FTSE 100 Makes Further Progress, C&C Shares Drop 10%
The FTSE 100 index has made stronger-than-expected progress as the top flight approaches an all-time high.
The London blue-chip index rose 45.30 points to 7839, with British Airways owner IAG and London Stock Exchange among the stocks rising about 2%.
The start of Wall Street’s quarterly earnings season, with earnings expected this afternoon from leading banks including Citi and JPMorgan Chase, will test confidence later on.
During today’s session, shares of Taylor Wimpey were flat at 112p after the trade update showed much lower sales alongside a plan to deliver £20m in cost savings.
Bulmer’s beverage company C&C fell the most in the FTSE 250 after downgrading earnings estimates for the year. Shares fell 10% or 18.1p to 165.7p.
FTSE 100 up, record in sight
The FTSE 100 is expected to remain within sight of its all-time high after CMC Markets predicted a positive start for European markets today.
The London intraday record of 7903 was set in May 2018, with the best closing level being 7877 in the same month. CMC expects the top flight to open 12 points higher at 7806.
The FTSE 100 is currently at its four-year high, up 4.5% year-to-date amid strong gains for retailers and homebuilders and after the reopening of China’s economy, boosting commodity stocks got.
Stocks received a further boost yesterday as US economic data suggested the Federal Reserve is finally winning the battle against inflation.
The US consumer price index, which peaked at 9.1% in June, fell for the sixth month in a row in December and now stands at 6.5%.
However, that is still significantly above the Fed’s 2% target and economists expect a further rate hike of at least 0.25% at the central bank’s February meeting.
GDP exceeds expectations after World Cup boost
GDP rose 0.1% in November after the services sector grew 0.2% thanks to a World Cup boost for pubs and bars during the month.
The overall performance beat City expectations for a 0.2% drop and kept hopes alive that the UK can avoid a recession, which is defined by two successive quarters of contraction.
GDP fell in the three months to September and the quarter-on-quarter performance in November showed a decline of 0.3%.
A strong run of retail updates means resilient performance in December is still a possibility, although much will depend on how union action affected production in the month.
Jonathan Moyes, head of investment research at the Wealth Club, said: “It may be too early to mark the start of a turnaround in sentiment for the UK, but a quiet consensus seems to be forming.
“Energy prices are falling sharply, China is reopening and interest rate expectations have eased significantly.”
Today’s figures from the Office for National Statistics for November show manufacturing output fell 0.5% in the month, while construction remained flat.
Taylor Wimpey warns of ‘significantly lower’ sales, announces cuts to save £20m a year
Taylor Wimpey has become the latest homebuilder to warn of the impact on the mortgage market that followed last year’s “mini” budget, though it stuck to its annual earnings forecast.
The FTSE 100 company pointed to “ongoing market uncertainty” and said “sales remain significantly below pre-mortgage interest levels in Q3 2022.” It means the company expects fewer new sales in the coming year, with “overall volumes expected to decline in 2023.
It has begun consultations on what it termed “proposed changes” to save around £20 million in costs a year, cuts expected to cost around £8 million.
The number of new homes completed fell from 14,302 to 14,154 and the average UK private sale price increased by 6% to £325,000.
But it stuck to its exciting full-year profit forecast of £921m when it reports its full results in early March.
Jennie Daly, CEO, said: “We have acted quickly and decisively to respond to changing market conditions and continue our efforts to maximize efficiency. Despite the near-term uncertainty, we remain confident that the fundamentals of our business remain very attractive in the medium to long term.”
ITV sound optimistic about new streaming service
ITV released an optimistic note about its new streaming service ITVX this morning, a month after its launch.
The broadcast company said it delivered a 55% increase in ITV’s streaming hours in the first month after launch (8 December 2022 – 7 January 2023) compared to the same period last year, while increasing ITV’s online user base by 65%. increased. That increase drops to 29% if you exclude people who watch World Cup matches.
Carolyn McCall, CEO of ITV, said: “It’s great to see so many new viewers coming to ITVX. Viewers have welcomed our strong roster of commissioned launch titles exclusive to ITVX, with many viewers coming from harder-to-reach audiences.
“ITVX has also landed very well with advertisers who see the added value of the scale and reach of audiences they can now target in a high-quality, brand-safe and measurable streaming environment.”