A difficult Queen’s speech today with little idea of how effective a hung Parliament can be. Already the Democratic Unionist Party (DUP) are warning the Conservatives to supply more focus to their demands – no deal has been reached after 10 days of negotiations. A DUP deal would help sterling: at 7am the pound was trading at $1.2628, down more than 1% on the week; the euro was -0.04% lower at $1.1130.
The biggest stock index provider MSCI is to include mainland Chinese shares in its emerging markets index – an attempt by Beijing to encourage overseas investment. A big (and brave) move given the governance worry about some Chinese operations, despite the dual-listing of many.
Later today US Existing Home Sales arrive with Crude Oil Inventories out at 3.30pm. UK Public Sector Net Borrowing data is out at 9.30am.
- UK FTSE 100 7,472.71 -0.68%
- Dow 21,467.14 -0.29%
- S&P 500 2,437.03 -0.67%
- Nasdaq 6,188.03 -0.82%
- Nikkei 225 20,161.91 -0.34%
- DAX 12,814.79 -0.58%
- CAC 40 5,293.65 -0.32%
- Gold 1,247.50 +0.32%
- Oil WTI 43.34 -1.95%
Revpar rise for Whitbread
First, a trading update from Costa owner Whitbread. For the 13 weeks to 1 June total sales are up 7.6% with strong sales growth from Premier Inn, up 9.2%. Costa sales growth is up 8.7%. The key metric for Premier Inn is revenue per available room, up 3.1% in total – better than expected.
Whitbread’s German Premier Inn operation in Frankfurt is performing well with five more hotels planned Whitbread says. Whitbread claims progress in China with positive like-for-like sales growth.
Its shares have climbed just 2% year-to-date to 3,853p and are down 1.5% on the full year overall. Earlier this month Goldman Sachs downgraded Whitbread to Sell from Neutral.
Berkeley Group warns of headwinds
Final numbers are out from Berkeley Group Holdings. Pre-tax profits surge 53% to £812.4m while net asset value per share is up 81.4% to £15.56. Despite the strong numbers Berkeley is clear the company is facing a number of “headwinds” and a period of “prolonged uncertainty”.
Berkeley attributes some of it to increased affordable home pressure and reduced levels of new housing starts in the London region.
“For Berkeley, this leads to greater uncertainty around the timing of delivery of homes from our land bank but will not change our absolute focus on the quality of the homes and places we create.” Berkeley Group shares are up almost 15% year-to-date and up 5% for the last 12 months.
Ford to export Chinese-made cars to the US
Lastly, it’s emerged that Ford is to shift production of its new Focus model to China. The move has drawn huge criticism from President Donald Trump. It also signals a move away to build vehicles in Mexico.
Ford’s move to build more of its small cars in China follows a move by GM. Ford's move is significant in another way: it will be the first time Ford exports cars from China direct to the US.
Breaking news: media reports claim Uber CEO Travis Kalanick has resigned. Several major Uber investors have recently demanded the 40-year-old's resignation.