(Alliance News) - Equities in London are called to open lower on Tuesday, in a sign of some nerves ahead of readings of the US labour market which are released as the week progresses.
The job openings and labour turnover survey reported at 1500 BST Tuesday could provide an insight into the health of the US employment market ahead of Friday's official nonfarm payrolls data, and Wednesday's precursor ADP jobs report.
Focus on Tuesday will also be on Federal Reserve Chair Jerome Powell, who speaks at a central banking conference in Portugal.
An inflation reading in the eurozone, meanwhile, will put the European Central Bank under the spotlight this morning.
"The aggregate inflation figure for early June is due today, both headline and core inflation are expected to have eased slightly in June. If that's the case, we could see the ECB doves breathe a sigh of relief, if not, the euro could see a minor support but in both cases, the euro will remain under the pressure of French political uncertainties throughout the week, and any rally attempts could limited into the second election weekend in France," Swissquote analyst Ipek Ozkardeskaya commented.
In early UK corporate news, Sainsbury's hailed grocery market share gains, budget carrier Ryanair enjoyed a record June, while footwear retailer Shoe Zone warned on profit.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.5% at 8,127.66
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Hang Seng: up 0.2% at 17,749.36
Nikkei 225: up 1.1% at 40,074.69
S&P/ASX 200: down 0.4% at 7,718.20
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DJIA: closed up 50.66 points, 0.1%, at 39,169.52
S&P 500: closed up 0.3% at 5,475.09
Nasdaq Composite: closed up 0.8% at 17,879.30
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EUR: higher at USD1.0734 (USD1.0723)
GBP: flat at USD1.2638 (USD1.2639)
USD: higher at JPY161.70 (JPY161.58)
GOLD: higher at USD2,329.31 per ounce (USD2,327.85)
(Brent): higher at USD86.77 a barrel (USD86.18)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 BST eurozone unemployment
10:00 BST eurozone CPI
14:30 BST US Federal Reserve Chair Jerome Powell speaks
15:00 BST US job openings and labour turnover survey
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The outcome of the election is not a "forgone conclusion" and the decision of a small number of voters could swing it away from a huge Labour majority, UK Prime Minister Rishi Sunak is to say. The prime minister will urge wavering Tory voters to stick with his party in a speech during the final 48 hours of the general election campaign. Multiple opinion polls have suggested the Labour party is on course for a huge majority in Parliament following the election. The Conservatives have dubbed this an unaccountable "supermajority", in a bid to dissuade voters who would usually back them from switching to rival political parties. Speaking in Oxfordshire, the prime minister will say: "The outcome of this election is not a foregone conclusion. If just 130,000 people switch their vote and lend us their support, we can deny Starmer that supermajority."
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UK opposition leader Keir Starmer has said a big majority would be "better for the country", as the Tories continue to urge voters to proceed with caution and not hand Labour a "blank cheque". With just 48 hours to go until polling day, Sunak has repeated the warning that Labour could achieve a "supermajority", allowing the party to raise taxes, which he claimed is in its DNA. In an interview with The Times, Starmer said he needed a "strong mandate" to reform the planning system and improve the economy. Asked if he was saying the bigger a majority, the better, he told the newspaper: "Better for the country. Because it means we can roll up our sleeves and get on with the change we need."
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UK food inflation is now lower than at any time since 2021, according to new figures. Food prices were 2.5% higher than a year ago in June, down from 3.2% in May – well below the three-month average rate of 3% and the fourteenth consecutive slowing of inflation, according to the British Retail Consortium-NielsenIQ shop price index. Food inflation is now lower than at any point since December 2021, helped by falling prices for key products such as butter and coffee. Fresh food inflation slowed further to 1.5%, down from 2% in May. Overall shop price inflation eased to 0.2% in June, down from 0.6% in May, and its lowest point since October 2021.
