Mike van Dulken at Accendo Markets, commented to clients this morning:
FTSE 100 called to open +5pts at 7190, holding yesterday’s 7150 bounce (and above the 200-day moving average) but hindered by 2-week intersecting resistance at 7200. Bulls need a break above 7205 for further upside towards 7315; Bears a breach of 7180 for a retreat towards 7150. Watch levels: Bullish 7205, Bearish 7175
Calls for a tepid open come after another weak session in Asia following a negative close on Wall St as worries over economic growth persist by way of US-China trade dispute and record low bond yields (inverted yield curve) which could be a recessionary signal.
Oil prices still in recovery, Brent close to recovering a $70 handle. Gold back in retreat, despite equity falls, due to USD strength. Copper off its worst levels, although holding around lows. GBP off lows, which could hinder a FTSE breakout.
In corporate news this morning;
Imperial Brands: continued to gain share over recent months; 14bp gain over past 26-weeks. Expects FY US industry volume declines will be maintained around 4.5-5%.
Johnson Matthey FY revenues +5% (+10% ex precious metals), pre-tax profit +53%, final dividend +7%; Expects more modest growth in 2019/20 with investments hurting margins.
FirstGroup FY underlying group revenues +5.7%, underlying adj. Operating profit +10.5%, statutory net loss narrows; Selling Greyhound after investor pressure, North America to become core market.
Inmarsat partners with Airbus to deliver transformation of Global Xpress network; contract for three next generation satellites, first launch 2023; on track to for annual Global Xpress revenue run rate of $500m by end 2020.
Pennon FY underlying revs +6.1%, EBITDA +7.2% (+5.4% adj.), op profit +8.4%, pre-tax +8.3%, net debt +9.9%, final div +6.0%; South West Water confident of outperformance;
Restaurant Group confirms Andy Hornby as CEO from 1 Aug 2019.
Equiniti completed technical separation of EQ US division from Wells Fargo.
Greencoat UK Wind raises £375m via equity capital raise to pursue investments and cut debt; recently said would raise £500m over next 12 months.
Ratings agency Fitch affirms Stagecoach at 'BBB'/Negative; Withdraws Ratings
De La Rue profits fall 78%, despite revenues rising 14%, due to exceptional charges from Venezuela sanctions. CEO to step down and leave board. Final div flat.
Daily Mail Gen Trust FY underlying revenues +1% (reported -3%), operating profit +11% (+8%), pre-tax profit +19% (-3%), interim dividend +2.8%; FY outlook in-line with consensus.
In focus today:
Beware of risk off among Miners late today with China PMI Manufacturing data expected overnight (2am), consensus expecting a return to contraction.
US GDP (1.30pm; Q1, 2nd estimate) is expected to confirm a re-acceleration from 2.2% QoQ, but to 3.1% vs the advance estimate of 3.2%.
A softening in GDP price data (1.30pm), which has inflationary read-across, would back up some expectations for a Fed rate cut.
US Pending Home Sales (3pm) may show a weakening in monthly growth which keeps the annual figure under pressure.
EIA Crude Oil Inventories (4pm) will be watched after last night’s API report showed a build in oil stocks.