WWe have seen more records for the FTSE250 and the Stoxx600 today, with the FTSE100 once again the eternal party’s poor, lagging behind due to underperformance in the basic resource sector.
The FTSE250 was led higher by decent figures from Savills, the estate agent who surprised the markets by reporting underlying pre-tax profit of £ 66.1million, well above expectations of 13 , £ 2million, while Greggs and Trustpilot also made decent gains.
Rio Tinto, Anglo American and BHP as well as Glencore are all lower than concerns over demand for iron ore from China, as prices slide to their lowest level in four months. The declines come despite Glencore’s record profits and a 32% increase in revenue, as the company announced $ 1.18 billion in dividends and buybacks when it released its first half figures today.
Lloyds Banking Group is also down sharply after being cut to sell by Goldman Sachs, amid concerns over margins in the UK mortgage market.
On the positive side, Rolls Royce appears to have made strides in reducing its cash leakage, which is how it was able to surprise the markets with an unexpected profit of £ 393million in the first half of the year, beating consensus expectations of a small loss. This was helped by a better-than-expected improvement of £ 600m in free cash flow, which, although still negative at £ -1.17bn, remains a marked improvement over there is one year old. The company also announced last night that it is in talks with Bain Capital about selling ITP Aero, its Spanish business for £ 1.6bn, which looks a lot more like it and will likely be necessary given the results. of the first half of today.
It still lags behind the Big Engine (EFH) flight hours which have improved to 43% but still remain below the end-of-year target of 55%, which the company conceded due to delays in restarting international travel could take a little longer.
The advertising world seems to be returning to a semblance of normalcy if today’s interim results from WPP are any guide. A strong H1 saw revenues return to 2019 levels a year ahead of management expectations, reaching £ 6.1bn, up 9.8%. Much of the increase has come from digital media and e-commerce.
The company has raised its advertising forecast for 2021 to 19% growth, with operating margins expected to be in the upper range of 13.5% to 14%, rising to 15.5% to 16% in 2023 The company announced an interim dividend of 12.5p, and plans to buy back £ 350m of its own shares in the second half of the year.
Packaging company Mondi also released a decent first-half update, with revenue reaching £ 3.6bn, up from the same period a year ago, although pre-tax profits were slightly lower at £ 461m of pounds sterling. operating margins are also lower than a year ago, although they have improved over the previous six months, reaching 19.5%.
US markets opened higher after weekly jobless claims were recorded as expected, but continuing claims fell sharply, from over 300,000 to under 3 million and 2.93 million and a post-pandemic low.
With wages in the United States tomorrow, this looks to be another positive news, adding to the anticipation of a decent jobs report in July.
Uber shares hit a nine-month low early in the session, despite lower revenues and bookings for the second quarter. Gross bookings reached $ 21.9 billion, while decent growth in its delivery business helped boost revenue to $ 8.6 billion. Losses were higher at $ 509 million due to the need to spend more money to recruit drivers on the platform as demand for delivery capacity increased sharply. Uber said it expects losses to narrow to $ 100 million in the third quarter and expects a profit in the fourth quarter. As unemployment benefits expire in September, driving costs are expected to moderate as more people are forced back into the workforce.
Robinhood Markets, after two days of big gains, stocks fell after a number of shareholders asked to sell up to 98 million shares. The shareholders in question appear to be the same investors who came to the company’s rescue when they needed help earlier this year as the very stock craze threatened to spiral out of control.
Moderna, also continued to reap the rewards of its own vaccine candidate, with shares hitting new records afterwards, posting second-quarter revenue of $ 4.4 billion well above expectations as the vaccine contributed to to the tune of $ 4.2 billion. Profits reached C $ 6.46 as the company announced a 2-year, $ 1 billion share buyback program. We also saw the latest vaccine data which showed the second Covid vaccine was still 93% effective 6 months after being delivered. Twelve months ago, second-quarter revenue was just $ 67 million, showing how far this company has come in the space of a year. Annual investments for 2021 are expected to be in the range of $ 450 million and $ 550 million as the company strives to add additional capacity.
The pound has elicited relatively little reaction to today’s Bank of England policy decision, which produced political dissent over MPC external member Michael Saunders’ bond buying program, as it filled the void left by chief economist Andy Haldane, now chief dissident. Overall, the move was more positive than negative, with the bank committing to start rolling back QE when the bank rate hits 0.5%. This was previously set at 1.5%, while the bank also improved its GDP forecast for 2022 and 2023, while keeping 2021 unchanged at 7.25%.
The Australian dollar is among the best performers today, with some citing a better-than-expected trade report for June. The big improvement in numbers appears to offset growing concerns over tighter restrictions, as Melbourne heads for another lockdown and Sydney’s infection rates rise. Today’s rebound may only be a brief respite as June’s numbers are largely mirrors.
Crude oil prices are on the rise again after three days of decline, with the rise limited by concerns about rising Delta infections in China, as well as the rest of Asia. Any downside is likely to be limited by US gasoline inventories which yesterday fell to their lowest level this year as the US driving season peaks.
Gold prices don’t seem to know which direction to turn with the way the bond markets have traded in recent days, testing both the high and low of its recent range. A decent payroll report tomorrow may well see the yellow metal bounce back towards $ 1,790, with today’s sharp drop in continuing claims helping to curb any attempt to rise.