FTSE 100 at 2-week lows
The FTSE 100 is down 0.2% in early trade today and testing fresh two-week lows.
Economic calendar: NFP preview
The UK economic calendar today is headlined by construction PMI figures out this morning. Attention turns to North America this afternoon, when we have Canadian jobs data.
However, the key economic event of today is the all-important US non-farm payrolls.
NFPs are forecast to rise at a slightly faster rate in July compared to June, although eyes will be on wage growth as economists think this will ease from June and take some pressure off the Federal Reserve to keep hiking interest rates.
‘All eyes will turn to the US jobs report today, as the market refocuses on Fed policy after the Fitch downgrade of US credit rating caused a risk off response in the markets, which sent the dollar and long-dated bond yields surging higher. The US dollar, gold and EUR/USD outlook could be impacted if we see a jobs report that deviates significantly from expectations,’ said our analyst Fawad Razaqzada.
You can find out what to expect ahead of the key event today in our Nonfarm Payrolls Preview, including how it may impact gold and EUR/USD.
FTSE 100 analysis: Where next for the UK 100?
The UK 100, which tracks the performance of the FTSE 100, tried to rebound from two-week lows before the bell today before slumping in early trade to fresh 2-week lows.
The long lower wick of the candle yesterday suggests we are at levels needed to bring buyers back into the market and that 7,500 should provide support, but any sustained slip below here risks seeing it fall back toward 7,450.
On the upside, the immediate target is to climb back above 7,650 before it can eye the upper falling trendline that has contained any increase for most of 2023.
Top UK stock news
UK travel stocks such as IHG, Whitbread, WH Smith, SSP Group are up 0.2% to 1.4% and airlines like easyJet, Wizz Air, IAG and Jet2 are up 0.5% to 0.9% today after Booking Holdings, one of the world’s largest online travel booking sites, beat expectations in the latest quarter and said demand for leisure travel remains robust. ‘We have seen these strong trends continue into July, and we are currently preparing for what we expect to be a record summer travel season in the third quarter,’ said Booking CEO Glenn Fogel.
WPP is trading lower this morning after the media, advertising and PR giant lowered its growth expectations for the full year as demand in North America is falling and China’s recovery isn’t providing as big of a boost as hoped. Revenue was up 6.9% in the first half of 2023 at £7.22 billion and came in ahead of the £6.78 billion forecast, with like-for-likes rising 2.3%. We saw sales decline in North America and China returned to growth, but not as much as WPP had anticipated. WPP said it is now expecting annual like-for-likes to grow 1.5% to 3%, down from its previous range of 3% to 5%. Adjusted pretax profit in the first half of £562 million was down 2.9% from the year before. WPP maintained its interim dividend at 15p.
Capita is down 1.5% after the outsourcer reported higher revenue and adjusted profits in the first half, but sank into the red at the bottom-line because of asset disposals, impairments and the costs of dealing with a cyber-attack. Revenue was up 6% at £1.4 billion and adjusted pretax profit rose to £33.1 million from £24.7 million the year before. However, it turned to a reported pretax loss of £67.9 million. Capita reiterated its full year outlook. ‘We have delivered increased adjusted revenue growth for the fourth successive reporting period, improving profitability, winning an increasing amount of work with new clients, and remain on track to deliver on our full-year expectations,’ said CEO Jon Lewis.
Halma is down 0.1% after announcing it has bought an Australian firm that designs and makes safety solutions for industrial press brake applications named Lazer Safe, which uses lasers to protect workers whilst they use machinery to make sheet metal. It is paying around AUD45 million on a cash-and-debt free basis. Lazer Safe reported revenue of AUD21.8 million in the 12 months to March 31 and has a return on sales at the upper end of Halma’s 18% to 22% target range.
Telecom Plus is up 2% this morning after it said it the strong performance it delivered in the last financial year has continued in the new one, giving it the confidence to aim for double-digit percentage growth in customer numbers and adjusted pretax profits this year. The utility provider, ahead of its annual general meeting later today, said energy price volatility has ‘reduced significantly over recent months’.
Morgan Advanced Materials is down 0.2% after reporting a steep drops in profits in the first half of 2023 after a cyber-attack earlier this year impacted profitability, with the firm still trying to bounce back. The company, which makes specialist ceramics and composites, was hit by a cyber-attack in January and this has cost significant sums to rectify. Adjusted operating profit was down 31% at £50 million, despite sales continuing to grow by 4.5% to £553.9 million. It kept its interim dividend flat at 5.3p. The company reiterated its full year profit goal.
JD Sports has been reinstated at Reduce by Numis, which has a price target of 140p on the retailer. The athleisure store owner is down 0.9% in early trade at 149.30p.
TI Fluid Systems has been upgraded to Buy at Jefferies, which has a 150p price target on the stock. The company, which builds fluid storage systems for the automotive industry, is up 1.7% at 129.20p.
Wood Group has been raised to Buy at Jefferies and given a price target of 210p. The oilfield and energy services provider is up 2.5% at 161.70p this morning.