Asian markets weakened slightly overnight with the Hang Seng down almost -0.20% while the Nikkei ended flat at 22,011 following the pressure of a stronger yen. The Bank of Japan has forecast slightly higher growth and kept interest rates on hold – no tightening expected in the medium term.
In the US the Dow closed down -0.36% last night but Apple stock touched new intraday highs while the stock closed up +2.3% at $166 as anticipation builds on sales for new iPhones 8 and X.
Overnight the euro was -0.07% down against the dollar at 1.1644 while the pound was up +0.05% at 1.3218. The pound has more or less priced in a Thursday +0.25% rate rise from the Bank of England but it will be the tone of delivery on future possible rises that will matter most on Thursday.
However a ‘wild’ card may still be played – no rate rise, which will exert pressure on sterling. Some economists worry the UK economy is slowing. “There may be further Brexit negotiation uncertainty, but there is arguably a lot of it already. Instead, we prefer to trade with conviction the idea that this [rate rise] is not a policy mistake and that the BoE is on a hiking cycle,” Nomura told poundsterlinglive.
Meanwhile, all eyes on the share direction of bookies such as William Hill, Ladbrokes Coral and Paddy Power Betfair. The release of a government review on fixed-odds betting terminals – responsible for a huge chunk of profits – is due later this morning. EU GDP numbers are out later.
- UK FTSE 100 7,487.81 -0.23%
- Dow 23,348.74 -0.36%
- S&P 500 2,572.83 -0.32%
- Nasdaq 6,698.96 -0.03%
- Nikkei 225 22,011.61 -0.01%
- DAX 13,229.57 +0.09%
- CAC 40 5,493.93 -0.01%
- Gold 1,278.20 +0.04%
- Oil WTI 54.10 -0.09%
Ryanir profits surge; BP confirms share buyback
Despite recent chronic flight cancellations – and a very public dunking – Ryanair claims a +11% half year profits climb to €1.29bn. This reporting period does not include the brunt of the cancellations difficulty – 700,000 passengers were affected – so the latest numbers need to be read in the light of that.
Ryanair claims passenger traffic was up +11% to 72.1m. Interestingly, Ryanair claims full-year profit guidance of €1.4-1.45bn is still on track. Fares are predicted to slip between four and six percent in the second half of the year.
“These results,” says Ryanair CEO Micheal O’Leary, “reinforce the robust nature of Ryanair's low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function in early September."
BP claims third quarter oil and gas production climbed +14% while its underlying replacement cost profit – a key oil industry metric – came in at $1.9bn compared with $684m for the second quarter. The dividend is unchanged at 10 cents a share and BP has confirmed it is recommencing a share buyback program in the fourth quarter.
Several new upstream projects have generated healthy earnings and cash flow, BP claims. “There is still room for further improvement and we will keep striving to increase sustainable free cash flow and distributions to shareholders,” CEO Bob Dudley said.
WPP snips forecasts again
Ad giant WPP – its share price is down from £19 earlier in the year to under £13 – says third quarter revenues are up +1.1% at £3.64bn. But like-for-like net sales slipped -1.1% though WPP says this is an improvement on the second quarter. On a constant currency basis, operating profits are up “slightly”. Sales and profit forecasts are again down.
“Like-for-like revenue growth,” says WPP, “in the third quarter was stronger in the United Kingdom, with all other regions, particularly North America, slipping back. Latin America and Central & Eastern Europe grew strongly with Africa & the Middle East also up, but Asia Pacific was more difficult.”