Just Group Q1 retirement income sales -59%, defined benefit sales -90%, GIFL sales -23%; Lifetime Mortgage advances -47%; quiet start to year, but DB transaction volumes in Q2 been good.
In focus today:
US Housing Starts and Building permits (1.30pm) could further boost stateside market sentiment should they deliver the rebound consensus has pencilled in. A pick-up in the Philly Fed (1.30pm) has potential to do the same. Watch USD (and GBP) and US stocks.
Results from across the pond include NVIDIA (barometer of tech sentiment and economic growth?), Pinterest (another recent tech IPO), Walmart (anything more about an ASDA IPO?).
Elsewhere, a Eurogroup meeting could see comments about the Eurozone economy. We get speeches from ECB Chief Economist Praet (8:30am) and De Guindos (2.30pm), both at a conference “European Financial Integration and Stability – The International Role of the Euro”.
Bundesbank head and ECB member Weidmann (9.15am and 5.30pm), Coeure (7pm) and Bank of England’s Haskel (6.30pm) could also move their respective Euro and Sterling currencies.