(Alliance News) - Stocks in London are expected to fall into the red at Friday's market open, as investors look ahead to the remarks from the Federal Reserve at a gathering of central bankers.
Investors' focus is on the main event of this week: Fed Chair Jerome Powell's keynote speech at the Jackson Hole economic symposium in Wyoming.
He is due to give a 25-minute speech at around 10.05 EDT, or 15.05 BST.
There will also be an address from European Central Bank President Christine Lagarde later on Friday.
During the Saturday session, there will be a panel featuring Bank of England Deputy Governor Ben Broadbent and Bank of Japan Governor Kazuo Ueda, which will discuss the topic of 'Globalization at an Inflection Point'.
In early UK economic news, consumer confidence improved slightly in August. Energy regulator Ofgem slashed the price cap on energy bills to GBP1,923 as wholesale prices fell further.
In UK company news, CMC Markets warned that challenges continued in August, and it expects annual profit to come behind the prior year. Panthera Resources said it has secured long-awaited litigation financing for its subsidiary's claims in India, after a lengthy due diligence process.
Here is what you need to know at the London market open:
FTSE 100: called down 8.0 points, 0.1%, at 7,325.63
Hang Seng: down 1.1% at 18,013.02
Nikkei 225: closed down 2.1% at 31,624.28
S&P/ASX 200: closed down 0.9% at 7,115.20
DJIA: closed down points 373.56, or 1.1%, at 34,099.42
S&P 500: closed down 59.70 points, or 1.4%, at 4,376.31
Nasdaq Composite: closed down 257.06 points, or 1.9%, at 13,463.97
EUR: down at USD1.0789 (USD1.0835)
GBP: down at USD1.2578 (USD1.2639)
USD: up at JPY146.11 (JPY145.66)
Gold: down at USD1,914.72 per ounce (USD1,921.41)
Oil (Brent): up at USD83.66 a barrel (USD82.41)
(changes since previous London equities close)
Friday's key economic events still to come:
10:00 CEST Germany Ifo business climate index
09:30 BST UK capital issuance statistics
10:05 EDT Federal Reserve Chair Jerome Powell keynote speech at Jackson Hole
10:00 EDT US University of Michigan survey of consumers
UK consumer confidence is showing "renewed optimism" against a backdrop of falling core inflation, figures suggest. GfK's long-running consumer confidence index improved five points in August, with all measures reversing the drop seen in July, although it remains firmly in negative territory at minus 25. Confidence in the general economic situation for the next 12 months increased by three points to minus 30 – 30 points better than last August – against a backdrop of falling core inflation, higher interest rates and rising average weekly earnings, GfK said. The forecast for personal finances over the coming year increased four points to minus three – 28 points higher than this time last year.
Ofgem has slashed the price cap on energy bills to GBP1,923 after wholesale energy prices fell further, it announced on Friday. The energy regulator said it was cutting the price that a supplier could charge for gas from 6.9p per kilowatt hour today to 6.89p from October 1. The price of electricity will fall from 30.1p per kWh to 27.35p, Ofgem said. This means that the average household bill will end up at around GBP1,923 per year, according to the regulator's calculations. Customers on prepayment meters will pay GBP1,949 on average. Because the cap decides the per unit charge, households that use more will pay more.
Germany's gross domestic product was flat in the recent three months from the first quarter. It was in line with a previous estimate from the statistics body at the end of July. In late May, Germany was confirmed to have fallen into a technical recession, after two consecutive quarters of negative economic growth at the end of 2022 and start of 2023. GDP contracted 0.1% in both the fourth and first quarters. On an annual basis, the German economy was confirmed to have shrunk 0.2% in the second quarter, after a 0.5% annual contraction in the first quarter.
BROKER RATING CHANGES
Jefferies raises Aston Martin Lagonda Global to 'buy' (hold) - price target 420 (300) pence
Barclays cuts Harbour Energy price target to 390 (450) pence - 'overweight'
COMPANIES - FTSE 250
CMC Markets warned it had seen a "more challenging environment" in August, after warning of subdued market conditions at the end of July. The online trading platform said it saw "markedly lower" monetisation of client trading activity, due to a higher proportion of lower-margin institutional volume. Trading and investing net revenues are trending 20% lower year-on-year, it said. "Whilst underlying market activity has the potential to recover, should year-to-date market conditions continue for the remainder of FY24 then it is expected that net operating income will be between GBP250 million and GBP280 million, the firm said. In the financial year ended March 31 2023, net operating income had been GBP288.4 million. CMC left its expectations for annual operating costs, excluding variable remuneration, unchanged at GBP240 million. "Core KPIs including client money, assets under administration, and active clients across both the trading and investing businesses remain robust with no material change seen through recent weeks," it added.
Panthera Resources said it has secured funding for its subsidiary's legal claims in India. After extending the deadline for due diligence several times, the gold explorer confirmed that LCM Funding SG has completed the due diligence and issued the funding confirmation notice for USD13.6 million. An unconditional funding facility has been made available to Indo Gold, Panthera's subsidiary, to support its claims against the Republic of India. The funds are made through a conditional arbitration funding agreement, and are therefore only repayable in the event of a successful recovery. "We are pleased that LCM has reaffirmed its view that IGPL has a meritorious claim against the Republic of India. LCM's detailed examination, supported by advice from multiple legal, mining and valuation experts over many months reinforces the view that an actionable expropriation, amongst other Treaty breaches perpetrated by India, has occurred to an asset of substantial value to the company," Mark Bolton, Panthera's managing director, said. The claims relate to a rejected prospecting licence application in Rajasthan, India.
Wesfarmers reported a rise in annual profit, with the Perth-based conglomerate getting growth in both its key retail and chemical divisions. Net profit rose 4.8% to AUD2.47 billion, about USD1.58 billion, in the financial year that ended June 30 from AUD2.35 billion the year before. Revenue rose 18% to AUD43.55 billion from AUD36.84 billion. It was up by 7.4% when excluding Wesfarmers Health. This division was created from an acquisition made in March 2022 and integrated during financial 2023. Looking at other divisions, the two retailing businesses, Bunnings and Kmart, saw 4.4% and 16.5% revenue growth, respectively. Wesfarmers declared a final dividend of AUD1.03 per share, bringing its full-year payout for the recent year to AUD1.91, up 6.1%. Looking ahead, Wesfarmers said it expects cost pressures in Australia and New Zealand to remain elevated.
By Elizabeth Winter, Alliance News senior markets reporter
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