Two news market movers today: UK GDP numbers emerge at 9.30am while a US Federal Reserve policy statement – an interest rate announcement – arrives at 6pm. The UK GDP numbers give a clear idea of how the UK economy is doing.
Consensus is for quarterly UK GDP growth to come in at 0.3% – a small pick-up in activity from first quarter growth of 0.2% says analyst Laith Khalaf at Hargreaves Lansdown.
“Economic growth provides employment and wage rises, and helps to keep government borrowing in check. It also influences monetary policy, which determines monthly mortgage payments, and how much interest we get on our cash in the bank.”
So the GDP number is significant for just about everyone. Overnight the pound was 0.03% higher at $1.3026 while the euro was down -0.11% at $1.1639.
On the news front the government’s proposal to ban new petrol and diesel cars by 2040 is a boost for battery-related tech players. Other news out today... look out for US mortgage application numbers at midday and US crude oil inventories at 3.30pm.
- UK FTSE 100 7,434.82 +0.77%
- Dow 21,613.43 +0.47%
- S&P 500 2,477.13 +0.29%
- Nasdaq 6,412.17 +0.02%
- Nikkei 225 20,034.30 +0.40%
- DAX 12,264.31 +0.45%
- CAC 40 5,161.08 +0.65%
- Gold 1,251.00 -0.60%
- Oil WTI 48.33 +0.92%
ITV boosted by Love Island
Let’s get some telly in first. ITV says overall group revenues expanded 7% to almost £700m for the first six months of 2017 though earnings slumped 9% to £110m.
ITV boss Peter Bazalgette was upbeat for the most part. “ITV is the only channel to deliver a commercial audience over five million and Love Island demonstrates that young viewers engage in great TV content,” he said.
Online, Pay & Interactive grew revenues by 5% to £112m with double digit growth across Online and Pay. Online viewing was up strongly at 34%. ITV’s share price at 176p is down 6.5% on the year and almost 15% lower year-to-date. Some analysts though continue to worry that younger people are deserting TV.
Hammerson warns on UK confidence levels
We move onto commercial property player Hammerson – current share price 583p, up 7.2% over the last 12 months – who’ve reported a 6% climb in profits to £120m while the interim dividend rises 5.9% to 10.7p.
However Hammerson is wary of the UK economic backdrop. While inflation recently saw a dip, huge Brexit uncertainty remains. “In combination with weaker sales, retailers are experiencing cost pressures from sterling weakness, adjustments to business rates and higher minimum wages.”
“More retailers," it went on, "are recognising the attraction of the outlet channel and working with skilled operators who provide outlet space which supports their brand proposition and attracts growing footfall, in particular from international tourists."
"We expect sales in premium outlets therefore to increase as the retail mix improves and as international tourist numbers to Europe increase strongly.”
Breaking news: Investec, in an interview with BBC Wake up to Money, warns that the UK is behind on battery technology: "They're [the government] well behind the leaders in this - China, the US, Japan and South Korea so I really think that's where we need to focus on - battery technology."