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BROKER RATING CHANGES
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JPMorgan adds National Grid to 'analyst focus list'
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Deutsche Bank cuts Quilter to 'sell' (hold) - price target 95 pence
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COMPANIES - FTSE 100
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Sainsbury's said it made the biggest market share strides in the grocery industry in recent weeks, helping the company record a rise in first-quarter sales. The supermarket chain said total sales in the 16 weeks June 22 rose 4.2% on-year. Grocery sales alone rose 4.8%. Sainsbury's said total retail sales, excluding fuel, rose 2.6%, while like-for-like sales climbed 3.0%. The like-for-like measure also excludes fuel. "We are pleased with our market-beating grocery performance and the early progress we're making against our next level Sainsbury's plan. We've been winning from competitors every month for 15 months, as more and more people are choosing Sainsbury's for their big weekly shop," Chief Executive Simon Roberts said. Citing Kantar data, Sainsbury's said it made the "biggest market share gains of any grocer" in the 14 weeks to June 9. Away from grocery, the picture was less bullish for the firm. General Merchandise & Clothing sales were down 4.3%. Argos sales fell 6.2%. "Sainsbury's General Merchandise & Clothing performance reflects improvement in clothing trend offset by weaker seasonal general merchandise sales," it said. "Argos sales declined against a particularly strong comparative period with significantly lower seasonal sales and weaker consumer electronics demand, notably in gaming." Looking ahead, the firm still expects retail underlying operating profit between GBP1.01 billion and GBP1.06 billion, growth between 5% and 10% on-year. CEO Roberts added: "Our summer ranges are the perfect complement to this summer of sport and we're gearing up for Wimbledon this week and England's quarter-final match on Saturday night."
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COMPANIES - FTSE 250
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Wizz Air reported capacity growth but a slight decline in passengers numbers last month. The budget carrier said June capacity rose 0.4% on-year to 5.8 million seats. Passenger numbers fell 0.2% to 5.3 million. Its load factor shrank to 91.7% from 92.2% a year earlier. On a rolling 12-month basis, however, capacity was 14% higher, passengers numbers up 15% and the load factor improved to 90.1% from 89.4%. For the whole of the first-quarter of its financial year, seat capacity rose 0.7% year-on-year, with passenger numbers up 0.5%, Wizz Air said. Wizz Air's financial year runs to March.
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OTHER COMPANIES
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Ryanair said its June traffic hit a record high, topping the 19 million passenger mark for the first time. Passenger numbers rose 11% year-on-year last month to 19.3 million, the budget airline said. Its load factor was unmoved at 95%. Ryanair said it is the "first ever month to exceed 19 million guests". The closest it had previously come to that threshold was in August 2023 when traffic spiked to 18.9 million.
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Craneware said it has teamed with Microsoft, in areas such as data analytics and artificial intelligence. Craneware, which provides software to the healthcare market, said the pact will "strengthen our relationship with Microsoft". It added: "The collaboration will see the delivery of differentiated offerings and increased value to customers through the application of industry leading data analytics, AI, and modern platform technology. As part of the agreement, Craneware's Trisus Platform and select Trisus offerings will be available on the Azure Marketplace."
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Retailer Shoe Zone warned on profit, as it cautioned it is still grappling with "cost pressures associated with container prices". Shoe Zone, which said the cost climb is due to a fall in the supply of shipping vessels and the continuation of a reroute away from the Suez Canal, now expects adjusted pretax profit for the year to October 2 of "not less than GBP10.0 million". In May, it had lowered its profit forecast to GBP13.8 million from GBP15.2 million.
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Consumer goods product supplier Supreme upped its payout and reported a rise in earnings, as it shrugged off a possible UK ban on disposable vapes. Revenue in the year to March 31 rose 42% to GBP221.2 million from GBP155.6 million. Pretax profit doubled to GBP30.1 million from GBP14.4 million. Supreme proposed a 3.2 pence per share final dividend. It means its total dividend for the year is 57% higher at 4.7p per share from 3.0p. "Supreme forecasts FY25 to be another profitable and highly cash-generative year for the group. Having made a positive start in Q1, the group is trading comfortably in line with current market expectations," it added. "The company's FY25 trading outlook for the Vaping and Branded Distribution divisions is expected to be largely unaffected by the government's proposed future disposable vape ban."
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By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
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National Grid (NG.)
Quilter (QLT)
Sainsbury's (SBRY)
Wizz Air (WIZZ)
Craneware (CRW)
Shoe Zone (SHOE)
Supreme Plc (SUP)
